Lords Sitting of 19 March 1858

MINUTES.
Took the Oaths.—The Lord Bishop of Cashel.
PUBLIC BILLS.—Ia Marine Mutiny; Militia Act Continuance; Commons Enclosure.
3a East India Loan.

EDUCATION—IRELAND.-QUESTION.

  THE NATIONAL SYSTEM.
  THE MARQUESS OF CLANRICARDBrose to ask the noble Earl opposite, the head of Her Majesty's Government, the question of which he had given him notice, with respect to the course intended to be pursued by the Government in reference to the National System of Education in Ireland. In making this inquiry, nothing could be further from his views than to take any step that might have the effect of embarrassing the Government. It was with great regret he felt himself called upon, in the performance of a public duty, to allude to a subject which, he thought, had been set at rest. Unfortunately, there had recently fallen from a right hon. Gentleman in another place—a Minister of high influence—observations relating to the National System of Education in Ireland. Those observations, which were made on Monday last, had occasioned considerable alarm. As no announcement whatever had since been made, by the Government on the subject, he hoped that those words had fallen | in the heat of debate, without consideration or any intention of announcing any fixed determination of the Government. But, at the same time, it was undoubtedly supposed by the people of Ireland, from what had been uttered by the Minister to whom he was alluding, that it was the intention of Her Majesty's Government so far to alter the system of education of the poor in Ireland as to extend the grants to the Church schools in that country not in connection with the National System. He thought that nothing could be more injurious than such a proposition at the present
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  time. he would not then go into a description of the system of National Education, nor did he think it necessary to describe its effects; suffice it to say, it had been established for a considerable number of years, and under it upwards of 500,000 children were receiving a sound and efficient education. That system was working well. In his opinion it was one of the elements by which they might hope for the permanent prosperity and tranquillity of Ireland. He thought it would be a great misfortune, on many accounts, if such a system were at all disturbed by the Government; and it was impossible that any such change as was supposed to be in contemplation could be made without most seriously affecting the present established system. If schools other than those connected with the National System were to receive Parliamentary grants, the two classes of schools must either be in rivalry with each other, or the National System must be essentially modified to make it correspond with the Church Schools. He would not discuss the question whether the separate was or was not preferable to the united system; but the united system had been long established, and no change could be made without seriously affecting the social peace of Ireland. He sincerely hoped that the noble Earl at the head of Her Majesty's Government would state that they had not come to any determination of the kind. He could not believe that there was any intention on the part of the Government to disturb the National System. At any rate, he hoped that if they had any such question under consideration, that no actual decision upon the point had as yet been come to. He therefore begged leave to ask Her Majesty's Government what course they intended to pursue with respect to education in Ireland!
  THE EARL OF DERBYMy Lords, I have listened with much attention to the observations of the noble Marquess, and I think that he has misunderstood the remarks made by my right hon. Friend the Vice President of the Council of Education in another place; because undoubtedly no such determination as that supposed to have been announced has been come to on the part of the Government. I believe that whatever differences of opinion there may be in regard to the merits or defects of the present system of national education in Ireland, which has been now about a quarter of a century in existence, there is

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  no one, not even amongst the most eager opponents of it, who does not admit that in its practical working it has very materially increased the extent, and moreover has greatly improved the character of the education given to the people of Ireland. I admit, on my own part, I much regret first of all that as a system of united education, which was intended to he national, it has to a considerable extent failed in realizing our anticipations; and, in the next place, in consequence of religious scruples, (which I respect, though I cannot share them) the clergymen of the Church of England in Ireland have abstained from giving that support to the system which I think they might have done to the great advantage of those under their spiritual care. I regret also that in a portion of the schools themselves there should be an encouragement and support given to those who are opposed to the system on which they wore established, in the fact, that, contrary to the original intent, in the great bulk of the schools, not only is no religious education given, but no facilities even are given for separate religious instruction by ministers of different persuasions out of school hours. I think in the non-vested schools, as they are termed, the absence of any such facilities for religious instruction as was intended by the original scheme of the vested schools, has furnished a great handle to the opponents of the system. Nevertheless, with all those defects, I think it is most important that this system of Irish education should be maintained. Her Majesty's Government will not therefore be a party to anything which in their judgment would have the effect of impairing or altering that system. At the same time I must be permitted to say I do not concur in the opinion expressed by the noble Marquess, that this determination on the part of the Government wholly excludes us from considering the question whether there may not be consistent with the maintenance of this system, that means should be furnished of affording encouragement on the part of the State to those schools that are founded upon a different principle, even though to a certain extent that support may be in violation of the principle of the existing system. I say distinctly—and the principle was discussed in a Committee of this House some few years ago—and I regret that that Committee did not make any report—I think that the principle of giving some assistance to schools of a different character, and founded upon a dif-
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  ferent principle—a proposition which was not unfavourably entertained by the noble Earl opposite, the late President of the Council—I say, I think that such a principle may be consistently recognised. But I am prepared distinctly to say this—that Her Majesty's Government have come to no decision on that subject. Her Majesty's Government have, however, come to the decision not to imperil the existing system; and further, they have determined that no alteration shall be made in the distribution of the grant without first obtaining the assent and concurrence of Parliament.

