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Committee

Volume 203: debated on Friday 5 August 1870

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Order for Committee read.

Motion made, and Question proposed, "That Mr. Speaker do now leave the Chair."

, on moving the Amendment of which he had given Notice, said, that it was not until this 5th day of August that Government, in their wisdom, vouchsafed to ask the House to give its consideration to the affairs of India, thus crowning the edifice of neglect with which, unhappily, those affairs had been for so long a time treated. He knew that he was taking an unusual course; but he thought it was justified under the circumstances. The Indian Budget had hitherto been a matter of form. He had long since come to the conclusion that if you wanted anything done by the Government, you must show a determination of action and a decision of policy. Therefore, he had determined that a distinct issue should be placed before the House on this occasion, so that if the Government should not give a reasonably good excuse for the affairs of India being treated in a manner in which they would not treat the most contemptible Bill that could be brought before the House—in a manner in which they would not treat a Turnpike Bill—the House might express an opinion on the matter. He must accuse the Government of what, to his mind, was a breach—of course, an unintentional breach—of an honourable understanding. Some days ago he asked the Under Secretary for India when the Indian Budget would be brought forward, and he understood the hon. Gen- tleman's reply to be that it would be brought forward at the Day Sitting to be held that day. Five hours would be little enough to consider the finances of a vast Empire which were, in some respects, in inextricable confusion; but what was his surprise that morning to find that, instead of having the whole Sitting, Indian Finance was put down as the eighth Order of the Day; and the House was now called on the 5th of August, at a quarter to 5 o'clock, to enter upon the consideration of a question second in importance to none which had engaged its attention that Session. His Resolution affirmed two distinct principles. Firstly, it asked the House to affirm distinctly that it disapproved the Indian Financial Statement being made on' the 5th of August; and, secondly, it asked the House to say that the finances of India were in such a condition that the time had come when the direct responsibility of Parliament should be asserted, and the finances of India scrutinized by a Select Committee of that House. As to the first point, he know that some persons thought the House of Commons had nothing to do with the affairs of India; that they had handed over the administration of her affairs to the Indian Council; and that when they spoke on an Indian subject they spoke as a debating society, without responsibility and without power. Lot them have a distinct understanding on that point. The people of India looked to that House for the redress of their grievances, and if anything went wrong in the administration of their affairs, depend upon it they would hold that House responsible for it. As a Member of Parliament, he felt that all the responsibility resting on him was as nothing compared with the responsibility of governing 150,000,000 of distant subjects; and if the Government said the House had no power, do not let them keep up the semblance of responsibility, do not lot them go through the sham and farce of discussing that Financial Statement; let them toll the Under Secretary of State at once that, if they had no power and no control, it would be far better to acknowledge the fact and have his Financial Statement annually read before the Statistical Society in St. James's Square. The latest assertion of the theory that Parliament had no direct control over the affairs of India emanated from the First Minister of the Crown, who, speaking in May last, on a Motion brought forward by the hon. Member for Carlisle (Sir Wilfrid Lawson), used language which utterly astounded him (Mr. Fawcett). The right hon. Gentleman said—

"The people of India are not your constituents; their finances are governed by the Indian Council; and the Indian Council are not appointed by you, and do not hold their offices during your pleasure."
[Mr. GLADSTONE asked from what source the hon. Member was quoting?] He was quoting from The Times of the 11th of May, and he should be glad to find that the right hon. Gentleman had either not expressed himself with his usual correctness, or had been misreported. But if they were to exercise a direct control, or any control, over the affairs of India, the House ought not to consent that the only Indian subject officially brought before them should be brought forward within three or four days of their proroguing, and at a quarter to 5 in a Morning Sitting. As to the second point, the finances of India were in such a position that it was most important that a Select Committee should be appointed to investigate them with the greatest care; and what seemed to him to be most unsatisfactory about the finances of India was the extraordinary confusion of the accounts. What did they find? An expected surplus suddenly became a heavy deficiency, and a heavy deficiency was suddenly transmuted into a considerable surplus. Two months since they were told that there would be this year in the finances of India a deficit of something like £1,500,000. Now, they were told, on the authority of the Duke of Argyll, that that deficit was likely to become a surplus of something like £250,000. But with remarkable naiveté that noble Duke said he could not place absolute confidence in the exactness of his calculation, because last year all their anticipations had been falsified by a slight mistake of £250,000 in the way in which they made out their accounts in the Home India Office. That was a conclusive proof that the accounts of Indian finance were involved in inextricable confusion. But there arose this important consideration—when the salt duties were raised and the income tax increased to 8d. in the pound, that aug- mentation of the taxation of India occurred upon the supposition that there was to be a deficiency of £1,500,000. Yet, now that it was believed there would be a surplus of £250,000, that additional taxation was not to be repealed, but still continued; and the Duke of Argyll said it was necessary to continue it because the financial exigencies of India would require it. That being the case, they had to decide between these two alternatives — If the anticipated deficiency of £1,500,000 had actually been realized, then, heavy as that additional taxation was, it would have been altogether inadequate. On the other hand, if it had been adequate, now that instead of that anticipated deficiency they were to have a surplus of £250,000, then they ought not any longer to burden the people of India with those onerous taxes. More than one quarter of the whole Revenue of India was spent in this country, and that fact alone should induce the House to exercise the utmost scrutiny over Indian finance. India was like a man who had a magnificent income, but who kept two large spending establishments, neither of which could be properly checked or controlled, and whose separate expenditures interfered with and overlapped each other; and, in addition to that drain upon his resources, he carried on upon his estates many improvements, some of them productive and others wasteful. The result was that he found himself, in spite of his magnificent income, landed almost every year in a considerable deficit. The spending departments in Calcutta and in London were not controlled, and, consequently, during the last 18 years, in five of those years only there had not been a deficit. As to the question of Home charges, he thought it would be a happy thing for India if the Secretary to the Admiralty (Mr. Baxter) could spare six months to look into the Store Department of the India Office. He was told, on good authority, that great and brilliant as had been that hon. Gentleman's discoveries at the Admiralty, they would almost pale before those which he might make at the India Office. There lately appeared in The Times, from a late high official of the Government of India, the most serious charge ever brought against a great Government Department—a charge so serious that he thought the Government must at once come forward to meet it directly, and must welcome any proposal for sifting it to the very bottom, either by a Select Committee or a Royal Commission. Mr. Laing, once an eminent Member of that House, went to India some years ago in a high official position. That gentleman had a distinguished career in India, and not many weeks since he wrote a letter to The Times, containing the extraordinary charge that the finances of India were constantly being sacrificed to the wishes of the Horse Guards and to the exigencies of English finance. That meant that there was no one sufficiently solicitous for the just administration of the finances of India to see that the charges which ought to be borne by England were not imposed on India. It seemed, on considering some of the facts lately brought forward, that that charge, whether right or wrong, had, at all events, a good deal of plausibility. What did Lord Lawrence state the other night in the House of Lords. That noble Lord said that the whole charge of the telegraph between England and India passing through the Persian Gulf had been thrown on India, and as England, at least, got half the advantage it ought to boar half the charge. Then there was the question of the Chinese and Persian missions, and he need hardly refer to the shameful act of meanness when London society enjoyed a great entertainment at the expense of the Indian people. Only lately he saw a letter in The Times, in which the writer said that these continual acts of meanness—alluding to the charges for the Chinese and Persian missions and the Sultan's Ball—produced a worse impression in India than if England were to levy in India an equal sum annually in a regular way. There was another charge, which, to his great surprise, he had found in the accounts of India. In looking over those accounts he actually saw that the Indian people had to pay something over £10,000 for the presents which the Duke of Edinburgh distributed, and for the travelling expenses from England of his two aides-de-camp. What would be the feeling of the English people if they should find, after entertaining an Indian Prince in this country with the most munificent hospitality, that for the presents which the Prince distributed in return they had to pay, as well as for the travel- ling expenses of some of his attendants. The sum might be small; but the smallness of the sum was only an illustration of the melancholy meanness of the transaction. He knew very well the official reply which would be made with respect to this matter. It would be said that it was customary to give those presents, and that the presents received by the Duke of Edinburgh were not retained by him but were handed over to the store of presents in India and afterwards sold. Nevertheless, he know from official sources that some of them were retained, and it would have been better for England to have paid the money ten times over than that such things should be published throughout the length and breadth of India. Independently of these matters, let the House consider what evils unfortunately accrued from the system of double spending, which prevented the responsibility being fastened on any one. He might mention, as an illustration of the serious evils resulting from the want of direct responsibility in respect to the finances of India, that an Indian official lately told him that the head of the Telegraphic Department in India sent in an account to the Government stating that such a quantity of stores were wanted. No pains were taken to ascertain the price of the stores, and the order was forwarded to the India Office in England, and the India Office executed it as agents. When it was discovered that too much money was spent in the Telegraphic Department the Home authorities said that they could not help it—that they received the order and bought the articles. On the other hand, the authorities in India said that they were not to blame—that they sent to the authorities in England for what were wanted, but that the articles were bought at an extravagant price. This kind of thing constantly took place. The Earl of Mayo, Sir William Mansfield, and Sir Henry Durand said that £500,000 was lost last year because the authorities would not carry out reforms in the Army which they formerly agreed were necessary. Again, whatever changes might be made, India always seemed to bear the pecuniary loss. No one could now deny that the amalgamation of the English and Indian Armies had cost India at least £1,000,000 a year. No Return would be more curious than one showing what each recruit now cost India and what the recruit cost under the old much-abused Company. He was told that, considering the amount India spent in the Transport Service, it would be far cheaper to abolish it, and send out all the European soldiers as first-class passengers by the Peninsular and Oriental Company, and give them in addition an amount equal to the fare as pocket money. The greatest ground of complaint against the administration of Indian affairs was the extravagance which hung over all the Departments. Lot the House consider the amount of money wasted on some of the public works in India. He would be the last person desirous of seeing useful public works stopped; but the Duke of Argyll had been obliged to confess that, during the last few years, £3,000,000 had been spent on Indian barracks; and that, with respect to the Bengal barracks, it was just possible, with considerable risk, to live in them; but that as far as the barracks in the North-West of India were concerned, they were actually intolerable. Therefore, all the vast amount of money expended on them had been wasted. He, consequently, desired the appointment of a Select Committee, in order at least to show the people of India that the cause of all this extravagance was blundering and mismanagement. It was sometimes the fashion to say that India was a wealthy and undertaxed country. He believed that India was one of those countries of the wealth of which people were likely to entertain delusive ideas. For centuries it had been the habit of the Indian people to keep a portion of their riches hearded; but on certain public occasions the symbols of barbaric wealth were exhibited. Nevertheless, he believed there was no country in which there existed a broader line of demarcation between the condition of those who were able to squander money in useless luxury and the general state of the lowest portion of the population. Let the House test the assertion that India was an undertaxed country by supposing an emergency to arise requiring £5,000,000 of additional Revenue to be raised in India. It could not be obtained from the land; because, with respect to a large portion of India, the Government were under a solemn covenant not to raise the rate upon land. The money could not be got from opium, or from that most iniqui- tous impost the salt tax. No one would contend that an income tax of 16d. or 20d. should be imposed on the people of India in a period of profound peace. When, therefore, India had been taxed to such a degree as to render it impossible to raise additional taxation, it could not be said that the finances of that country were in a satisfactory condition. The people of India were a most intelligent race; many of them were highly educated; and they looked with the utmost anxiety to every word that was uttered in that House and every act that was done by the Government relating to the affairs of that country. Not long since he was reading the speech of an eminent Native, who in one sentence referred to some extravagant expenditure by the authorities, and in another described how people were driven by the increased taxation upon salt to suck a little salt from the mud that they picked up near where salt was manufactured. That speech was read from one end of India to the other, and such statements would have great effect if over the day of retribution should come. This was not a more Indian question, it was also an English question. The other day it was discussed at a club of which he was a member, when an eminent Indian authority laid it down distinctly that if anything wrong should happen in regard to finance in India, England, though not legally, would be morally bound to pay the interest of the Indian Debt. He did not agree with that opinion; but he thought a distinct policy should be laid down on this subject. If we were morally responsible for the debt, let us say so, and let India have the full advantage of our borrowing powers; if we were not, let us at least show that we were disinterested, and as anxious for her welfare as if we were really responsible. The history of the world did not present a worse tax than the salt tax. Taxing salt in India was like taxing water in England. The finances of India could not be considered in a satisfactory state till they could materially diminish, instead of materially increasing, the salt tax. No Government had ever been strong enough to maintain an 8d. income tax in England in time of peace; and if such an income tax could not be maintained in England, why should it be maintained in India? When that tax was proposed by Sir Richard Temple, every person who spoke, either directly or indirectly, said that the tax was not necessary, and that there would be no occasion to impose it if the finances of India had been administered with due economy. Both the Earl of Mayo and Mr. Strachey expressed a hope that such a Budget would never again be introduced for India. There were three other members of Council well known in India not only for great mercantile sagacity, but for their high character and financial ability — Mr. Chapman, Mr. William Smith, and Mr. Cohen — who insisted that it was not only unjust, but unnecessary. Such being the case, could they wonder that there was discontent in India? Would England be content to pay an income tax of 8d. in the pound, imposed not in consequence of any European crisis, but simply in consequence of mismanagement and extravagance, and after some of the most important Members of that House had declared that the tax was absolutely unnecessary? There was high authority for saying that every argument against the income tax in England had greater force in India. Mr. Laing said that inquiry into income was absolutely abhorrent to the Oriental mind, and that the Natives considered it a matter of honour and credit to defraud and delude the Government upon that matter. He said also that there was more than one well-authenticated case of suicide committed rather than to submit to an inquisitorial inquiry into income. He had read two days ago in The Times that a considerable portion of the income tax had to be collected by native assessors. They were underpaid, and all kinds of complaints were made of the extortionate nature of their demands. One of these was lately investigated, when it was proved that this native assessor had imposed the income tax in a great number of cases in which he had no right to impose it. The cost of the Army in India was £16,500,000; though successive Indian Ministers had said that it ought not to exceed £12,500,000 or £13,000,000. There was no serious attempt made to reduce the cost; but there was a great deal of cheeseparing and small reductions scarcely worth considering, and it was now rumoured that the Government intended to reduce the grants made for higher education in India. He hoped that rumour was untrue. No policy could be more short-sighted. He apologized to the House for having so long detained them. His object was to direct attention to this subject, and to show the Government that there were some Members who henceforth would not be content to have the Indian Budget shoved off to the end of the Session; they believed that no subject of greater importance could be brought before the English House of Commons, and that it must be thoroughly considered by the House. Although they did not look upon the people of India as their constituents, they felt that in taking on themselves to govern that vast dependency they assumed a responsibility of an unparalleled gravity, and the people of India were bound to them not only by the tics of moral obligation, but by the bonds of sympathy and Imperial representation. The hon. Gentleman concluded by moving his Resolution.

