Sitting of 13 August 1860

MINUTES.
NEW MEJIBEK SWORN.—For Sligo Borough, Francis Macdonogh, esquire.
PUBLIC BILLS.—2° Customs (No. 2); Defence of the Realm; Law and Equity.
3° Spirits.

THE INDIAN ARMY—QUESTION.
SIR DE LACY EVANSasked, Whether the Secretary for India would have any objection to communicate to the House the names of the Commissioners appointed to consider the question of the amalgamation of the local force in India with the Queen's

1181
troops, and also the letter of instruction furnished to the Com mission on that subject?
SIR CHARLES WOODsaid, it would perhaps he satisfactory that he should state at once the names of the officers composing the Commission which had been appointed to consider the various details connected with the amalgamation. In conversation with a distinguished Indian officer it had been suggested to him that it was far better that a mixed commission of officers should meet for the purpose of considering these details. He was fortunate enough to obtain the services of his noble Friend (Lord Hotham) to preside over the Commission, and the officers who composed it were Sir Charles Yorke, General Clarke, of the Madras am, Brigadier-General Russell, who served in India (not my hon. Friend who is a Member of the House) Colonel Wetherall, Colonel Melville, Adjutant-General of the Bombay Army, and Colonel Norman, Deputy Adjutant-General of the Bengal Army. These officers were working satisfactorily together, and great benefit would, no doubt, arise from their united consideration. With regard to the minute of instructions be thought there would be no advantage in laying it on the table. It was intended that the committee should inquire into the various questions which would arise, paying due regard to the just claims of Indian officers, and providing at the same time that the arrangement should be carried out as economically as possible.

INDIAN BUDGET—EAST INDIA LOAN.

  COMMITTEE.
  Order for Committee read.
  House in Committee.
  SIR CHARLES WOODsaid: A year ago, or thereabouts, it was my duty to lay before a Committee of this House the best estimate which I could then give of the Indian revenue and expenditure. Since then two events have happened which materially affect the statement which I shall have to make to-night. One is that a gentleman whom we all know, Mr. Wilson, has proceeded to India to aid with his financial knowledge and experience the Indian Government in their measures of fiscal administration, and in the endeavour to bring the finances of India into a sounder position. The other event is that the Indian Government, aided, no doubt, by Mr. Wilson's experience, have proposed, and by this time, I have no doubt, have carried
  1182
  into law the most important financial measures which have for some time been brought forward in India. The statements which Mr. Wilson has made, very much like those of the Chancellor of the Exchequer in this country, and which are among the papers printed for the use of the House, arc so clear and full that I might almost dispense with any but a very short summary of them. On the other hand, the proposals of the Supreme Government have excited great criticism and great opposition, and have led to a controversial correspondence with the other Governments in India. The diversity of opinion and of statement is so great that it is not very easy to unravel the web, and it would be still more difficult to put the whole controversy before the Committee. It is not necessary, however, to do so; and I hope I shall be able to state the results, and to make them clear in no very great compass. The correspondence on the table is almost entirely that which arose between the Government of India and the Government of Madras in reference to these measures. They were laid on the table in connection not only with the proposed financial measures, but with the recall of Sir Charles Trevelyan. Upon that subject I hope it is utterly unnecessary to say a single syllable. In the whole course of my public life I never had so painful a duty to perform, and I regret exceedingly that necessity, for I believe it has deprived the Presidency of Madras of the benefit of services which would have been invaluable. I had the pleasure of seeing Sir Charles Trevelyan this morning, and he promised to give me every information and assistance in reference to the Government of Madras; and I should not be doing justice to him or to myself if I did not take the earliest opportunity of expressing my grateful sense of that assurance. In addition to the correspondence on the table, there is a letter from the Government of Bombay—a Minute of Lord Elphinstone's—and an answer from the Government of India. The papers would, I think, have been incomplete without those two documents, and, in fact, they were almost necessarily included, as they are referred to in the Minute of the Madras Government. Here, again, I cannot help saying what a loss to India and to this country has been the death of Lord Elphinstone. No man had greater experience of Indian administration, under ordinary circumstances, and when the late mutiny called for more energetic action, in no

  1183
  respect was he wanting to the emergency. I can only say that his is a loss which this country, equally with India, must greatly deplore. Having paid this tribute to his memory, I will only say that in addition to this voluminous correspondence there are the ordinary finance accounts of India, with an explanatory despatch; and beyond that there is a paper which is still more material than any—a comparative account of revenue and expenditure for the last five years. There are some differences between the finance accounts and the figures contained in that paper, but the comparative account is compiled from more recent information, and contains some items which are not in the other accounts. Before, however, I go to the expenditure and income of the year, I wish to refer to the deficits of the last two years. I have been sometimes accused of taking too gloomy a view of Indian finance. I can only say my sole object has been to present to the House and the country the most faithful accounts in my power to produce. I stated last August what I estimated the deficit of the years ending April, 1859, and April, 1860, would be. I was wrong, no doubt, both as to revenue and expenditure. The revenue has been larger and the expenditure has been larger than I anticipated, but the two have so far kept pace together that the deficit is as nearly as may he what I stated. I estimated the deficit of 1859 at £14,707,000, whereas it was only £14,187,000. For the year ending April, 1860, I put the deficit at £9,281,000, while it was actually £9,981,000. Payments are sometimes thrown from one year to another, which prevents a perfectly accurate estimate; but while my estimate of the deficits for the two years was £23,988,000, the actual amount was £24,163,000, there being only a difference of about £180,000. The close agreement is, of course, to some extent accidental, but I think I may take credit for having formed no inaccurate estimate, and for not having exaggerated the unpromising state of affairs. I now come to the present year. The expenditure in 1859–60 was £45,890,000, and the income £37,796,000, leaving a deficit of £8,094,000. To that is to he added the guaranteed interest upon railroads which amounted to £887,000, making a total deficit of £8,981,000. The expenditure for the year 1860–1 is estimated at £43,958,000 and the income at £37,762,000, leaving a deficit of £6,196,000, to which is to be added the
  1184
  guaranteed interest upon railroads, which has this year increased by £400,000, and amounts to £1,276,000, thus increasing the total deficit to £7,472,000. It seems to me that the mere statement of these figures is enough to dispose of the controversy which has been carried on in India and completely overthrown the opinion of the Government of Madras, and of that of Bombay, that is, that the whole deficit might be made good by a reduction of military expenditure. When I show the Committee that the deficit is £7,400,000, it can be conceived how difficult it would be to get rid of such an amount by a reduction in the military expenditure to that extent within the year. The military expenditure for the year is estimated at £15,276,000, and deducting from that amount the supposed deficit, there would remain in round numbers £8,000,000, which sum would be £3,000,000 below what the military expenditure was in the year he-fore the mutiny. No one can he sanguine enough to expect that our military expenditure can be reduced as low as it was before that mutiny, now that a large additional European force must inevitably be maintained under the altered circumstances of India. In the Estimates upon the table the proposed reduction in the military expenditure is about £2,600,000, and if we were to add to that the amount of the deficit a reduction of no less than £10,000,000 must be made in the military expenditure at the end of this year. Will any one maintain that that will be possible? That Estimate is made by the Government of India, not upon any hypothetical notion of their own, because they had received the actual estimates of reductions from the Governments of Madras and Bombay. The reduction proposed by the Government of Bombay is £655,000, by Madras £591,000, while reductions by the Government of Bengal swell the total amount to £2,600,000. This question of what reductions in the military expense can be expected is not a question upon which we are without experience, as attempts were made last year to make reductions, and the greatest pressure was employed to enforce them. The Government of Madras however, last year reduced its expenditure by only £330,000, but that of Bombay was actually increased by £197,000. There was a larger reduction in Bengal, where, of course, it was more natural to expect it. In the last and the present

  1185
  years there will be a total reduction of military expenditure of £6,000,000—namely. £3,400,000 in 1859–60, and £2,600,000 in 1860–1; and I am not sanguine enough to think that reduction can be carried much further within the year. That is the state of affairs for the present year, but we must, of course, look beyond and see what are our prospects of reductions in future years. I have always taken the year 1856–7 as a pattern year. It was the year immediately preceding the mutiny, when there were no additional expenses, and when the income and expenditure in India were about equal. Starting from that year I find that the military expenditure has increased by £3,785,000. For local corps there is besides an increased sum of £333,000, and for transport £141,000. Then there is an increased home charge for payment in this country, on account of troops £1,195,000—making a total of £5,454,000. But in looking at this question we must include the police, which has necessarily been increased to a considerable extent. Since 1856-57 the increase in the police has amounted to £1,024,000, so that taking military and police together the increase has amounted to £6,478,000. Then there has been an increase of expense for barracks during the last four or five years. It is not necessary in regard to Native troops to have this kind of accommodation, as they provide for themselves after their own fashion, but in the case of European troops it is not reasonable or fair that we should send them to India without providing for them such barracks as are necessary for their health. It has been thought right, too, to construct the barracks in such a way as to make them capable of defence—to make them fortified posts to which in cases of emergency the women and children, and invalids, might retire. This naturally entails considerable expense, though it is an expense that cannot last more than a year or two. But though this expense has increased from £374,000 in 1856–57 to £1,827,000 in 1859–60, there has at the same time been an almost perfect stoppage of expense on account of civil public works and buildings, and, therefore, though I anticipate a considerable reduction in regard to military buildings in the course of the next year or two, I do not expect any reduction whatever in the total expenditure for public works. There has been, as I have stated, a great increase of expense in military buildings
  1186
  that will be stopped in the course of next year, but the saving thereby effected will be counterbalanced by the increase that will take place in civil public works of various kinds which are most urgently required in all parts of India. There will be a transfer from the military to the civil expenditure, hut the charge on the Indian revenue will not be diminished. There has been since 1856-57 an increase in the cost of collection of £476,566; civil and political establishments, £508,361; judicial establishments, £163,625; public works, £452,732; miscellaneous, £124,573—making a total of £1,725,857. There is another item of increased expense—the interest on the debt. Before the mutiny took place the debt was £59,442,000, and the interest £2,525,000. In 1859–60 the debt is £97,851,000, and the interest is £4,461,000, being an increased charge for interest of £1,936,000. Beyond that there is an increased charge for what is called guaranteed interest on railways. In 1856–57 the amount of guaranteed interest was £404,000; 1857–58, £526,000; 1858–59, £606,000; 1859–60, 887,000; 1860, £1,276,000; being an increase of £872,000. The sum total of all these increased charges since 1856–57 is military, £5,454,000; police, £1,024,000; civil, including buildings, £1,725,800; interest on debt £1,986,000, out of interest guaranteed to railways, £872,000—making a total increase of £11,011,800. The revenue has increased-partly from the old sources and partly from additional taxes, to the extent of £4,400,000. A large portion of the arrears due subsequent to the mutiny has been paid up, but I do not anticipate more receipts from that source; and, after as fair and impartial an estimate as we can make of the entire revenue and of the expenditure, the result arrived at is that we shall have a deficiency for 1861–62 of about £6,611,000. Then comes the question how is that to be met? Are we to borrow? I think not. I am of opinion that to leave the Indian Government the power of borrowing, as has been the practice on open loans, would hold out the greatest temptation that can possibly be offered to a wasteful expenditure. It has always been found to be so, and therefore it is the last step that ought to be taken if it is wished to promote economy. This House has resolved, very wisely as I think, not to guarantee the payment of any part of the Indian debt, but to throw the Government of India entirely upon its own

  1187
  resources. That being so, and when they are made to feel that they are themselves responsible for every shilling of their expenditure, they will find in it an inducement to economize in their outlay as far as possible. I am satisfied that these two considerations—the knowledge that they have not the power to borrow, and that they are responsible for their own expenditure—will go very far to render the Indian Government cautious of imposing any unnecessary charge on the revenue of India, and to produce the most rigid economy. Then, if we are not to borrow, there is no other resource but to impose additional taxation. I have explained to the House that I am speaking of that which I believe is possible for the next three or four years; and I must repeat my conviction, after careful examination of the whole case, that it is impossible to effect any such reductions of expenditure as would meet the deficiency of the revenue. We must, then, have recourse to taxation, and the question is, what ought that taxation to be? On this point the most various opinions have been pronounced. Just to take one instance, we have been often told how foolish it was to look upon the revenue from opium as an uncertain revenue, and that we were entitled to reckon it as a perfectly certain source of revenue. That assertion, however, made last year, has this very year received a signal contradiction, for the Government has been obliged to increase the price paid/or opium. They anticipate a reduction of the receipts from that source of £300,000 and an increased charge of £275,000, so that the amount of revenue received from opium will be £575,000 less than last year. I think we ought not to rely on such a source of income. A good deal has been said about Mr. Wilson visiting India with English notions, and about his having started a scheme of taxation that no one in India ever heard of before. If hon. Members will look to the papers, they will find that this question of raising a further income in India was under discussion for about a year before Mr. Wilson's arrival. The first of the papers on the table of the House will show that the whole question of the system of taxation necessary to supply the deficit was discussed during the whole spring and summer of 1859, and that a Bill was introduced into the Legislative Council for a licence tax, which wa3 more or less of an income tax, in the summer of 1859. During the whole of this discussion an income-tax in some form or other was
  1188
  more or less contemplated, and the opinion of the Madras Government upon that subject is given. It will be found also, by reference to the papers, that although the Government of Madras objected to any additional taxation at all, yet Sir Charles Trevelyan said that if the time ever came for the imposition of such additional taxation, an income tax, and not a licence tax, would be the best method of raising the revenue. As soon as Mr. Wilson arrived in India he went up the country to join Lord Canning, and with his full concurrence and approbation it was determined that the new taxation should be that which has been proposed—an income tax, with the addition of a duty on licences to trade, and a duty in some shape on tobacco. This was not done without communication with the officers of the Government in the various Presidencies; and, with the fullest concurrence on the part of the other Members of the Government in India, with the approbation of the Governor General. After the fullest consideration and discussion, the Bills were put substantially into the shape in which they now stand. I am not aware that any other course was open to the Government than that which I have described. I attach great weight to the opinion of Sir Bartle Frere. He was not an officer of the Bengal Government. He came from Scinde and Bombay to Calcutta with the conviction that additional taxation was not necessary in India, and that by a reduction of expenditure the Indian deficit might be met. Sir Bartle Frere was, however, unprepared for the state of things that he found at Calcutta, and, unwilling as he was to admit that reductions could not be made, and that taxation was necessary, he was compelled to admit that no other alternative than the levying of new taxes was open to the Government. Sir Bartle Frere said—
  "I therefore assented to Mr. Wilson's schemes not as free from difficulty and danger, but as less open to objection on that score, and far more complete and effectual for their purpose, than any which had been offered. I believe that I rate the risks much higher than he does; but I am convinced that the risks are as nothing compared with the certain ruin of drifting into bankruptcy, or remaining as we are."
  He also stated that the notion that the taxes proposed were alien to former practice in India, was unfounded. He stated, on the contrary, that taxes of the same character, but not so fair in their incidence,

  1189
  had been constantly imposed and paid in India. In another Minute Sir Bartle Frere said:—
  "No notice has been taken of the fact, that during the present discussion no scheme of fresh taxation has hitherto been propounded by any one, Native or European, which would bear a moment's examination, which has not included some form of direct taxation, all more or less partial, inadequate to our wants, or otherwise more objectionable than that selected by Mr. Wilson; but all direct taxes, and generally, in some form more or less cumbersome, taxes on incomes—such taxes, in fact, being from the earliest times component parts of all Native schemes of finance. It seems to be forgotten that up to 1834-6 taxes on incomes, trades, and professions were levied almost universally throughout British India, under various names, and that they were then abolished in parts of Bengal and throughout the North-Western Provinces and Bombay, not because they were in theory bad taxes, but because they were so unfairly assessed and unequally levied, that it was difficult to reform them in their then existing shape."
  The Indian authorities felt that, much as some persons objected to the income and licensing tax, no one had proposed a scheme of taxation at all adequate to the necessities of the case, or which would not have left us drifting into bankruptey. That being so, they took the greatest pains to gather information from the greatest number of persons; and after giving the subject the fullest consideration, the Government of India, without a dissenting voice, determined on adopting the system of taxation of which I am now speaking. I confess I thought the low point at which the income tax began, a great objection to the scheme. Mr. Wilson, however, informs me that in India no complaint was made on that score, and that a person in the receipt of an income of 200 rupees, was very much in the same position as a person having £100 a year in this country. It was also felt that if the limit were raised, the tax would be altogether unproductive. It was thought by some that it pressed rather hardly upon the smaller landholders; but, with the alterations and amendments adopted since its introduction, the Indian Government consider that it will not press hardly at all upon leaseholders for twenty or thirty years, whom they wished to see pretty well exempted from the tax. In the Presidency of Madras there are 1,518,187 landholders, only 1,800 of whom would pay the tax, if assessed at half the amount of the rent paid, So that, out of the 1,518,187 holdings in that Presidency, not less than 1,516,387 persons would be exempt from payment, if assessed at one-half the rent. It is now proposed that the tax shall be
  1190
  levied on one third, instead of one-half the rent; which, in the Presidency of Madras, will reduce the number of those who pay the tax to a much smaller number. We hear from the Punjab, and various parts of India, that there will not be the smallest difficulty in raising the tax. I am not aware whether hon. Members have seen a letter addressed to Mr. Wilson by the Rajah of Burdwan, the largest landholder in Bengal. He sees the value of the rule of Great Britain, in the protection given to life and property; and declares that the Natives of India, who derive so much benefit from that protection, ought not to object to pay so small a percentage of their incomes for this purpose. Such a declaration is highly to the credit of the Rajah of Burdwan; and I trust that in these sentiments the Rajah only represents the large zemindaries and landholders of Bengal. It has been frequently said that the mercantile classes, both European and Native, ought of all men to contribute to the wants of the State, considering the benefit they derive from our rule and the protection they enjoy. The result of the taxation now proposed is, that the small landholders will escape; that a small number will pay; and that the tax will be paid, as it ought to be, by the richer landholders and the mercantile classes, who have hitherto paid nothing to the revenue. The licence-tax also presses on the latter class, which, in fact, derives the greatest benefit from our rule, and contributes the least to its expenses; and for it, I think, the least objectionable shape has been selected. Within the last few days one of the strongest opponents of this system of taxation has confessed to me his opinion that, if taxes must be imposed, they have now assumed their least objectionable form. I think that the many Amendments which have been introduced into the Bill, have placed the taxes in the shape in which they can best be levied. Of course I am bound to admit that I contemplate the new mode of taxation with some anxiety; but, considering the circumstances of India, and seeing that no other alternative has been proposed, and that unless we are prepared to raise additional revenue for the purposes of the country, we must proceed in the ruinous course of incessant borrowing, I feel we can do nothing better than give our cordial support to the Government of India, who are directly responsible for the administration of that Country, and who, being on the spot and in the midst of the people, have the best means of judging