THE INDIAN LOAN BILL,

  THIRD READING.
  LORD MONTEAGLEMy Lords, I have hitherto been unable to call the attention of the House to this very important Bill, from the desire I felt to have first been able to examine the Financial papers for which I moved before the adjournment, and which have not been distributed till within the last very few days. But being sincerely anxious that the Bill should pass without avoidable delay, I raised no objection to its progress to the second reading, nor do I mean to do so even on the present occasion. I cordially support the grant of an increased provision for the public service of India, and I shall give the same support to an extension of those powers, if such extension be hereafter required, an event which I cannot but consider as highly probable. Nor do I entertain a doubt but that the House of Commons will be swayed by the same motives. I am old-fashioned enough to consider the British Empire in India as one of the most wonderful and important possessions of the Crown. It raises our country in the estimation of all foreign states, and connects with the European dominions of Her Majesty an area and a population never before possessed or governed by any other power. Even if it could be shown that India creates a permanent balance against us, I could not agree to the suggestion that we should therefore be justified in treating our Eastern empire with unconcern. It would neither be true nor wise to do so. We are bound to India by the obligations of duty, a much stronger tie, to a country like ours, than any mere question of money profit and loss. We dare not throw India off, if we were unfortunately tempted so to do. We have contracted obligations to its 180 millions of people from which we have no escape. Those obligations must be fulfilled,

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  whatever may be the pecuniary sacrifices they entail upon us. The noble Earl over the way (Lord Ellenborough), on a former occasion expressed his regret that the House of Commons had reduced the Indian loan from ten to eight millions. If I considered that this reduction implied any unwillingness to contribute all that could be required to meet the necessities of India, I should participate in that regret. But I feel assured such could not have been the motive for the reduction made in the other House. Your Lordships should remember the peculiarity of the position in which Parliament is placed in respect to this Bill. Concurrently with this application for an authority to raise ten millions, a legislative measure has been announced to abolish the existing Government of India. The East India Company to whom by this Bill we are asked to confide the Imperial function of borrowing and of expending ten millions of money, has been, by another measure, served with notice to quit; or rather is left to await the execution of a capital sentence already pronounced. The present Indian Government will obtain the loan; a new Government, on the constitution of which Parliament has not as yet decided, will be intrusted with the expenditure of the sum borrowed. It was, therefore, thought expedient elsewhere (and in that opinion I heartily concur), to mark, by a reduction of the vote, that whilst Parliament was willing to sanction a loan for all that could be required to meet present necessities, it was imprudent and inconsistent with sound principles, to exceed that immediate demand, till we could see our way clearly to form a judgment whether the new Government of India were constituted on principles to make it deserving of confidence. This is the more necessary when the conditions of the proposed loan are considered. These conditions have not as yet been even adverted to, and many of your Lordships may be under the false impression that this Indian loan is identical in principle with the loans with which we have been but too familiar in our own home service, Such is not the case. A British loan can only be applied to certain specified services approved of by Parliament, and to which it is strictly appropriated. Thus the 19 Viet, c. 6, recites as the object of the loan, "the Supplies which have been cheerfully granted," and in 19 &, 20 Viet. e. 44, the proceeds of the bills and bonds authorized to be issued and sold under the Act are required to be paid into the Ex-
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  chequer to the account of the Consolidated Fund, being thus brought under the most rigid rules of responsibility, appropriation, and ultimate audit. No provision of an analogous kind is made in the Bill before us. It authorizes the borrowing of eight millions, but not one word is stated under what responsibility, for what objects, or where, these millions are to be expended. No limitation is even introduced, enacting that the loan shall be expended solely for the public service of India. It might be devoted to other purposes, without violating any one of the enactments of the present Bill. We have been informed that the Government claim very large repayments out of the funds to be borrowed, for stores furnished and advances made; yet no provision is made to recognise, or to secure, the discharge of these pressing obligations. I am not unprepared for the reply which I may receive to these remarks. I shall be told that I am not entitled to compare the strict practice of a constitutional Government, like that of England, with the practice of what must be considered to be at best a regulated despotism. This reply is, however, inconclusive, for I can point out precedents even of Indian loans, in which the more accurate system for which I contend has been adopted. Thus by 33 Geo. III. c. 47, s. 14, the subscriptions to the loan raised in 1793 are appropriated primarily to the reduction of the bond debt in Great Britain to a sum of £1,500,000, and are only made applicable as an ultimate trust to the discharge of other debts. By the 34 Geo. III. c. 41, the fund originally granted to pay off India bonds is permitted to be appropriated to the general purposes of the Company as circumstances may require." By 47 Geo. III., Sect 2, 41, £2,000,000 authorized to be borrowed, is appropriated "to the same purposes as the capital stock of the Company." Precedents like those, might have been advantageously adopted in the Bill now to be read a third time, which, on the contrary, leaves the House uncertain by what Government the eight millions granted are to be expended, and to what uses they may be applied.
  I rejoiced the other night to hear my noble Friend (Lord Ellenborough) speak so cheeringly of our military prospects. The past victories of our brave troops justify anticipations, which I trust may be realized by the event. But the military strength of a State should always be con-