said, he rose to second the Motion of his hon. Friend (Mr. Fawcett). He thought, however, that his hon. Friend had dealt with the subject too personally. The present Government were not specially responsible for the difficulties of the question. They had inherited a system which had brought them into all those perplexities. He wished to draw the attention of the right hon. Gentleman at the head of the Government to the fact that it would be impossible to discuss the finances of India at a proper period of the Session unless the date of the termination of the financial year were changed. If that year were made to end on the 31st of December instead of the 31st of March, they might then discuss the finances of India in May instead of August. As regarded the confusion existing in the Indian accounts, no evidence was needed beyond that of the Duke of Argyll, who, in several passages of the correspondence which had been laid upon the Table, expressed himself even more strongly than in the observations which he made the other day in the House of Lords. The noble Duke seemed to think the confusion to be almost hopeless and inextricable. He (Mr. Fowler) certainly thought that much good would be done if the opinions of the people of India could be brought to bear upon the Estimates, before their final adoption by the Government, in the same manner as they now had the opportunity of considering and discussing now laws before they were adopted by the Council. A better illustration of the working of the present system could not be found than the recent imposition of an increased income tax and salt tax. In this country the imposition of heavy taxes with a view to the making of great public works would not be tolerated for a moment. But in India it came to this—that the people were taxed most heavily in order to make these works, for he could show that but for the vast expenditure on public works, the income would be ample to defray the whole of the expenditure. According to the revised Estimate for 1869–70, the income of India was £48,500,000, and the total expenditure, independent of public works, but including the guaranteed interest on railways, was £44,400,000. Independent, therefore, of public works, there was a surplus of over £4,000,000; but on the other side of the account an outlay was incurred of £5,000,000 for what were called Public Works Ordinary, and of £3,500,000 for Public Works Extraordinary. The truth was, that the Revenue of India had been increasing for the last 20 years; but the expenditure had increased yet more rapidly, and we had now got into the period of chronic deficits. The main cause of this state of things was the excessive expenditure on public works, though it was quite true that the expenditure on the Army was extravagant. He wanted to know on what principle they were executed out of Revenue? Either such works were of permanent value to the country, or they were useless. If the former, the charge ought not to be imposed on the taxpayers of any given period, but the payment ought to be spread over a term of years, and if the works were useless they ought not to be begun. Take the case of the barracks. They were costly structures, and meant to be useful for many years—a generation at least, and yet they were paid for out of Revenue. But here in England we paid for our fortifications by a loan, and no Minister would have dared to propose an income tax in order to defray the cost of such works. It seemed to him that the whole system in India as to these works was bad. There was a want of proper responsibility on the part of those who spent the money. He agreed with what was said by Sir Bartle Frere, in a recent speech, to the effect that you ought to appoint a good man to do a work, and trust him and make him responsible, and not to attempt to put him under the chock of another man thousands of miles away. There was need at once of more freedom and more direct responsibility. He had referred to the Army as one source of needless expense. The Army of Madras cost about £3,000,000; and he had recently heard a speech of Sir Charles Trevelyan, in which he intimated that there was no more occasion for that large Army in Madras than there would be in Hertfordshire. If that were so, here at once an opportunity presented itself for effecting an important economy. He regretted that want of time had prevented him from entering more into detail respecting these most important questions; but he entirely agreed with both the propositions contained in the Motion of his hon. Friend, and he hoped before another Session expired a careful and thorough investigation would be made into the condition of affairs in India.

Amendment proposed,

To leave out from the word "That" to the end of the Question, in order to add the words "this House regrets that the Indian Budget is introduced at so late a period of the Session, and is of opinion, considering the present position of Indian Finance, that it would be expedient to appoint a Select Committee early next Session to inquire into the administration of the finances of India,"—(Mr. Fawcett,)

—instead thereof.

Question proposed, "That the words proposed to be left out stand part of the Question."

Sir, I shall not follow the example either of my hon. Friend who moved, or of my hon. Friend who seconded, this Motion, by discussing the details of Indian Finance before the Speaker has left the Chair. To do so would be entirely to reverse the rule of this House with regard to the annual Statement of Indian affairs, which is first of all to hear the representative of the Government, and when his Statement is concluded, then that there shall be full freedom for all Gentlemen to discuss, as fully as they please, the details of the policy which has been laid before them. The questions which have been touched upon of the salt tax, the income tax, and public works, are subjects of immense importance, and which well deserve all the attention hon. Members may be willing to devote to them. It is, therefore, from no want of feeling as to their importance that I hope the House will now adopt the usual course, and consent to go into Committee. But my hon. Friend who made this Motion has submitted two propositions that require from me a very brief notice. My hon. Friend refers to a speech of mine which, he says, to use the mildest expression, astounded him. If that be the mildest expression of my hon. Friend, I should like to know what a less mild expression of his would be. He quoted words as having been used by me—which I will not say astounded, but which certainly surprised me—for he used words which were not mine. And if he will compare the Report of his speech to-morrow—which I have no doubt will be very correctly given—with my actual words, he will find that he entirety misrepresented the whole tenour and purport of my argument—which was, I think, an argument perfectly sound for the purpose which I had in view—that of persuading the House that they had no right to cut off a great branch of Indian Revenue, for which, under the present constitutional arrangements of India, they were not in a position to provide a substitute. I am sure that my hon. Friend's misquotation and misrepresentation were entirely unintentional.

I can only say that I learnt the words accurately by heart. Of course, if I made a mistake I deeply regret it, and I apologize to the Prime Minister. But an hon. Friend of mine has gone to get Hansard and The Times, and he says that the words I quoted were exactly as they were reported in The Times. [The hon. Member, having placed the reports in the hands of Mr. Gladstone, proceeded.] I will ask him now to read the words, and if that be so, the fault of course will not be mine.

The words quoted by my hon. Friend—as well as I can remember his words — were not those which I find in The Times. But I have no doubt that disjecta membra of my speech have been collected, and used for a purpose wholly and absolutely at variance from the purpose for which I used them. With regard to the introduction of the Indian Budget, I cannot altogether agree with those who say that the present practice is highly inconvenient and scarcely consistent with what I will call the decorum of a discussion of this kind. I will not say that the Indian Budget is passed over very lightly, even when it is brought forward at this period, because, happily, there is a body of Gentlemen—small, it is true — but still accustomed to go carefully into those questions, and to pay much attention to the annual Statement of the Indian finances. I wish it was in our power to deal with this question at a more appropriate period. But the real state of the case is this — The Indian Budget is one of those questions which, although enormously important, is not important to-day, or to-morrow, or next day. It is not one of those questions urgent in point of time in the same manner and degree as most of the questions on which we have to make practical decisions during the Session of Parliament, and I will venture to predict it will never be found possible, as long as domestic legislation is in an active state, to discuss Indian affairs in the month of April, May, or June. That is the conclusion at which I have arrived from my experience of Parliament, because in that part of the year the pressure on Government is such that they cannot afford a night for any purpose except one which is to lead to immediate practical results. The conclusion, therefore, that I have come to is that, if it is desirable—and I think it is most desirable—that Indian finance should be discussed at a time when a considerable number of Members of Parliament are in London, and when the mind of the House is tolerably disengaged, there is but one period at which it can be done, and that is the first month of the Session. In the first six weeks of the Session you have those conditions—a large attendance of Members, and the mind of Parliament not totally engaged. Therefore, it becomes a question for those connected with the administration of India whether it is possible for them so to regulate matters as to enable the accounts to be sent home, and the Minister in this country to expound his policy in the early part of the Session. The case is one entirely connected with Indian administration, and I should be extremely glad if the exigencies of Indian affairs would permit of such a change being made, because I feel as strongly as anyone that the present practice is not satisfactory. My hon. Friend then moves that it would be expedient early next Session to appoint a Committee to inquire into the administration of the finances of India. I do not at all join issue with my hon. Friend on principle; but I do not think it would be desirable, in point of precedent, to resolve this year that it would be expedient to appoint a Committee next year. It would be better, as far as a particular decision is concerned, to allow the subject to stand over. But in saying this I do not wish to give any hostile judgment on this question. I think it is desirable from time to time that Committees of this House should be appointed to examine into all the various departments of administration, and among them is the finance of India; and the fact, which we must all deplore, that it is not easy to secure adequate attention within these walls to Indian affairs, is an additional reason for having a Committee to inquire into the matter. I do not think there would be any advantage in giving now what may be called a premature judgment on the case. Do not let it be supposed that I wish to check discussion; but I trust the House will be disposed to pursue it in Committee, because there it can be done most effectually and regularly.

With respect to observations which have lately been made, I wish to call the attention of the House to these two rules—

"No Member is to allude to any Debate in the same Session upon a Question or Bill, not being then under discussion, except by the indulgence of this House, for personal explanations.
"No Member may lead from a printed newspaper or book the report of any Speech made in Parliament during the same Session."

said, he desired to apologize to the right hon. Gentleman in the Chair for having been out of Order. He also wished to say that he now quite understood the position of the right hon. Gentleman the First Minister of the Crown. He had taken great pains to quote correctly; but he most cordially accepted the statement which the right hon. Gentleman had made.

said, he was quite sure his hon. Friend did not in the least intend to misrepresent his meaning.

said, that the late period at which the discussion of Indian affairs was brought on was a long-standing evil, which ought to be put an end to. On the 5th of February, 1845, the Court of Directors of the East Indian Company sent a despatch to the Government of India to which amongst others his own signature was attached as a Director, ordering that the Indian accounts should be at the India Office by the 31st of March in each year, but that order had never been obeyed. If the Indian Council sent out orders to have the accounts prepared at a given time and the officials in India did not obey those orders they ought to be removed from their places. That was the only way in which the Council and the House could get the accounts sent home in proper time. The House was entitled to have the accounts placed before them at such a period of the Session that they could be deliberately inspected and fairly and honestly discussed. From the statement made by the Indian authorities both there and in India, it was quite obvious that no reliance whatever could be placed upon the accuracy of those accounts sent. Under those circumstances, he was ready to divide with the hon. Member for Brighton.

said, that after the speech of the First Minister he did not intend to divide. He understood the right hon. Gentleman to acknowledge that it was desirable, if possible, that the Indian Financial Statement should be brought forward at an earlier period of the Session, and he also thought the right hon. Gentleman would not be unfavourable to his Motion, if renewed next year, for a Select Committee.

said, in order that he might not be misunderstood, he would say that in principle the Government were not in the least degree unfavourable to the Motion of the hon. Member for Brighton (Mr. Fawcett); but it would be necessary for them to reserve to themselves a discretion as to time.

Amendment, by leave, withdrawn.

Main Question, "That Mr. Speaker do now leave the Chair," put and agreed to.

Considered in Committee.

(In the Committee.)

