HL Deb 09 August 1877 vol 236 cc651-65

(The Marquess of Salisbury.)


Order of the Day for the Second Reading, read.


, in moving that the Bill be now read the second time, said, the purpose of the measure was to enable the Indian Government to raise £5,000,000 by way of loan. It was rendered necessary principally to meet the expenditure occasioned by the Famine; but it did not differ in form from ordinary Bills of the same kind, except that in it power was taken by the Government of India to follow the precedent recently initiated by the Imperial Government, to raise part of the loan by the issue of India Exchequer Bonds redeemable from time to time. Language of a desparing character was used sometimes with regard to the finances of India; and therefore he would like to say a few words in order to indicate to their Lordships that the Government of India in raising this loan was not committing an act of great financial imprudence, as had been said, and that there was no reason to entertain any apprehensions in respect of the financial course that Government had of late years pursued. The doubts that had been expressed on that subject appeared to rise principally from the fact that the expenditure of the Indian Government on works expected to be reproductive and its ordinary expenditure were mixed up together. Of course, it was necessary to take both into consideration when you asked what were the prospects of the Indian Government; but they ought to be taken separately, if the precise position of the Indian Government was to be accurately ascertained. Now, if they separated the expense on works expected to be reproductive from the ordinary expense, it would be found that the course pursued by that Government, since the great expenditure of the Indian Mutiny was surmounted, had not only not been a wasteful one, but taking the whole 15 years into consideration a fair surplus had been maintained. Taking the accounts of the 15 years from 1861–2 to 1875–6 inclusive, including expenditure on Famine, but excluding that on Public Works Extraordinary from 1867, the aggregate surpluses of the years in surplus amounted to £13,151,411, and the aggregate of deficits in deficit years to £10,209,191, making the balance of surplus £2,942,220. He thought that was sufficient to show that apart from Public Works there had been nothing wasteful or imprudent in the management of the finances of India, and that there was no cause for gloomy apprehensions respecting that management in future. Then, if the Budget in respect of reproductive works also were examined, it would be found that things were not unfavourable. The total capital expenditure on irrigation works and on State and guaranteed railways had been £115,800,000, while in 1875–6 the net revenue from railways and irrigation works was £4,727,219, giving a net return on the capital expenditure on those undertakings of little more than 4 per cent. It was to be remembered, moreover, that in those works were included not only those which were opened and were yielding revenue, but those, like the Burmah and Indus Valley Railways, and the Soane Canal, which were still under construction, and yielding no revenue whatever. He thought, therefore, that the financial management of the Indian Government had been frugal and prudent. He need hardly tell their Lordships that the prospect was improving, for the new works were beginning to yield some revenue, while the old works were yielding more. Before he sat down he desired to say a word with respect to the Famine which was the main cause of this loan. The prospects in the Famine districts, as their Lordships might have gathered from the telegrams in the newspapers, were not quite so gloomy as they were about a fortnight ago. A considerable quantity of rain had fallen, and a certain portion of the crops had been saved; but nevertheless it was to be feared that a considerable and aggravated amount of distress must continue for several months from this time. He was anxious to take this opportunity of removing an impression which had got abroad, and for which he was certain there was no foundation whatever. There was an impression that the Government of India were less eager and less liberal than on former occasions in relieving this terrible distress. There was no ground for that belief. From the very first his noble Friend near him (the Earl of Carnarvon), who was occupying the India Office while he (Lord Salisbury) was away, warned the Indian Government that the utmost care must be taken and no expense must be spared to preserve human life, and the Indian Government cordially accepted the duty. He believed the false impression to which he had alluded had arisen from a controversy which had gone on with respect to the proper amount to be given to the labourer, or to what was known as "the Temple wage." Sir Richard Temple maintained that a pound of rice was sufficient to enable the labourers to work, and he was very justly of opinion that it was not right to give them more than was absolutely necessary to keep them in health. In that view he was supported by the medical authorities in Calcutta and opposed by the medical authorities in Madras; and a somewhat embittered controversy, turning mainly upon the number of grains of nitrogen and carbon necessary to enable an Indian labourer to work, continued for some time. But it must not be supposed from this controversy that any restriction was laid on the Madras Government