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  sidered in connection with its credit and revenues, and though I do not wish to excite any unnecessary alarm on the subject of Indian finance, I cannot disguise from myself, whatever success we may expect in the field, that our Indian money prospects are but gloomy, and that a time will probably come when the Exchequer of England may be called on to assume a responsibility for some portion of the engagements of India. I, therefore, earnestly entreat your Lordships to look forward and examine this subject with prudent caution —to weigh well all future contingencies, and to apply yourselves carefully to the great question of the finances of India. Let us inquire whether the present or the past state of the resources of India—whether the peculiarities either of its income or of its expenditure, are such as to place us at our ease. I shall avoid the fallacy of reasoning and drawing general conclusions from what we are, I trust, justified in considering the exceptional case, of mutiny and revolt, and I shall, therefore, direct your Lordships' attention to the twenty-two years from 1834–5, to 1856–7. Now during this period, I find but seven years showing a surplus income, to sot off against fifteen years of deficiency. The seven years 1835, 1836, 1837, 1849, 1850, 1851, and 1852, show a surplus of £5,195.206, and the fifteen years (1834, 1838, 1839, 1840, 1841, 1842, 1843, 1844, 1845, 1846, 1847, 1848, 1853, 1854, 1855), a deficiency of £20,349,238. We have thus to deal with a deficit of £15,154,032, the balance between the income and expenditure of twenty-two years. Nor do I see much reason to expect that this state of things, which I find described in perfectly accurate, though somewhat fanciful diction, as "a chronic state of deficit" and "a dilapidated condition of finance," is likely to be set right by any improvement in our Indian revenue. I consider that revenue to rest on a most precarious basis. Take for instance the net revenue received in the year 1854–55. It amounted to £27,312,235. Of this no less an amount than £22,137,94S was collected under the following, three heads: Land, £16,419,000; Salt, £2,385,347; Opium, £3,333,601. Let us examine shortly how far the permanence of these sources of receipt can be relied on. We know that though the several strongly contrasted systems of land revenue have, in their turn, been subjects of high eulogy, each of them is now considered justly liable to serious
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  objections. It is admitted that a mistake was committed by that kind and generous man Lord Cornwallis, who, in making his permanent settlement, chiefly benefited the zemindar, or middle man, and gave no due consideration to the claims or interest either of the cultivators or of the real owners. In the Madras Presidency we have seen the Ryotwaree system with all its eccentricities of varying valuation, taxing the industry of the Ryot rather than the land itself, and, as has been proved to our horror and astonishment, collected, in too many cases, through the agency of torture. These atrocities have been practised, it is true, without the cognizance of the superior authorities of the Government; but they are all the more dangerous on that account, as being successfully concealed from those whose duty it was to detect and to punish. This is enough, independently of other evils, to condemn the Madras system, though that system has been, I might almost say, consecrated by the great name of Munro. Of the system practised in the newer settled districts, it appears that better hopes may be entertained, though few men are so sanguine as to believe in the practicability of its immediate introduction into Bengal and Madras. It is indeed suggested, and may perhaps be true, that by a reduction of land rents the total amount collected may be increased. This must be considered as, at best, but an experiment. It can only succeed slowly, if it succeeds to any considerable extent, not furnishing any certain or immediate relief to our financial wants.
  The next head of revenue is that of salt, which if not subject to the same perils as those which attend the land tax, is exposed to risks of its own. Let me entreat your Lordships to remember what took place in 1853. We were then precipitated into most hurried and inadvertent legislation. We passed the last India Act of 1853, under compulsion, and subject to protest. The Government would not allow us to complete our inquiries, or even to wait till our evidence was laid on the table. Still less were we given time to frame and present a report. But, nevertheless, the other House of Parliament acting with less consideration for India than their constituents would have approved, had the case applied to England, found time with what might almost he termed a rash generosity, to increase the salaries of their rulers, and to place in jeopardy the salt revenue of India,