, in rising to make his Statement on Indian Finance, said, Indian finance was a phrase which summoned up very few agreeable associations. All the more proper was it that the first idea which he brought before the mind of the Committee in making the Indian Financial Statement should be an agreeable one, and such it certainly would be; for he had to announce that, whereas on the 3rd of August, 1869, he was obliged to trespass at great length upon the attention and forbearance of those hon. Members who still survived the Irish Church debates, it would not be necessary for him to trespass at anything like the same length upon the attention and forbearance of the scanty survivors of the Irish Land Bill. The second idea which he brought before the Committee would be hardly loss agreeable, for he had further to announce that, by adopting a device suggested last year in The Times, and distributing the compendious Statement of Account which hon. Members had just received, he should be able to disencumber his Statement of many figures. He could not, however, escape from the trinoda necessitas of dividing it into three parts. He must speak first of Actuals; secondly, of the Regular Estimate; thirdly, of the Budget Estimate. By Actuals he meant the completed accounts of the year beginning on the 1st of April, 1868, and ending on the 31st of March, 1869; by the Regular Estimate he meant the Estimate founded on about 10 months' Actuals, and two months' calculation and conjecture, for the year beginning the 1st of April, 1869, and ending the 31st of March, 1870; by the Budget Estimate he meant the forecasts made last April by the Financial Member of the Governor General's Council for the year now in progress, beginning on the 1st of April, 1870, and ending on the 31st of March, 1871. He need not say that that Budget Estimate was founded entirely on calculation and conjecture. Some hon. Members might recollect that he explained very fully in August last the different sources of their Revenue and the different heads of their Expenditure. He thought it well to do so, because many years had elapsed since the representative of the Indian Government in that House had happened to treat his subject in that particular way, and it would seem to be desirable that it should from time to time be so treated; but it would not be necessary now to repeat what he then said, for no change had occurred in the nature either of their incomings or their outgoings, and it would be more interesting or less uninteresting to the Committee if, instead of going over the same ground once more, he began by briefly noting the chief differences between the Actuals of 1867–8 and those of 1868–9, as well on the side of Revenue as on that of Expenditure. The gross amount of their receipts in 1867–8 was £48,534,412, or, in round numbers, 48 millions and a half; the gross amount of their receipts in 1868–9 was £49,262,691, or, in round numbers, 49 millions and a quarter. It would be seen, then, that the receipts of the year 1868–9 were better than those of 1867–8 by £728,000. If they turned to the separate heads of their income they found that the Land revenue, the principal source of their wealth, had fallen off somewhat, thanks to an unfavourable season in Madras and the North-West Provinces. Assessed Taxes had fallen off considerably, because in the year 1867–8 they had a licence tax which affected incomes as low as 200 rupees per annum; whereas in 1868–9 they had a certificate tax on trades and professions, which only swept into its net incomes of 500 rupees per annum and upwards. Salt again showed less favourable results, because the stock of salt in Bengal which they had on hand when they ceased to manufacture salt on Government account in that part of India had become exhausted. Opium, too, had fallen off largely. On the other hand, the Forest returns had risen a good deal, as had also the excise on spirits, and drugs known as the Abkari revenue. A brisk trade brought in an additional £100,000 for Customs. Stamps went up, so did the Mint revenue, the Post Office revenue, the Telegraph revenue, the receipts from fees of Courts, fines, and the like; while the sale of a large amount of naval stores bought in connection with the Abyssinian War in 1867–8, and sold in 1868–9, largely swelled the returns under the head of Marine. The general result was, as he had said, that the Revenue for 1868–9 was better than that of 1867–8 by £728,000. He did not think he need trouble the Committee with any further remarks about the actual receipts of 1868–9, except as regarded two items—the Forest revenue and the Opium revenue. He singled out the first of those because the Committee showed some interest last year in the remarks he had occasion to make with regard to their forests, and because very frequent inquiries about the Forest service were made at the India Office. It might accordingly not be out of place for him to observe that the experiment which they had been making of selecting young men by a competitive examination, and then giving them a thorough training in the great forest schools at Hanover and Nancy, bade fair to produce excellent results, and to give them a real forest school in India. That was all the more important because, although the natural products of India were not as yet made anything like so available to mankind as they ought to be, the increased tendencies of all art and science in our times to produce specialties and encourage specialists were depriving them to a great extent of the assistance which they used to receive in that field from various classes of their officers, and, above all, from their medical men. The examinations for the special Forest service showed increasingly careful preparation. The accounts they received of the progress of the young men now, or rather till the other day, studying on the Continent, were good, while those who were in India were thought likely to turn out very useful officers. He ought to mention that although the receipts had largely increased there had also been a proportionate increase in the expense; but in a new service of that kind that was only what was to be expected, and the expense might well go on increasing for some time without raising any presumption against the ultimate pecuniary results of the plan. In truth, however, as he showed last year, much more than mere pecuniary results were at stake. Climatic changes of a very dangerous kind were threatening, or in some instances had actually occurred, and the evils that had to be met were of a sort that could only be checked by the direct action of the Central Government. An Indian officer of very great distinction, writing to him a short time ago about the denudation of the North-West Provinces, illustrated that point extremely well. He said—

"I feel rather horrified when I think of the acres of denudation that I had a hand in when burning bricks for the Ganges Canal Works at Roorkee; but it was my business to burn bricks, and as cheap as I could; it was the business of the railway establishment to get fuel as cheaply as they could—I think it is probable that if I had been very hard up for lime I would have burnt the Apollo. But it is only Government that can look to such large results as those affecting the future climate of the country."
That strong central control they were at last he hoped in a fair way of getting, and should thus be able to save wide districts of India from the fate which had overtaken Greece, Algeria, and many regions round the basin of the Mediterranean. The Committee was familiar, from some Papers that had been laid before the House, with the excellent results of the chinchona cultivation. They had already 2,250,000 chinchona plants growing at Darjeeling alone. Peru and Ecuador had given increased facilities for combating fever, one of the worst enemies of man in India. It was now the turn of Brazil to enable them to combat acute dysentery, a hardly less formidable foe. Measures had been taken to send out from Kew, from Edinburgh, and also directly from Brazil, the ipecacuanha, which was now considered almost a specific against that terrible malady. A considerable number of ipecacuanha plants had arrived safely from Brazil, and Dr. Anderson was about to take out 60 more. The Government of India had lately been devoting some attention to the Rhea or China grass, an abundant Indian product, which, if there could only be obtained a machine that would detach the fibre from the stalk in an easy and satisfactory manner, would become of great economic importance. Rewards, to the extent of as much as £5,000, had been offered by the Indian authorities for such a machine. The opening of two new routes—that through the Suez Canal to Europe, and that through Cashmere by an easier pass than those formerly used to Eastern Turkistan, seemed likely to exercise a very favourable influence on the tea cultivation of Northern India. Mr. Shaw, a Kangra planter, went lately as a pioneer of that new form of commerce and returned with so excellent a report of the friendly dispositions of the powerful Prince who now ruled there, that the Earl of Mayo had despatched a mission to his Court. Turning to another very important Indian product, it was gratifying to observe that India last year actually sent nearly as much cotton to our shores as the United States and Brazil put together. What would have been said if anyone had prophesied that in 1860? He hoped that every succeeding year would show better and better results. The general question of opium was discussed in the House in the month of May last, and therefore he would confine himself to the financial bearings of the subject. There was satisfactory evidence that the cultivation of the poppy was spreading very extensively through China, although the old rigorous edicts against it still remained unrepealed; but there was not satisfactory evidence as to how far that extended cultivation was merely the result of the withdrawal of much of the pressure that prevented the Chinaman from indulging in his favourite luxury, and of a consequent increase of consumption; or whether it implied that the Chinese opium was now used by many who formerly used the Indian opium. For anything yet known, Indian opium might still find a very profitable market in China. The returns from opium had varied so very much in the last 10 years, and even the best-informed know so very little of the real facts connected with the growth of opium in China, that it would be most unwise in the Indian Government hastily to adopt the extreme views of those who believed that our Opium revenue must go. On the other hand, the recent great fall might possibly presage a much smaller average return, and they must be prepared for that eventuality. Passing to the Expenditure, he would compare the actual out-goings of 1867–8 and 1868–9. In 1867–8 there was spent £49,542,107; in 1868–9, £52,036,721. The increase of receipts was very considerable and very satisfactory; but more considerable and less satisfactory was the increase of expenditure, which amounted to £2,494,614. The first important head of increase was Allowances, Refunds, and Drawbacks, where there was a large increase, arising from the fact that we paid over in this year to the Nizam the accumulations of the surplus revenue of the Berars, which were certain provinces ceded by the Nizam under arrangements made in 1853 in payment of the expense of the Hyderabad Contingent. The item of Political Agencies and other Foreign Services was swollen by the payment to Shere Ali which they discussed last year, and by the expense connected with the reception of that Prince when he visited the Viceroy. He was happy to say that almost every mail brought increased testimony to the wisdom of the policy inaugurated by Lord Lawrence, and carefully imitated by his successor, under directions from home—the policy, he meant, of giving the most friendly countenance to the ruler who had proved himself to be really the elect of the Afghan people. For some years, the Committee would remember, a civil war raged in Afghanistan, and it had been impossible for even the best informed statesman to say to which side the sympathies of that wild race would at length incline. During those years, Sir John Lawrence, in spite of discouragement, in spite of taunts, in spite of Russophobia, and that still more dangerous complaint, which ever raged along the Indian frontier line, and was known as the K.C.B. mania, held his hand, and preserved an attitude of friendly observation. That was the period of "masterly inaction," to use the happy phrase of a gifted man, the late Mr. J. S. Wyllie, who was in this House for a few weeks, but had now, alas! illustrated the saying—"whom the gods love die young." But then circumstances changed. It became clear that Shere Ali really represented a majority of the Afghan nation, and Sir John Lawrence assisted him with no niggard hand. All that had since been done had been the development of that policy. We had made no entangling alliance; but the knowledge that we desired to see the existing ruler of Cabul strong, peaceful, and prosperous, together with the frank interchange of views that had taken place between the Foreign Offices at St. Petersburg and London, had produced a most excellent effect from the mouth of the Khyber far away to the cities of Central Asia. The political troubles of Afghanistan, however, arose as suddenly as the winter storms among her mountains, and many accidents might upset the fair promise of the present. Yet the impartial historian would, he was sure, come to the conclusion that the late Viceroy acted wisely both at the beginning and at the end of his rule, and that both the late and the present Government were right in giving him their entire support. The rise under Army Charges was very great — nearly £400,000, from increases to the Bengal and Bombay Com- missariat establishment, the Ordnance establishment, &c, and he feared that, read by the light of information which, we had recently received from the Government of India, so large an increase in the most unsatisfactory of all branches of our expenditure could not be altogether defended. There was a great increase also under the head of Public Works Ordinary; but much of this was necessary. There was famine in many districts, and after the Orissa catastrophe public opinion in this country would not have suffered the Indian authorities to be slack in pushing on famine relief works, even at the risk of seriously affecting the finances of the State. Then, again, the Government of India pressed the Home authorities to send them out, with inconvenient and expensive speed, materials required for improving the port of Calcutta; and here, too, they had English public opinion on their side, for the two cyclones coming so near upon each other had, not unnaturally, struck terror into the shipping interest. Further, there was a large increase in the demands of India on England under the head of stores, mainly for the supply of moorings for the Hooghly, of machinery for making breech-loading ammunition, and for larger supplies of marine, military, and public works stores. There was also a large increase in the expenditure in England, exclusive of that incurred for Stores for India—an increase, however, wholly beyond the control of the Home authorities, arising under such items as charges for a submarine telegraph which had been laid along the Mokran coast; for the construction of two "Monitors" to defend the harbour of Bombay, the second city of the British Empire; for military and medical fund pensions, which were now included under charges in England consequent on the transfer of those funds to Government; for interest on debt, and for increased pensions and furlough pay paid in London. Then there was a greatly enlarged expenditure, under the head of Law and Justice, from an increase to the number of collectors and magistrates in Bengal, and many other things connected with the better management and more scientific administration of the country. These constant increases of existing salaries and fresh appointments were inevitable evils, for we had been teaching the Natives to insist on a higher standard of government. In the judicial department something might be saved by employing more native labour, for the Courts were full of pleaders, who knew the codes and the regulations as well as the European who sat on the judgment seat; but first-rate legal ability must be found in some way, for in most parts of India the good old times of patriarchal justice under a spreading tree were gone by for ever. Civilization brought a demand for scientific administration as well as good tribunals, and the day was not far distant when the ablest man would be overmastered by the work of a collectorate which was, like some of the Madras ones, as big as all Yorkshire, or even by the average Indian district, which was only as big as Devon and Cornwall rolled into one. Various branches of expenditure decreased in 1868–9. We got rid, for instance, of the payments for Interest on Service Funds, for we arranged to take over the capital of the military and medical funds and to pay the pensions, so that to have charged ourselves with the old high interest on the capital would have been a needless complication. The opium market again was falling, and fewer cultivators wished for advances; that made some difference; and Marine Charges, which had been swollen by the Abyssinian Expedition, also fell off considerably. So did Allowances and Assignments under Treaties and Engagements, which had been exceptionally high in the previous year; and much less was paid as well under the head of Miscellaneous as under the head of Superannuation, Retired, and Compassionate Allowances; because the first of these heads of charge had been swollen in 1867–8 by the demands of famine-stricken Orissa, and the second had been exceptionally high in the same year, because we had during its course paid up certain arrears of donations to Service Funds. For the year of the Regular Estimate, which began on the 1st of April, 1869, and ended on the 31st of March, 1870, our accounts were, as he had already explained, not complete when Sir Richard Temple, the Financial Member of the Governor General's Council, made his Statement on the 2nd of April. He had before him the Actuals of from 10 to 11 months only. The rest was a matter of estimate; or, in other words, of calculation and conjecture. We were given to understand by Sir Richard Temple that the receipts for the year 1869–70-would amount to nearly £53,000,000, or, deducting the not returns from Railways after the payment of the working expenses, which had this year been included without any sanction from the Secretary of State in Council, to £50,387,925. On the other hand, we were given to understand that the expenditure would amount to £53,500,000, or, making the necessary correction with regard to the Railway Guaranteed Interest, on this side also, to £50,951,420. From these figures the Committee would perceive that the general result, as anticipated in April last, was a deficit of about £563,000 on the ordinary Revenue of the year. These were the figures which were before Parliament; but we had assurances that the Actuals would turn out better than Sir Richard Temple believed when he made his Budget Statement. The substance of the information telegraphed by the Viceroy on the 18th of July was that the accounts of 1869–70, adjusted up to July the 16th, were better than Sir Richard Temple expected on April the 2nd by about £700,000, so that we might expect, as at present advised, a small surplus, or at least an equilibrium, thanks to the prompt and decisive action which was taken in the autumn of last year by the Viceroy and his Council assembled at Simla. The year 1870–1, for which we had no accounts, was entirely dependent on calculation and conjecture. Speaking on the 2nd of April, Sir Richard Temple expected to receive about £52,300,000, including, that is, the traffic receipts received from the Railways after deducting working expenses. But if we exclude these last, according to the usual and better arrangement, the amount would be much less, say £49,200,000. On the other hand, he expected to have to pay about £52,200,000, including the gross amount of the interest guaranteed to the Railways; but if from that amount the net traffic receipts were deducted, the charges in India and England came to a little over £49,000,000, leaving a small surplus of £163,440. That amounted really to no surplus at all, and was far below the figure which had been pointed out as the minimum by successive Secretaries of State, whose orders had been to frame Estimates so as to show a probable surplus of from £500,000 to £1,000,000 sterling. This Estimate was, however, in respect of expenditure in England, too favourable, and according to the information now obtainable here, the revenues would amount to about £49,300,000, and the charges to about £49,400,000, thus showing a probable deficit of over £100,000, instead of a surplus of £163,000. Even that small surplus could not have been estimated for by the Government of India except by calling in the aid of the unpopular, but in the opinion of the Viceroy and his Council absolutely necessary, income tax, without the recent increase in which the Indian Chancellor of the Exchequer would have had to estimate for a deficit in the year 1870–1 of very considerably more than £1,000,000. That would have been a strong measure, and he was fortunate in having at hand a resource so convenient as the income tax, which affected only 1 in 1,000 of our Indian fellow-subjects, and those the persons who were best able to pay. To notice the chief objections that had been taken to the policy of the Government of India in raising the income tax to 3⅛ per cent, he would take the Calcutta Memorial latety forwarded to the Secretary of State in Council through the Govornmont of India, and say a word on each of its allegations seriatim.