as to the amount of relief. The reports, however, were so persistent, that they at the India Office, though they knew that no new restriction had been imposed, were yet inclined to think that some representation had been made on the subject by the Supreme Government; and accordingly he sent this telegram to the Viceroy— Accounts reach me from many quarters expressing serious fear that insufficiency of relief food on famine works, especially in Madras, is producing diseases of exhaustion, and will end in great mortality. Matter requires extreme vigilance, and if there is any real cause for apprehension it will be better not to place too much restriction on Local Government. Our medical authorities are alarmed by accounts, official and other. The reply received was as follows:— We have placed no restriction on Local Government in this matter. If the Government of Madras were satisfied that the present rate was unduly low, they would doubtless raise it. We have asked Bombay to consider expediency of giving Sunday wage, which is allowed in Madras, but not in Bombay. Accordingly, within ten days or a fortnight the Madras Government did raise the rate. Therefore there was no ground for thinking that the Government of India prevented the Madras Government from following its humane instincts. It was said that there had been a very great amount of mortality—he had seen a telegram which put it at as high a figure as 500,000. He inquired of the Madras Government as to the accuracy and certainty of that statement, and he received a reply indicating that the estimates of the mortality as yet rested upon somewhat conjectural grounds, but that whatever the mortality was it had arisen, not from starvation, but from epidemic disease—the two diseases of cholera and small-pox. Everyone knew that the famine had stimulated both diseases. The want of rain had lowered all the wells and diminished the quantity and purity of the water, and, as everyone knew, there was nothing which determined the virulence and spread of cholera so much as a tainted supply of water. In the same way with regard to smallpox. It was a disease which could be dealt with so long as the people could be isolated; but it was impossible to isolate them when they had to be relieved in vast multitudes. The number relieved amounted now to 2,300,000, and it was impossible to isolate them when collected on relief works and in relief camps. It necessarily followed, therefore, that small-pox had its terrible opportunity. He did not dispute that suffering had occurred in many cases where relief came to people whose strength had been reduced by want—it was not, however, because relief had been denied; the difficulty was to get people to ask for it— the officers had to hunt the starving people and infirm men and women and children, and induce them to come and ask for the relief which was ready to be given to them. In a vast Presidency such as Madras, with a population in the famine districts numbering 16,000,000, and a territory, taking Mysore with Madras, extending over 100,000 square miles—not far from twice the area of England and Wales—the agency of relief must be conducted to an enormous degree by Native means. The 150 covenanted Civil servants could do very little themselves—they could only superintend the vast machinery of Natives. The Government had been obliged to employ the Native village headmen to hunt out these poor people; but, unfortunately, as Sir Richard Temple had lamented again and again, they were hardly equal to their opportunities and duties. Those headmen were appointed in Madras upon the hereditary principle, but it had not answered well. They were perfectly capable of doing their ordinary duties with efficiency and success, but they had not acted up to the expectations formed of them in the early period of the famine. They had hardly appreciated the responsibility, the weight and the necessity of the duties cast upon them; and the fact must be admitted that in the early part of the year many persons were not relieved until their physical strength was considerably depressed, and cholera and small-pox found them an easy prey. In the Presidency of Madras there was a comparatively inactive population. The difference between them and the population of Northern India was seen in the enormous amount of gratuitous relief given in the famine-stricken districts of Madras, for which no work was required. It was twice as much as that which it had been found necessary to give in Behar. In Behar the maximum number relieved was 2,100,000, against 2,300,000 in Madras, yet in Behar the proportion of gratuitous relief had been kept at a comparatively low point, which had not been possible in Madras. He would not be doing his duty or acting in accordance with his own feelings if he did not say how deeply we were indebted to the untiring and unsparing exertions of the officers employed, in relieving the famine. The Viceroy, Sir Philip Wodehouse, the Duke of Buckingham, and Sir Richard Temple had all devoted themselves unsparingly to the duty, and in spite of the ravages of disease they had done so in the main with signal and merited success. He wished to add that the Viceroy had wisely determined to go himself to the distressed districts, and no doubt his presence there would animate the officers and render it more easy to work the administrative machinery for the relief of the famine. He begged to move that the Bill be now read a second time.