  1191
  what taxes it is possible and expedient to levy. I have the strongest conviction that the less this country interferes in the affairs of India, the better they will be administered. We have frankly told the Government of India what our opinions on the question were; and are now prepared to give them our cordial support in carrying out the determination they have formed. The nest point I come to is the probable produce of the tax. It is very difficult, of course, to estimate with any certainty the produce of any new taxation. The Government of India expect that no very large sum—probably not more than £1,000,000 i—will be raised during the present year; and that £3,500,000 will be obtained in 1861-2. Deducting this amount from the deficit which I have already mentioned, we shall still have in 1861-2 a deficit of upwards of £3,000,000. I am in hopes, however; that the Government of India, by making, as I have no doubt they will do, an earnest effort, will be able to make a still further reduction in the expenditure for 1861-2; which is obviously indispensable, if we are to equalize our income and expenditure. There is, unquestionably, Considerable scope for reduction.
  I have said that I do not think the Civil Service expenditure can be diminished, but there are various branches of the military expenditure in which a saving may possibly be effected. The military expenditure of 1860-61, exclusive of building, may be estimated at £17.000,000, and the police at £2,000,000. These must be taken together, for any increase in the one would lead; to a certain extent, to a reduction in the other. We have here an expenditure of £19,000,000, in which it will be very hard indeed if we cannot effect a reduction of £3,000,000, or even more than that, in the Course of the year. With that reduction and the increased taxation I think there is a reasonable prospect of placing the income and expenditure on an equality during 1861-62, or at any rate in the following year. The ordinary sources of revenue show marked symptoms of improvement, and in the course of three or four years I hope the ordinary income will meet the ordinary expenditure. That can not be, done at present, however, unless there are some extraordinary resources to draw upon; and it is as clearly demonstrated as any matter of finance can be, that additional taxation, to at least the amount which we expect will be derived from new taxes, is indispensably required at this mo-
  1192
  ment. The prices of produce I am glad to say are rising, and the wages of labour in all parts of the country are higher than they ever have been. In Madras there is abundant employment for every one; and Sir Charles Trevelyan tells me that the men of some disbanded troops have found there higher wages than in the army. This is very remarkable, as formerly men in the military service were held to be in a much better position than others. These circumstances indicate an improvement in the condition of the people, and consequently an increased power of consumption. Therefore I think I may fairly say that there is every prospect, in the course of time, of a reduced expenditure and an increased income. The more immediate question is how I am to provide for the deficit of this year? I am glad to say that I shall be able to do so from the balances in the Treasury, without bringing them below what both the Indian and home Governments deem to be safe. It may be asked, then, why I propose to take any power of borrowing? My answer is, that I depend in a great measure for the means of defraying my home expenses, on the sums to be paid in by the railway companies. We receive into the home Treasury all the sums paid by them. The expenditure in India for railway purposes is provided out of the Indian treasuries, and I apply to disbursements here, the sums which would otherwise be sent to India for that purpose—instead of receiving remittances from India. If the railways pay all they ought to pay, then I shall not require a single shilling additional. There may, however, be some deficiency on their part, and it is to provide against that that I propose to take the power of raising, if it should be necessary, a loan of £3,000,000. In the course of this year the Railway Companies ought to pay in £7,000,000. Of that amount between £4,500,000 and £5,000,000 will, we expect, be expended in India for the construction of railways. What is not disbursed in this country; and would, if the Indian Government did not, defray the expenditure on railroads in India, be sent to India to defray railroad expenditure there, is left in the Home Treasury, and it is on this balance that I depend for meeting the home expenses. I have,however, thought it wise and prudent to take powers to raise £3,000,000, in case the railway companies should happen to pay in less than I now anticipate. I hope and trust that the railways will provide the full

  1193
  amount required, and that I shall not need to avail myself of the borrowing powers which I now propose to take by way of precaution. The Resolution which I shall place in the hands of the Chairman is a general Resolution, but in the Bill which I shall introduce I shall insert a clause limiting the power to raise money to£3,000,000. With regard to the Customs duty, which is to be at the uniform rate of 10 per cent, I have not heard much complaint of the rate of duty, though it is very odd indeed if some of those who have to pay do not complain of the taxation. The objection which the hon. Member for Sheffield has taken is opposed to the view of Sir Charles Trevelyan, who says—
  "The circumstances that the new advantages conferred by the arrangement are in favour of the European interest is an additional reason for distrusting our first impressions. In both points of view the arrangement is singularly advantageous to the European mercantile interest in this country."
  The objection principally urged is not so much to the amount of duty as to the valuation on which it is assessed. Several representations were made to me on the subject by deputations from manufacturers, and to all of them I have drawn the attention of the Indian Government. Among others it was stated that the system at Calcutta is not so fair as that pursued at Bombay, where the duties approximate more nearly to what they profess to be—namely, ad valorem duties. It is the intention of the Indian Government to call on civil servants at Bombay and Madras, as well as representatives from the Chambers of Commerce, of Calcutta, Madras, and Bombay, who are well acquainted with the matter, to meet at Calcutta for the purpose of devising such a system of valuation as shall be as nearly as possible equal and uniform. With regard to the paper currency, I am afraid that in Calcutta, as well as here, a great deal of time has been taken up in the discussion of financial subjects, and that from that cause the measure has been delayed. As far as I can learn, the proposal has been favourably received in India, and I hope before long to receive from Calcutta the Bill which has been introduced for that purpose. It will no doubt be a great convenience and advantage to trade, and at the same time, by facilitating the transmission of money from place to place, it will remove the necessity of large balances being held in the 365 treasuries which exist in India, The
  1194
  railroads are going on, upon the whole, very satisfactorily in India. We hope that by the beginning of next year 1,200 or 1,300 miles will be open for traffic. Some of the works are very heavy, and render necessary a large expenditure. A very able Report has been laid on the table, which gives the fullest information on this subject. In order to complete the railways £52,500,000 will he required. The amount authorized to be raised is £36,500,000. The amount paid up is £29,500,000, and the amount exnended is about £28,000,000. Of the £29,500,000 which has been raised £25,250,000 has been raised by shares, and £4,250,000 by debentures. The traffic returns are, so far, very good, and when it is remembered that none of the lines are open between substantial termini, there is every reason to believe that, when great towns become the termini of the railroad lines, the returns will increase far beyond the ratio of distance on the lines now in operation. The electric telegraph extends nearly 11,000 miles. The submarine cable appears to be subject to a great number of accidents; and, although on one occasion a message was received in six days from Calcutta, communication has been interrupted by an accident, to which I fear the cable will be very liable in the Red Sea and on the coast of Arabia. A line will shortly be laid down between Calcutta and Singapore, which will very much shorten the time necessary for communication with China. The civil public works have been very much at a stand-still during the mutiny. Many of them were interrupted because it was necessary to draught off the officers superintending them to military duties, and since then the officers have been employed on military public works, the necessity for which has been more pressing. But I trust the necessity has passed away, and that we shall be able to revert with increased vigour to the civil public works, and to which I attribute the greatest possible value, as tending to benefit the resources of India. The works which are being proceeded with in the Punjab are the BareeDooab Canal, the trunk road to Peshawur, and the Attock tunnel under the Indus. The last promises the greatest success, and when completed, will be a very wonderful work. In Seinde the irrigation works are going on, and an expenditure has been authorized which will open up canals throughout the Province. These works are being carried on as fast as, is consistent with the non-disturbance of the

  1195
  labour market. The harbour at Kurrachee and the works there are in course of improvement. In Bengal 17 roads are under construction, 450 miles long, which will be feeders to the railroads; and a new town is being created at Mutlah. The Orissa works, for saving Cuttack from the violence of the Mahanuddy, and utilizing the waters of the stream, are works which the Madras Irrigation Company propose to undertake without any guarantee. Negotiations are not quite concluded, but if they do not undertake it we shall do it ourselves, and in one way or the other it will certainly be done. The Grodavery works are delayed for negotiations with the Nizam. If we are to respect the rights of Native Princes we cannot take possession of the banks of a river running through their territories without previous arrangement, although we may propose to improve them. I do not anticipate any objection in this instance, but we must make such arrangements as will entitle us to effect the improvement with the Nizam's concurrence. In Southern India two roads are ordered through the Eastern ghauts to effect communication between the cotton districts and the port of Sedashevaghur. Gogo will soon be connected with the cotton-growing districts of Ahmedabad, and the anchorage improved. We have also sanctioned the proceedings of a Company formed for constructing docks at Bombay. I am not aware that I have anything more to say on this important subject, but I must pay a tribute to the course, which Lord Canning has been pursuing in Upper India, by which a revolution, as I hope and believe, will be effected in the feelings Of the higher classes. I do not mean to underrate the conduct of those who have hitherto administered Indian affairs in reference to land settlements and matters of that kind. They have invariably been actuated by benevolent and beneficent intentions, but somehow or other they have not succeeded. The ryotwar system was introduced in Madras with the belief; that it was calculated to promote the welfare of the people. We introduced what is called the village system in the North-West Provinces, and considered it as a vast improvement on anything that had been done before, and on our taking possession of Oude we introduced it there. In the North-West Provinces the result was the utter destruction of the.old landowners. In truth we thought we were I conferring a benefit on the vil
  1196
  lagers by emancipating them from the oppression of the Talookdars. In the North-West Provinces the result was that the property of the landowners was sold up and got into the hands of the great money dealers. During the mutiny the people rose up and turned out the legal owners, and re-installed the old hereditary landowners. In like manner the villagers in Oude rose against us, under their talookdars, who, in many cases, had exercised the greatest cruelty and injustice towards them. On the whole, however, they preferred the former system to that which we introduced. The mistake we fell into, under the influence of the most benevolent feelings, and according to our notion of what was right and just, was that of introducing a system foreign to the habits and wishes of the people. A curious result of what was called the confiscation of Oude was that, whereas we thought that it had been proposed to confiscate the talookdar system in favour of the village settlement, the latter has become confiscated, and the property is reinvested in the talookdars. Lord Canning has carried that system a little further, and has enlisted on his side the feeling of the landowners. He has invested the talookdars with magisterial powers to a certain extent, and the report of the Commissioner at Oude states that they undertake these duties with alacrity, and show a disposition to exercise the powers with which they are invested, and to administer justice with great impartiality. It is exceedingly gratifying to find that these persons exercise their responsible functions in so satisfactory a manner, and I hope this course of proceeding will have the effect of attaching the landowners of the country to our rule. A similar system has been carried into effect, but only to a certain extent, in the Punjab, where Lord Canning proposes to invest the Sirdars with the same magisterial powers. A further step has been taken in assuring a great number of chiefs in the northern part of India that we recognize what is called the right of adoption. The manner in which certain properties had been taken possession of has told very much against us. Lord Canning assured several of the great chiefs that, in the event of their dying without heirs, adoption, according to the customs of the country, should be recognized. He has proposed to carry this a great deal further, and to give to the generality of the chiefs the same assurance, anticipating, and I believe truly, the most beneficial

  1197
  effects from such an announcement. He says that unless something of this kind be done you cannot depend on the attachment of the people. It is necessary to attach them to us, and to make them feel that they would lose and not gain by a change of rule in India. If the result he anticipates should be attained it will be very much easier then to withdraw some of our troops from those places where our rule would be exercised over a well-disposed and contented people of all classes, and not merely the masses, who certainly showed no indisposition to our rule during the late mutiny, for the only districts where the population took part in the mutiny were those in which the brothers, sons, and relations of the mutinous Sepoys dwelt. But I hope that by the measures now adopted we shall soon se cure not only the passive but the active attachment of the people. Under these circumstances, I trust that India may by the blessing of Providence be preserved in peace, and that we may look forward in time to the improvement of the country, and to the application of English capital, which is necessary to the development of its resources, by which I believe that the finances of the country may be restored to a healthy and prosperous state. The right hon. Gentleman concluded by proposing the Resolution, which he had explained in the course of his speech.
  MR. DANBY SEYMOURsaid, that as far as the financial part of the right hon. Gentleman's speech was concerned he had never heard a more unsatisfactory or unfair statement. The right hon. Gentleman stated that the lowest point to which the Government of India could reduce the deficit for the year 1860-61 was £7,000,000; whereas Mr. Wilson, in the Council at Calcutta, showed that the deficit might be reduced now to £5,700,000. It was true that Mr. Wilson did not get down to that figure until he was hardly pressed by Sir Charles Trevelyan, who had shown that the military expenditure of the Madras and Bombay Presidencies might be reduced within the present financial year by upwards of two millions, and before the end of the following year by another million. A very small de crease had been taken into account, and not the very large decrease which Lord Elphinstone and Sir Charles Trevelyan spoke of. How was it that Lord Elphinstone was regarded as a high authority when he spoke in favour of amalgamation, and as no authority at all when he pronounced against
  1198
  the plans of Mr. Wilson? Both Lord Elphinstone and Sir Charles Trevelyan stated that our expenditure in India need not be greater after the mutiny than it was in 1856. It was true that they did not go into details, because they had not the accounts, but they should not on the statement of Mr. Wilson impugn the testimony of the Governors of Madras and Bombay. It was said by Sir Charles Trevelyan that the delay in effecting a reduction of expenditure was caused by the sluggish action of the Supreme Court, and the Commander-in-Chief also stated that they could reduce the army if the Supreme Court would take up the question of the police, and get the police to do duty performed by the army of Madras. But the Supreme Council kept the project for a police force before them for another year, and that was the real cause of the army of Madras not being reduced, as had been anticipated by Sir Charles Trevelyan, and also by Sir Patrick Grant. The right hon. Gentleman put down the police at £2,000,000, but Sir Charles Trevelyan declared that the police necessary for the Presidency of Madras, with its population of 30,000,000 would not exceed £123,000, or at the utmost, 143,000 a year. Sir Charles Trevelyan was supported in that statement by the chief of police, and he went into details to show that for, at the most, 140,000, they would have one policeman for every thousand inhabitants. He (Mr. D. Seymour) would therefore ask the right hon. Gentleman how it was that that estimate was put so high. It appeared that the Supreme Council were making an effort to keep up this enormous expenditure to the highest point, instead of reducing the expenditure to the lowest amount. The Budget of the right hon. Gentleman, therefore, was unsatisfactory, as he had failed to show that he had used to the utmost his endeavours to keep down the expenses in India and in this country to the lowest point. Sir Charles Trevelyan said that having visited all the Indian presidencies, served twelve years in Bengal and Upper India, and made Indian affairs his study all his life, he was of opinion that the military expenditure might be reduced to £11,500,000, the standard before the mutiny, with great additional security to our position in India. He went on to say that Mr. Wilson had not only overestimated the sum which the army need cost, and which was believed by responsible persons to be necessary, but that he had under-estimated our resources in India for

  1199
  the future. The amount of the estimated increase in the revenue for 1860-1 was, in his opinion, much too small; and Sir Charles declared that if real protection to life and property were established in India by an adequate system of police, the magnificent valley of the Ganges alone would yield a greater revenue than the whole of British India now produces. He could not find that in his military estimates Mr. Wilson had ever counted on a sufficient reduction in the armies of the minor Presidencies, but Sir Patrick Grant said that several regiments might be disbanded were it not for the apprehension of a rising of the population of southern India in consequence of the imposition of the three new taxes. What better authorities could they have than the men who had been charged with the superintendence of the military and civil resources of the country? They showed the great decrease that might be effected by the cutting down of the military expenditure, if the Government did not harass the people by the imposition of new taxes, and surely they knew as much about it as the secretaries in Bengal, who were not responsible for anything.
  The right hon. Gentleman said that £1,500,000 would be required this year for building barracks and forts for the reception of women and children, and it appeared from the Estimates that a similar amount would be required next year. That was equal to what the Government asked for to fortify Great Britain. But there was no security that that expenditure would not be continued from year to year. He should wish to know whether the whole question of fortifications in India had been considered by the right hon. Gentleman, and whether he had inquired into the best points for establishing forts. M. Brialmont was now occupied upon a great general work upon fortifications, and had specially considered the case of India. When such an enormous expenditure was contemplated surely the whole subject should be considered, and the best authorities, British or foreign, should be consulted. The right hon. Gentleman spoke of "many places," but the highest authorities in India were of opinion that the forts for the reception of troops and the protection of the helpless portion of the European community should be as few as possible. But in order to carry out this military expenditure the outlay for civil works had been stopped. He regarded it almost as a crime to discontinue works which produced from 40 to 600 per
  1200
  cent interest upon the outlay, when, as Sir Charles Trevelyan said, "if we sowed water we reaped gold." He regretted that the plan suggested some years ago by the Marquess of Dalhousie had not been carried out—that they had not come to that House for a loan for public works, and keep a separate account of such advances, and then their system of borrowing would not be looked upon by strangers as a sign of the weakness of the empire, but of prudence and wisdom, when they raised money in that way, instead of burdening the people with increased taxation? Before the mutiny, three millions a year were laid out on those works, and two millions during the mutiny. Now, these sums should not have gone into the general account, but a separate one; and if it were publicly known for what purpose this money was raised, the result would be favourable to the Government.
  Again, with regard to railway shares. They had guaranteed shareholders to a large amount. Never had fifty millions been better laid out than in making those railways. They had guaranteed, from the time the money was subscribed, an interest of 5 per cent. That had amounted to about half a million, and in future years would reach a million. Now, instead of taxing the people to pay this million; instead of putting on a tax for five years, as it was said, but which, from what they knew of the income tax in this country, was likely to be permanent, and which, he was prepared to contend, should be made permanent; that money was a fit subject to be paid from a public works loan. With regard to the paper currency, he believed it would be of the very greatest advantage to India. A paper currency was spread all over Russia, who paid her troops in Asia by that means, and found it to answer. He had always advocated the introduction of a paper currency; and he was glad that at last they were on the eve of seeing it established.
  He would also call the right hon. Gentleman's attention to the desirability of expending the money proposed to be laid out at Galle, in providing a port near Cape Comorin; and would refer him to the plans prepared by Colonel Cotton upon that point, whose estimates ought to be laid upon the table. Again, there was a charge for making a road to Sedashevaghur; but a road would be of small use compared with the benefits which a short extension of the railway to that place would produce.