Committee report Progress; to sit again this day.

House again in Committee.

, on resuming his speech, said, he was about to make some observations in regard to the income tax in India, and the simplest way of placing before the Committee the objections to the raising of the tax and the answer of the Government would be to take the Calcutta Memorial, and go through its allegations seriatim. The first four paragraphs related to the rapidity with which the Income Tax Act was passed through the Legislative Council, and he believed dissatisfaction had been aggravated by contrasting this rapidity with the great amount of deliberation which preceded the imposition of the income tax by Mr. Wilson. Now, while it was necessary that long deliberation should precede the imposition of a new tax, strange to the British system in India, it was not necessary that long deliberation should precede the raising of an already existing tax from 2 to 3⅛ per cont. The period of representative bodies in India was not yet, and when the whole Cabinet of the Governor General had consented, however reluctantly, to the raising of the income tax as a State necessity, it made little matter whether the Bill went through in a few days or a few weeks. All concerned, however, including the Secretary of State in Council, would have been better pleased if the Financial Member had seen his way to make his proposal with regard to raising the income tax somewhat earlier. The 5th paragraph complained that the Budget Statement was framed upon an erroneous principle, expenditure upon the construction of extensive public works of a permanent nature, such as barracks or other works of emergent necessity, being charged against the Revenue of the current year, instead of the whole of such expenditure being spread over a series of years, and the current year debited with a fair proportion only. To this he replied by reiterating in the most positive terms that the policy, as well of the Secretary of State in Her Majesty's present Government as of the Secretary of State in Her Majesty's late Government, was that barracks in India and all other works of a similar character should be charged against the Revenue of the current year or not executed at all. "Sint ut sunt, aut non sint." To adopt any other course would be simply to throw dust in our own eyes, and to palter with the financial security of the Empire. The 6th paragraph expressed the alarm of the memorialists at the "imposition of an income tax of 3⅛per cent, equal to 7½d. in the pound, in a time of profound peace." To that he replied that an income tax of 7½d. in the pound, though often exceeded in England, was a higher income tax than the Government would wish to see continued in time of peace; but that, considered as a temporary measure mainly occasioned by our having in the last few years tried to civilize India a little too fast—in accordance, be it remembered, with the wishes of the very class which was making the loudest outcry—it could not be considered excessive under the circumstances in which the Viceroy's Council found itself placed. The memorialists further represented, in the 7th paragraph, that "a tax intended to fall exclusively upon the middle and upper classes of this country, who comprised less than one-thousandth part of the whole population, was unjust." His reply to this was that the classes which were hit by the income tax were the very classes which had not hitherto paid enough—Europeans who had gone to India in search of fortune or competence, and the wealthy Natives. The greatest obstacle in the way of a good financial system in India was the difficulty of making these last contribute a fair proportion to the necessities of the State which made their existence possible. Every device known to the financiers of the West—succession duties and so forth—broke down before the altered conditions of the taxation problem in India, and a civilized Government could not resort to those short and easy methods which were employed so freely in the good old times. The memorialists also submitted in the 8th paragraph, that the taxpayers of India had a substantial grievance in the large and excessive expenditure in England of money drawn from India, to the extent of nearly one-fourth of its entire annual Revenue, without any efficient check or control being exercised from India, and in the absence of the early publication of full and exact details of such expenditure, His reply to that was that only a mere fraction of the money expended in England for India could properly be called home expenditure at all. Almost all of it consisted of money expended in buying things which the Indian Government asked the Secretary of State to buy for it in Europe, because they were not to be bought, or begged, or stolen in Asia, and nearly the whole of the rest consisted of payments made by the Secretary of State, because the Indian Government must make those payments somewhere, and found it more advantageous to make them in London than at Calcutta. Such, for example, was the interest on the debt contracted on behalf of the Indian Government in England, the guaranteed interest on the railways in India, paid in the way most convenient to all parties, to the people in England who had made them, and the pensions, furlough-pay, and so forth, disbursed to the retired or actual servants of the Government when in Europe for its convenience, and virtually at its request. The 9th and 10th paragraphs regretted the state of the finances, and asked for the disallowance of the Income Tax Act, and the appointment of a Royal Commission to inquire into the position of the State so far as its pecuniary circumstances were concerned. To that he replied that no Secretary of State would over have dreamt of overruling in such a matter the Governor General and his whole Council in compliance with the demands of a fraction, though an influential fraction, of the population of India, and that the appointment of a Royal Commission would be an excellent thing if by the first wave of a wand we could create half a dozen thoroughly competent Western financiers willing to go to India, and by a second wave of the wand could make them intimately acquainted with all the past and present of India, in their bearing upon receipt and expenditure. Even with the increased income tax, Sir Richard Temple was only able to promise a surplus of £160,000, and when he promised that he was not reckoning a sufficiently large amount for home expenditure. The telegram, of which he had stated the substance to the House, was, however, so far reassuring—projecting, as it did, some brighter hopes into the year 1870–1. Opium, too, was doing better than was expected when Sir Richard Temple made his Statement in April. He would not have the Committee, however, to be over sanguine. We were, hon. Members would remember, in our capacity of receivers of the Land revenue, largely dependent upon the seasons, and the last two or three seasons had not been favourable. A bad season impoverished the people, who became unwilling to buy European goods, which were, or appeared to them, in the nature of luxuries; and so our Customs were apt to fall off, just as our Land revenue was checked. Opium, again, was, as we had already seen, having one of its periodical depressions—if, indeed, the recent fall could be spoken of by so mild a name—and Sir Richard Temple was not thought, even under the slightly improved circumstances to which he had alluded, to have been, on the whole, too cautious in estimating the receipts in 1870–1 from that second most important feeder of our Revenue at un- der £7,000,000; whereas, in 1867–8, a smaller Opium expenditure brought an Opium revenue of nearly £9,000,000. Turning to the other side of the Budget Estimate, to the contemplated payments of the Government of India, the pruning-hook of reduction had, he must admit, been applied to the expenditure with no sparing hand. The Grant for Public Works Ordinary, for example, was reduced by about £1,700,000 below the actual expenditure under that heading in the year 1867–8. He was far from saying, however, that, although the pruning-hook of reduction had been vigorously applied to the expenditure of 1870–1, it might not be further applied in 1871–2. In fact, the Government of India encouraged them to hope that that would be the case. He had now stated the probabilities of their outgoings and incomings for 1870–1, so far as he knew them. It remained to ask what was the state of the cash balances on the 31st of March, 1870; or, in other words, what balance had India at her bankers on that day? India had at her bankers on that day £13,982,099 (being £337,240 more than was anticipated by Sir Richard Temple in his Budget Speech, and in the accounts as laid before Parliament), including an unexpended balance from the last loan of over £1,000,000—a sum which the Government of India considered would be more than adequate for all the ordinary requirements of the year. It was, however, proposed to expend £3,000,000, or a little more, for Public Works Extraordinary. Of these, £2,000,000 would probably be raised in England, and the rest would be taken from the cash balances. Public Works Extraordinary were, he might remind the Committee, that class of public works for which they thought themselves entitled to borrow. It was in them that the commercial interests of Great Britain were, or conceived themselves to be, chiefly interested; and a good deal of needless alarm was sometimes created in this country, and even found expression in this House, when it was announced that there was to be a reduction in Indian public works. That arose from not apprehending the distinction which was made between Public Works Ordinary and Extraordinary, the broad distinction between the two kinds of public works being that we classed as Public Works Ordinary improvements, more or less analogous to those which, a country gentleman would think it his duty to pay out of his income, and under the other, those kinds of improvements on which he would think himself justified in expending capital. By the one class of improvements it was hoped to effect great indirect good, but the Government did not look for a direct pecuniary return; by the other they hoped to obtain an early and ample return in hard cash. Of the large sums which, as he mentioned a few minutes ago, it was proposed to expend in Public Works Extraordinary, about £1,732,500 would be for irrigation works, and the remainder—about £1,300,000—would be for expenditure in India and England on account of State railways. The Committee generally liked to hear a little about our irrigation works, and would be glad to learn that, whereas we spent about £220,000 upon them in 1867–8, and £468,000 upon them in 1868–9, it was proposed to spend in the year now passing the large figure which he had just mentioned—namely, £1,732,500. Hon. Members would listen with interest to the following extract from a speech by the Viceroy in the Budget debate at Calcutta:—