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  in consideration to the interests of Cheshire, and of other English salt producing districts. A signal service was then rendered to India by the noble Earl opposite. The noble Earl (Lord Ellenborough) not contented with protesting against this somewhat selfish decision, induced your Lordships to reject the decision of the Commons by omitting the clause so imprudently adopted. Does such ill-considered financial legislation give us grounds for confidence that Indian finance will be discreetly managed by a distant Legislature which exhibited in 1853 so much carelessness for the interests of India? I am unwilling to go into the Opium case at any length, though sorely tempted to do so. But the question is too important to be altogether overlooked. Opium yielded in 1854–55 a net revenue of £3,333,000, and I believe this income is still increasing. But will the President of the Council of India deny that this revenue hangs by a thread? Who can affirm what may happen in China? If the Government of that Country should come to it3 senses, and substitute a moderate duty for its absurd prohibition, the Opium revenue of India is gone; the Poppy will be grown in China, and the Indian Treasury is made irretrievably Bankrupt. We have known one enlightened Governor, Keshen, who was called, as I remember, the Chinese Huskisson. But the Chinese need not rely exclusively on their home political market to furnish them with teachers of wisdom. We send them out an instructor in the person of our British consul at Hong Kong. Whatever differences exist in the value assigned to Sir John Bowring's services, as a statesman and a soldier, there is no doubt of his acquirements as a political economist. If he desires to persuade the Mandarins, we can hardly doubt but that he will be able to convince them of the folly of their existing laws, and of the necessity of abjuring their present faith and practice.
  I shall not trespass on your Lordships' time by any observations on the miscellaneous revenue of India, amounting in 1855–56 to a sum of £5,174,287. But I think I shall not be open to contradiction when I assert that it would be rash and over-sanguine to anticipate any considerable or certain improvement in our Indian finance, from an augmentation in the revenue receipts.
  Nor can we find more of consolation if we consider the present prospects of Indian expenditure. The existing amount
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  of Indian debt has been stated by Sir George C. Lewis at £68,000,000, and its annual charge at £2,829,000. The heaviest portion of this charge must be, at the present time, the military expenditure. Can the noble Earl opposite give your Lordships any approximate estimate of the increased expense of the military establishments of India likely to be required, as consequent upon the mutiny? Coming events cast most portentous shadows before. I have seen an estimate which raises the probable number of the Queen's troops in India to 92,000, or above 52,000 in excess of the present contingent. It is true that this may be accompanied by a reduction of the Native Forces. But is there any one among your Lordships who is at present prepared to state what will be the augmented expenditure, and what the saving of this change? I have already alluded to the great difficulties we are under from the unfortunate events, connected with the hasty renewal of the Charter in 1853. We now suffer from the want of information which that incomplete and unsatisfactory proceeding has occasioned, which leaves Parliament without the means of forming any well considered determination. Certain facts are, however, distinctly stated. We are informed that in 1857, the following funds were at the command of the East India Company. The borrowing powers of the Company amounted to £3,000,000; the cash account stood at £1,000,000; a similar sum of £1,000,000 was reserved in 3 per cents.; and £1,800,000 in exchequer bills. Since then we are told that "those resources have been called into requisition and are nearly exhausted." In the return made to the order of the Chancellor of the Exchequer, and signed by Sir George Clarke, there appears the following statement of the cash balance in the Homo Treasury. On the 1st of January. 1858, the credit balance stood at £1,187,963; on the 1st of May, 1858, it is estimated at £859,958; but in May. 1859, the estimated deficit is calculated at no less a sum than £7,586,068. This suggests serious reflections.
  I am far from calling attention to these figures with the view of throwing difficulties in the way of the progress of the present Bill. On the contrary, they prove its necessity. But they do much more. They show us the obligation we