  1201
  The right hon. Gentleman had spoken of the land sale, the questions of police, and of trusting the Native gentry. These were matters which all persons taking an interest in India had always advocated, and which had been pressed on the right hon. Gentleman for seven years. He had been struck by an observation of Mr. Campbell, the author of an excellent work on the resources of India, who replied to a question which he had asked, "Why not promote the Native gentry to high offices?"—that there were none of them left. And when he (Mr. Seymour) said, "How is that? In former times we read of their having been employed by the Duke of Wellington?"—Mr. Campbell said, "Our system has been to destroy all the upper classes in India; we have left merely the ryot and an aristocracy of civil servants." He was glad to hear that they were now going to restore those gentlemen to that place in the Native society for which God intended them. With regard to the land question, the noble Lord, the Member for King's Lynn, was the first Minister who took that view which he (Mr. Seymour) had always believed the right one; and which was, that they never would have a rich people, or a prosperous state of things in India, until they sold the fee-simple of the land. The noble Lord ordered the fee-simple of the land to be sold in certain cases; and Sir Charles Trevelyan was the individual who had done most in carrying out those orders.
  He should like to make one or two observations upon the accounts. Last year the military expenditure of India was nearly three-fourths of the whole net revenue; but if they wished the country to be really safe from bankruptcy, it was absolutely necessary to insist that that military expenditure should be enormously reduced. He saw a very considerable sum for the ecclesiastical establishment; that is, for the maintenance of the clergy of the Etablished Church. The amount for all India was not less than £125,000; and that sum was quite separate from that for the establishment of chaplains. The promotion of Christianity in India had gone on separately from the chaplains; and he might almost say, with reverence, separate from the Bishops; and it was well known that the most efficient teachers of God's Word in India were missionaries, who lived generally on £100 a year and under, while the chaplains had six times that sum. He strongly objected to the State Establishment which was
  1202
  growing up in India, and which did not exist in their Colonies. He did not believe that in the colony of Australia any allowance was made for Bishops or Ministers of the Established Church. The Bishops were continually asking for fresh chaplains to be placed upon the different stations; and he saw by the returns beforn him that there was a sum voted for carrying out the Bishop to Calcutta. He thought that religion and ministers of all denominations should be placed upon a certain footing, and that the Secretary for India, or the Government, should not have the power to transgress any rule which might be laid down in this respect.
  The right hon. Gentleman had promised to lay upon the table anuually a blue-book which should give the House a complete picture of the prospects of the Indian empire; but he (Mr. II. Seymour) had not yet seen anything of that kind. He remarked that the Punjab was made to show a surplus, and Bombay and Madras a deficit. They knew that the Punjab was a pet province of Calcutta, but he could not believe that it really did show a surplus, because they knew also that there was a larger portion of European troops placed in the Punjab than in any other part of India. They had the territories under the Governor General, the revenue of which was, he believed, £18,000,000, bringing in only £2,000,000, leaving £16,000,000 of a deficit. Attention was specially called to that point by the noble Lord the Member for King's Lynn (Lord Stanley), who wrote out to India a peremptory letter that it should be altered; but the right hon. Gentleman had totally neglected this matter, as he had many other excellent reforms begun by his predecessor in office. The right hon. Gentleman was the complete autocrat of India. He did not consult his Legislative Council, and he governed India as the Emperor Nicholas governed Russia. The House of Commons ought therefore to know what this autocrat was doing in his empire. He had on previous occasions suggested that there should be one Mint instead of three in India, and that the copper could be sent out ready coined, by which a considerable sum would be saved. The Bill called the Coast of Africa Act Amendment Bill ought to be postponed till next year, in order that not only Singapore, but Tenasseram, and perhaps Burmah, might be formed into a separate governor-generalship of the Malay provinces. The Government of Calcutta had

  1203
  plenty to do without looking after these provinces; and the people were a separate race, and required a different Government to develope their immense resources. These provinces might then be made to pay. Singapore, with its £10,000,000 sterling of commodities passing through it, ought certainly to he made to pay its own expenses. The right hon. Gentleman had said nothing of the Civil Service and the law reforms, both which subjects were of pressing importance. The law of India was a disgrace to any people, and the taxes upon obtaining permission to commence suits were unknown to any other county in the world. A Bill was brought in three years ago by the Law Commissioners of India, which the right hon. Gentleman had not yet presented to the House. The right hon. Gentleman (Sir Charles Wood) had been sixteen months in office, and he had done so little during that time that the Indian Office, it was said, might as well have been shut up. The delays in answering letters and transacting business were greater than they used to be under the Company's rule, and there had been indeed no perceptible improvement whatever since the East India Company had been done away with and the right hon. Gentleman had presided at the India House. Since the right hon. Gentleman was raising a loan, why did he not make provision for the abolition of the taxes on the administration of justice, which were a scandal to the English rule? What also was the right hon. Gentleman doing about the sale of land? Was he encouraging the sale of land or not? Was the redemption of the land-tax still allowed? He believed Mr. Wilson, in his new scheme of taxation, was right in principle. The fault of the Government was that they had not done all in their power to keep down expenditure. A reduction of the salaries of civil servants would never be effected as long as it was left in the hands of interested persons in India. A plan of reduction ought to be drawn up at home by the Secretary of State, assisted by men of experience in Indian affairs. He was of opinion that the salaries of the higher class of civil servants might well be cut down, and that the Native servants should receive higher remuneration. At present it was notorious that there were thousands of Native officials who received such a miserable pittance from the Government, that they were obliged to pilfer in order to obtain a livelihood. The Secretary of State ought to set an example to the Indian Govern-
  1204
  ment, by reducing the expense of the home establishment. He was surprised the right hon. Gentleman should not only have continued the office of Under-Secretary of State, of which Sir George Clerk, on his removal to Bombay, had advised the abolition, as it was a complete sinecure, but should have bestowed it upon Mr. Herman Merivale, who knew nothing about India, and had never been in that country in his life, instead of upon some tried and experienced Indian official. With regard to Sir Charles Trevelyan, he thought that he had not shown discretion in sending so strong a Minute to a member of the Legislative Council against a law which after all he might have to carry into effect, but that literally, if not morally, he was justified by an order of the Supreme Council which appeared to authorize such communications. He did not believe, however, that if the Secretary of State had done his duty the difficulty would ever have occurred. Sir Charles Trevelyan and Mr. Wilson had been rivals in the public service in England for a vast number of years, and when Sir Charles Trevelyan was saying to a friend, on leaving, that he was making great sacrifices, his friend endeavoured to console him by reminding him that, at all events, he would not have Mr. Wilson near him. It was a parallel case to two appointments in the Crimean war, and it was the duty of the Secretary of State to warn Sir Charles Trevelyan and Mr. Wilson of the dangers to the public service which would ensue should they not agree together in India. There was no indication in the despatches that these rivals were not left to their own passions, and if anything passed in the shape of private letters he entirely objected to that kind of correspondence. It appeared to him that the Secretary of State was as indifferent upon this matter as when he replied to a question of his, that he knew nothing about and had not seen the Bills which threatened to convulse India. He did not find the same energetic desire to reduce expenditure expressed in the despatches of the right hon. Gentleman which he could trace in the despatches of the noble Lord the Member for King's Lynn, and he really did not see the use of paying the right hon. Gentleman so much to do so very little. It was not the way in which the right hon. Gentleman ought to execute his high office, and he was convinced that the right hon. Gentleman would never make a more satisfactory speech than the speech of this evening, while he conducted his

  1205
  business in the manner ho had done since his return to the Indian office.
  He believed that Mr. Wilson's taxation would inaugurate a new era for India of the greatest possible importance. It was somewhat similar to that which commenced with our glorious Revolution, at which time the bulk of the taxation was raised by the land tax. Since then personalty had enormously increased, and the taxes had been gradually placed on that branch of wealth. The same principle was being introduced in India by Mr. Wilson, and he (Mr. Seymour) believed that the people of that empire were sufficiently enlightened to see that it would be to their lasting advantage and interest. He must say, in conclusion, the Whig theory of Government appeared to him to be that able men were to be found scattered on the streets. He had been amazed during the ten years he had been in Parliament at the appointments of the Whigs. Take the two last cases. There were two men of the greatest talent—in every respect exceptional men—men of whom there were very few produced in the course of a century—ho referred to Sir Charles Trevelyan and Sir Henry Rawlinson, and both of them, on account of some trifling blunders, which were more the fault of the Whigs than themselves, were recalled, and were wasting their lives in idleness. These men were the appointments of the Government opposite. They would never have been picked out by the Whigs, hut they showed the greatest alacrity in getting quit of them.
  MR. W. EWARTsaid, he fully concurred in the praises which had been bestowed upon Sir Charles Trevelyan, but he thought that, after the course taken by that officer, the Government could not do otherwise than remove him, notwithstanding his great abilities, as they could never allow a governor to act at variance with the instructions of his superior. With regard to the army in India, he trusted that, in due course of time, it might be reduced, and he thought the reduction could be effected if a proper and vigorous police were established throughout the country. He was glad to hear that the Government of India had adopted the plan of appointing magistrates selected from the principal landowners of India, whether Europeans or Natives; and the recognition of the system of adoption he considered to be a wise concession, calculated to attach the territorial proprietors to the British rule. The establishment of military posts in the most
  1206
  healthy parts of the hill districts would be in his opinion, a most desirable measure. From these posts the troops might be brought down into the plains at any time, when their services were required, retaining all the vigour of European constitutions. But what ho mainly trusted to was the development of the resources of India by encouraging the introduction of English capital, by improving the means of communication, and by a judicious extension of public works, especially works of irrigation. Irrigation, he maintained, would be found the great agent for developing the resources of India. It might he said, to use a somewhat Irish expression, that water was the blood of India. He wished to say a word with regard to the planters. He believed them to be a vigorous and valuable race of men, and likely to produce great benefit to India. No doubt they had, in former times, abused this power. But he believed they were destined to do much good hereafter. Ho thought that the salaries of the civil officers might be reduced, but he did not anticipate any great saving from the reduction. If the salaries of the lower officers were raised, then some reduction might be made in the salaries of the other officers. With regard to the revenue, what was wanted was a strict system of appropriation, and he was of opinion that there ought to be an Imperial audit. The India Council in this country he conceived to be inconsistent with a vigorous executive, and be did not believe that there could ever be a proper system of government with a sort of Parliament sitting in the India Office. He hoped and believed that the people of India would in time be conciliated by a mild but firm system of Government, watchful over the security of persons and of property and considerate of the feelings, while it did not sustain or justify the religious errors of the people.
  MR. GREGSONsaid, he also concurred in regretting the loss which the public service had experienced by the removal of Sir Charles Trevelyan, who during the short time he had been in Madras had effected many improvements. He considered that the military expenditure might be prospectively reduced, and a considerable saving effected. In 1856 the revenue was £33,000,000, and in 1860 it had increased to £37,000,000, so that it might be hoped by degrees the income and expenditure would be equalized. He hoped that the right hon. Gentleman was not

  1207
  going to add to the heavy taxes which were being imposed on India any increase in the duty on salt. Sir Charles Trevelyan said, he should he sorry to see such an increase, and, considering the millions of people in India who possessed not more than £5 a year, and who were consumers of salt, they ought to be spared any additional tax on this commodity. He hoped that the right hon. Gentleman would be successful in carrying out the reductions which he proposed; and, from what he saw of the increasing resources of India, he had every confidence that at the time when the right hon. Gentleman expected that the income would balance the expenditure it would really largely exceed the expenditure.
  SIR HENRY WILLOUGHBYsaid, he could not quite agree with the hon. Gentleman in the sanguine view he had just expressed of Indian finance. In his opinion a more serious question could hardly come before the Committee than the prospective state of that finance, which seemed to him most alarming. When the hon. Gentleman referred to the increase which had taken place in the revenue between 1857 and 1860, he overlooked the elaborate Minute signed by Sir Bartle Frere and Mr. Wilson, showing that the increase did not arise from a legitimate development of the resources of India, but was owing to accidental circumstances, and that there was no reasonable mode of meeting the difficulty except by imposing these new and dangerous taxes. In considering this question the Committee should remember the doubt which beset every proposal respecting Indian finance. Mr. Wilson's first discovery on going out was that the deficit had been largely under-estimated; and the difficulty of discussions in this House on Indian subjects was that they could not be sure of the ground on which they were treading. The chief point on any question of Indian finance was of course the composition of the army. In 1856–7 there appeared to have been 45,000 Europeans and 287,000 Natives, and in the present year there were 80,000 Europeans and 300,000 Natives. He should like to hear whether these numbers were correct, because with anything like that army it was perfectly impossible that Indian finance could right itself. In 1856-7 the expense of the army was £13,500,000; next year it was £17,500,000; then it was £24,000,000; in the following year £21,000,000; and for 1860–1 it was
  1208
  taken at £15,250,000. He greatly feared that the cost in the current year was under-estimated. But even taking it at that amount, and assuming that the income tax was ordinarily successful, how could you expect to wring such a sum from India or to avoid deficits for a series of years? Before you could touch a single rupee of Indian revenue it was necessary to clear off ten or eleven millions of dead weight, in the shape of cost of collection, allowances and grants, and interest on the debt. When to this was added£15,000,000 for the army and £800,000 or £900,000 for the navy, there was but a small sum left to defray the general expenses of Government. Mr. Wilson, with Lord Elphin-stone and Sir Charles Trevelyan, agreed that the expense of keeping up a European army of 80,000 men in India would be enormous; and the whole question of military expenditure was one of vital importance. There was more danger of losing India by means of obnoxious taxes than even through a mutiny, and the greatest caution was therefore required in the imposition of new duties.
  MR. GREGSONexplained that ho had quoted from memory the revenue was £32.000,000; he found on reference the net revenue was £33,300,000.
  MR. ROEBUCKsaid, he wished to refer to a question which had not been touched on during the debate. In the Indian mutiny a large amount of property was sacrificed by persons who were not in the Company's service, but were settlers and planters. The value of their property so destroyed was, by their computation, about £3,000,000. These losses were occasioned by the servants of the Company. The Indian army rebelled. The servants of the Company, therefore, caused all the losses that were incurred during the rebellion. By the law of England, any loss sustained in consequence of rebellion would fall upon the hundred within which the property was situate. The persona to whom he referred considered that they had a distinct right to come upon the Government for compensation. The Government had acknowledged that right, for last year the right hon. Gentleman said the Government proposed to draw a distinction between property which it was impossible to move, and property which might have been saved from injury. They proposed to give half the value in the first case, and one-third the value in the second, and they further proposed to limit the whole amount

  1209
  to be distributed to £1,000,000; but within a few days after making that statement the right hon. Gentleman wrote a Despatch, in which he recommended that in the cases of building factories, and crops where the admitted loss did not exceed 2,000 rupees, the compensation should be one-half of the admitted loss, and if the loss exceeded 2,000 rupees then only one-third of the additional loss beyond 2,000 rupees should be granted. In regard to jewels, cash, and personalty one-third of the admitted loss should be allowed; but in no one case should more than 5,000 rupees compensation be allowed. Thus there were two departures from the proposition which the right hon. Gentleman had stated to the House, and those departures seemed to militate against a principle which he had dwelt upon, in that India might flourish English capital must be introduced. But English capital would not be introduced unless its owners were satisfied that they were under the protection of English justice, and if questions of that kind were to be dealt with in the offhand and fantastic manner in which the right hon. Gentleman had dealt with the sufferers by the late mutiny a feeling of uncertainty would be created that would keep capital out of India. He might also refer to another class of cases—that of the insurance companies. Those offices insured the lives of civilians. Those civilians were called upon by the Government to act as soldiers. They did so, and many were slain. In all those cases the insurance offices paid the insurance moneys, and then appealed to the Government to reimburse them. The Government, however, refused to recognize their claim, and would not permit them to participate in the £1,000,000 that was to be distributed as compensation for losses. He would warn the right hon. Gentleman that this subject would be renewed next Session and in future Sessions, until justice was done, or the sufferers were convinced that they had no grounds of hope from the justice of Parliament or the Government.
  SIR DE LACY EVANSsaid, he fully-agreed with the hon. and learned Gentleman that civilians having been required to act as soldiers, and having perished in performing the duties of soldiers, and the insurance companies having liberally paid the claims upon them, those companies were entitled to expect a liberal consideration from the Government. The only part of the right hon. Gentleman voluminous
  1210
  statement to which lie should refer was the military expenditure. He was glad to find that it was intended to construct barracks calculated to preserve the health of the troops, and also places of safety for women, children, and treasure, in case of a sudden rising either of troops or people against our authority. He quite concurred in the remarks of the right hon. Gentleman as to the great loss the public service in India had sustained by the removal of Sir Charles Trevelyan from the Government of Madras. He admitted that the conduct of Sir Charles Trevelyan might have given some cause of complaint to the Supreme Government, but, on account of the undoubted abilities of that high Officer, he (Sir De Lacy Evans) regretted that some less severe course had not been pursued, and he hoped that the Government would take a speedy opportunity of utilizing that gentleman's great abilities. He had listened with much attention to the statement of the right hon. Baronet, but confessed himself unable fully to understand it. Thus much, however, was clear that the whole statement rested upon the immense military establishment now retained in Bengal. In 1857 there were but 45,000 European troops on the Indian establishment, and, in fact, there were not more than 40,000 in that country. The neck of the rebellion was broken by those men. The capture of Delhi was the turning point of the mutiny, and that was accomplished without the aid of a man or a gun from England. The Government very properly made every effort to send out men, but the great event took place before they arrived, and it was always said that the Native population did not take part in the outbreak. He knew of no conquest more decisive than that which we had accomplished in India, and yet, notwithstanding the prestige our triumphant success had given us, English troops were being continually sent out to India. He believed that at this moment there were not fewer than 80,000 European troops in India, and he understood that the Native army had also been greatly increased. How was it possible in these circumstances to have the finances of India in a prosperous state? Why was it necessary to have this vast army in India? It would be easy to reduce them gradually and continuously, but he had not heard that there was any intention to make a reduction at all. He must say that, independently altogether of financial considerations, the retention of so large an