"There never was a year in which the benefits of irrigation were more decidedly evidenced than in the last year. In the unusually dry season of 1868–9 a great calamity was averted. It is stated on the authority of the Government of the North-Western Provinces and of the canal officers engaged there, that in those Provinces alone 1,425,702 acres were kept in a state of fertility which would otherwise have been unproductive. Colonel Brownlow and his officers exerted themselves to the utmost. The result was that in those irrigated districts there was a considerable increase in the production of the lower class of cereals, and I find that the 2,786 acres of that description of crop which were under irrigation in 1867–8 have increased, in 1868–9, to the amount of 85,281 acres. The Returns exhibit an increase of the extent of land watered of 665,023 acres over the preceding year, 96 per cent more than that irrigated in 1860–1, the most recent year of scarcity, and 45 per cent greater than in 1866–7, the previous maximum of irrigation. In the Meerut Division irrigation reached the extraordinary extent of 308,161 acres, or 30 per cent of the entire culturable area of the district, exhibiting an increase over the preceding year of 103 per cent. These facts tend completely to show the enormous value of irrigation works."
With regard to State railways the Committee would be satisfied that we were applying the sinews of war to them pretty freely, when he stated that whereas we were in the year 1870–1 about to spend on them well on to £1,300,000, we spent on them in 1867–8 only £594. Full details as to what was being done would be found in Mr. Juland Danvers's Report, which had been lately circulated; but he might observe, in passing, that the Viceroy announced in the Budget debate of April last at Calcutta that he hoped to open 801 additional miles of railway in the year which was now in progress. What, then, in a sentence, was the financial story that he had to tell in the last two years? There was a deficit in 1867–8, a deficit in 1868–9, a small surplus, after much effort, in 1869–70, and an equilibrium in 1870–1. No one would say that this was a brilliant state of affairs. Had we, then, any reason to hope that it would mend, and that the near financial future would be better? He thought we had. The necessity of a radical change had this year been impressed upon the authorities in India not merely by despatches from the Secretary of State, but by the discovery suddenly made by themselves that the forecasts laid before the public in March, 1869, and transmitted to the Secretary of State, were unmistakably misleading. Since this came to the knowledge of the Viceroy and of his Council we had observed the most gratifying signs of a feeling that such a state of things as declared itself last September was injurious, not only to the Department which it immediately concerned, but to the whole Government. The altered tone of many communications which had been received from India led the Government to hope that the absolute necessity for a severer economy, for an improved financial department, and for obliging all the subordinate authorities to bring their accounts more closely up to date was thoroughly apprehended and keenly felt, while at the same time there was a perfect conformity of opinion between the Home Government and the Government in India as to what he might call the great lines on which our financial policy should be built. The great lines on which our financial policy should be built were, in his opinion, as follows:—First, military reduction; peace round the frontier and within the frontier. Every year in which the Indian atmosphere was undisturbed by a little war—and such years were unhappily few—was a year gained to the habit of peace, and it was certain that retaliatory raids against wild tribes, like the Huzara people in the far Northwest, or the Looshais in the North-east of the Empire, were, even when most necessary and most successful, a very great evil, only to be resorted to in the direst extremity, because they excited and troubled an area far wider than that over which the operations extended. The best authorities united in assuring us that the habit of peace in the British territory south of the Nerbudda had extended during the last few years in the most surprising manner, and they were sanguine as to our being able before many years passed by considerably to diminish our force in these regions. Those who reflected that the countries of which he was speaking contained the scones of many of our most famous victories would appreciate the significance of this statement; but this was not all. We had in this part of India two great hopes, which seemed to be in a fair way of fulfilment, and which were both eminently favourable to peace. The first of these was that the ruler who would eventually succeed to the great inheritance of Mysore would not disappoint the expectations which had been formed of him, and would maintain and develop the admirable system of government which Mr. Bowring, an extremely able public servant, had just handed over to the care of Colonel Meade, who long managed, with great success, the difficult and delicate diplomacy of Central India. Certain it was that the progress of the heir-apparent of the Throne of Mysore, of which we were kept carefully advised, had been, up to the present time, highly satisfactory. Our second hope was that the efforts of the enlightened Government which now controlled the wide realms of the Nizam, far the most powerful of Native Princes, might be thoroughly successful, and that by the time the child-ruler of these broad lands—equal, be it remembered, to about three Irelands—came to his Throne he might read, with incredulous wonder, the description of his capital which was laid before this House in the famous sua si bona nôrint Papers. The second line on which our financial policy should be built was civil reduction; not so much by cutting down salaries—always a process of doubtful advantage when service, to be good for anything, must be more than willing—but by availing ourselves of all increases of communication to amalgamate the duties of posts that must be held by Europeans, and to take advantage of improving Native intelligence to obtain cheaper labour, in connection with which we must, however, remember the imperious demands which civilization made for improved administration, to which he had already alluded, and which would, perhaps, more than neutralize all we could do in this direction. The third line upon which our financial policy should be built was the throwing as much as possible upon the local governments the financial burden of those improvements which, while they did not directly add to the income of the State, and must not, therefore, be paid out of loans, were of distinct palpable benefit to the localities concerned. The fourth line upon which our financial policy should be built was the pushing on, with the utmost zeal and to the fullest extent to which it could be done without deranging the labour market or injuring our credit, all public works which would be directly remunerative, while we rather held our hand in improvements which were not directly remunerative. Further, we must take care, by improving our Public Works Department, and providing ourselves with other securities, that the works called reproductive should be really so, and not in any case so only upon paper. This question of reorganizing the Public Works Department was occupying the most serious attention of the Secretary of State in Council. It would be premature to attempt to explain at any length what was being done about our civil engineering College in the present state of the arrangements; but he felt confident that no one would complain that the scheme likely to be adopted did not go to the root of the evils complained of. The fifth line upon which our financial policy should be built was the resisting to the uttermost all those benevolent but dangerous persons who advocated the claims of this or that interest, which strove to make good some unjust and unscrupulous demand upon the pocket of the Indian taxpayer. The High Court of Parliament had no more nobile officium, as they would say in Scotland, than to stand between these voracious interests and the patient millions of India. He need say nothing about the extreme importance of fostering the Land revenue, nor of the necessity for carefully watching the opium trade. By working steadily upon the lines he had indicated, along with the Government of India, he thought are long we should find they had as few deficits as at one time they had surpluses; even in spite of the falling off in the Opium revenue, which would, probably, take place before long. He would not now repeat what he said last year of the very great improvements which would result in some few years from the natural operations of the Revenue, nor need he say anything about the fact that in 1874 they would get rid of the payment of about £450,000 a year to holders of the old India Stock. He would simply allude to the fact which was explained last year, that before long they would begin to gain and not lose in the railway exchanges between this country and India. He should not enlarge upon any one of these things, because his object was to give the Committee anything but a sanguine view of the state of affairs. But there was one matter on which he would say a few words. The usual practice in all countries in making railways was to consider the dividends paid to shareholders, while railways were in course of construction, as part of the capital of the line; but those in India had never adopted that plan. They had always considered the guaranteed interest as a charge on the Revenue of the year. This alone represented a sum of £1,244,742 for the current year, and not much less than £16,000,000 for past years, which some financiers, and those not of the ultra-sanguine school, would wish to treat as so much debt legitimately incurred for promoting the locomotion and general welfare of the country. He could not take that view, considering the peculiarity of the tenure by which India was held; although everything seemed extraordinarily peaceful and prosperous, it was quite impossible to say what a generation would bring forth. In making an experiment absolutely unique in human history, we should be very great purists in the matter of debt. Our Indian Debt was small, indeed, in comparison with that of the great nations of the world; but then we must remember that the words "our Indian Debt" meant something quite different in the mouth of an Anglo-Indian from what "our English Debt" meant in the mouth of an Englishman. The possessive pronoun covered a much larger number of persons here than in India. If, however, we steadily resisted the blandishments of couleur-de-rose financiers, he saw nothing that should induce us to feel any real anxiety about the future of Indian finance. Great surpluses we were not likely to have, because our object was to spend every penny of surplus upon improving the country without involving it in debt, and endangering the powers or credit of the Government. The foreign rulers of India, more unhappy than the much-enduring hero of the ancient world, were doomed to sail not once, but, he had almost said, for over, certainly for not a few decades, between Scylla and Charybdis. Such a voyage required no small amount of nerve, and the helmsman must not be blamed too harshly if occasionally he seemed to be dangerously near either the Italian or the Sicilian Coast; if, in other words, he seemed sometimes to be pushing on improvements too quickly, and sometimes to be husbanding a little too much those pecuniary resources without a free use of which improvement was impossible in a country like India. Having laid before the Committee these views with regard to Indian finance, he would merely say with reference to the speech of the hon. Member for Brighton (Mr. Fawcett), that the hon. Member appeared to have strained very much the forms of the House in making a speech full of financial details while the Speaker was in the Chair. It had been the custom of the House to take care that such matters should be discussed in Committee. It would, perhaps, be the best course to treat that speech, which offered room for a great many observations — to use the least strong term which he could find — as having been made in Committee, and he would reply at a later hour to such of the rash, reckless, and more than erroneous expressions of the hon. Gentleman as might happen not to be sufficiently disposed of in the course of the discussion.

Motion made, and Question proposed,

"That it appears by the Accounts laid before this House that the total Revenue of India for the year ending the 31st day of March 1869 was £49,262,691; the total of the direct claims upon, the Revenue, including charges of collection and cost of Salt and Opium, was £9,240,766; the charges in India, including Interest on Debt, and Public Works ordinary, were £33,100,826; the value of Stores supplied from England was £1,432,840; the charges in England were £6,246,819; the Guaranteed Interest on the Capital of Railway and other Companies, in India and in England, deducting net Traffic Receipts, was £1,700,470, making a total charge for the same year of £52,036,721; and there was an excess of Expenditure over Income in that year amounting to £2,774,030; that the charge for Public Works extraordinary was £1,370,613, and that including that charge the excess of Expenditure over Income was £4,144,643."