Moved, "That the Bill be now read 2a" —(The Marquess of Salisbury.)


wished to express his deep sympathy with the population suffering, by no fault of their own, from this great calamity. It had fallen on a people loyal, industrious, and patient, charitable to their relations, obedient to the law, grateful to the officers who had to deal with them, and entertaining an affection for the Government which came forward to assist them in time of distress. With regard to the nature of the famine, he would remark that the information presented to the House was not recent, for it extended only to last January; but it was apparent from the Papers themselves, and from the statement of the noble Marquess the Secretary of State, that the calamity was most serious, especially because this was the second year in which there had been a failure of the customary rain. In the month of January last the number of persons receiving relief in Madras and Bombay exceeded 1,500,000; 1,250,000 in Madras, and more than 300,000 in Bombay. It was then expected that when the annual rain fell in April the distress would be alleviated, and that it would nearly cease in July; but so far from that being the case, the number of persons now being relieved was stated by the Secretary of State to exceed 2,000,000. That fact, he feared, showed that the famine was not likely to be soon at an end, and that grave difficulties would exist in meeting it for at least some months more. It was remarkable that in times of drought there often happened a second failure of rain, which greatly intensified the danger. Thus in 1874, the rain necessary to secure the rice crop in Bengal, which should have fallen in August, did not come till September, and a repetition of the scarcity of the previous year was imminent. Remembering the very great responsibilities of a Ruler at that time, he felt that the most generous support should be given to all the Indian authorities, and he knew from personal experience their energy, their ability, and their devotion. He was sure that the Viceroy had rightly determined to visit the distressed districts. He had been associated in India with the Duke of Buckingham, upon whom the most serious responsibility had fallen, and no man could be more zealous in the performance of his duties. He thought that the Government of India had done wisely in sending Sir Richard Temple to the spot, for his previous experience in Bengal must have enabled him to offer valuable advice and assistance, and in accepting that duty Sir Richard Temple had given another instance of his high public spirit. He rejoiced that in Bombay the greatest stress of famine was over; the measures taken to meet the distress there appeared to have been successful, and reflected great credit upon Sir Philip Wodehouse and the officers of the Bombay Government. So far as he was informed regarding the proceedings of the Government of India, he had but little to offer in the way of criticism or suggestion. The one object was to prevent loss of life, taking care, at the same time, to interfere with trade as little as possible. He did not, however, observe that the plan of making advances of money or food to the cultivators which was found very successful in Bengal had been adopted. He had talked in 1873 with a Mahomedan nobleman in Calcutta, and on asking him him what measures he would take in the event of a famine in the State of which he was Prime Minister, had been told that the best plan would be to advance money to the cultivators, who would return it in good years. Those who had to deal with an Indian famine were brought into contact with an enormous number of small cultivators, especially in Madras, where in one district there were 50,000 occupiers of less than 5 acres, and in another 80,000 holding less than 10. The State stood in the place of a landlord to these men, and it was very important to help them as much as possible. He would also suggest that the Secretary of State and the Government here might assist the Indian Government in providing officers to deal with the distress. In 1873, great difficulty was caused by the want of proper supervision. On the occurrence of such a calamity the first thing which ought to be done was to strengthen the administrative Staff to the greatest possible extent, and he could not but think that if the Government required such assistance many officers of the Army in this country who had been in India and possessed some knowledge of the language would volunteer for the service: most valuable work was done by officers for the Army in Bengal during the distress of 1873. He was satisfied from his own experience under somewhat similar circumstances, that the noble Marquess fully appreciated the gravity of the situation, and would, to the best of his ability, assist the Government of India, and he merely threw out these suggestions for what they were worth. As the Government of India would have a grave calamity to contend with, he would suggest that it would be wise to