  1211
  army in India was very much to be deprecated.
  MR. VANSITTARTsaid, he regretted to hear the right hon. Baronet announce that it was necessary to raise another loan this year, as he had been in hopes, on perusing the speech which Mr. Wilson delivered in the Legislative Council of Calcutta on the 18th of February last, that that ruinous system was about to be put a stop to. On that occasion Mr. Wilson observed:—
  "But what has this state of our finances brought about? Our deficiencies have been supplied by loans in England and in India, and what have been the results? And here I claim the special attention of every one, Native and European, who feels a real interest in India. What was the state of our debt before the mutiny? What is it now? And let me ask what will it be soon if we are to resort to the miserable, the disreputable expedient of continuing to borrow in time of peace?"
  With regard to that speech—and upon which they had refrained very properly from commenting up to that period, lest it might have embarrassed the operation of Mr. Wilson's financial scheme—it appeared to him that the most serious, almost appalling circumstance, that could not fail to strike the reader, was that, since the commencement of the present century, with the exception of fifteen years, there had been an annual deficit, sometimes larger and sometimes smaller in amount, and that of the entire Indian debt of £97,851,807 no less than £38,410,755 had been incurred by the late mutiny of our Bengal Sepoy army. When Mr. Wilson left the shores of this country for India it was thought that he would have to provide for a deficit of a few millions, whereas on his arrival at Calcutta he found that the deficiency for the past year ending the 30th of April last, and for the current year, amounted to no less a sum than £15,790,129. A more gloomy view of the financial condition of a country had, perhaps, seldom or never been presented, and he thought, therefore, that great allowances should be made if the right hon. Gentleman had been compelled to resort to a severe system of taxation. He could not, however, approve the income tax portion of his scheme, which occupied 181 folio pages in print, containing 206 clauses, and which, by exempting nothing but the pay of private soldiers and non-commissioned officers, was ill-calculated to reconcile the Native population to the payment of such a novel, oppressive, and searching tax. He was
  1212
  aware that he had since amended it very materially, and that he had cajoled the zemindars to pay it by an abatement of the Government rent from one-half to one-third.
  SIR CHARLES WOODsaid, the abatement referred to did not apply to the landholders.
  Mr. VANSITTARTwas under the impression that it did, but he would not pursue that part of the subject. He must say, however, that he much doubted whether the right hon. Gentleman would not be disappointed with the Returns under this head. In corroboration of that opinion he would only mention that an inquiry had been set on foot a few years since by the Indian Government, in order to ascertain what would be the probable return from a succession duty, similar to what prevailed in this country, and that it had not been estimated at more than thirty-seven lacs of rupees, or £370,000. He would further observe that he could not anticipate any difficulty in regard to the machinery by which the income tax was to be collected. He apprehended that duty would devolve upon the Revenue Commissioners, collectors, deputy-collectors, and assistants of the different districts in the Mofussil, and that that much vilified body of public servants, the covenanted civilians, disregarding all apprehension of the consequences likely to arise in carrying out such an unpopular measure, would, with that zeal and fidelity for which they had always been distinguished, proceed to realize it in the same manner as they did the land revenue, the abkarry, and other sources of revenue. He considered the enhanced tax that Mr. Wilson had imposed on salt and tobacco, which latter article was the one sole luxury and universal solace of the toiling millions, to be not only impolitic but likely to be met in the interior with a dogged, passive resistance. Mr. Harrington, the Member for the North-Western Provinces, laid himself open to ridicule by exempting himself and other officials from the first licence tax which he introduced into the Legislative Council, but he thought it was to be regretted that he did not proceed with his second or amended Bill, as this mode of taxation was evidently not only far more in harmony with the feelings and prejudices of the Natives, but he believed that the returns would have been found to be more profitable. Indeed, he held in his hand a Return which the right hon. Baronet laid on the table on the 30th of last month, and he found that the

  1213
  yield from the trade taxes in the province of the Punjab only was estimated at £230,000. The right hon. Baronet did not seem to he indisposed to introduce certain measures which were demanded by the transfer of India to the Crown; but he might depend upon it that it was hopeless to expect to effect any real practical good until the Legislative Council of Calcutta was remodelled, for it was absurd to suppose that a Council of eleven members, all paid nominees of the Government, could cope with the wants and requirements of such an enormous country as India. He had been conversing a day or two previously with Governor Keate and Sir Charles Maearthy, and he learnt that Trinidad with its population of 100,000 souls had a Council of twelve members, six paid officials, and six unpaid non-officials; and that Ceylon, with its population of 2,500,000, had a Council of fifteen members, nine paid officials, and six unpaid non-officials; wheroa3, India with 200,000,000, had a Council of but eleven members, all officials. That some non-official element was greatly needed had been fully confirmed by the mail which arrived that day, for it appeared when it left Calcutta that the Council, at the dictation of Earl Canning, were discussing a Bill having for its object to re-arm the Native population and to disarm the Europeans, and were it not for the fearlessness with which the Bill was opposed by those two upright judges, Sir Barnes Pea-cocke and Sir Mordaunt Wells, it would probably pass into law. This being the case, could it be wondered at that the finances of India should have fallen into such a dilapidated condition, and that mutinies and agrarian riots should so continually take place? One word about the Indigo Commission then sitting at Calcutta. That Commission consisted of two civilians, Messrs. Seton Kerr and Temple; Mr. W. Fergusson, an indigo planter, chosen by the Indigo Planters' Association; the Rev. Mr. Sale, a missionary; and Baboo Chunder Mohen Chatterjee, chosen by the British Indian Association; and this mixed Commission was working admirably. Now, he thought they might draw an advantageous lesson from it, and request the Indigo Planters' Association, the Chamber of Commerce, and the British Indian Association to select two gentlemen from among their respective bodies, in order to associate them with the members of the present Legislative Council, and he ventured
  1214
  to say that their varied knowledge and this infusion of fresh blood would quicken that jaded Council into something like activity and efficiency. At all events, were the right hon. Baronet to adopt that suggestion, he would have the satisfaction of knowing that he had done something towards repairing the error into which he fell in 1853 by creating such a ludicrous assembly as it was at present: and that, although the Eastern horizon was overclouded by financial difficulty, and the resources of India were well-nigh exhausted, yet they would not be quite without hope that her future might ere long assume a brighter and serener aspect.
  MR. CRAWFORDsaid, he could give a cordial concurrence to the Resolution with which the right hon. Gentleman (Sir Charles Wood) concluded his speech, as he looked upon it as a measure not only of caution but of absolute necessity. The hon. Member for Poole had urged the construction of one or two more new railways in India, and had recommended an extension of the guarantee. He trusted that the Secretary of State would pause before he extended the system of guarantee, whatever the merits of the railways might be; because, if the plan of subsidizing were further carried on, the thing would be overdone and a guarantee of 5 per cent would be insufficient for the purpose. The railway companies were at present guaranteed 5 per cent on their capital. When the lines were opened, if the profits exceeded 5 per cent, one-half the surplus went to the Government in repayment of their advances of interest during construction, and the other half was to be divided among the shareholders. He would susrgest that the agreement should take effect as soon as the lines were worked, although a portion was yet unconstructed, and that half the surplus profits over 5 per cent should be immediately divided among the shareholders, Such an arrangement would, he thought, stimulate the companies to proceed with the construction of their lines. The hon. and learned Member for Sheffield had adverted to the question of compensation. He did not know whether the claimants to compensation had any common law rights or not, but he could not but join in an appeal to the right hon. Gentleman to consider the sum of £1,000,000 set aside for this purpose as a minimum as well as a maximum. With regard to Customs' duties, they were, no doubt, a fair source of revenue, but he could not but feel that

  1215
  there was a disposition in India to stretch this source of revenue, and to raise the duties so as to interfere with the trade of India. He entirely concurred with Sir Bartle Frere in the Minute quoted by the right hon. Gentleman, that a tax in the nature of an income tax was one to which the Natives of India were in some degree habituated, and that if it were left to the Natives to carry out they would readily conform to it, and it would form a most productive source of revenue.
  Mr. T. G. BARINGthought the hon. Member for Evesham (Sir Henry Willoughby) had no ground for the complaint he had made of the inaccuracy of the statements of his right hon. Friend the Secretary of State for India. The Estimate which the right hon. Gentleman gave last year of the deficit of the present year had proved to be within a few hundred thousand pounds of the actual amount. From the speech of the hon. Member for Poole (Mr. H. D. Seymour), it appeared that nothing which the right hon. Baronet had done had had the good fortune to please him. The complaints of the hon. Gentleman were singularly inconsistent. According to him the Secretary of State governs India like an autocrat, and yet stoically leaves India to govern herself. If a Bill is introduced it ought to be postponed. If one is postponed it ought to be pressed. He complained that Papers had not been produced which no one had asked for, and that a document which had not yet been received from India had not been laid upon the table. In one breath he condemned the Secretary of State for not abolishing an office and for not filling it in a different manner. The hon. Member declared that nothing had been done, and yet his whole speech was an objection to what had been done. He could inform the hon. Member that there was no foundation for his assumption that any good measures introduced by Lord Stanley had been checked. The measures as to the sale of lands had not been altered; and the accounts which he was so anxious to see were contained in Papers which had already been laid before the House. An improved system of accounts was being introduced in India, much simpler and more rapid than the old system; and, in consequence, the Indian accounts had this year been presented for the first time within the period laid down by Act of Parliament. He denied that there had been any delay in the public works. As his right hon.
  1216
  Friend had stated, all the works of importance were being carried on. The canals in Scinde were being pushed forward, the Madras Irrigation Company were actively employed, the improvement of the river Godavery was in progress. It was absurd to talk of a railway to Sedashe-vaghur, as it would have to be carried over a steep mountain pass, and would be enormously expensive both to construct and to work. If any new port were to be established instead of Galle, as suggested by the hon. Member, it should be at the point where the Madras railway touched the west coast, rather than on the south coast. He was glad to be able to inform the Committee that a decrease of nearly six millions since the year 1858–9 had already been effected in the military expenditure, and that there had been a considerable reduction in the number or Native troops. The Government of India were fully conscious that it was absolutely necessary that the Native army in India should be largely diminished, and were endeavouring to effect that object as rapidly as they could do with safety. It would be dangerous to be in too great a hurry in the matter. His right hon. Friend had made allowance for the greatest possible reduction during the year in that branch of expenditure. The difference between the military expenditure of 1856–7, the year before the mutiny, and 1860–61 was £3,500,000; and that was the amount of reduction anticipated by the Secretary of State, in order, together with the estimated produce of the new taxes, to square the revenue and expenditure for the year 1861–2. Hon. Members, therefore, could not say that reduction in the military expenditure had not been fully taken into consideration. The hon. Member for Poole (Mr. H. Seymour) was altogether mistaken when he asserted that the home expenditure had not been revised, for since he had been in office his right hon. Friend had cut down the Home Establishment considerably, abolishing a number of offices and one whole department. A revised scheme had recently been approved by an Order in Council, which had been laid upon the table of the House, and if the hon. Member for Poole had taken the trouble to examine it he would have seen that large reductions had been made. The Committee would also be glad to hear that by simplifying the mode of conducting business the time necessary for passing papers through the department had been very

  1217
  much reduced. He was glad to hear from the hon. Member for the City of London that his experience of India confirmed the opinion of the great majority of persons who were conversant as to the feelings of the Natives, that the measures which were rendered necessary by the state of the finances would meet with no more difficulty than was incidental to the introduction of renewed taxes in most countries. He agreed with the hon. Member for Windsor that the greatest reliance might be placed on the tact and ability of the officers of the Civil Service who would have to carry those measures into effect, and, while alluding to the civil servants, he might state that Mr. Rickett's Report was not laid on the table, because it occupied five folio volumes, and the expense of printing would be far more than commensurate with the advantages of its being printed, If, however, the hon. Member for Poole desired to see the Report he would gladly furnish him with a Copy, and he was sure that the perusal of it would occupy the hon. Gentleman during the whole of the recess.
  MR. AYRTONexpressed his regret that at so late a period of the Session, when many hon. Members had left town, the right hon. Baronet should have made a statement of another year's mismanagement and another year's insolvency, for, if such a statement had been made at an earlier period of the Session, the House would have felt that it was its imperative duty to appoint a Committee to investigate the circumstances which had brought about so lamentable a result. It had been proposed to save 2 per cent in the rate of interest by the Government of England making advances to the Government of India upon the security of the revenues of India. There were objections to that proposition, but it possessed this advantage—that the attention of Parliament would, under those circumstances, be specially directed to the manner in which the Government of India was conducted. Another course to meet the difficulties in Indian finance was an open loan, but the right hon. Gentleman dismissed that proposition, because it would foster the extravagance of the Indian Government. The course which was adopted was, to his mind the worst of all, because it declared to the Government of India that, let their expenditure be what it might, they had only to write a despatch to the Secretary of State in Council, and the Secretary of State in
  1218
  Parliament would obtain authority to raise millions without consideration and without discussion. Credit must produce unlimited extravagance in the administration of the Indian Government, and the result at which they had arrived proved the truth of that assertion. The foundation of all improvement must be, not to restore, hut to establish confidence in the British Government. He could see only one redeeming feature in the statement of the right hon. Gentleman, and it was that in which he told them that the Governor General had at last entered on that career which could alone place the Government on a solid and enduring basis. Since the new school of the Civil Service was introduced it had been their settled plan to oppress, to harass, to degrade, to insult, and to injure the territorial aristocracy of India, and it was most gratifying to find that this policy was now to be abandoned, and that the Governor General had at last undertaken the duty of recognizing the rights of the territorial aristocracy to the possession of that territorial interest which many of them had enjoyed for centuries. But if that was a consoling circumstance, he could wish that it were not marred by other events which had taken place at Calcutta. He did not intend to express any opinion about these matters because the time for that had not yet arrived. They had not had on the table of the House the Bill introduced into the Legislative Council of Calcutta, and therefore, it was impossible to form an opinion of the measures which had been the subject of discussion there. But it was a remarkable circumstance that upon the introduction of this new scheme of taxation, it was taken for granted that there was to be a very large expenditure, and that there must be a deficit. Mr. Wilson, in addressing the council, never condescended to explain whether there was any necessity for the new taxation, or whether it was possible to reduce the expenditure within the income. But it was one of the anomalies of the question that there was a Legislative Council at Calcutta, presuming to deal with the finances of India. It was announced to the council that the expenditure would be so much, and then they were to find the revenue. The whole subject had been withdrawn from the consideration of the House of Commons. Sir Charles Trevelyan pledged his official character—and the opinion was backed by Lord El-phinstonc—that if the finances of India were properly managed the military ex-