Sir, I am sure that everyone who has listened to the very able Statement just delivered will be satisfied with it — as a Statement. Indeed, as far as regards clearness of explanation and lucid arrangement, nothing more could be desired, and that is all for which my hon. Friend the Under Secretary of State is responsible. But when we come to that for which he is not responsible—that is, to the financial measures themselves of this year's Indian Budget, I own I think the reverse is the case, and that they are so eminently unsatisfactory as to deserve the censure which they have already received from the Indian public. In saying this, I do not mean to impute any blame to Sir Richard Temple, whose career I have watched from the very first, and whose great abilities and indefatigable energy I, in common with all who know him, admire. It is the system I blame, which, in spite of what was done to improve it by Mr. James Wilson and by the Financial Commissions of 1859 and the following years, is still very far from being perfect. How, indeed, can a system be called perfect which omits from account such a glaring item as £152,290, a charge in the political department which was avowedly overlooked in the Estimate of 1860–70! How can anything like complete accuracy be attained as long as the Indian Estimates are liable to be deranged by a sudden order from the Secretary of State in Council to pay, perhaps, £500,000 to some Native Prince or public company? Can we look for exact Estimates when the Home Accounts are year after year unexpectedly swollen by enormous indents for stores, regarding which neither the Financial Minister in India nor the Secretary of State in this country has had any previous warning? The Indian financial system is still confes- sedly imperfect, and the Indian authorities who have to carry it out seem to me not even yet sufficiently impressed with the extreme, I might almost say the desperate, necessity there is for better arrangements, and for carrying economy to the very farthest limits compatible with the safe working of the machinery of government. It is, perhaps, impossible for men who have resided long in India, whose minds are biassed by Indian associations, and who have been accustomed to lavish expenditure, to realize the true position of affairs. Occasionally, no doubt, as was the case this year, some compunction is shown by them at the increasing expenditure, and spasmodic efforts are then made to reduce it. But these efforts, by their very suddenness and uncertainty, have a contrary effect; for, as was well said by one who took part in the Indian debate of the 5th of April last—"It is impossible to make suddenly great and fundamental changes without enormous loss." In general, however, to use the words of the same speaker, Mr. John Strachey, "the Indian Government lives in a fool's paradise," an illusion which, I fear, will not be dispelled now that the expected deficit is reconverted into a surplus. Sir, I, for my part, wish to do something towards dispelling those illusions, and closing the doors of this paradise; and I would, therefore, beg to point out one or two of the most prominent reasons which make it imperative on the Indian Government to adjust its finances, and carry retrenchments to, as it were, the outside edge. The first reason is, of course, the precariousness of the Opium revenue, as to which I must call attention to a new element of danger which, I believe, has hitherto escaped notice. It was certainly overlooked by Sir Richard Temple, who, in his Financial Statement, contented himself with a slight reference to the increase of opium cultivation in China, and merely said that "the trade will be subject to a competition not hitherto experienced." But he did not so much as allude to the rapid increase of opium cultivation in Persia, a country which, a few years ago, did not export opium at all, but last year sent no less than 4,000 chests, worth about £500,000 sterling, to China. This Persian opium has been analyzed at Bombay, and is proved to be nearly, if not quite, equal to Indian, and, as it pays no duty, being carried in French, vessels to Ceylon, the profit on it is so enormous, that we must not be surprised if we should see the trade in it doubled, or quadrupled, in a year or two. "We shall thus not only be supplanted in the Chinese markets to a considerable extent, but must expect to receive very reduced prices for what opium we may continue to sell. In face of such a contingency, and with the position and known fact of the rapid extension of opium cultivation by the Chinese themselves, it would be madness to delay any longer making preparations to meet the, perhaps, gradual, but in the end inevitable extinction of the Opium revenue. The next point to which I wish to draw attention is the rise of prices and of wages throughout India, but especially in the Bombay Presidency. This renders it every day more difficult for the Government to economize by reducing the salaries of its employés. Servants now get in some parts of India three times the wages they got before the Mutiny, and junior officers, both civil and military, instead of being able to save money out of their pay, as formerly, are now sometimes compelled to club together to take a house. As a labourer receives double the hire he did 10 years ago, the construction of new public works is rendered more expensive, and that circumstance alone must operate as a restriction on the effective outlay of Government. But in the item of repairs, which is an annual charge that sometimes rises to between £1,000,000 and £2,000,000, expenditure cannot be stinted unless we would see the existing public works in ruins; and this item of expense must, therefore, go on increasing every year. The last reason that I shall mention for abandoning illusions and instituting a most searching inquiry into expenditure with a view to its reduction, is one which has been alluded to in "another place." It is that justice demands that "nothing shall be exacted from India but what is strictly due to its defence, or paid for exclusively Indian purposes." Now, when we consider that the Home Charges rose from £3,529,673 in 1867 to £16,870,337 in 1869, we cannot feel surprised that the educated part of the Indian public believe that a great deal more is exacted from India than what is due to its defence. I can assure hon. Members that those who influence the Press and public opinion in India have long been most deeply occupied with this question, and are scrutinizing it in a way which demands that corresponding attention should be given to it here. Now, I am quite aware that those Home Charges are in part stereotyped, and cannot be reduced, as, for instance, Pensions and Dividends on Indian Stock, which together make up £1,335,000, but others admit, I believe, of reduction. I am not going through the list seriatim, but I ask attention to only one item, which appears at the bottom of every column of disbursements as "Stores," and amounted for 1868–9 to £1,609,198, being an increase of £438,723 on the year preceding. Now, these stores are required for consumption in India, and the Secretary of State is merely a purchasing agent with respect to them, and has no information which would enable him to check the demand! I ask, then, why these stores should appear at all in the Home Charges, and why the heads of Departments in India should not forward to the Finance Minister in that country regular Budget Estimates of the stores they require, with list of prices and explanatory reports, so that these charges might be checked in the finance department and kept down to a regular and moderate amount? The responsibility for them would then rest with the Finance Minister; but at present it is fixed nowhere, and though economy may be possible under such a system, there is plainly nothing whatever to enforce it. Such are some of the most urgent reasons for retrenchment; but I despair of its being carried to the necessary extent, unless some independent financier is sent out from this country as Finance Minister, who, after thoroughly examining the Home Accounts, and conferring with the Secretary of State regarding them, should then proceed to India with his full support to apply the pruning knife wherever possible. If that were done, and if the Secretary of State in Council would renounce the practice of ordering expenditure by a simple despatch, I should begin to have hopes of economical results. I will give, as an illustration of the practice I allude to, the £45,000 ordered as a contribution to Her Majesty's naval forces in Indian waters in 1869–70, and of which Sir Richard Temple himself tolls us in his Financial Statement he had no previous intimation. I contend, that as a substitute for that practice, the Secretary of State should direct Bills for the outlay he desires to be brought before the Legislative Council, that they may be duly discussed. I would add that, in order to make the discussion really valuable, the number of the non-executive members of Council ought to be increased, and that instead of all being nominated, some of them at least ought to be elected. With these remarks, I proceed to the main question before us—namely, the Budget Estimate for 1870–1. The years 1868–9, and 1869–70 are past and gone, and it is useless to dwell on the actual accounts of the one and the regular Estimate of the other, which ended, in the one case, in an actual deficit of £2,750,000, and in the other, in an estimated deficit of £625,594—I am using Sir Richard Temple's figures—now declared to be converted into a small surplus. Our real business is to see what can be done in the future. Let us begin, then, with the Army, under which head there is a saving of £554,016, the total net expenditure being reduced to £15,009,116. Now, I confess I am far from being satisfied with this reduction, which still leaves the cost of our Indian Forces greater than that of the enormous French Army on its peace establishment, and £750,000 more than that of the whole Army of Great Britain. For my part, I shall not be satisfied until the expenditure under this head is brought down to £13,000,000, including Home Charges. In order to effect this reduction, we must begin by adopting some of the suggestions made in a clover pamphlet called India as it Should be, and published some years ago by Mr. Lodwick, one of the principal officers in the Accountant General's Department in India. His suggestions have been in part endorsed by Sir William Mansfield, who not only advises that the commander-in-chiefships in the subordinate Governments, with their expensive Staff, should be done away, but says—"So long as the separate system lasts I am hopeless of real economy." The same high authority, while declaring that "to attempt the diminution of the existing British Forces in India is fraught with so much danger as not to be thought of," yet admits that the Government may well dispense with a large part of the Native Army in the Provinces, where peace has now lasted for three-quarters of a century. To this reduction of the Native Army, then, I earnestly call the attention of hon. Members as being the only safe means of bringing our Indian finances to a satisfactory state. Far be from me, Sir, at this crisis to recommend any reductions which would impair the real efficiency of our Indian Forces, but I am confident that reductions might be made which would increase instead of diminishing that efficiency. For the safety of our European regiments, the Punjab Frontier Force, the Sikh, Gurkha, and Biluch battalions, and the Sindh Horse and other Native cavalry are amply sufficient, and we might retain all those and yet reduce the Native Army by 50,000 men. At present that great force, which I must remind hon. Members still outnumbers our European soldiers by two to one, is kept up in order to garrison a number of unhealthy stations in the plains of India, which the railroads and the approved loyalty of the Native Princes have rendered unnecessary. If anyone will take the trouble to look at a map of military stations, he will see that our forces are disposed along the Indian frontier in the shape of a fan, with several very large cantonments in the centre of India, close to the capitals of Native Princes. Now, I ask, have not Sindhia, Holkar, the Gaekwar, and the Nazim passed through the fiery ordeal of the Mutiny? When Delhi was in the hands of a great rebel army—when 100,000 of our mutinous Sepoys clamorously called upon those Princes to place themselves at their head not a breath tarnished their loyalty, and why, then, should we continuo to stud their dominions with our cantonments? It has been said that they ought to contribute towards the defence of the Empire. Well, I am sure I may venture to say they are willing to contribute to it by guaranteeing the tranquillity of Central India. Can we doubt it when we see by this last Budget that Holkar and the Nazim have advanced each £1,000,000 for the construction of railroads to the centre of their capitals? I say, then, let us rely on their approved fidelity, let us push forward our European regiments from such unhealthy places as Cawnpore, Morar, and Secunderabad, to more salubrious stations on the frontier, such as the new station Ranikhet, and let us reduce a moiety of our Native re- giments, including the 25 mixed Bengal regiments, to simple cadres, which may be expanded again if necessary; thus we shall enormously reduce our expenditure, and transfer 50,000 men from the unproductive to the productive class of the community. Beyond this, as regards military expenditure, I would only ask that a searching inquiry should be made into those commissariat and miscellaneous expenses which raise the cost of a European infantry regiment from £18,000 or £20,000 a year in England, to £80,000 a year in India. It is my conviction that considerable reductions might and should be made in this quarter. The inquiry might be extended to the number of the officers of the Staff corps and locals, which seems still in excess. I see that at the close of last year out of a total of 3,311 officers there were no less than 888 on furlough, 410 in civil employ, 148 in the police, and 82 in the Public Works Department, besides 253 returned as supernumeraries, leaving only 1,530 engaged in regimental duty and on the Army Administrative Staff. Sir William Mansfield's speech shows that there were altogether 7,086 British officers in India to 55,333 English soldiers, or, an officer to every eight men. I come now to Public Works, and here I must begin by asking the Government whether, with an expenditure in this Department which rose in 1869–70 to £8,000,000, and, adding the expenditure on railways, to upwards of £12,000,000, it is possible; any longer to overlook the necessity for appointing a Minister of Public Works? At present, the Viceroy himself holds the portfolio of this Department, and, fully admitting the Earl of Mayo's great ability and aptitude for this particular kind of work, I must still think this a very objectionable arrangement. What should we say if the Prime Minister here, in addition to his own duties, were weighted with those of the First Commissioner of Works? Great as are the right hon. Gentleman's powers, we should be sorry to see him in that way bending under the lot of Issachar. Sir, I suppose it will be admitted that the Army and the Public Works Department are the two great causes of Indian deficits. And yet, in spite of this admitted fact, there are persons who urge the Government to accelerate the already overwhelming outlay in this Department. These persons would make no distinc- tion between ordinary and extraordinary works, but would pay for all alike with, borrowed money. Loans terminable and interminable are, according to them, to be the one grand feature of Indian finance. Sir, I protest against this policy, less weightily, indeed, but as warmly as did James Wilson in his memorable speech of the 18th of February, 1860. I ask with him—"What was the state of our Indian Debt before the Mutiny? What is it now? And what will it soon be, if we are to resort to the miserable, the disreputable expedient of continuing to borrow in time of peace?" Do I say peace—who can tell how soon India may be compelled to borrow to carry on war? The war of the Mutiny cost India £38,000,000, and imposed on her a yearly payment of £2,000,000. Surely that is warning enough that we ought to reserve the credit of India and her borrowing powers for a period of war! But there are other, and to my mind irresistible, reasons against the loan policy. In the first place, those who advocate loans forget that there is only one way of paying the interest on them, and that is by fresh taxes. The utmost that retrenchment can do for us is to replace coming losses in Revenue and prevent increasing deficits. If the interest on the debt is to be augmented it must be met by augmented taxation. How senseless and absurd, then, is the combined clamour for a reduced income tax and an increased debt! Another reason against an abnormal expenditure on public works by Government is that it discourages private enterprize, which is already shy enough of India. It must have struck everyone that while millions of private capital go yearly to Mexico, to South America, to the ends of the earth, very little, if any, goes to India unless the interest be guaranteed by Government. Now, why is this? The reason is plain, that to spend money on public works in India is not in general very remunerative. We are told, indeed, in The Times of India of June the 2nd last that the Jumna Canal declared 19 per cent dividend last year, and that it will declare a dividend of 23 per cent this year. On the other hand, Sir Richard Temple tells us he has written off as irrecoverable the advances made on account of Port Canning, and the Earl of Mayo mentions that the Government have had to buy up the Orissa and Sone Irrigation Company at a cost of £1,040,000. I do not say that public works may not be remunerative in India; but I do say we ought to scrutinize very closely the schemes of well-meaning enthusiasts. The rapid progress of scientific discovery, too, is continually inventing cheaper modes of constructing public works, and by imprudent haste the advantage of these discoveries is lost. Railway communication, for example, might, perhaps, have been accelerated in India by increased outlay, but Government would thus have lost the advantage of the light rails and carriages, which now seem likely to be generally adopted. I am glad to hear a report, which I hope is correct, that the Government have sent Commissioners to Norway to inquire into the economical system in use there with a view to its adoption in India. I should think that the wire tramways, too, might be found useful. The possibility of other changes, too, must ever be kept in view, which may sometimes make great public works a great public waste. Take, as an example, the lately-erected costly barracks for Europeans. I have looked over the list of stations where they have been built, and I see a dozen places in which it appears to me, under present circumstances, and after what Sir William Mansfield has said, little short of insanity to keep European regiments at all. Lastly, and above all, I would cite as an argument against loans for public works the words of Mr. Laing. He said in his Financial Statement of 1861—

"India has two great wants—irrigation and communication. I do not moan grand schemes only, which strike the imagination, so much as village roads, and village tanks and water-cuts, which enable every rood of ground to grow its crop, and send it to market. Such works we are most anxious to encourage, and, accordingly, instead of simply curtailing the Imperial allotment to local Governments, we say to them—'Take what we are able to give you, and for the residue take certain powers of taxation, and raise it yourselves.'"
This, in my opinion, is emphatically the true policy. Let the local Governments raise funds for local works in the manner they judge best, and expend those funds without the friction and delay of constant references to the Supreme Government. Let the Supreme Government rather reduce than enlarge its expenditure on public works, which we are told by the Earl of Mayo will amount for the two years ending the 31st of March, 1871, to £28,500,000, or £3,000,000 more than the whole Revenue of Prussia. Let the Government be content with executing works to which it is pledged, as to the 15,000 miles of railroad, of which, by the last Returns, only 4,628 have been opened. And, for the present, let the all-engrossing object be the adjustment of the finances, and the obtaining a margin of surplus Revenue. If that surplus is to be obtained, the present amount of taxation cannot be reduced. I do not say that it cannot be changed. I admit that in a time of peace an income tax of 3⅛ per cent, or 7½d. in the pound, is too high, and must create discontent. That discontent has been naturally increased by the sudden and precipitate manner in which the increased tax was imposed. The Bill was read the first time on Saturday, passed into law on the Tuesday following, and promulgated as law on Wednesday. But I am very far from thinking that it ought to be reduced below 2 per cent. Even its strongest opponents admit that it has one redeeming feature—namely, that it falls on the Native traders, "who, but for it, would not contribute at all towards the burden of the State." But it has other recommendations. The expense of collection is only 3 per cent, whereas that of the salt duty is nearly 4½ per cent. It falls on the class best able to pay, and can never excite general discontent, as only one man in a thousand is reached by it. The irregularities and exactions which are said, on the authority of respectable witnesses, to have taken place in collecting it, might easily be stopped by vigilant investigation and severe punishment. As for what is said about its demoralizing tendency, we may be sure that only the frail will find it a stumbling-block. In my opinion, Sir Charles Trevelyan was wrong to abolish it in 1865. I think it ought to be retained at a moderate rate, and that it is an instrument of great power, which will improve by use. In the meantime, if it is to be reduced, and if the five additional annas just imposed on salt are to be taken off, it is necessary to find a substitute. Well, Sir, I, as no doubt many other hon. Members, have spent much time in weighing and examining every sort of Indian tax, both direct and indirect, and have heard them discussed by persons most competent to form an opinion, and the result is that there are objections to them all. I have heard good things of a succession tax, and still more of a hearth tax, and of other taxes; but, to sum up, the general argument seems to incline in favour of direct taxation, for which, in the first place, there is the great authority of James Wilson. Sir Bartle Frere, too, has shown that all Native States resorted to direct taxation, that they bequeathed it to us, and that it is only 35 years since we gave up the bequest. I find, too, from Colonel Grant's pamphlet, called Indian Deficits, that in our Burmese Provinces "the contented, prosperous, industrious, and progressive population," as he calls them, pay willingly a capitation tax of 4 rupees for every married man and 2 rupees for every unmarried. I have great faith in Lord Grey's maxim. He says an opposite policy of taxation to that which obtains in Europe is proper in the tropics. "Make," he says, "taxes press, so far as prudence will permit, rather on those who are content with a mere subsistence than upon the possessors of property and the purchasers of luxuries." In accordance with that opinion I think that the people of India, who are a very frugal, but not a very productive people, might be induced to produce a great deal more than they do by direct taxation judiciously initiated. At present there are immense swarms of unproductive people in India, and an immense waste of time in innumerable pilgrimages to the shrines of innumerable deities, amongst whom it is a pity that no one over thought of deifying a god of labour, Direct taxation might, perhaps, have a beneficial effect upon those swarms, and reduce a little that great waste of time, I am not arguing in favour of a capitation tax, but I think that there are similar taxes which have been imposed, and might be imposed again. But, Sir, I feel I have been too long, and must conclude. Before doing so, I would say that I think the time has arrived when the whole subject of Indian finance and taxation should be again reviewed by a Select Committee of this House. That would afford an opportunity of looking into the question of the drain of treasure to India, which since 1800 has absorbed £311,000,000 of bullion, and takes in one year more silver than the whole world produces in that time. Thus in one year India takes £14,500,000 of silver, while the total annual produce is only £10,000,000. That question is, of course, intimately connected with that of a gold currency for India, which seems to me the most urgent matter to which a Finance Minister could direct his attention; and that, again, is bound up with the extension of paper money. These questions ought all to be thoroughly sifted; and, at the same time, the error of the impoverishment of India by the so-called tribute, which has taken such root in the minds of educated Natives, might be exposed. Lastly, the English public would become better informed of the inestimable treasure we possess in the magnificent Indian Empire, and this House might, perhaps, be induced to bestow on Indian questions more of that valuable attention and wise consideration which have produced such great results in the individual affairs of this country.