postpone, at all events, for the present, certain administrative changes that were contemplated in the Punjab. He would not discuss their merits now, but only observe that so far as he knew they were disapproved by all those men who had long experience of that part of India, and that at least some further consideration might well be bestowed upon the proposals. The Secretary of State had not taken advantage, as had occasionally been done before, of the present opportunity to make a statement of the events of the past year in India; and, therefore, he (Lord Northbrook) would abstain from making any such general observations. He would only express his sorrow at the loss which the British Government had sustained by the recent death of three eminent men. Sir Jung Bahadur, the de facto ruler of Nepal, a loyal ally of the Queen who rendered essential services during the Mutiny; Maharaja Romanath Tajore, the highly respected leader of Hindoo society in Calcutta, who was always ready to give his valuable advice and assistance to the Government; and Sir Jametsetjee Jeejeebhoy, who filled a somewhat similar position in Bombay. Both these Native gentlemen he (Lord Northbrook) was proud to reckon among his personal friends. Turning to the Bill before the House, and to the state of the finances of India, he had been much interested by the able financial statements which had been made public by Sir John Strachey, the financial Member of Council, which left nothing to be desired in the way of information which could be supplied by the Government of India. The Estimates of the current year, 1877–8, showed that, including the cost of famine relief, there would be a deficit of £621,000. The cost of famine relief was expected to amount to £2,150,000, so that the apparent surplus, if there had been no Famine, was £1,528,000; but Sir John Strachey had correctly pointed out that the effect of Bills like the present one, by which money was raised in England for the service of India, was to diminish the remittances from India to England, and so to bring about a considerable saving in the cost of making those remittances. Making due allowance for this saving, Sir John Strachey calculated that the real surplus this year, if there had been no Famine, would have been £928,000, of which £500,000 was to accrue from new taxes to be imposed, and from the Provincial Governments undertaking certain charges for a less sum than had hitherto been defrayed on that account by the Go- vernment of India. Comparing the financial condition of India in the last two years with the three preceding years the results were that the surplus, excluding Famine charges, of the three years 1873, 1874, and 1875 amounted to £6,791,499, or at the rate of about £2,250,000 a-year. The cost of Famine relief in Bengal was £6,698,312, which was met out of the surplus of those three years. In 1876 the surplus fell to £624,800, and in 1877, without the new taxes and the arrangements with the Provincial Governments, it was estimated at only £428,000. This unsatisfactory condition of things was mainly occasioned by the increased cost of the remittances from India to England which were required to pay the interest on Debt incurred in England, and other Home Charges. The price of silver, as against gold, had very greatly fallen in the last three years. Consequently the loss by exchange had increased from £500,000 in 1874 to £1,000,000 in 1875, and to £1,500,000 in 1876. He wished to express his entire concurrence with the conclusion at which the Government of India and Her Majesty's Government had arrived, not to change the standard of value in India from silver to gold, or to adopt certain other proposals which had been urged upon them. If there were no question as to the rate of exchange it would, he thought be right to borrow money, wherever it could be raised on the easiest terms; but the operation of exchange with respect to receipts in silver in India and payments in gold in England made it advisable, and it had been rightly determined by the Secretary of State, that the loans required by the Government of India should be raised as much as possible in India in silver, and that no more than was absolutely necessary should be raised in England in gold. He wished to ask from the noble Marquess an explanation of a transaction which took place last year which appeared to him to be inconsistent with this principle. The Government of India reckoned that for the service of 1876 it was necessary to raise £2,640,000 in England; but it appeared from Sir John Strachey's statements that £4,600,000 had been borrowed in England, or £1,960,000 more than was required. This excess was partly balanced by the purchase by the Government of India of rupee paper in India to the amount of £1,250,000; but more debt was incurred by about £750,000 than was required, and, moreover, £1,250,000 of Debt, the interest on which was payable in India in silver, had been exchanged for a similar amount on which the interest would have to be