  1219
  penditure could soon be reduced to the same level as before the Indian mutiny. Against that firm and deliberate assertion on one side was placed the authoritative negative of Mr. Wilson, speaking likewise for the Commander-in-Chief and the Governor General. In this conflict it was impossible for Members to form an opinion, unassisted as they were by a particle of practical information. All they could do was to assume the deficit to be as stated by Mr. Wilson, and to vote the amount requisite to cover it. This was the melancholy position to which the House of Commons was reduced, after undertaking the superintendence of the finances of India! The course pursued at Calcutta was such that it would become necessary next Session to consider whether such a mockery of legislative proceedings—such an injurious farce as the Legislative Council—ought to be continued. A few Members, appointed by the Governor General at salaries of £4,000 to £5,000 each, met in a room, and entered into controversies in which they absurdly mimicked the proceedings of the House of Commons, addressing each other as the "hon. Member" for a particular district, and having Treasury and Opposition benches each maintained by the State; but the effect of those discussions could only be to lessen British influence in the eyes of the Native population. There was taxation without the shadow of a real representation, and the sooner the errors resulting from the doctrinaire policy of 1834 were corrected the better, in his opinion, it would be. A tax might be levied without danger in any one district of India, in the Punjab, in Oude, or Bombay, but as soon as it was attempted to apply the system generally, every sort of opposition and disloyalty was evoked which might attain to a pitch subversive of British rule in India. He hoped the right hon. Gentleman would think it right to establish separate Governments, each of which would apply itself to the local circumstances of its own district, and impose taxes in accordance with the feelings and ideas of the people. How was it to be supposed that the Natives of India could know anything of the 180 clauses of which this Bill was said to consist? Sir Charles Trovelyan rightly attributed their supposed contentment to their total ignorance. A Native inhabitant of Madras knew as little of the proceedings of the Council at Calcutta as a peasant in Lincoln did of the regulations of the Chancery of Austria; but they were painfully
  1220
  sensitive when visited by the taxgatherer. The large military organization which had to be kept up was required to guard against the danger to be apprehended from sedition. But besides the military expenditure, there were other branches to which the right hon. Gentleman would do well to address himself at an early period. There was a very large item of £100,000 for naval expenditure in India, the necessity of which he never could make out. There was a little service kept up in Bombay called the Indian Navy, which was the growth of the East India Company, who thought, as they bad an army, they must also have a navy. It had never done any useful service; it gave rise to a large expenditure, and a reduction might safely be made under that head. It was said that it would be quite impossible to reduce the civil service expenditure; but he found that though it had not been reduced, it had been considerably increased. But what was the cause of that increase? It was to be found in the tendency to set aside Native administration, and to substitute European. But it was by the use of Native agency, to be paid upon a Native scale, that they could economize the Indian expenditure. Again, the uncovenauted service was a sort of abortion between the regular establishment and the Native service. When a Native got into it he was overpaid; when an English gentleman got into it he was underpaid. He did hope that the right hon. Gentleman would apply his mind to the reorganization of the Civil Service in India, and that he would effect those reductions which he (Mr. Ayrton) believed could be accomplished, provided the right hon. Gentleman did not lend himself too much to the prejudices which had grown up in times past. He could not help expressing his regret that the right hon. Gentleman did not proceed with that most important measure, which was the foundation of any improvement in the administration of justice in India—namely, the amalgamation of the Courts of Appeal, which would effect a saving not only of money but of time to the people, and must lead to very great improvement in every branch connected with the administration both of civil and criminal justice.
  There was another point which he wished to impress upon the right hon. Gentleman. He (Mr. Ayrton) observed that no sooner was any scheme of improvement suggested in India, than forthwith it was made the pretext for an enormously expen-

  1221
  sive establishment. A despatch had gone out from this country, giving directions to improve the education of the Natives; and what was done? A great educational department was created, and he would venture to say there was more money spent in inspectors, superintendents, and chiefs, at salaries ranging from £300 to £1,000 a year, than was actually spent in the education of the Natives. The same was the case with the Public Works Department, and in consequence of the new system of currency, he saw looming forth the Currency Commissioners, their deputies, and a whole staff of persons who, it would be said, occupied very responsible positions, and if any profit should arise out of the currency, it would be all absorbed in the enormous establishment which would attend its introduction into the country. That was a most pernicious system. With regard to the cultivation of the existing revenue, there was only one means by which the increase could take place, and that was by increasing the productive resources of India. That must be done by the foundation of an excise, customs, or land revenue. That, again, could only be increased, in the first place, by irrigation; and secondly, by improving the communications in India. He wished to impress upon the right hon. Gentleman that if he desired that the railways in India should flourish, he must be cautious in entering into engagements; but when he had entered into them, he should take care that they were honestly observed on the part of the Government of India. As far as his own observation had gone, he did not think the Government had exhibited that disposition faithfully to perform its engagements that the railway companies had a right to expect. He sincerely trusted that early in the next Session of Parliament the House would be favoured with the measures which the right hon. Gentleman had shadowed forth in the present Session, and that he would be enabled to check and control the disposition to extravagance that was still manifested by the Indian Government.
  MR. HADFIELDcomplained that under Mr. Wilson's Tariff the imposition of 10 per cent Customs duty on British manufactures amounted to protection in favour of the Native manufactures. Nearly all the produce of India, which was sent to this country, came free of expense; but, under Mr. Wilson's tariff, the British manufacturer would be debarred from sending his manufactures to India, and from the same cause
  1222
  would also be prevented from ordering from India the produce of that country. That was a most unreasonable tax, which, he would venture to say, must prove injurious to India, both on the principles of political economy and free trade; and he therefore appealed to the better judgment of the right hon. Gentleman to say whether this tax on British manufactures was one that ought to he imposed. He desired to know if it was correct, as stated by the hon. Member for Poole (Mr. H. Seymour), that £120,000 of taxes were raised in India from a Heathen and Mahometan population to maintain the ecclesiastical institutions of that country? He should be glad to hear from the right hon. Gentleman an explanation, or rather a contradiction, of that statement. His objection to it was, that a tax of that nature was prejudicial to Christianity itself; and damaged the exertions made by different societies in this country, which, by voluntary contributions, defrayed the expense of Missionaries in India.
  MR. KINNAIRDsaid, he did not agree with the hon. Member for Poole in all his invectives against the right hon. the Secretary of State for India, who had made a clear statement of the revenues and liabilities of India with great fairness, and without any attempt at concealment. He understood the right hon. Gentleman to say that he was most anxious to foster the introduction of British capital into India; and that the Madras Irrigation Company, having a simple guarantee, which cost the country nothing, saved, by the mere introduction of labour, a vast population from starvation. The Company were willing to undertake further operations without guarantee; but be understood from the right hon. Gentleman that the Government were ready to carry on the works themselves. Now, if he wished to introduce British capital into India, he had certainly better accept the terms offered by the Company.
  MR. LYGONsaid, he hoped that the right hon. Gentleman (Sir Charles Wood) would review the system under which the official director of railways to the Indian Council dealt with contracts for the construction of lines in India. Those contracts ought to be thrown open to wider competition; and the specifications in connection with them ought to be delivered in plainer and more intelligible terms than those in which they had been hitherto couched.
  MAJOR WINDSOR PARKERsaid, in

  1223
  reference to the observations which had been made by previous speakers to the effect that the course pursued by the authorities in India towards the Natives had been one of a discouraging and humiliating tendency, that if there was one point in which the Government of India had shown itself more anxious than another to conform to the customs and habits of the Natives, it was the way in which they had conducted their intercourse with them. In fact, the Government had evinced this disposition to an almost excessive degree; and he was quite sure, therefore, that there was no foundation for the observations to which he had alluded.
  MR. GREGSONinquired whether the subscribers to the intended £3,000,000 would be liable to the income tax in India?
  SIR CHARLES WOODsaid, that the hon. Member for the Tower Hamlets had complained of the late period at which this question had been brought forward, but in making his remarks the hon. Member must have forgotten that it was impossible for him (Sir Charles Wood) to make the statement until after the financial accounts were received from India; and it was only the previous day at three o'clock that a most important financial despatch from India was received. With respect to the comments made by the Member for Poole, (Mr. D. Seymour) he must say that he gave up all hopes of satisfying that hon. Member, who attributed to him everything that he considered to be wrongly done—even matters which were transacted when the hon. Member was himself Secretary to the Board of Control. He could inform the hon. Gentleman that he was not aware of any intention to expend money from the Indian revenue on improvements at Point de Galle. With regard to the improvement in the land revenue, owing to reductions in the land assessments, the credit of which the hon. Member gave entirely to Sir Charles Trevelyan, he (Sir Charles Wood) must observe that he had himself suggested those reductions to Lord Harris, and therefore his hon. Friend would perhaps allow him some little credit on this score. His hon. Friend complained of the largo expenditure arising out of the ecclesiastical establishments of India. But his hon. Friend must surely know that ever since civil and military servants were sent to India it had been considered the duty of the Government to provide them with the means of spiritual instruction. He (Sir Charles Wood) had not increased those establishments in any way whatever,
  1224
  but had only filled up such vacancies as occurred. His hon. Friend had spoken of the necessity of enforcing economy on the Government of India; but he bad not lost sight of this subject, for of four despatches of his which were published there were two enforcing economy on the local Government in the strongest terms, and these were not the only despatches on the subject. His hon. Friend was wrong in assuming that there was not a large allowance for reductions in the Bombay and Madras Presidencies. The reductions in those two Presidencies would amount to £1,200,000, and the Government had based their proceedings on the official returns. His hon. Friend (Mr. Ayrton) said the House had no means of judging of the deficit. But there had been furnished to the House the financial account of the Indian Government, with the Estimates for the current year, and every possible paper. There was, indeed, a plethora of information, for letters and papers had been produced beyond those ordinarily laid before the House, and he had never heard a complaint so unreasonable.
  MR. AYRTONremarked, that he had not complained of the want of a statement of figures, but of the absence of any details corresponding to our Army Estimates, so that nobody could form an opinion as to whether the account presented was reasonable or not.
  SIR CHARLES WOODsaid, that he could only repeat that all the information usually furnished to the House was now on the table, with a good deal more besides. The lion. Member for Poole attacked him for the appointment he had made of a gentleman as Under-Secretary of the India Board, who was not an Indian servant, and contrasted that appointment with Sir George Clerk, a very distinguished Indian servant, as Under-Secretary of the Board of Control; but his hon. Friend entirely overlooked the change of circumstances. The Minister responsible for India did not necessarily possess any Indian knowledge. In former times the President of the Board of Control, had not in his office any person connected with India, and therefore it was very important for him to have as one of his secretaries a person of experience in Indian affairs. The Secretary of State, however, bad a Council of fifteen persons of large Indian experience, and it was therefore not necessary that he should add to them a sixteenth person of Indian experience as Under-Secretary. Mr. Herman

  1225
  Merivale was a gentleman of great administrative ability and of great experience, and lie did not think it would have been possible to make a better choice. With regard to the question put by the lion. Member for Lancaster (Mr. Gregson), there had been an increase in the duty on salt, but there was no intention of making any further increase. As to the planters who had lost property during the mutiny, he did not see the discrepancy to which the lion. Member for Sheffield (Mr. Roebuck) referred between his speech last year and his despatch. He had stated generally the principle which the Government had laid down—namely, the allowance of one-half in the case of fixed and one-third in the case of moveable property, and that the probable amount of allowances would be £800,000. In the despatch he had entered more into detail, but its substance was the same. He declined to pledge himself to distribute pro raiâ the difference between the £1,000,000 and the sum first awarded. There might be some among the former and smaller holders who in equity might have a stronger claim than others, and he reserved to himself the power of considering whether any such claims might not be more deserving of attention. From private letters received from Mr. Wilson, he believed that the 1st of August was the period fixed for distribution. The hon. Member for Windsor (Mr. Vansittart) had directed his attention to the stale of the Legislative Council. He admitted it had not answered so well as he expected the purposes for which it was instituted, though he believed a great deal of injustice had been done to it, and, without giving any pledge on the subject, he would seriously consider whether some alteration might not be made in its constitution. There could be no doubt that some reduction might be made in the naval expenditure, but during the present Session he had experienced difficulty enough in dealing with the Indian army. Then as to the amalgamation of the courts, he should have been very happy if he could have attended to that subject this year, but the same obstacles which prevented legislation on other subjects had prevented it on that also; but he hoped early next Session to be able to introduce a measure for that purpose. He had always encouraged the construction of railways on the most liberal terms between the Government and the companies, but be was not prepared to say that full and open
  1226
  competition to an unlimited extent would he the best mode of procuring railway materials. In sending out such materials to India—he alluded particularly to rolling stock—it was essential to sec that they were constructed by competent persons. He could not agree with the hon. Member for Sheffield that the Customs' duties were imposed for protection, and not for revenue. The hon. Member for Perth (Mr. Kinnaird) had misunderstood what he said on the subject of irrigation. What he stated was that he hoped the Madras Company would undertake the Orissa works without a guarantee, but that, if they declined to do so, the Government was pre-prepared to undertake the works themselves.
  Resolution agreed to.
  Resolved,
  "That it is expedient to enable the Secretary of State in Council of India to raise money in the United Kingdom for the Service of the Government of India."
  Resolution to be reported To-morrow, at Twelve of the clock.

FORTIFICATIONS (PROVISION FOR EXPENSES) BILL.—COMMITTEE.
Order for Committee read.
House in Committee.
(In the Committee)
Clause 8 (Annuities payable and transferable at the Bank).
Clauses 1 to 7, inclusive, agreed to.
MR. HUBBARDsaid, he rose to propose that the following words should he added to the clause:—
"The Commissioners of Her Majesty's Treasury shall append to the contract made with the contributors to this loan a schedule, wherein shall ' be separately stated the amounts of interest on; principal moneys unpaid, and of principal moneys I to be discharged, forming together the sums of the several half-yearly payments of the annuities to be by this Act created; and the Bank of England shall, in the half-yearly payment of the said annuities, describe on every dividend warrant the; amount of interest and the amount of principal moneys therein discharged."
It was an objection to the present mode of paying annuities that there was no accurate statement of the public accounts, so that it was impossible to tell accurately what the national debt really amounted to, The last account made it £786,000,000, and the interest thereon £28,000,000; but of that £28,000,000, £4,000,000 were paid as annuities. Moreover the income tax was levied upon the portion of annuities, which was a repayment of capi-

1227
tal as well as of that which constituted interest. That was an injustice that ought not to be perpetuated, and when a new series of loans was about to be commenced it was a good opportunity of amending a system which entailed a considerable additional expense upon the country. He did not propose any Amendment touching the essential principle of the Bill—that the whole amount should be repaid in thirty years, but he asked the Committee to sanction a schedule by which the stockholder would every half-year find upon his dividend warrant the amount of capital that had been repaid and the amount of interest which he was receiving upon the balance. He would then be taxed only upon the interest, and not upon the repayment of capital. Upon the same principle the loan might be carried out by means of Exchequer bonds repayable at certain fixed periods; but there was an advantage in terminable annuities that capital and interest could not be severed. In one loan that was contracted upon annuities the terms were equal to £5 4s. per cent, while money could be borrowed upon Consols at £3 8s. The large difference was partly owing to the fears of capitalists concerning the income tax, and the present was a good time for altering the practice.
MR. W. WILLIAMSsaid, the statement made by the hon. Gentleman (Mr. Hubbard) was merely a repetition of what he had urged on former occasions; and although it might be more convenient for the Bank of England to advance the money in the way proposed, yet he (Mr. W. Williams) should prefer having the money raised in the manner proposed by the Chancellor of the Exchequer—by terminable annuities.
MR. HANKEYsaid, he thought the hon. Member for Lambeth had misunderstood the object of the hon. Member for Buckingham. That hon. Gentleman did not say anything that could lead the Committee to suppose that the Bank at all wished to make the loan a perpetual one. The effect of his hon. Friend's suggestion would be to relieve from income tax that portion of the annual payment which was a return of capital. That would open a very wide and very difficult question, and he did not think that it would he wise for the Chancellor of the Exchequer at that moment to change the principle upon which annuities had hitherto been charged as income. If a man purchased the goodwill of a business, the income which he derived
1228
from it was in part a repayment of the capital which he had expended, and he would have as much right to be exempted from income tax on that portion as had the annuitant. If the income tax was to be arranged upon such a principle its collection would be impossible, and as they were not prepared to abandon it they ought to take care not to clog it with such conditions as would render its collection more difficult than it already was. His hon. Friend had referred to the loan of £16,000,000, and he would state to the Committee some facts connected with the Irish famine loan, contracted about the year 1847, which would show that it was not always so economical to borrow by means of Consols as his hon. Friend supposed. That loan was issued in 3 per cent Consols at about 89½ per cent. During the following six years the Commissioners for the Reduction of the National Debt redeemed out of the surplus income of the country stock to the amount of rather more than £8,000,000, or the whole of that loan. The loan was contracted for at 89½, but the stock was repurchased at an average of 97 per cent. Thus, during six years the public had to pay 9 per cent more than they had received, or about 1½ per cent per annum. Adding this to the exact rate of interest paid—£3 7s., it appeared that this money was raised at not much under 5 per cent. That showed that the issue of Consols was not at that time, and under even favourable circumstances, an advantageous mode of raising money. His hon. Friend had said that one of the disadvantages of borrowing on terminable annuities was, that every contractor would necessarily allow such a margin in his bids as to secure him against the contingency of a high rate of income tax. As regarded the interest, this would apply equally to Consols; and the difficulty, therefore, only arose specially upon that part of the annuity which was a repayment of capital. He would not discuss the question what would probably be the average rate of income tax during the next thirty years, but he did not think that the uncertainty as to that would have such an effect upon the mind of the public as to render this mode of borrowing more disadvantageous than that which was adopted in the case of the loan of 1847. The termination of any amount of Government debt was a matter of so much importance that he must press the Chancellor of the Exchequer to follow the precedents, and to adhere to the proposition which he had