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  are under of considering another, and a much more important question to which they necessarily lead. I allude to the obligation existing, or which may hereafter exist, in case of a continuing deficiency in the finances of India, and the liability which such an event may cast on this country—a liability to supply means to meet such deficiency. This question does not arise as a necessary result of the loan now proposed, hut rather as the effect of another measure, which we are all aware is submitted to Parliament. Assuming that the measure about to be proposed by the Government involves the abolition of the East India Company, and the transfer of the territory and revenue of India to the Crown of England, I cannot, for the life of me, see how the Parliament of England which is to effect this mighty change can escape from the liabilities to which such revenue and territory are subject. The territories of India will necessarily cease to be held by a great Corporation in trust for the Crown —they will become the absolute possession of the Crown itself, and must be taken subject to all their burthens. I feel that this proposition is unpopular, I know that it is startling, and I therefore am bound to support it by authorities higher than my own. Even before such abolition of the Company was dreamt of, and before such transfer of Indian revenue and territory was suggested, this great question was opened to Parliament in the most distinct manner by no less important a person than Sir Robert Peel. In 1842, when that great statesman laid before the House of Commons his financial propositions, and recommended the strong measure of adopting an income tax in time of peace, he did not overlook the relations existing between the finances of India and of this country. On the 18th of March, 1842, he said:—
  "I refer to a subject which has of late occupied but little attention in the House. I refer to the state of Indian finance. I am quite aware that there may appear no direct or immediate connection between the finances of India and those of this country; but that would be a superficial view of our relations with India, which should omit the consideration of this subject. Depend upon it, if the credit of India should he conic disordered—if some great exertion should become necessary—then the credit of England must be brought forward towards its support; and the collateral and indirect effect of disorders in Indian finances would be felt extensively in this country."
  This was a serious warning, and the
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  words which then fell from the lips of the head of the Government were words of weighty import, particularly in times like the present, when I have shown you a continued decrease in the revenue, and a continued increase in the expenditure, of India. These words, it must also be remembered, were spoken whilst the Company still existed, governing India, subject, it is true, to the authority of the Board of Control, but possessing an indisputable right of applying Indian revenue. This state of things it is now proposed to set aside. If the Company were still to be permitted to exercise the jurisdiction and appropriate the revenue of India, as in 1842, it might be said in reply to any applications from the Company for British aid or guarantee, though it might not be wise or generous invariably to employ such an argument, "You are entrusted with the whole revenue of India, you have the power of applying it to the payment of Indian debt, and to the support of Indian Government, and being so entrusted, you cannot urge any claim whatever upon this country." The case will be widely different hereafter. But even in times past—I repeat it—if the revenue of India become deficient, and that Indian necessities could not be mot by Indian credit or increased Indian taxation, the austere refusal of British aid under circumstances which may easily be conceived, would neither be generous, wise, or even practicable. And if the pressure became extreme, this country would find itself compelled, in duty and in interest, to realise the prediction of Sir Robert Peel, and to bring forward its resources in support of India.
  Nor would such a course be unprecedented. Under very different circumstances, and before Parliament had interfered with the commercial and exclusive privileges of the East India Company, Parliament did not adopt the principles which have been avowed in our times. For instance, in 1810 (50 George III. c. 114.) Parliament granted to the Crown a sum of money in exchequer bills for the relief of the East India Company. This statute recites, "Whereas the East India Company at present labour, and have for some time past laboured, under difficulties for certain demands by creditors; and whereas it is expedient that a sum of money be advanced for the relief of the said Company:" and the Act proceeds to authorize the issue of one million and a half for In-

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  dian purposes. Two years subsequently, by the 52 George III. c. 125, a sum of £2,500,000 was advanced to the East India Company to enable them to discharge part of the Indian debt. This sum was deducted from the loan of £22,500,000 raised in 1812, and was directed to be applied "for the relief of the Company under existing circumstances."
  But I will assume that neither these precedents nor yet the authority of Sir Robert Peel existed, I shall contend with confidence that the argument with respect to the British responsibility becomes irresistible on the enactment of a statute abolishing the Company, and vesting all the revenues of India in the Crown. Under these circumstances, when we assume the responsibility of governing India, we cannot separate from that responsibility the obligation of meeting the engagements chargeable on Indian revenue. Those obligations must rest somewhere. If the proposed Act be once passed, it cannot be argued in Parliament that these obligations rest upon the non-existing Company abolished by Parliament itself. They must be sought for elsewhere. With the revenue of India they must be transferred to the Crown of England, and must, in case of necessity, be met by Parliament. I know that the argument which I am now urging is a most unpopular one. Even your Lordships may be displeased at being reminded of those serious liabilities. Remember I do not urge my argument as arising out of the present Bill, but in reference to the important change which it is proposed to make in the Government of India. I ask not for any immediate reply on the part of my noble Friend, the head of the Government, but I express a confident expectation that in connection with the India Bill, he will be prepared hereafter to give us a clear explanation upon the subject. It is not consistent with the decision and manliness of his character that we should be called upon to legislate in the dark, or that the slightest doubt should be loft to rest on the minds of the lenders of money as to their rights, or on the minds of the borrowers respecting their responsibilities. The question demands a decision, Aye or No. It is idle to talk of leaving this great question to a moral responsibility, or to a vague general understanding. I must be permitted to say that according to my experience, what is generally designated a good understanding, as distinguished from a precise contract, generally ends in a misunderstanding. The jus vagum at eque incognitum has
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  been well described as a miserable bondage. I need not rest on the philosophical historian: I can appeal to official authority in our own times in support of my views, for I find that the present Chancellor of the Exchequer in the debate upon the India Bill, on the 11th of February, is reported to have made the following statement:—
  "Let me remind the House of the Bill now on the table for raising money for the service of India, and of the effect on our finance, and on Indian finance, of the proposal of Government. It is idle any longer to distinguish between English and Indian finance. If the President of the Indian Council, a Queen's Minister in Downing Street, should find it necessary to raise money by a public loan to pay Her Majesty's troops in India, it will be idle when the dividends are due upon that loan to pretend to assert that he will be able to say if the means are not at hand, ' the Exchequer of India is empty and the revenue of India is alone liable' Every Gentleman will feel in his own mind, that such a distinction as this, between the finances of India and the finances of England cannot be retained for a moment, and that a blow on British credit at its very source where the tide is highest is infallible and inevitable."
  The right hon. Gentleman, who used this powerful and unqualified language, has but expressed in a more distinct manner, the very conclusions to which I have endeavoured to lead your Lordships. I cannot understand, indeed, by what process of reasoning any noble Lord, whom I am addressing, can satisfy himself that if there should be a deficiency in the revenue of India hereafter, which the Government were unable to meet from the resources of that country, we can contend that the responsibility of making good such deficiency would not ultimately rest upon the Parliament of England. This is a point which at a proper time will require to be clearly explained, because the Government of this country have no right to leave those who under the sanction of Parliament may lend money for India in any doubt as to the obligation for repayment. I have thought it my duty to address those observations to your Lordships to prepare you for the solution of the] question hereafter, when the Indian Bill comes under discussion. I do not raise any objection to the passing of the present Bill, which is admitted on all hands to be absolutely necessary, but the public attention should be directed to the consideration of the ultimate results of a policy which proposes to vest the absolute Government and possession of Indian territory in the hands of the Crown, and which appears to me thereby to augment the financial responsibilities of the European dominions of Her Majesty.
  THE EARL OF ELLENBOROUGHMy Lords, if I understand aright, the object of