said, he rose rather for the purpose of entering his protest against the reckless system of discussing a subject of such grave importance so late in the Session. Last year at this time, almost to the very day, his hon. Friend, in a comprehensive and eloquent address, laid the Indian Budget before them. He then drew, for the delectation of his hearers, a picture of the vastness of the Empire, its untold resources, and almost innumerable population. He (Mr. Haviland-Burke) had at the time hoped this showed the interest and attention his hon. Friend took in questions relating to this vast dependency; but he deeply regretted saying his expectations had not been realized. An hon. and gallant Friend, the Member for Aberdeen (Colonel Sykes), had last year congratulated the House upon there being so many as 40 Members present! but this Session the attendance had fallen off to 26, which he hoped, however, was not to be accepted as a sign of the falling off in the interest displayed in Indian affairs by this House. He had listened with much interest to the observations of the hon. and learned Gentleman who had just sat down (Mr. Eastwick), with some of whose remarks, however, he was unable to agree. In particular, he could not agree that loans should be raised in India only for the purposes of war. [Mr. EASTWICK: I meant to say, in the present state of Indian finance.] He still remained of opinion that loans might properly be raised for Imperial purposes, and this correction of the hon. and learned Gentleman was not happy, for he was strongly of opinion that the £38,000,000, said to have been added to the debt on account of the Indian Mutiny, might have been better expended. An outlay of that £38,000,000 on useful public works would have been more beneficial, and, coupled with a wise and conciliatory policy, might have had a great influence on events in India. Certainly recent events showed a marvellous system of Indian finance. But the other day there was an estimated deficit of £1,500,000; to-day there was an estimated surplus! What trust could there be in such a system? There were so many hon. Gentlemen present who wished to address the House, that at this period of the evening and of the Session he would not detain them except to point out one or two items in the Budget requiring attention. He thought the sum of £8,000,000, or even more in round numbers, was too large to pay for the cost of collection, and the great charge of over £12,000,000 for the Civil Government was one that he thought might be reduced. As to the Army, he concurred in what had been said as to the possibility of its reduction. But we had this consolation, that in case of necessity we could fall back upon 50,000 well-equipped and seasoned soldiers, who could be brought to Europe at any moment, as, indeed, had been done in the case of the Crimean War. It was reported to have been said by a noble Duke in "another place," that "the people of India did little or nothing to help themselves." But how could they at present be expected to do so? His hon. Friend the Under Secretary stated last year his surprise that so small an amount of our stocks was held by the Natives of India, and his hon. Friend thought the Native education had not reached the investing point. He (Mr. Haviland-Burke), however, thought the Natives knew too much for his hon. Friend. We ought to consider whether our conduct had been such as to encourage them to trust in us. It had been said that up to the time of the Indian Mutiny there was scarcely a single year in which there had not been a war of annexation. Hence the cause of our deficits. We had deposed their Princes. We had solemnly entered into treaties and engagements with them, and these treaties and engagements had been deliberately broken. These breaches of faith naturally created great mistrust in the minds of the people, and hence they were not at present found willing to entrust their hoards to the British Government. His hon. Friend had, on a former occasion, informed the House of the importance of Native Princes, but results proved the reverse, so far as evidenced by the treatment of those Princes. He could not quite agree in the remarks made by the hon. Member for Brighton (Mr. Fawcett) as to the taxes. Doubtless the salt tax was most objectionable; but so also, if not more, was the income tax. It was most unpopular in India. It produced a comparatively small sum—he believed little over £2,000,000—while the expenses of collection were enormous. He thought the debate taking place that day would have a most beneficial effect. It would show the people of India we were beginning to look into their affairs. He would suggest that the Budget should be prepared earlier, say in the month of February, so that it might be laid before, and discussed by, the Governor General and his Council before they dispersed for Simla. Under such an arrangement the Budget might reach this country in May, and hon. Members might then have an opportunity of studying it before the closing days of the Session. It would have a good effect in India if it were known there that the subject was really exciting interest and attention in this country. There were persons in this country who seemed to think the possession of that magnificent country was of little importance to us. He could not, however, agree to that. If for no other reason, India had been useful as a training field for distinguished soldiers and eminent public men. Some of these of whom we were most proud had made their reputations in India. Then, too, there was scarcely a family in England who had not some cadet who had laid the foundation of his fortunes in India, and he thought it was to be regretted that so many Englishmen who had made their fortunes in that country, retired and, ceasing to take an interest in India, ignored the source of their prosperity. It might be of the greatest advantage to this country and India if such men would perform the public duty which their past successes in India might be supposed to impose on them in after-life. He thought that a rigid economy and a careful investigation must produce the desired effect in regulating Indian finance. At any rate he, for one, rejoiced at the awakening interest in India, which showed that the House at least was beginning to be determined to execute firmly and conscientiously their most important trust.

said, he thought that the hon. Member for Brighton (Mr. Fawcett) had done good service by the discussion which he had originated. The fact that the affairs of so great an Empire as India were only discussed once a year at the close of the Session was discreditable to the House and to the system of government. He was glad that the First Minister of the Crown had been induced to promise that he would not prejudge the policy of having an inquiry into the finances of India next Session. He thought, however, that it would be wholly impracticable to adopt the Prime Minister's suggestion and have this discussion in February. In that case, the Indian Accounts must be made up to the 31st of December; but the amount of the Land revenue was unknown until late in February, because there were two crops a year in India, and the land tax was collected in three separate instalments each half-year, and one of the instalments was not collected until late in January. It was, besides, physically impossible that the Indian Accounts could be made up with sufficient expedition to be laid before Parliament in February; and, further, a great and sudden change in the malting up of the Indian Accounts would be no slight matter from the confusion it would cause. He fully agreed with those who thought that the financial administration of India demanded a systematic overhauling. He thought that the manner in which the India Office discharged its duty to Parliament demanded attention. As a rule, the India Office was not in harmony with the spirit of the House; for it was secret, despotic, and bureaucratic. It never afforded the House information except under pressure. It discouraged and disliked discussion. The documents which they had then before them were only printed three days ago; and last year many of the most important Papers were not delivered until after the Session closed. Now, that was not the proper way in which to treat the House of Commons. The India Office, at all times, under all Administrations, was adverse to criticism. One great reason why the Office should be brought to book was that the expenditure through the Home Government had increased from £3,000,000 to £16,000,000, or, including the railway contributions, £20,000,000. The Office also insisted upon keeping at the end of each year a balance of £3,000,000 in hand. At the very time when Sir Richard Temple was making his Financial Statement in Calcutta, and was urging special reasons for the imposition of the income tax, there was this balance here to the credit of the Indian Government. This required explanation. Then, again, the India Office systematically refused to give reasons for their expenditure; and how could the Finance Minister in India know how to frame Ms Budget when the Home Government refused to furnish him with the details? Such a state of things ought not to exist. On that ground alone he would support a Motion for Parliamentary inquiry. During the Elections of 1868 the Under Secretary for India said that we lived in days when every institution in the land would have to show cause why it existed, and that aphorism was afterwards adopted by the Prime Minister himself. Now, he (Mr. C. Denison) thought that one of the first institutions that should show cause why it existed was the India Office. There was, however, a dead weight of passive resistance on the part of Ministers for India, past, present, and expectant, which made inquiry difficult, many of those persons making no secret of their opinion that the less the House of Commons discussed Indian affairs the better for the people of India, and therefore it would require a great deal of pressure to get a Committee of Inquiry. He was astonished that the memorial from Calcutta, as to the increase in the income tax, had not received any notice from the Secretary of State for India when he made his Statement in the other House, for such treatment would cause bitter disappointment. The hon. Gentleman the Under Secretary contended that that tax was thoroughly justifiable in itself; but he (Mr. C. Denison) must deny that in time of peace an income tax of the present amount, brought about by no fault of the population, could be justified. Mr. Wilson, he maintained, had to deal with a totally different state of affairs, and the manner in which the tax had first been imposed, as it were with a word and a blow, was, in his opinion, highly objectionable, and altogether contrary to the necessities of the case. Mr. Wilson went to India to deal with a state of affairs which required special legislation. He imposed the income tax only for a period, and it was understood that it would be taken off as soon as possible. What induced the Government of India to raise the tax from 2½ to 3⅛ per cent? Simply an error of account; but at the end of the year there was a slight surplus. Such an imposition was indefensible and dangerous. The Native communities, whom they treated so lightly, combined as they were with the Anglo-Saxon community, would not long endure such conduct. He agreed that the only redress the Government could make was to publish the Indian Budget earlier; the day for the establishment of representative institutions for India was not yet. But that was no reason why the just complaints of the people were not to be listened to. He put it to the dispassionate judgment of men in the habit of dealing with taxation in this country, whether such a system of taxation could be continued or could be repeated? Then, as to the salt tax. The Under Secretary of State had last year held out the hope that its most objectionable features would be done away with; yet, instead of being revised, it had been made more intolerable than ever, its amount having been more than doubled. If means could not be found to reduce the tax, he thought the strongest argument was thus afforded for diminishing largely the extravagant sums which were being spent on public works in India. He thought it would be quite possible to reduce very considerably the Army which was kept up in the Madras Presidency, which numbered something like 20,000 men. The civil reductions could not be realized in practice, all experience showing that if they saved with one hand they lost with another. They had yet to discover what were reproductive works in India. That remark applied especially to canals, while as regarded railways the course pursued by the Government, in giving up a large amount of interest to the companies, required explanation. As to the Governor General, the manner in which he had devoted all his energies to bringing about an equilibrium in the finances of India was beyond all praise. The noble Lord was, to a certain extent, the victim of circumstances; but he had no doubt that under his able superintendence we should have a full measure of efficient administration.

said, he had listened with, some degree of satisfaction to the speech of the Under Secretary for India, inasmuch as he candidly acknowledged the mismanagement which had led to the embarrassing state of Indian finance with which he assured them the Government was now prepared to deal with an unsparing hand. Notwithstanding that the Expenditure exceeded the Revenue they found one hon. Gentleman in favour of abolishing the opium duty, while another desired to repeal the salt tax; but he did not know how the Indian Revenue could bear such reductions, nor was he prepared, until he saw a very different state of Indian finance, to entertain such projects. As regarded the salt tax, which was the only direct tax paid by the great mass of the people of India, it was no longer the great grievance it was in times past, because, first, the ability of the people to pay the tax had been increased by a three-fold increase in the rates of wages; and, second, because there had been a great reduction in the increments of the cost of salt. The great increment in the cost of salt was not the tax but the cost of carriage. Where salt was carried hundreds of miles on the backs of bullocks the cost of carriage operated as a heavy tax; but in the last 10 years the opening out of railways and water communications had so greatly reduced the cost of carriage, that in some places the cost of salt had been reduced a third to one-half its former price, and the consequence had been that the consumption had doubled in the last 10 years. Those who desired to see the cost of salt reduced to the people of India ought to advocate the extension of cheap water and railroad conveyance. As to cotton, he had for a long time past endeavoured, and, he feared, with little effect, to direct the attention of the Government to the improvement of the quality of cotton, and to the provision of cheap conveyance by opening out water navigation. He again warned the Government that a crisis was approaching which would have a serious effect on the exports of India. During the cotton famine and season of high prices the value of the exports of cotton from India reached £30,000,000 sterling, and even last year, notwithstanding a great decline in prices, the exports of cotton amounted to £20,000,000. Now, the whole exports from India in 1860 amounted to £53,000,000, of which, as he had stated, £20,000,000 were cotton. Could India afford to lose such an important item of export? The production of cotton had been resumed in the United States and was rapidly increasing, and very soon the planters of India would be brought into serious competition with those of America. Now, the Indian planters laboured under the disadvantage of only producing 60 to 100 lbs of cotton per acre, while in America 250 to 400 lbs per acre were produced. At the same time the American planter had the advantage of cheap water conveyance, which India might equally enjoy if her rivers were made navigable. The increase of the Revenue was, he admitted, a very favourable sign. In 1860 the Revenue amounted to £33,000,000, and in 1869 to £49,000,000. The imports in 1860 amounted to £40,000,000, and in 1869 to £50,000,000; while the exports rose, during the same period, from £28,000,000 to £53,000,000. This extraordinary increase in the productive power of India was in great part attributable to the development of the resources of the country, by the opening up of the rivers and railways, there being 4,000 miles of railway open in 1869 as compared with 734 miles in 1860. With regard to loans for public works, he would remark that India had a great future before her, and in proportion as capital was invested in the country its productiveness would increase. He was pleased, therefore, to hear that it was the intention of the Government to expend a large amount of money on irrigation works in the ensuing year. In his opinion, however, the loans contracted for reproductive works ought to be classed separately from other State debts, so that the amount borrowed might always be known. He contended that such works ought not to be contingent on surplus Revenue; if they were pro- perly selected every shilling expended, principal and interest, would be returned. In support of his opinion he would instance the case of the Godavery irrigation, and of the irrigation works connected with the Ganges Canal, which, although not yet completed, paid last year 6 per cent, and, what was more, prevented a famine, which saved more than the whole cost of the canal. In conclusion, he would express a hope that the whole question of Indian finance and policy would be brought under the consideration of a Committee of that House, as he believed such an investigation would result in benefit both to India and to this country.