1229
made as to the method of raising of this money.
THE CHANCELLOR OF THE EXCHEQUERsaid, he wished to call the attention of the Committee to the fact that though two subjects had been discussed in the conversation, only one of them was for any practical purpose before them. The question whether they ought to borrow on terminable annuities or on permanent annuities formed no part of the subject really before them. He must say, however, that his hon. Friend (Mr. Hubbard) was somewhat bold in his assumption when he said that the difference between borrowing on Consols in 1855 and borrowing on terminable annuities was as £3 8s. to £5 per cent. The difference was not as stated by his hon. Friend, as the hon. Member for Peterborough (Mr. Hankey) had shown in the clear and simple illustration which he had given, and he might add that the hon. Member for Peterborough had rather understated his case, as the period of six years which he tool; was not the maximum, but the minimum period on which he might have based his calculation. Further, his hon. Friend should recollect that the loan of 1855 was not two separate transactions, but one and the same loan, so that it must ever he matter of uncertainty what the lender gave for the perpetual sum and what for the terminable annuity.
With reference to the actual question before the Committee, his hon. Friend who moved the Amendment said the amount of the public debt did not distinguish between the payment of interest, and the repayment of capital. It did not do so, but really that was a matter of small importance. What the public wanted to know was the annual charge of the debt. The minute question how much was interest, and how much was capital, was a calculation which every man made for himself; but it was not of practical moment that it should he presented to the public in the annual statement of accounts. His hon. Friend did not put his case as the ground of defending the interest of the future proprietors of the terminable annuities. The truth was they were in no danger whatever, and his lion. Friend did not rest his case on that ground. The question as to the incidence of the income tax on such annuities had been raised long ago, but no income tax was in existence when terminable annuities were first introduced; and the whole groundwork of the argument against them, in its connection with the
1230
income tax, disappeared if the contract for the annuities was made at a time when the income tax was in force. It was, in his, estimation, impossible to adopt the system proposed by his hon. Friend and not endanger the whole foundation on which the income tax rested. Some people he know I wished to reconstruct the whole system of the income tax, and his hon. Friend was one of them. He now proposed to introduce the thin end of his scheme, but he hoped the Committee, before they adopted it, would seriously consider the consequences to which it would lead. His hon. Friend's argument as to the economy of his proposal was not so very clear as he seemed to suppose, he said it would lead to greater economy in future years; but the House of Commons did not give by the Bill before them any judgment whatever, either as to the precise amount they might raise in future years, or the manner in which that amount might be provided. It would be quite open for the House of Commons next year to borrow in Consols, or not to borrow at all, or make any other provision. What they had before them was a limited operation, and there was a clause in the Bill, the: 17th, which authorised the Treasury to bring the annuities now to be contracted into the category of the annuities of 1855, and, by placing them on the same footing as those annuities, enlarge the stock instead of creating new and limited stock. The creation of a multitude of new and limited stocks was inconvenient. It was better to have the stocks few and large. The annuities of 1855 had got twenty-five years to run, and the most expedient mode of action might be, to put out the new annuities in all respects in the same condition as the annuities of 1855, and the economy of making them part of existing stock might counterbalance any disadvantage they might have to encounter in the element of uncertainty. He believed that the Government had come to a right conclusion on this question, and therefore he trusted that the Committee would not give its sanction to the proposal submitted by his hon. Friend.
MR. HUBBARDreplied. The hon. Member (Mr. T. Hankey) had levelled his argument, not at what he had said to-day, but what he said last week. The hon. Member's illustration was the worst he could have used, for he had picked out the loan of 1847, when a panic prevailed, and when the Government borrowed at a disadvantage. If that loan, too, had resembled

1231
the present, the period of thirty years would not have expired, and the time would therefore not yet have come for repayment. There was no affinity whatever between the two cases. In the addition he proposed to the clause, he had not said a word about the income tax. He did no more than tell the truth, and he could not help thinking that a deplorable state of things had arrived when the Chancellor of the Exchequer deprecated telling the truth in a matter of finance, Such a shrinking from facts he could not help thinking was not worthy either of the House or the country.
Amendment negatived.
Clause agreed to, as were the remaining Clauses.
Schedule,
SIR FREDERIC SMITHsaid, he rose to propose to reduce the sum for Portsmouth by £200,000. The whole sum proposed to be expended at Portsmouth was £1,920,000, of which it was intended to take £580,000 in the present year. The outlay was to be divided between the Needles, the Isle of Wight, Portsdown, and Gosport barracks. Opinions differed, however, as to the value of some of these defences. Sir John Burgoyne was against the construction of some of the proposed works at the present moment. The Commissioners, on the other hand, designed to erect the works without the protecting links, which would leave them very incomplete. It was a great mistake to execute works of such an extent as would require enormous garrisons to defend them. It would be far better to construct works on a more limited scale, but as strong as they pleased, provided they could well garrison them. Take the Chatham lines, for example. They were about a mile in extent, and would require from 8,000 to 10,000 men to defend them. Double their extent, and they would require 20,000 men. But if they strengthened the same works by making a covered way and raising the walls, 5,000 men would suffice to hold them. He had to complain that men like Sir Hew Ross, Admiral Chads, Admiral Richards, and Sir William Parker, had not been summoned to give evidence before the Commissioners. Lord Seaton and the gallant Member for Westminster—men who had commanded armies, and who could tell where we could place our forces in order to be able to meet an enemy—ought also to have been examined as witnesses. The proposed expenditure at Dover, like that at Portsdown Hill, would
1232
be money thrown away; while, on the other hand, the whole outlay for the defence of the Thames was to be £180,000, of which only £60,000 was to be expended in the first year. Why not take the whole £180,000 at once, and complete the works for the Thames without delay? We saw that the New Zealanders could throw up earthworks in a few days, and surely, with our advantages, we could execute field-works on the shortest notice. He hoped that the scheme for so greatly enlarging the works of Dover would be given up, and that the money asked for would not be applied to Portsdown Hill. There might be a hot fit just then, but a cold one would follow in another year, and the works at Portsdown Hill would not be finished.
Amendment proposed, in line 5, after "Portsmouth." to leave out "£580,000," and insert "£380,000."
SIR FRANCIS GOLDSMIDsaid, that a careful perusal of the Report induced him to support the Amendment of his hon. and gallant Friend. It was clear that, in order to show the expediency of sea defences, it was only necessary to point out the probability that an enemy's fleet, giving the slip to ours, might run in and bombard our docks, On the other hand, the demand for land fortifications must proceed upon the supposition that the enemy would think it worth while to incur the enormous risk of putting troops on shore in order to attack the docks from the land side. Now, he thought the Commissioners bad made out a good case for the establishment of sea defences; but they had made out no case for the fortifications on the land side which they recommended. They applied a magnifying glass to everything that could tend to facilitate the invasion of this country; and, on the other hand, they used the best optical instrument they could find to diminish the apparent size of objects when they came to look at our means of resistance. In the third paragraph of their Report they advanced the extraordinary proposition that if for a time our fleet lost the command of the Channel our insular position would be rather a disadvantage to us for defensive purposes, because it would enable the enemy to select any part of the coast they pleased to effect a landing; and they referred to the experience of the late Russian and Italian wars in support of this proposition. Now, in the first place, he thought there was no ground for the apprehension that the English fleet would

1233
ever lose the command of the Channel; and in the next it should be remembered that the Russian fleet never had the command of the sea, and the allied commanders were, therefore, able to lay their plans just as though the Russians had had no fleet whatever. Could even the Commissioners fancy there was any ground for supposing that the English fleet would ever be reduced to a similar position? The Commissioners treated somewhat contemptuously the facilities for defence afforded by our railroads and telegraph. But every other military authority considered these facilities, which the Russians did not possess in the Crimea, to be of the very highest importance. He submitted, therefore, that the Russian war had no bearing on the question. Neither could the landing of the French troops in Italy during the late war; for the French army landed at Genoa, one of the best ports in Europe, belonging to an active and zealous ally. What inference could be drawn from that, applicable to the lauding of an army in England, probably on an open beach, in the face of an opposing force, and certainly in the midst of an earnestly hostile people? Why, by the same process of reasoning he could prove that it was perfectly easy to take the fort of Ehrenbreitstein; for he had more than once entered that place, without the garrison daring to oppose him, when he had the permission of the commandant to view the fortifications. But without this permission a skilfully led army could probably not have entered. Yet it was in reliance on logic such as that of the Commissioners, inferring what can be done against energetic resistance, from what can be done when there is no opposition, that the House was about to impose heavy burdens on the taxpayers of the country. The improvements now making in gunnery threw additional doubt on the propriety and expediency of erecting these fortifications, and that doubt applied with greater force to land than to sea fortifications. It was already thought necessary to erect the sea defences on the points farthest seaward that it was possible to find; and even if further improvements took place in long range artillery, we could not be asked to build forts on places more seaward, because no such places could be found. On the other hand, if immediately after land defences should have been erected four or five miles from a dockyard, a future Whitworth should increase the range of artillery to seven or eight miles, we might be told that the
1234
forts just completed had become wholly useless, and it might be found necessary to carry those defences still further inland. He thought, therefore, that it was desirable that as far as possible our expenditure for the present should be confined to our sea defences, and as the Motion of his hon. Friend would only delay that part of the works as to the expediency of erecting which there was the greatest doubt, he hoped it would find favour with the Committee.
MR. SIDNEY HERBERTsaid, he hoped the Committee would not be influenced by the authority of his lion, and gallant Friend, high as it was, to give their assent to the Motion. It was said they had not sufficient evidence on this subject. His hon. and gallant Friend had asked why they had not examined Sir Hew Ross. Why, if they had wished altogether to shelve the matter—to stave it off entirely—they could not have done better than go hunting about for men of reputation in the army and examine them; but the Commissioners had taken evidence at considerable length, and that evidence was of the most distinct and satisfactory character. With regard to Portsdown Hill, until he heard this discussion he could not have conceived that any body of men could be found to say that, in defending Portsmouth, of all places in the world, they should omit Portsdown Hill. [Mr. BERNAL OSBORNE: You could not take an army there.] Yes; let them fortify Portsmouth to the sea, to the east and to the west, and leave it open to the north, and they would find an army there. An enemy would not come and attack us where we were strong, or neglect to attack us where we were weak. They had been told a few nights before by the hon. Member for Brighton (Mr.White) that the strength of a chain was its weakest point. Now the Motion of his hon. and gallant Friend would purposely leave a weak point—the only weak point in which they could attack Portsmouth. What the Commission recommended was what every officer had proposed, except his hon. and gallant Friend, who had been commanding officer at Portsmouth. But a new state of things had since then arisen with the long range. General Shaw Kennedy had recommended Portsdown Hill for fortification works, and Sir William Napier agreed with him, General Shaw Kennedy had published a letter in the newspapers, in which he entirely agreed with the plan of the Commissioners, which he declared to be an ad-

1235
mirable plan if Government had only the courage to adopt it. Sir John Burgoyne, in November, 1858, before the Commission had given evidence confirmatory of these views. Last year the question of the long range arose. Sir John Burgoyne gave evidence before the Volunteer movement, and said he did not see where they could get troops; if they could get troops, he said, they should defend Portsdown Hill. Last year another document was signed by Sir John Burgoyne as to the means of defending Portsmouth now we had got the long range, and in that he expressed his opinion of the importance of fortifying Ports-down Hill, as the whole dockyard could otherwise be bombarded from it. Having got the Report of the Commission, it was submitted to a Committee, consisting of the noble Lord at the head of the Government, the First Lord of the Admiralty, and another Cabinet Minister, who were assisted by the Duke of Cambridge, the Commander-in-Chief, Sir John Burgoyne, Inspector-General of Fortifications, Sir Howard Douglas, and others. It was decided that the sea defences should be taken first, because they were of most importance, Accordingly they were now taking the sea defences, and were going to spend all the money they could on such limited works in one year. The land-works were regarded as only of secondary importance to complete the protection of the dockyard. They had for these fortifications the authority of Sir John Burgoyne, Sir Howard Douglas, Colonel Shaw Kennedy, and of the whole Commission. And yet they were told they had no authority! The gallant Officer (Sir Frederic Smith) talked of field-works on Portsdown Hill. It should be borne in mind that the hill was composed of hard chalk, that there was not a sod of any thickness on the top of it, and that field-works could not, therefore, be rapidly constructed upon it. Ours was not a military country. Was it wise, then, to postpone to the last moment works which, in the hour of need, would be of the greatest importance, and which it was acknowledged must be erected in the end? The gallant Officer owned that they must be made ultimately. Surely it would be far wiser to construct them in good time. Allusion had been made to the deficiency of barrack accomodation in England. Our barracks were how overcrowed to the extent of 25,000 men. But these forts would be barracks. There was no reason why we should not build barracks so as to form an
1236
element in our defences. It was asked why they did not take more money for the sea defences; but the reason simply was that they were advised by competent persons that the sum the had taken was as much as could be spent in the year. The truth was, we had gone on for years nibbling at this matter of fortifications. The persons engaged on the works did not believe they would be carried out so as to become solid and complete lines of defence, and the consequence had been a disposition to ''scamp" the work. Here, at last, was a complete and comprehensive plan, and immediately a demand was raised for the omission of a small but important part of it, all for the sake of showing superior acumen and powers of criticism. When they were about the work, why not do it thoroughly and completely at once? The object of the fortifications was not so much to resist as to deter attack; and as long as one weak point was left that object would not he secured. The enemy were as acute as ourselves, knew all our weak places, and the point against which they would direct their attack would be one of those places. He earnestly hoped that the Committee would not accede to the proposition of the hon. and gallant Member.
COLONEL DICKSONsupported the Amendment. These land defences were not necessary, as he believed it was utterly impossible, with the use of the commonest precaution, that a foreign army could invade our shores. We had not a sufficient army to man such places as Portsdown Hill, and it would be throwing money away to fortify that place, unless the army was increased. He thought the state of the militia was most unsatisfactory. In England, Scotland, and Ireland only 38,852 of the militia had been trained during the last year, and there was no security that the number would not be less next year. He thought that our money had better be devoted to an increase of the army and of the militia, than to the erection of these land defences, and had therefore great pleasure in supporting the Amendment of his hon. and gallant Friend.
MR. NEWDEGATEsaid, that all the warnings which had been given of the insufficiency of our naval defences appeared to be totally forgotten in the Committee. It was admitted by the highest authorities, both naval and military, that our naval force was insufficient to guard our coast, and to say that invasion was impossible was therefore to contradict the evidence of

1237
the most competent witnesses. In the Russian war they all knew how readily an army was transported across a far wider sea than separated France and England, and disembarked with safety and rapidity on a foreign shore. It was essential to convince the people that the Government and the House were proceeding in a workmanlike manner. If he could believe that the works at Portsdown Hill were wholly unnecessary he would vote against them; but they were recommended by authority of such weight, that he would not accept the responsibility of doing so. There was, however, one proposal which he thought might very well be postponed, and that was for the central arsenal. The work was not included in the first Report of the Commissioners, and it was obvious that it could only be of use after the Metropolis was in the hands of an enemy, and the forces of this country were falling back towards the north of England. He was in favour of removing the military stores from Woolwich, but Weedon was a better site in every respect for an arsenal, except that it was not favourable for permanent fortification. The proposal was to make, not merely an arsenal, a central fortress, and it would render the whole scheme liable to misrepresentation. It would lay the Government open to the imputation that they sought such a fortress as a protection against the people of this country, and would damp the energies which were now directed towards making provision for the construction of defences which were really necessary.
MR. BAILLIE COCHRANEsaid, he thought they were acting with great inconsistency towards the Emperor of the French, at one moment treating him as an ally in whom they had the greatest confidence, and the next as the representative of a power against whom they were to guard themselves at an enormous expense. He should support the Amendment.
Question put, "That £580,000 stand part of the Schedule."
The Committee divided:—Ayes 79; Noes 28: Majority 51.
Schedule agreed to.
House resumed.
Bill reported, without Amendment; to be read 3° To-morrow.
House adjourned at half after Two o'clock.

MINUTES.
PUBLIC BILLS.—2a Refreshment Houses and Wine Licences (Ireland).
3a Census (Scotland); Corrupt Practices Prevention Act (1854) Continuance.
Royal Assent.—Oxford University (No. 2); Herring Fisheries (Scotland); Tithe Commutation; Game Certificates, &c.; Senior Member of Council (India); Admiralty Jurisdiction (India); Superannuation Act (1859) Amendment;
1160
Police and Towns Improvement (Scotland) Act Amendment; Labourers' Cottages (Scotland); Militia; Railways Act (Ireland) (1851) Amendment.