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  the measure which was proposed by the late Government, and the object of the measure proposed by Her Majesty's present Government, with respect to India, is to give to that country a better and cheaper government; and if that object can be accomplished, undoubtedly the danger of this country being called upon to assist India in its pecuniary difficulties will be greatly diminished. What I understand, then, is, that it is the duty of the person, whoever he may be, who is placed at the head of Indian affairs in this country, to endeavour so to reduce expenditure in India as to make that expenditure, if possible, come within the revenue. That, undoubtedly, is his first duty; and, above all, I desire and trust that we shall effect the object of relieving this country from any burden on account of India. My Lords, although the difficulties are undoubtedly great, I look forward with some hope to the ultimate result, I recollect that, when nearly thirty years ago I undertook the same office which I hold now, we had to encounter difficulties similar to those we are now experiencing; yet, under the advice and assistance of the late Duke of Wellington, in the course of two years and a half we effected or ordered, or had in contemplation reductions which in the aggregate would have exceeded £1,800,000 a year. No doubt the pecuniary difficulties arising out of the present condition of India are very great. We are compelled to employ, and shall be compelled to employ, in that country more than forty additional battalions of European troops, and at least ten, if not more than ton, additional regiments of European cavalry; besides that great arm, the artillery, a portion of which was formerly Native must now be altogether European. That will cause a very considerable increase in the expenditure, for the expenditure for a European soldier is very nearly equal to three times that necessary for a Native soldier; and it is therefore perfectly impossible for us to effect the equalization of the revenue and expenditure without a great reduction in the Native army. What is passing through my mind at the present moment, is a reduction of sixty-four battalions in the Bengal army. Your Lordships may depend upon it, if I am to be at the head of this great work, I shall do it with a determination of succeeding, if success be possible. I know it will be necessary to make great reductions in the ex-
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  penditure; and every reduction will probably create considerable unpopularity. That will be to me a matter of very small account, and I shall bear it as I have borne it before. As I have mentioned to your Lordships, I shall in every direction make such reductions as appear to me consistent with the public interests. My noble Friend (Lord Monteagle) observed that this loan differs altogether from loans which are raised for the service of this country. Those loans have a specific object; but with respect to this there is none, further than that it is for the general expenditure of India. Although, however, it differs in its general character from loans raised for the service of this country, this loan entirely agrees with the power of raising money which from time immemorial has been extended to the East India Company. They have had at all times the power of raising a large amount of money on India Bonds—£7,000,000, I believe—a portion of which remains to be raised at the present moment. The usual amount which they raise is £3,000,000 or £3,500,000, and sometimes it may go to £4,000,000. They have borrowed a large sum of money of late on these securities; nevertheless they have at this moment a power which is still unexercised of raising £1,000,000. This loan is only an extension of their power—a large extension, no doubt; still only an extension of the power of borrowing money which at all times seems to Parliament to have been consistent with the public interest that they should have. A power is to be now given to raise an amount that will about equal the expenditure; and no doubt it is extremely probable that events may occur which, under the present difficult state of circumstances, will render it necessary for the Government of India to depend altogether, for a time, upon our means of borrowing money, and not upon revenue. My noble Friend has referred to circumstances which existed twenty years ago, and he tells that at one period he found a surplus which amounted to £5,000,000, and at another a deficiency amounting to £15,000,000. But, my Lords, if you recall twenty years, you must recollect that the first portion of that period embraced the Affghan war, which continued four years, the two years' war in the Punjab, and another war, though not a long one a very costly on, in Scinde. These wars added millions to the expenditure. Although, however, the wars in the early part of those twenty years affected the