paid in England in gold. There was certainly a saving in the loss by exchange for the year, because the remittances from India were decreased by this transaction, but the ultimate result seemed to be disadvantageous to the finances of India. Famines had occurred so frequently in India during late years, that the Government were in his opinion right in endeavouring to raise some additional means to provide for their cost, and he was entirely satisfied with one step which had been taken—the giving more powers to local Governments, at the same time providing some relief to the finances of the central Government. Whether the manner in which it was proposed that additional taxation should be raised was the most desirable to adopt he would not say, and he felt the difficulty of throwing upon the local Governments the task of providing by taxation for the cost of public works, for instance, of irrigation, in the construction of which the people presumed to be benefited had no concern. He was glad to find that no proposal for the re-imposition of the Income Tax was made, as it had caused great discontent, and he might observe in passing that it was not the intention of Lord Mayo to re-impose it when it expired in 1872. There was one part of Sir John Strachey's Financial Statement on which he could not look without some degree of apprehension—he alluded to the recent increase in the military expenditure. The gross military expenditure, he found, which had averaged about £15,500,000 for the four years ending with 1874, had since risen to £16,250,000, an increase of nearly £800,000, which brought the military expenditure nearly back to what it was in 1869. That increase, he was aware, was in some measure due to the increase of pay of the British and Native troops, which he believed to be necessary and right, but there were other items, especially in connection with the Home Charges, of which no sufficient explanation had been given. The "Home Charges of Her Majesty's Regiments serving in India" had increased from £500,000 in 1874 to £660,000 in 1876, and Sir John Strachey could only say that this was "the result of much negotiation with the War Office at home, and does not seem susceptible of definite explanation in India." Their Lordships might remember that in 1872 the Duke of Argyll protested strongly against the amount of these charges upon Indian revenues. There had subsequently been a Parliamentary inquiry, in the course of which the noble Marquess opposite (the Marquess of Salisbury) gave evidence to the effect that it required constant vigilance to prevent other Departments in the State encroaching upon the rights of the Indian Exchequer. Sir John Strachey appeared to be greatly impressed with the tendency of these charges to increase, for he used the following remarkable words:— That the Indian revenues are liable to have great charges thrown upon them without the Government of India being consulted, and almost without any power of remonstrance, is a fact the gravity of which can hardly be exaggerated. He (Lord Northbrook) commended this subject to the particular attention of the Secretary of State. He wished also to ask for some explanation of the incidence of the cost of the recent operations in the Straits Settlements upon the British and Indian revenues respectively. A year or two ago Indian Forces were employed at Perak, and he believed that all the ordinary expenses of the troops so engaged were borne by the Government of India. In the 55th section of the Government of India Act there was the following important statutory provision with regard to such charges:— Except for preventing or repelling actual invasion of Her Majesty's Indian possessions, or under other sudden or urgent necessity, the revenues of India shall not, without the consent of both Houses of Parliament, be applicable to defray the expenses of any military operations carried on beyond the external frontiers of such possessions by Her Majesty's forces charged upon such revenues. The Straits Settlements were formerly part of British India, but by the 29 & 30 Vict. c. 115, they were separated from it, and in the words of the enactment, ceased to be part of India "for the purpose and within the meaning" of the Government of India Act. It seemed, therefore, that the consent of their Lordships' House and of the other House of Parliament was necessary before the revenues of India could lawfully be used to defray the cost of the operations at Perak. In the case of the Abyssinian War, an Address to the Crown was moved in order to comply with the requirements of the law under similar circumstances, but no such Address had been moved to meet the case of these operations. True, the charge in question was not very large, but the principle involved was one of the greatest importance. With respect to the future prospects of Indian finance, he believed that the figures given by Sir John Strachey, and the expectations founded upon them, were sound. There was much greater elasticity than had