ROYAL NAVY—THE RESERVED LIST.
THE EARL OF SHREWSBURYsaid, that in moving for Correspondence, commencing November, 1859, between captains on the reserved list and the Board of Admiralty, he should trouble their Lordships with a few observations on a subject affecting the officers in Her Majesty's Navy to whom it referred—the captains on the reserved list. Those officers, it appeared to him, had been treated with a considerable degree of hardship, if not with something very near akin to bad faith. The case was a very short one, and rested on one or two orders that had emanated from the Admiralty. Previous to the year 1851 the promotions of officers in Her Majesty's Navy were conducted in this way:—Eirst, there was promotion from the various lists by selection, and afterwards there was what was called brevet promotion. The latter generally took place when there was some national event of importance, such as the birth of a Prince. That course was found to be inconvenient, as burdening the active list too much, and making the flow of promotion difficult, if not impossible. In the year 1851 the reserved list was created. The officers put on that list were not to be called upon to serve the Crown except in cases of emergency^; they were to advance one step in rank, and to receive the half-pay of the rank to which they were promoted. Previous to 1851, when an officer was put on the retired list with a captain's commission, there was a distinct bargain made with him that he was to remain on the superior list on which he was placed—that he was never to be moved from it, but should continue to receive the lowest rate of half-pay—10 s. 6d. a day. However, by an Order in Council of the 25th June, 1851, it was directed that captains promoted to the rank of admiral and placed on the reserved list should receive the half-pay of rear-admiral, but be allowed the same advantages in respect of rising as if they remained on the active list. In the case of commanders put on the reserved list as captains, there was no stipulation that any were to remain at the lowest rate of half-pay, and therefore they considered that they had a right to advance on the list and receive the increased half-pay given to those nearer the top. There were three classes of those officers;

1161
the first 70 captains on the list were entitled to 14 s. 6d. a day; the next 100 to 12 s. 6d.; and all below that to 10 s. 6d. The great grievance of this last class of officers was that they were kept at 10 s. 6d. By the change that they made in 1855 they only received an additional Gd. per day, because had they continued on the commanders' list they would have got 10s., and they now only received 10 s. 6d., although they were placed on this list for meritorious service. Their Lordships were aware that a new scheme for retirement had been propounded. Those officers hoped they would be allowed to participate in the benefits of that scheme, according to which they would be allowed to retire from the active list at the age of 60 with an allowance of 18 s. a day. It appeared that those officers who had allowed themselves so long ago as 1851 to be placed on the reserved list were now treated as if the were only commanders. The absurdity of this interpretation of the Order in Council was made sufficiently manifest by the fact that some were placed on the reserved list for not having served and others because they had served. A good deal of correspondence had passed between these officers and the Admiralty, by which Department all recognition of their claims had been refused. He would now leave the case in their Lordships' hands. In pleading the cause of these meritorious officers he was only advocating the claims of justice; and he trusted that some expression of opinion might emanate from their Lordships would induce the Admiralty not to persevere with a measure calculated to disgust the service. The pecuniary amount involved in this question was a mere bagatelle. These officers had been cajoled into allowing themselves to be put on this reserved list, and many of them would now be glad to get back to their former position. Indeed, several of them had-applied to be reinstated as commanders. He hoped that the noble Duke, who would be the last person to wish to do an injustice, would not finally dispose of the claims of these officers in a hurry. If there had hitherto been any misunderstanding in this matter, let there be none in future, and if hereafter an officer went upon the reserved list, with a knowledge that he would only receive 10 s. 6d. a day, ho would have no right to complain. The noble Earl concluded by moving—
"That there be laid before the House Correspondence, since November, 1850, between Cap-
1162
tains on Reserve List and the Board of Admiralty."
LORD CHELMSFORDsaid, he had been requested to assist his noble and gallant Friend in bringing the case of these officers before their Lordships, and he did not undertake the task until he had heard some of their personal statements, and had satisfied himself, on careful examination, of the justice of their claims. He was convinced that every one of their Lordships had an earnest desire that justice should be done to a deserving class of officers. He had no intention to cast any reflection upon the noble Duke at the head of the Admiralty, who, he was sure, had been uniformly actuated by an anxious wish to perform his duty with perfect fairness towards all branches of the service. He believed either that this case had never been properly brought before the noble Duke, or that his view of it was erroneous. The question depended upon certain regulations of the Admiralty, which were passed for the purpose of carrying out an Order in Council of the 25th of June, 1851, on the subject of promotion and retirement in the navy. Prior to that time, apart from promotion for distinguished services, there was a system of brevet promotion, which took place on occasions of public rejoicing, or periodically at intervals of four or five years. Under the head of "captains," there appeared the following regulation, which was intended to carry out the Order in Council to which he had referred:—
"While my Lords have to recommend the abandonment of the system of brevet promotion in future, they are, nevertheless, desirous of meeting the claims of old officers who have served long and well, and who seek their promotions rather as a reward for past services than in expectation of further employment. To meet those claims equitably, and, at the same time, not to fill the active list with officers who cannot long continue fit for service, their Lordships will promote by selection fifty commanders to the rank of captains."
By an Order in Council of January, 1856, this number of fifty was increased to one hundred. These officers believed that under this regulation they would be entitled to all the advantages which officers upon the active list enjoyed, with the exception of having a right to active employment. The right, however, was reserved in the Order in Council to employ these retired captains on the reserved list. They considered that they would be entitled to the gradual advance in pay and rank, and

1163
all the advantages of the out-pension of Greenwich Hospital, and other privileges which that class enjoyed. The officers who were advanced to this rank, of course they became entitled immediately to the lowest scale of captain's half-pay, amounting to 10 s. 6d. a day. The Admiralty, however, construed this regulation at the present moment, though not from the first, as en titling these officers merely to the 10 s. 6d. a day for their lives, without any advance in rank or in pay, and without any of those concomitant advantages to which he had referred. There were parts of this Order in Council referring to other classes of promoted officers to which he requested particular attention. The next class, numbering 100, were under the head of commanders, to be promoted to the rank of retired captains, and these were persons who agreed to take that rank on the un derstanding that they were not to advance in rank or pay, but to retire from the ser vice on the increased rank given to them. The third class, under the head of com manders, were to be placed on reserved half-pay—namely, all commanders who had not served afloat or in the packet ser vice within twenty years, or who were physically incapable of service. Now, they were not here dealing with officers selected in consequence of meritorious ser vice, but with, those who had not served for twenty years, or who were physically incapable of service. And what were the advantages they had? They were to be allowed to retain all the advantages they now enjoyed, of rising in pay and rank, and receiving the Greenwich out-pensions. Here, then, was the anomalous inconsistency of the construction put by the Board 'of Admiralty at present on this Order in Council with respect to the retired list of captains. They were to be advanced as a reward for meritorious services; the others because they had not served for twenty years afloat, or were physically incapable of service. They deprived those who were selected for promotion, as a reward of merit, of any advance in rank and pay, and all corresponding advantages of the out-pension of Greenwich Hospital, and gave all those advantages to the other class, not as the reward of merit, but merely as the consequence of physical in capacity to serve. The half-pay of commanders was 8s. Gel. a day; but the first 150, whether on the reserved or active list, had 10s. a day; so that these meritorious officers, had they continued commanders,
1164
would have risen to 10 s. a day; nay, to be captains with increased pay, and to rear-admirals ultimately with 18 s. a day. The reward for the service of these meritorious officers, therefore, was only 6d. a day for their lives without any advance. He asked whether it was possible to put fairly and justly such a construction on this Order in Council as the Admiralty of late years, and only of late years, had put upon it? Bat it appeared to him that by some regulations they had lately issued the Admiralty had almost given sentence against themselves. The Navy List was published by authority, and it was rather remarkable that from the time this Order in Council of 1851 was passed down to 1856 there was no class of half-pay for the reserve captains. At that time the Admiralty entertained the notion that they were entitled to all the advantages they now demanded, and three of them were actually given the outpension for Greenwich Hospital. In the year 1859 Captain Gordon, who was at the head of this reserved list, and who became entitled, as being within the first 170 on the list of captains, to the advanced pay of 12 s. 6d. a day, applied for it to the Admiralty, and was told there was some recent regulation, or some opinion was entertained, under which he was not entitled to it, but that he must continue at 10 s. 6d. a day for his life. Since 1856 there had been a class of reserved captains upon the half-pay list at 10 s. 6d. a day, placed below the retired captains at 10 s. 6d. a day; so that, in point of fact, these reserved captains, advanced for merit and long service, were placed by the Admiralty precisely in the situation of the retired captains on 10 s. 6d. a day, which they had agreed to accept and retire from the service. It was important to observed the distinction that was made in the Commissions of reserve captains and captains on the retired list. The former were actually appointed to a ship With the addition of "for rank only;" and the latter were appointed not to a ship, but "to the rank of retired captain" only. He held that the case of these officers on the reserve list was almost irresistible, and it was quite impossible fairly and justly to put the construction upon this regulation for which of late years the Admiralty had contended. During the present year regulations had been published in the Gazette, according to which the retired pay of commanders who had been advanced to the list of captains, and who had served more than twenty years at sea, was to be

1165
6s. 6d. a day; and to this there was a note—"Commanders who have been promoted to the reserved list of captains, under the Orders in Council of the 25th of Juno, 1851, and the 20th of January, 1856, will he entitled to increase of pay on the above scale, according to their length of service." If the Admiralty was right in treating these officers as they had done since 1856, as retired captains, only entitled to 10s. 6£ per day, on what principle did they now say that they were and should be entitled to an increase of pay according to length of service? Was this intended as a boon, or only as the tardy acknowledgment of a right, and if it was a boon, why was it so grudgingly given? According to the true construction of the regulations, these officers were entitled to advance from rank to rank, and from pay to pay, until they arrived at the rank of Hear Admiral, when, not having served for their flag, they would be put upon the reserved list of Admirals, and would he entitled to 18s. per day, to advance from rank to rank, and to receive the pay of their rank if they were called into active service. Was this retirement to be compulsory or voluntary? If it was proposed to give these officers the choice of retirement, let them at least have the benefit of the highest scale, to which they were entitled; while if the retirement was compulsory it was one an addition to the injustice which had already been practised, because they were in fact to be replaced in the class of commanders, for the purpose of compelling them to retire upon the terms applicable to that class, and to that class alone. He had pleaded earnestly and anxiously for these officers, because he believed that their case was a good one. There was 100 of them, and the difference between 16 s. 6d. and 18 s. a day would only amount to twenty-six guineas a year for each of them. Ho hoped that so paltry a saving as that would not be allowed to stand in the way of the recognition of the just claims of a most deserving and meritorious class of officers.
THE DUKE OF SOMERSETsaid, he must claim the indulgence of their Lordships, because he came down to the House, knowing indeed that a question was to be put to him respecting the reserved list of captains, but not at all aware that the question was to be argued with all the legal ability with which the noble and learned Lord had just discussed it. There was, it was said, nothing so terrible on board ship as "a sea lawyer." His noble and
1166
learned Friend had assumed that position, because he had argued this matter with all his legal ability and with all his attachment to his former profession—the navy. He could assure their Lordships that he was anxious in this, as in all other eases, to treat the navy with perfect good faith. It was not correct that what the noble and learned Lord complained of had been done by the present Board of Admiralty; he had done no more than follow in the course he found already laid down, and if ho had followed any other line of conduct he should have been acting contrary to the decisions of previous Boards of Admiralty, and must have obtained a new Order in Council. The noble Earl (the Earl of Shrewsbury) had imputed to the Board of Admiralty that they had treated these officers with had faith, and had construed the Order in Council as it had never before been construed. Neither of those imputations was well founded. Under the Order in Council of the 25th of June, 1851, which was passed when Sir Francis Baring was First Lord of the Admiralty, commanders on the reserved list were to be made captains. The object was to reduce the number of commanders on the active list, and that was to be attained first by placing on the redundant half-pay list commanders who had not served for twenty years, and allowing them to rise in rank and in pay; and, secondly, by selecting other officers for immediate increase of rank and pay, to whom, while giving that immediate increase, the plan offered no prospective advancement. The wording of the Order in Council did not point to any increase of rank; and it had been declared by Sir Francis Baring that it was not the intention of the Board of Admiralty of that day to grant to captains on the reserved list the advantages which they now sought for. In April, 1856, a commander applied to the Admiralty to know whether, if he consented to be placed on the reserved list, his half-pay would increase in the same ratio as officers on the active list—whether, in fact, if he went on the reserved list he should go on rising? The Admiralty in their reply distinctly stated that officers promoted to the reserved list were not entitled to any increase of half-pay. in November last a letter repeating the same inquiry was addressed to the Board, the only difference being that it proceeded from officers who had consented to be placed on the reserved list, while in the other case the officer prudently

1167
wrote before accepting the offer, and finding that his half-pay was not to increase refused to allow his name to be transferred. The Admiralty in their reply stated that
"Removal to the reserve list carries with it increase in rank as well as increase in pay. The officers on the reserve list cannot, therefore, he placed in the same position as those on the active list."
It was obvious that the moment the same advantages were given to the reserved as to the active list, officers might as well be kept on the active list for all practical purposes; the object of all schemes of retirement being by immediate payment of an increased sum, to attain eventual economy. But as it might fairly be considered that the word "reserved" did not carry with it the same meaning as "retired," he had been willing to give to officers on the reserved list the advantage of any distinguished services which they might have had the opportunity of performing: to extend this boon, however, to the length of placing them in every respect on a footing with those on the active list would be positive injustice to the latter, over whom they had already obtained promotion and increase of pay. He contended that there had been no breach of faith on the part of the present Board of Admiralty with the excellent and meritorious officers whose requests they would gladly have complied with had it been possible justly to do so; but they had strictly followed the precedents established by former Boards. He would offer no objection to the Motion, on condition that it was made to include correspondence previous to 1859, so that their Lordships might have the whole case before them.
THE EARL OF HARDWICKEthought the noble Duke, if he had any professional feeling or knowledge of the matter would have dealt differently with it; but as it was he was compelled to treat it in accordance with the information of the Admiralty Office, instead of being guided by his own high sense of justice and independence of character. He did not think that the noble Duke had the slightest intention of doing an injustice; but, the fact was, that a class of officers who were placed on the reserved list by brevet promotion; (and their names written in italics, to show that they were placed there for rank and pay alone;) but were not eligible to be employed in the command of ships. When the Admiralty brought in that most unjust act of forcing a reserved list on the
1168
navy, they said that the abolition of the system of promotion by brevet, and the substitution of that described in the Order in Council, was intended as a reward for the past services of meritorious officers, and was to be equitably carried out. He was sorry to say that the conduct of all Boards of Admiralty in reference to these reserved lists had been nothing but a system of shuffling; and this arose probably from their having to deal with officers who were weak in Parliamentary power, and who had against them the desire which naturally existed in the House of Commons to save money. This accounted for the way in which the Admiralty dealt with officers whenever they thought that they could get a few shillings out of their pockets. Their Lordships could but little understand the feelings of officers, who, having entered the service with high hopes, were suddenly stopped in their career, and compelled to leave the service; but this was the condition of many officers. There was an order of the Admiralty, which went to this extent, that these officers should never be employed. He knew one particular officer on the reserved list who during the war with Russia was anxious to serve; and Sir Charles Napier having been told that, as he had a great and important duty to perform, he might choose his own officers, chose this particular officer for his captain. The Admiralty, however, refused to make the appointment; the only reason being that this officer was on the reserved list. Such a course of proceeding was not in accordance with the spirit of the Order in Council. He thought the conduct of the Admiralty amounted to an act of bad faith and treachery towards officers who had been compelled to go on to the reserved list. He did not think that any system of retirement could be conducted justly, except on these two grounds—that there should be a retirement for officers, who from age and infirmity were unable to perform their duties—and this should be a compulsory retirement; and a voluntary retirement (within certain limits) for officers who wished to do so. Every other system of retirement must be founded upon injustice. Take the case of the compulsory retirement of captains at the head of the list, because they had not served for six years. Why, the officers could not get employment, because the country had none for them; and for this they were visited with punishment. Suppose those at the head

1169
of the profession wished to promote an officer, they could refuse to employ the officer who stood before him, and thus force those officers to the retired list. Another point he would suggest was, that it might be advisable for Parliament to advance a sum of money for the purchase of a certain number of commissions from officers annually who wished to retire, and who would prefer having money, instead of taking half-pay. He was sure that many officers would consider this arrangement a great boon, and that the country also would benefit by it.
THE EARL OF SHREWSBURY,in reply, said he only wished to get at the whole truth, and therefore he would assent to the Amendment suggested by the noble Duke.
Motion, as amended, agreed to.

REFRESHMENT HOUSES AND WINE LICENCES (IRELAND) BILL.

  SECOND READING.
  EARL GRANVILLE moved to Resolve,
  "That, inasmuch, as the Money to be paid under the said Bill is a Grant of Supply, and the other Enactments of the Bill are only for providing certain Regulations which are necessary in connexion with the granting of the said Licences, the said Bill may be read a Second Time as a Bill of Supply."
  Resolution agreed to.
  Then the Order of the Day for the Second Reading, read.
  Moved, That the Bill be now read 2a.
  LORD DENMANmoved, as an Amendment, that the Bill should be read a second time that day three months. The Bill, he said, was very imperfect, and would require a great deal of consideration. A Wine Licences Bill in 1660 had been opposed in the House of Lords, and more time had been given for its consideration. He earnestly implored their Lordships not to extend this Bill to Ireland, as the Bill for Scotland had been withdrawn, and petitions against it had been presented from Wales. He referred to an Irish Act, which gave the magistrates power to refuse licences on the grounds of distance from other houses, and read two clauses of that Act—one as to the powers of magistrates, and the other as to appointing inspectors of all houses licensed for the sale of liquor; and he hoped the Government would introduce a general measure for England, Ireland, and Scotland.
  Amendment moved, to leave out ("now") and insert ("this Day Three Months").
  THE EARL OF HARRINGTONsaid: My Lords, I pray you to bear with mc for
  1170
  a few moments, for this is a question, as I view it, so unpopular, except among the working classes, so unfashionable, too, that no one of note would undertake the discussion of it in this House. My Lords, I have ever been a friend of free trade, but I object to the police portions of this I Bill, more especially to the increase of the public-houses, for it is a known statistical fact that the greater the number of public-houses the greater the drunkenness and the greater the number of crimes. My Lords, Mr. Gladstone has passed this Bill through the House of Commons as a measure calculated to promote sobriety—that is to say, a Bill that is intended to flood the country with wine to promote peace with France, that increases the publichouses thousands, that does not diminish the consumption of spirits, and still less of beer; such a Bill is intended to sobriety England and Ireland ! My Lords, like Mr. Gladstone, and in his words, I have in past days occasionally "indulged in no illiberal potations of wine;" he for his health, I for my pleasure; but I never yet discovered that those "no illiberal potations" had a soberizing quality. Lest I should misrepresent Mr, Gladstone I will now quote his words:—
  "I am not going to propose this to the House of Commons as a measure essential to lowering the wine-duties commercially considered. I wish that it should be tried, and stand or fall according to the conscientious judgment of Parliament upon the question whether it will not tend to promote sobriety."
  Following the example as regards the Gin Bill of some of your Lordships' famous ancestors, I have opposed and protested against a similar Bill to this on a former occasion. Permit me, now, to recall to your Lordships' memories some of those great historical statesmen who distinguished themselves in the discussion of the Gin Bill in 1743. The temporal Lords wore Chesterfield, Harvey, Lonsdale, and Talbot; the spiritual Lords were Oxford, Salisbury, Sarum, Canterbury, St. Asaph, London, Norwich, Gloucester and Bristol. My Lords, I entertain profound respect for the spiritual Lords of this House. I admire them for their charities, for their profound learning, and above all, for their sacred office, as the great heads of our Protestant Church. It is for these reasons that I have ventured to bring to their notice an example worthy to be followed, the conduct of some of their saintly predecessors. I do so the more readily because