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  revenue materially, it was not so with respect to the last ten years; whereas, by the way in which it was put by my noble Friend, it would appear as if £7,000,000 had been added to the debt during that latter period. If my noble Friend will look into the amount of the balances in the treasury of India, he will find that those balances have increased £3,300,000; so that, in point of fact, the total increase of the debt has only been £3,700,000. If against that debt he will place £4,000,000 or £5,000,000, which have been expended in public works, many of them most profitable and remunerative to India, he will find that the revenue of India during the last ten years stands better than it did before. My noble Friend has gone into details with respect to land and other portions of Indian revenue. I speak from recollection; but when in India I took occasion to look at the subject as closely as possible, and the result which appeared to me at that time likely to occur with respect to the land revenue of Bengal was, that there would be a probable increase at the rate of £100,000 a year, but not beyond that amount. Undoubtedly, as regards the revenue from opium, no one can look to that without feeling apprehension as to its probable amount in future years, because circumstances happening from time to time may materially affect it. I should have mentioned, amongst various things to be taken into consideration as affecting the revenue of the previous period of ten years, that the war in China, although in one sense it cost India nothing, the expenditure being thrown on this country, yet it was not an event which ought to be omitted to be taken into consideration—it seriously affected the trade of India at the time, and the effect of it upon the revenue from opium was to lessen it fifty per cent., and therefore it most materially deteriorated the then position of the Company. At the present moment the amount receive I from opium is extremely large; and although sanguine persons may expect that the progress of civilisation and enlightenment will decrease the consumption of the drug, yet it is an undoubted fact that a most extraordinary increase has of late taken place in the quantity of opium exported to China, and the demand for it in that country seems to be still extending. Now, if we are capable of obtaining a good Government for India—and I know that we shall do what we can for the attainment of that object—why should we despair of seeing that country hereafter in a prosper-
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  ous condition? It is the most extensive and the richest empire in the world; it is traversed in all directions by noble rivers, which can be made navigable by the art of man; we are now intersecting it in every direction with railroads; and I cannot understand why we should not, with all our European energy and European knowledge, make India as productive as it was in the time of Aurungzebe, who, it is stated, drew as large a revenue from that portion of the country which was under his control as the East India Company have derived from the whole of their territories. I confidently look forward to the realization of that object, which, if it can be accomplished, will be particularly gratifying to my noble Friend, who very naturally takes a fiscal view of these matters. I am willing to do the same, for I hold that a Government conducted by intelligence can do more for the good of the people than one which, by injurious parsimony or unpardonable extravagance, impoverishes the resources of the country. My Lords, I shall say no more than that before a fortnight has elapsed my noble Friend will see what steps I have endeavoured to take, which I trust will have the effect, not only of giving good government to India, but of greatly improving its fiscal position.
  EARL GRANVILLEI recollect that at the last stage of the Bill my noble Friend near me (Lord Monteagle) complimented the noble Earl opposite on the very satisfactory statement which he then made with regard to India; but I cannot help thinking that my noble Friend has not tonight, followed the text on which he then preached. There is no doubt that the finances of India require very great attention, fend I believe that a reform in them, might be most advantageously carried out. I think, even with regard to the system of accounts, much remains to be done under that head. The income of the last year has of course seriously suffered from the rebellion; but I believe some compensation for that will be found in the fact of the Company having been released from some of its liabilities. I do trust that in the reorganization of the army, although I quite agree that it will be necessary to increase very much the number of European troops, it will not be found impossible on the whole to reduce considerably the total cost of the Indian army. J3ut of one thing I am quite certain, and that is, that any real economy must depend on the local government of India. If the Imperial Parliament once encourage the local government to believe