been supposed to exist in the main sources of Indian revenue, and he trusted that under a steady and economical administration of the finances, if only the customary rainfall took place in its season, we should see in a few years the satisfactory condition of the finances of India restored. It was with much satisfaction that he had heard of the prosperous financial condition of the Indian railways. This was a very hopeful sign. Another very satisfactory fact was the increase in the exports and the imports. Since the year 1874 the exports had increased at the rate of £2,000,000 sterling a-year, and the imports had increased by £ 1,000,000. The measures taken of late years by the Government of India to remove the export duties on certain commodities had had a very remarkable effect. In the case of wheat and seeds, the result was particularly striking. In 1872, before the export duty on wheat was removed, the export consisted of 320,000 cwts. of the value of £135,200. The duty was taken off in 1873, and the export gradually increased until in 1876 it reached 4,839,000 cwts. of the value of £1,673,400. The value of the seeds exported in 1874 was £2,451,900. The export duty was taken off in 1875, and the value of the exports in 1876 had increased to £4,688,600. These figures were interesting as showing the importance of removing the export duty on products in which there was a competition with other countries. With regard to taxation in India, it was clearly im- possible at the present moment to reduce it. Indeed, in consequence of the cost of the famine in the South of India, and the fall in the price of silver, the finances of India must for some time be in a critical condition. It was obvious, therefore, that the condition of the finances did not justify any expectations being held out that the import duty of 5 per cent on cotton goods could be given up, and he regretted that the subject had been mooted by Sir John Strachey in his speech on the Budget in Calcutta, although it was afterwards explained that he had only expressed his individual opinions, and not those of the Government of India. No one could wish more than he (Lord Northbrook) did to see freedom of commerce extended, but he would be sorry to see the stability of the revenues of India imperilled, or fresh taxation imposed upon the people of India, in order to remove the grievance—no very real grievance after all— of the English manufacturers to which he was referring. In concluding, the noble Lord observed, with reference to the famine which was now hanging over the people of Southern India, that this was an occasion when economy of expenditure was not the paramount consideration. In famine, as in war, when the safety or honour of the country was concerned, the great object to aim at was success, and not economy. If nations did not grudge the employment of all the means in their power for the carrying on of war, they ought with infinitely greater reason to tax their energies and all the resources of the State to the utmost for the preservation of the lives of the people.


, in reply, reminded the noble Earl (the Earl of Northbrook) that the noble Duke (the Duke of Argyll) only tried the experiment of making a general statement of the financial position of India on two occasions, and that on the second the noble Duke and himself were left alone in the House. He quite agreed with his noble Friend that a supply of officers in the Presidency of Madras was much needed. The Government had laid hands on every officer they could, but it was impossible to get a sufficient number of officers of the Indian Army speaking the language of the famine districts. Every officer on furlough in this country had been laid hold of and sent to India to assist the Government in relieving the distress. It was perfectly true, as the noble Earl further pointed out, that in the Spring of 1876 the Indian Government borrowed a sum of money considerably in excess of what they had stated would be required. They were perfectly sensible of the inconvenience of the operation, but they were driven to it by the pressure of the silver famine which then prevailed. The same circumstances, however, were never likely to recur, and he did not anticipate that the particular inconvenience alluded to would ever again arise. With regard to the question of military expenditure, he could not help admiring the—what should he say?—the courage of his noble Friend. Before being Viceroy his noble Friend was connected with the War Office in this country, and it was precisely to the noble Lord's (Lord Cardwell's) administration that the increase in the military expenditure which his noble Friend now so justly deplored was due. The Indian Government had been in a perpetual state of feud with the War Department ever since the noble Lord (Lord Cardwell) was in Office; but he hoped some satisfactory means of adjusting their differences would soon be adopted.

Motion agreed to; Bill read 2a; Committee negatived; and Bill to be read 3a To-morrow.