  1171
  it might be supposed either that the Bishops did not take the same interest in the Temperance movement that is taken by the working classes, or that they had been bit by Mr. Gladstone in considering this as a soberizing Bill, or from prudential motives that they did not agitate the question, regarding it in the light of a Money Bill. My Lords, this is a mixed Bill, partly fiscal and partly of a public character. It is, therefore, quite within the constitutional sphere of the Peers of this House, and especially it is the sacred duty of the Bishops to discuss the Bill, and to make such Amendments in the police portions of it as they may deem necessary. I speak with confidence, because I have the authority of Mr. Gladstone for what I state. These are his words:—
  "If the House of Lords make any alterations in the police portions of the Measure, the House of Commons, though it would not accept the Bill so altered, as it was technically a revenue Bill, yet if it approved of the alteration, might send up to the Lords another Bill, embodying the Amendment."
  In contradiction to what I have stated, it may be said that this is a wine Bill, not a Gin Bill. Yes, it is far worse than the Gin Bill. The promoters of the Gin Bill did but get their wedge in. Now, Mr. Gladstone, with an iron will and an iron arm, has driven it homo to free trade, or something nearly approaching free trade, and which, if not checked, must lead to it, and be a saturnalia of drunkenness. My Lords, we have the high authority of Mr. Gladstone that the measure is to lead to sobriety. Against his authority, I set that of a king of France. Up to the day of his fall, he was considered one of her greatest monarchs. Louis Phillipe said "he wished every vine in France was rooted up, except those devoted to the food of man." I will now state a still higher authority, that of the greatest and wisest of mankind. Lord Bacon said, "Of all things known to mortals, nothing excites and influences the passions like wine. It is, indeed, the common fuel of them all." Let me point out the relative strength of beer, of Mr. Gladstone's wines, and of gin. Beer contains eight per cent of proof spirit. Mr. Gladstone's light wine has 10 per cent of proof spirit; so it is stronger than our delicious Derbyshire ales. It is composed of the skins and stalks of grapes, of the sediments of the first brewing, mixed with a small portion of water, and trodden out by dirty feet. His strong wine is 40 per
  1172
  cent of proof spirit, just five times the strength of beer. Strong gin has 6G per cent of proof spirit, but as it is sold in the gin-palaces it contains not more than 50 per cent of proof spirit. It is, therefore, nearly on a par with the 40 percent wine, which is a sort of gin in disguise. My Lords, I call these Gladstone wines, because no pure juice of the grape, when fermented, contains 40 per cent of proof spirit. Do not, my Lords, imagine that this Bill will diminish the consumption of spirits or beer. No! These are Mr. Gladstone's words:—"I do not believe that the extended use of wine will act very powerfully in limiting or restraining the use of spirits; still less do I believe that it will act powerfully in limiting or restraining the use of beer." Conceive, my Lords, if you can, the beneficial effects that would have been entailed on future generations if those illustrious statesmen and bishops whom I have named had succeeded in their opposition to the Gin Bill. Further reflect on the benefits that would have followed if the Free-traders had been thwarted in carrying the Beer Bill, with its 42,000 pot-houses. Then, judging from old experience, you may prophesy the results of this third curse. Permit me, my Lords, to give you a slight sketch of Frederick the Great's mode of soberizing his motley legions. It was not on the Gladstonian principle, by increasing the consumption of light or of strong wines, or of light or strong schnapps—such, for example, as the "creme d'amour," or "mother gin" that he soberized his soldiers; nor did he lead them into temptation by increasing the number of his public-houses, but rather delivered them from evil by his preventive justice and the rigour of his laws. By Frederick's code, for every crime committed in a state of drunkenness the punishment was double. Thus for the highest of military crimes—cowardice—an officer would be sentenced to be beheaded; but for the same crime, if drunk, he would be sentenced to the ignominious punishment of being hung. Permit me, my Lords, to tell you what Mr. Gladstone has not told you—namely, how this Bill will, in no sham language, lead to sobriety. It will do so by leading to the poor-houses, the mad-houses, the ragged schools, the penitentiaries, the reformatories, the jails, the penal settlements, and finally to the gallows. Now, mark well, this is no claptrap, that in all these places an absolute system of teetotalism is rigidly observed.

  1173
  My Lords, there are two noble Lords in this House—namely, my Lord Llanover (an ex-minister) and the noble Duke of Argyll—who have shut up the public-houses on their estates. I understand that great benefit has arisen from this measure. I therefore ask the noble Duke why a measure which has proved so advantageous on his estate should not prove equally beneficial on every estate in the kingdom? My Lords, these two noble Lords are not the only Peers who have shut up the public-houses on their vast domains. Twenty other Peers have, I understand, done so likewise; and among the rest the Prince Consort, who represents Her Majesty the Queen in all Her virtues. Add to these that great minister, Lord Palmerston. My Lords, I see no reason why that which has been carried out by the Prince Consort and twenty Peers of this House with such marked success, should not be adopted in the towns by the people or the ratepayers in the way of a permissive Bill.
  THE EARL OF DONOUGHMOREcomplained that the Government had made the present a Bill of Supply, with the purpose of compelling the House to pass it, or reject it as a whole. The two or three clauses which made it a Supply, might very well have been embodied in a separate measure, and then their Lordships could have made such alterations as they thought desirable in the other provisions, which were not of a fiscal nature. The measure was simply a police regulation; and there were no circumstances which required it to pass at this part of the Session, when the Standing Orders must be suspended for the purpose. In Ireland, there were no beerhouses, and, in consequence, no such machinery existed for the working of the Act as in England. In consequence of the Ribbon plots still planned in Ireland, it was necessary that public-houses in which these lodges met should be under the constant supervision of the magistrate; but one of the principal points in the present measure took away their control over wine-licensed houses. As he had no other plan of opposing such objectionable machinery as he complained of, he felt there was no resource open except to vote against the second reading.
  EARL GRANVILLEreally thought it would be unnecessary to reply to the arguments used by the noble Lord who had moved the rejection of this Bill, as they were exactly the same arguments as were used by his noble Friend on a former oc-
  1174
  casion against the first Bill, and which their Lordships had refused to entertain. He trusted the Motion would be withdrawn.
  THE MARQTESS OF WESTMEATHhoped the Government would pause before proceeding with a measure which disarranged the entire police arrangements on which the tranquillity of Ireland depended; more especially at a period when it was notorious that Ribbonism was rife throughout the country.
  LORD MONTEAGLEfelt it was impossible to exclude the sale of spirits from these refreshment-houses. He had no objection to the second reading, provided the Government allowed changes to be introduced in Committee, whereby the magistrates should retain the jurisdiction they at present possessed over public-houses. Should the Bill not receive the changes himself and other Lords wished, he would resist its progress at later stages; but the period at which the Session had arrived scarcely justified their expecting the Commons to pass another on the same subject, to which its rejection now must lead.
  VISCOUNT DUNGANNONtrusted his noble Friend would persevere in his Motion. This was a Bill of a very serious character when viewed in connection with the peculiar, state of things in Ireland. Nine-tenths of the Ribbon conspiracies were hatched in public-houses, and, therefore, he looked upon the measure as one of the most dangerous ever laid on their Lordships' table; for it was impossible that the police could have an efficient superintendence over houses of this description. It was an unfair and unjustifiable proceeding on the part of the Government to force such a Bill on at the fag-end of the Session, and when there were very few Irish Peers in town.
  THE EABL OF MAYOthought the Bill was very defective; but if the noble Earl (Earl Granville) would give a pledge to amend it in Committee, he should not be disposed to vote against the second reading.
  THE EARL OF DERBYthought that Her Majesty's Government must have found out by this time that there was no noble Lord in the House connected with Ireland who did not view the provisions of the Bill with the most serious apprehension; and he trusted, therefore, that his noble Friend the President of the Council would not persevere in the attempt to pass the measure in its present shape. No doubt the effect of the rejection of the

  1175
  Bill would be that this particular tax would not be levied in Ireland, but there were a great many clauses of the Bill which had nothing whatever to do with fiscal matters—in fact, there was one clause among the police clauses which had no reference whatever to the subject matter of the Bill,—and it would be most unfortunate if, because there was one clause in a Bill referring to fiscal matters, their Lordships should, therefore, be debarred from considering the other parts of the Bill which had reference to subjects on which their Lordships ought to have coordinate authority with the other House. Nothing was more common, when a Bill of this sort had been altered by their Lordships, than to drop that particular Bill altogether and introduce a new Bill containing those enactments only on which both Houses were agreed. That had been done over and over again, and, unless some course of the sort were adopted, it would be obviously impossible, in a great many instances, for their Lordships to exercise any discretion in matters which had no connection with finance. If he understood from the noble Earl opposite that by consenting to the second reading they would not be precluded from submitting Amendments in Committee, even though at the risk of the Bill being dropped and a new one brought in, he had no hesitation in saying that he should be quite ready to support the second reading with a view of giving to those noble Lords most conversant with the subject an opportunity of stating their views and proposing their Amendments; but, on the other hand, if his noble Friend thought the position of matters to be such that no alteration-whatever could be made in the Bill, and no understanding come to between the two Houses, but that their Lordships must either take the Bill as it stood or reject it altogether, then, though very unwillingly, he should be obliged to support the Amendment. He asked the noble Earl opposite whether ho considered that their Lordships were at liberty to exercise a judgment upon this Bill in reference to moving Amendments, not of a financial character, but such as were purely technical as regarded the police. He should certainly vote with reluctance against the second reading of the Bill; but he hoped, at all events, that they would not be tied down by a declaration of the Government that no alterations whatever could be made by their Lordships in the measure.
  EARL GRANVILLEwas not prepared to say that this was a Bill which their Lordships could not amend, if they thought fit. He did not think that it would be at variance with practice, or unconstitutional, for their Lordships to amend any parts of the Bill, which did not relate to financial matters. He could not, however, pledge the Government as to any particular course in the event of such amendments being adopted. At the same time, as their Lordships knew, it was the practice of the House of Commons to reject Amendments in a Bill of Supply. The Bill had been well considered in the other House, and all the objections he had heard stated tonight were objections to its principle, and not to its details. Ho should regret, therefore, if their Lordships should deem it their duty to introduce Amendments, though he could not pretend to say that it would he contrary to their usual practice to do so, as far, at all events, as police regulations were concerned.
  THE EARL OF DERBYsaid, that after the answer of the noble Earl, and as they would have an opportunity of considering the details of the Bill hereafter, he thought the House should not be inconvenienced by a division on the present stage. He thought it would be an ungracious course for the noble Lord to persevere in his Amendment.
  LORD DENMANsaid, he was extremely sorry he could not acquiesce in the suggestion of the noble Earl, as he felt himself compelled to divide their Lordships upon his Amendment.
  On Question, That ("now") stand part of the Motion?—their Lordships divided:—Contents 27; Not-Contents 5: Majority 22.
  Resolved in the Affirmative.
  Bill read 2a accordingly; and committed to a Committee of the Whole House on Friday next.

SAVINGS BANKS AND FRIENDLY SOCIETIES INVESTMENTS BILL.

  RESOLUTION OF URGENCY.
  THE DUKE OF ARGYLL,moved to Re-Solve,
  "That, inasmuch, as the Postponement of this Bill will withhold a Power of effecting a considerable annual Saving which may be made under its Provisions, and will thus practically continue for a Time an unnecessary Liability on the Public, the Circumstances which require Legislation on this Subject appear to this House to be of such real Urgency as to render the immediate Consideration of the same necessary.

  1177
  The noble Duke said, that when he undertook the charge of the Bill he had no idea that it was to he opposed, and still less that it was to be opposed by his noble Friend (Lord Monteagle) on the cross benches. He could not help thinking that there was some misconception as to the object of the Bill. It was quite true that several matters connected with savings banks had been matters of keen controversy in the other House of Parliament; but this Bill had nothing whatever to do with those matters. The most strenuous opponents of this Bill when it was first introduced were now strongly of opinion that the measure should pass in its present form. The facts were shortly these. The public were under an obligation to pay to the trustees of savings banks interest at 3^ per cent, and, at the same time, they were bound to invest this fund in certain public securities, provided only they were part of the National Debt of the country. The result was that the interest due from them was much less than they received. Consequently there was an annual loss to the public, which they were certainly not compelled to pay every year, but which was, nevertheless, continually on the increase. At the present moment the amount of deficit was £3,000,000 beyond the amount provided for by the Act of Parliament. The object of the present Bill was simply to allow the trustees to invest these funds in other securities, and thus enable them to obtain a larger amount of interest. There was another question as to the power which the Chancellor of the Exchequer had far financial purposes over this fund. It had been said in former times that this financial power had been exercised in a way which was convenient to the Government of the day. But this Bill did not in any way increase or diminish the power of the Chancellor of the Exchequer to deal with these funds for financial purposes.
  LORD MONTEAGLEsaid, that he felt it necessary to bring shortly under their Lordships' notice the real question which was at issue in regard to this Bill. That question was of the first importance. The Chancellor of the Exchequer could now at Ids discretion go into the Stock market and purchase or sell particular security, according as it suited his financial views to raise or lower the value of that security, and for effecting this purpose he had the disposal of £40,000,000; thus possessing a power over the public securities far
  1178
  exceeding that of any individual or any confederacy of individuals. All this, which had hitherto been a surmise or a suggestion, was now matter of proof and of Parliamentary record; for a Committee had lately been sitting under the able and trustworthy presidency of Mr. Sotheron Estcourt, before whom all that he (Lord Monteagle) had in former times asserted had been fully proved. A Bill had been introduced professing to be founded on the report of that Committee; but it had failed to satisfy the expectations of Parliament or to meet the exigency of the case. Though it proposed to withdraw £30,000,000 from the control of the Chancellor of the Exchequer, it still left him £10,000,000 with which to operate on the money market. This Bill had been withdrawn. The present Bill of two clauses was produced as the only record of the proceedings of the Select Committee and of the other House in this matter. It was inadequate and incomplete. He maintained that there could be no urgency for such a measure. Where an evil was admitted there was nothing more imprudent or more unbecoming than for Parliament to pass a Bill which affecting to reform a grievance did not go to the root of the evil, and provide an adequate remedy. This measure contained no remedy at all, and yet it might hereafter be used as an argument against the adoption of a larger and more satisfactory Bill. He objected to the power given to invest deposits in many different securities. Safety was sacrificed, for the chances of a higher rate of interest. Whether in regard to savings banks, private banks, or the Bank of England, immediate convertibility was the principle which ought to be adhered to, a diminution of convertibility for the sake of a better interest was a danger which no trustee ought to incur. In conclusion, he maintained that there was no justification for a departure from their Lordships' Standing Order in favour of this measure, and permitting it to be read a second time at the very close of the session.
  LOUD REDESDALEsaid, he had previously expressed his disapprobation of the Bill, and it was viewed with surprise by some of the most important savings banks in the kingdom, and he had a letter from one of the largest and most important of them in St. Martin's Place, in which they said they had considered the subject, and that they disapproved of the Bill. It was true that the Committee on the Savings Banks

  1179
  did not object to the extending the limit of the security on which the money should be invested, but they disliked it so long as the funds remained in the hands they were in at present. There was a suspicion with respect to savings banks that the subject did require great caution on the part of Parliament, circumstances having occurred in connection with them that had created excitement throughout the country, and which did not render the proposed extension desirable. The advantage to be gained was small, and hardly to the interest of the savings banks. The gentleman who wrote from the St. Martin's savings bank said the Chancellor of the Exchequer's hands had been tied up since 1858, and they had better not be relaxed by passing this Bill, as it would give sanction to transactions in this £40,000,000 in the market, seeing that funds were wanted for India and for fortification purposes. Any advantage to be derived was far less than the danger. There was a feeling that in the hands of the Chancellor of the Exchequer about £3,000,000 of money in the savings banks had disappeared by jobbing and transfer, and this came out in Committee; and as the Bill only took up a small portion of the general legislation required on the subject, and as there was no urgency in the matter, he should oppose the Resolution.
  EARL GRANVILLEwas understood to say he did not see the validity of the objection to the measure or that the investments in the proposed securities were objectionable. The general objections to the Bill were very weak. It was confessed that general legislation was required, but it was said that passing a Bill dealing only with a small portion of the legislation required might be urged as an objection to entering into the consideration of the entire subject at a future opportunity. The Bill could do no possible harm by extending the investments to certain securities guaranteed by Parliament, such as the Turkish Loan, the Canada, Jamaica, and other West Indian Loans. Why their Lordships should deny the public the advantage he could not at all understand. With regard to the question of urgency, it was surely enough to say that the Bill would save the public money.
  LORD MONTEAGLEobserved that the Bill would have the effect of extending the agency in buying and dealing on the Stock Exchange on the part of Her Majesty's Government, thereby giving a sanction to
  1180
  a practice which was condemned and deserved condemnation; and the small saving that might by possibility be effected would be a most incomplete and insufficient return for the sacrifice made in sanctioning a bad system.
  On Question, their Lordships divided:—Contents 18; Not-Contents 18.
  The Numbers being equal it was (according to ancient rule) resolved in the negative.

  CONTENTS.

  Campbell, L. (L. Chancellor.)

  Sydney, V.

  Torrington, V.

  Somerset, D.

  Camoys, L. [Teller.]

  Cranworth, L.

  Ailesbury, M.

  De Tabley, L.

  Foley, L. [Teller.]

  Chichester, E.

  Harris, L.

  De Grey, E.

  Ponsonby, L. (E. Bessborough.)

  Ducie, E.

  Granville, E.

  Sundridge, L. (D. Argyll.)

  Spencer, E.

  Wodehouse, L.

  NOT-CONTENTS.

  Normanby, M.

  Dungannon, V.

  Salisbury, M.

  Hutchinson, V. (E.Donoughmore.)

  Westmeath, M.

  Amherst, E.

  Blayney, L.

  Derby, E.

  Chelmsford, L.

  Desart, E.

  Denman, L.

  Hardwicke, E.

  Monteagle of Brandon, L. [Teller.]

  Mayo, E.

  Orkney, E.

  Redesdale, L.

  Romney, E.

  Wynford, L.

  The Order of the Day for the Second Reading of the Bill read, and discharged.
  House adjourned at Nine o'clock, till To-morrow, a Quarter before Five o'clock.