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  that they can obtain facilities for raising money, not on the security of the Indian revenue, but on the security of the Crown and the Parliament of this country, there will be encouragements to a lavish expenditure, which will not exist if they find they are checked by the difficulty of raising loans merely on the security of the Indian Government itself. I think this is a most important consideration. The noble Lord referred to certain assistance which had been given by this country to India at a former period. No one can doubt that circumstances may arise in which this country might think fit in some way or other to afford assistance to India; but I do not understand how the form of Government at home can in the slightest degree affect that question. It appears to me that it would be entirely unreasonable to raise money now at a higher rate on the security merely of the Indian revenue, and to look afterwards to the English Government for the repayment of the loan. I believe that could not have been the intention of Sir Robert Peel when he stated, as he did on one occasion, that it might be necessary for this country to come to the assistance of India in a time of great difficulty. I really have nothing more to say in defence of this Bill. The noble Earl upon whom has devolved the responsibility of conducting it through your Lordships' House has disposed of the arguments raised against the measure. In conclusion, I will only say that I entirely deny that by this Bill we give in the slightest degree any collateral security to that afforded by the revenues of India for the repayment of this loan.
  THE EARL OF ELLENBOROUGHThe noble Earl is quite right. Neither by this Bill nor on any other ground can India evade in the slightest degree the liability thrown upon it to repay the whole of this loan. As regards what Sir Robert Peel appears to have said, I was in India at the time he made the speech to which reference had been made, and I recollect reading that speech with complete astonishment. What he could have meant I cannot understand. I felt I was then thoroughly independent. I had to pay my own way, and I never had the slightest chance of obtaining assistance from this country. What assistance Sir Robert Peel could have contemplated, I repeat, I cannot understand.
  EARL GREYMy Lords, I rejoice to find that, with a single exception, there is a general repudiation by your Lordships of the doctrine that, by this Bill, any engage-
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  ment whatever can be implied on the part of Parliament to make up any deficiency on the part of the revenue of India, to provide for the interest of the loan about to be made. I think there is no obligation, either moral or otherwise, imposed on this country to pay the debts of India. If it were otherwise, what would be the consequence? If you adopt the principle that this country may be answerable for debts contracted by India, you must follow it up by taking care that the whole expenditure of the Indian Government shall be brought under the consideration of Parliament, and Parliament must exercise a close scrutiny over that expenditure. But more than that. If that principle is to be applied to India, must it not be extended to other dominions of the Crown? And remember there are dominions of the Crown—such as Trinidad, the Mauritius, and others, which do not possess any representative legislatures. I contend that the principle is one which we cannot too studiously guard against admitting, either directly or indirectly. I hold that the revenue of India, and the revenue of India alone, is pledged by this Bill. There are reasons of policy which make it desirable that English security should not extend to loans contracted on behalf of India. I think it desirable that there should be a great number of persons in this country who would take an interest in seeing that the affairs of India are so managed as to conduce to the welfare of the Native population under our rule, and to the interests of the mother country, and who would exercise a check on the misgovernment of India, by which the security of private property might be injured. I am persuaded that, if India is properly governed, the security it affords for this loan is a very good one. I have heard with great satisfaction the views stated by the noble Earl opposite (the Earl of Ellen-borough). I believe with him the resources of India are so great that, if properly administered, they will furnish ample means of repaying this debt. I was glad to hear that he looks to the possibility of reducing the expenditure of India, especially the military expenditure. So, from the fearful calamities consequent upon the mutiny, we may at least derive this benefit, that in future the policy pursued towards India will be very different from what it has been heretofore. We have hitherto kept up a disproportionate army in India, not so much for internal purposes as with a view to meet imaginary external dangers. The real source of our calamity in India, and of

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  our future danger, is, the warlike policy on which we have acted. I trust we shall now feel the necessity of keeping our army in India, and particularly the Native army, within more moderate limits; and we shall then adopt the principle of not meddling in the affairs of our neighbours, a course which has drawn us into unnecessary and expensive wars, and been the cause of all our difficulties. If the £12,000,000 of money thrown away on the Affghan war had been applied to internal improvements, how far it would have gone to increase the security of our position in the country, and to establish our influence in the central parts of Asia.
  THE MARQUESS OF CLANRICARDEsaid, he would remind the House that in 1773 Lord North complained of the conduct of the East India Company being so oppressive towards the Natives that it was absolutely necessary to subject it to the control of the Crown, and at the same time proposed a loan from Parliament to the Company of £1,400,000. No doubt, the resources of India, if properly developed, were fully equal to make it one of the richest Governments, as it was by nature about the richest empire, in the world. But to attain that end a very different system of administration must be introduced into that country from that which had prevailed under the East India Company. The noble Earl had referred to the reduction of the army of Bengal; but the army of Bombay required almost as much looking into it as what was left of the Bengal army. Indeed, to effect great reductions the army of all the Presidencies must undergo revision. Nor, indeed, ought their economy to be confined to the military service. The salaries now paid to the civil service of India were in many instances in the highest degree exorbitant. If the Administration of that country was to be put upon a proper footing, with a view to its being permeated throughout by British capital and British enterprise, and to its being really civilized, they must establish better laws and an improved judicial system. This, however, would lead to a considerable increase of expense, the means of defraying which could be supplied only by careful retrenchment in the other branches of the Government. He thought the noble Earl took too bright a view of the probable prosperity of India for some time to come; and when he stated that at the present moment there was such a demand for opium in China that the value of
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  that drug had largely increased, and, consequently, that our opium revenue had greatly advanced, he should not forget that this growing demand in China would most likely induce the Government of that empire to alter a policy which, though beneficial, perhaps, to this country, was yet perfectly absurd in itself. English credit and English revenue were therefore intimately connected with questions of Indian finance.
  Motion agreed to.
  Bill read 3a accordingly, and passed.
  House adjourned at Seven o'clock to Monday next, half-past Ten o'clock.