said, the aspect of affairs in regard to the finances of India was grave. It was only by the energetic measures adopted by the Earl of Mayo, the retrenchment of £1,000,000, and the increase of the income tax to nearly 4 per cent, that an equilibrium had been brought about. The problem for solution was how the equilibrium could be maintained in the face of an increased income tax and a declining Revenue from opium? The right hon. Baronet (Sir Stafford North-cote) had laid down a good, sound principle when he resolved that unproductive works should be paid for out of Revenue and the productive only by loan. Mr. Laing had set the Indian finances to rights by reducing expenditure and setting his face against borrowing. If our predecessors had constructed barracks out of borrowed money, we should now be saddled with a debt of £100,000,000. And even as regarded railways, it was acknowledged most distinctly that a well-selected line made with due economy would yield interest on the capital within 10 or 15 years from the time of opening its entire length. He, therefore, deprecated carrying out such works by borrowing, and maintained that a departure from the principle he had referred to would bring Indian credit, which was now—notwithstanding the extraordinary deficits—second only to British, down to a level with that of Turkey and Egypt. For taxes to produce in India it was said they must reach the poor; but salt and spirits were taxed already, and to tax tobacco, their only other luxury, would be cruel. The income tax had not only been raised, but had been raised sud- denly and without discussion, contrary to the acknowledged principle that the propriety of increasing taxation should be long discussed to acquaint the people with the necessity of the step; and this had occasioned irritation. He did not object to a moderate income tax, but he objected to its increase in time of peace, and he thought that a heavy tax of 9d. in the pound should be reserved for periods of great emergency, and should not be imposed simply to repair the errors of financiers and make up for former wasteful expenditure on barracks that had proved to be unsatisfactory. As he objected to loans for any but productive works, to indirect taxation, and especially to a heavy income tax, he might be asked what remedy he had to suggest for India's financial difficulty. The only remedy was the old-fashioned one, reduction of expenditure, and one source of that relief was to be found in the reduction of the Army, of which, however, the Indian Government were the best judges, as they were charged with the maintenance of peace. So long as the British Government only exacted those taxes that had been the acknowledged dues of the Governing Power in that country for centuries the Revenue would be raised with ease; but no new taxes ought to be imposed without the consent of the Native population. He thought that for the future they must look principally to the Land revenue for increasing the income of India. But when the Government imposed new and increased taxes it naturally created a demand among the upper classes in India for some voice in the expenditure of the revenue. He believed that one of the most eventful eras in Indian history was about to commence, and that before long some constitutional reforms would have to be conceded to the country. He hoped the inquiries which would be made by the Select Committee to be moved for by the hon. Member for Brighton (Mr. Fawcett) early next Session would lead to a beneficial result not only as regarded finance, but also as respected the general system of Indian Government. A searching inquiry by a Select Committee was the only measure that could by any possibility be satisfactory to the natives of India.

said, he also trusted that great good would result from the proposed inquiry. It was to be regretted that the Act of 1858 had failed to interest hon. Members in the affairs of India, and it was to be further regretted that the Indian Budget should be postponed until the end of the Session, when it was impossible to secure a full attendance of hon. Members to discuss it. He fully concurred with the hon. Member for Brighton that there was no subject in regard to which so heavy a responsibility rested on him, as a Member of that House, as in connection with India. With empty front Benches on both sides of the House and a thin attendance generally, it was impossible to do justice to important questions affecting the welfare of the millions inhabiting India. His hon. Colleague (Mr. Eastwick) had brought three questions under the notice of the Committee. The first was relative to the opium trade. He (Mr. R. N. Fowler) last year, and again this year, in seconding the Motion of the hon. Member for Carlisle, urged objections with regard to that trade. His objections were based on moral grounds. This country, by encouraging the opium trade, had incurred a great moral responsibility, and, in his opinion, Revenue obtained from such a source was a disgrace to a Christian and a civilized nation. In abolishing that traffic we were bound to make some sacrifices ourselves, and not to throw the whole of the loss on India. The salt duty and the income tax were questions that must press themselves with great force on the attention of Parliament. If the statements of the hon. Member for Brighton, in regard to the sufferings of the people in consequence of the salt tax, were true—and he feared they were—the matter deserved the attention of the House. With great deference for so high an authority as his hon. Colleague, he thought it was a doubtful question whether an impost like the income tax should be forced on the people of India. He hoped that the hon. Member for Brighton (Mr. Fawcett) would early next Sestion move for a Select Committee, and that the Government would accede to it in order that an opportunity might be given of fully investigating all subjects connected with India. He desired to express his satisfaction that the Prime Minister had held out hopes that if nothing unforeseen occurred a Committee would be appointed next year to inquire into the finances of India; the questions of the salt tax and the income tax would have to be considered very carefully by that Committee.

said, that anyone looking at the immense import of treasure into India—no less than £160,000,000 during the last 10 years — must have arrived at the conclusion that India had been in a state of immense prosperity; but he feared that this year there would be a great falling off. India depended upon two great sources of income for that prosperity — namely, cotton and opium. During the last year the Revenue received from cotton and opium in India amounted to £30,000,000. From this it appeared that the Revenue of that country also depended mainly on these two articles. He believed the real danger ahead was finance. Indeed, he thought no one would look at the financial accounts of India during the last 10 years without seeing that. In those 10 years there were only two in which the income of India exceeded the expenditure. During that period cotton had produced £207,000,000, and opium £108,000,000, or an amount equal to almost the half of our National Debt; and those £315,000,000 were derived from the produce of unskilled labour. In 1869 cotton produced £20,000,000; but 10 years before that it produced only £5,500,000. Events were now occurring which plainly indicated that the Revenue derived from cotton must be very considerably reduced. Cotton had fallen nearly 20 per cent in price, owing, no doubt, to the increased, production of cotton in America. He believed the opium question would soon settle itself. The Chamber of Commerce at Shanghai had appointed commissioners to inquire into the opium trade in China. They found that, though the growth of opium was nominally prohibited in that country, duties were levied on it, and the cultivation was carried on in Zchuen. As the Chinese opium could be produced at 40 per cent of the price charged for Indian opium in China, the Native growth must be superseding the opium which was imported into China from India. Looking at what was going on in Persia and China, one must look at the probable decrease of the Revenue from opium with the greatest alarm. He said this without reference to the moral question. He was treating the matter merely as one of finance. Having regard to the facts he had referred to and to the rate charged for bills, he was afraid we must look forward to hard and difficult times in India. He believed that the management of Indian finance would require all the energies of British statesmen. A suggestion had been made that it would be useful to publish the Budget for the benefit of the people of India. He had no doubt that great benefit would arise from presenting it to the House within a reasonable time after it was prepared, for it was impossible to go into all the details at so short a notice; and he hoped this was the last occasion on which the Indian Budget would be brought forward within two or three days of the close of the Session.

said, he thought the expenditure for barracks in India was very unsatisfactory. Large sums had been laid out for their erection in the most unhealthy situations. A sum of £200,000 had been spent for the erection of barracks at a number of the most unhealthy stations, and £100,000 had been spent on stations in the plains, while £17,500 had been appropriated to two new hill stations, and another sum, not specified, for five old hill stations. For months the Indian papers had been filled with complaints of the misery and discomfort suffered by the English soldiers in these barracks, and very lately the officer commanding the 92nd Highlanders had been compelled to remove his regiment from new and costly barracks at Rawul Pindee to the old buildings of mud and thatch, because it was found that the temperature was so much lower in the latter. The same story came from the new barracks in Nusseerabad, and from other places in which these new barracks had been erected. The wisest plan would be to abandon the new barracks and remove the troops to the hills, where comparatively healthy quarters might be found. It was gratifying to know that the soldiers, averageing 2,000 at a time, who had been employed from 1863 up to the present time in the making of roads among the hills, had enjoyed very much better health and complete immunity from cholera, heat, apoplexy, and other diseases from which 90 per cent of the deaths in the plains arose. The expense incurred in employing soldiers to make the roads had been greater than the profits of their labour; but there should be taken into consideration the necessity for those roads and the political advantages of having the troops in those places. He wished to have from the Under Secretary of State for India an assurance that the new barracks in unhealthy localities would not be completed, and he hoped the Government would see the necessity of making a radical reform in the matter of quartering the troops not merely as a measure of economy, but on account of the health and welfare of the soldiers, not to say their existence.

said, he regretted that the Indian Accounts were in such an unsatisfactory state, and he would suggest that accountants should be employed to render them creditable to the country, and capable of showing the actual position of affairs. There was little doubt that extravagant expenditure was at the bottom of the matter. The Army cost something Like £5,000,000 a year more than it ought. If that amount were not spent the income tax which had been so much complained of would be altogether unnecessary, and there would be a surplus instead of a deficit. His right hon. Friend (Mr. Grant Duff) had spoken of the increased production of cotton in India; but it should be remembered that the American supply had of late been very much increased, so that, unless the quality of the Indian cotton was much improved, England would not derive those advantages which she might anticipate. Seeing that the trade and commerce of London were likely to be very much embarrassed by the Continental War, he thought it was the duty of the Indian Government to give every facility for the development of the industrial resources of our great dependency, for he believed that in the future we should have to rely on India much more than in the past, both for a market for our own manufactured articles and for a supply of raw material. A promise had been made some time ago that a Department of Agriculture and Commerce should be established in India, and he hoped that promise would be carried out; otherwise the resources of that great country would continue to lie in a dormant state. One suggestion submitted to the House to-night he had heard with alarm—a proposal to found an engineering College for India. He hoped that would not be carried out, for we had already a superabundance of engineering talent in this country which was available for India, and not only would the establishment of such a College lead to great unnecessary expense, but the institution would be apt to direct the minds of students rather to the refinements of mechanism than to the useful adaptation of mechanical agencies to the ordinary purposes of life.

said, he could not let the debate close without saying a few words in defence of Sir Richard Temple, upon whom so many reflections had been cast that evening. It was on an emergency, caused by the failure of the attempts that had been made to obtain a Finance Minister from England to go out to India, that Lord Lawrence had prevailed on Sir Richard Temple to undertake the duties of Finance Minister — duties of great importance and responsibility, and to which he had not been trained. He had discharged those duties with great ability, and therefore no blame ought to be attached to him. Sir Richard had always shown himself to be an able administrator, and he (Mr. Kinnaird) believed it would be found that the Indian Government, in the end, would be in possession of a surplus instead of a deficit. He must also observe that there were plenty of engineers in this country competent to carry on irrigation works in India, and many engineers, including Mr. Hawkshaw, had protested against the contemplated alteration of the gauge of some of the Indian railways, as it would destroy their value for military purposes. With reference to education, enough had been done for the education of the higher classes, who could pay; but he regretted that nothing had been said about the education of the masses of the people. The licensing system of India demanded the attention of the Government, for India was, with reference to it, becoming afflicted with the same evils which had grown up in this country.

said, he hoped the Under Secretary of State for India would be able to give some information to the Committee in reference to the progress of the agricultural education of the people of India, or, at all events, that the Government would give an assurance that some movement was being made in that direction. He wished to endorse what had been said by the hon. Mem- ber for Manchester (Sir Thomas Bazley), as to the necessity for a reduction of the military expenditure; and, as a Native soldier cost £40 against £180 for an English soldier, he would direct attention to the fact that the reductions of the last 10 years had been made in the Native Forces, while he would suggest the propriety of considering whether the Indian Government ought not to organize its own forces and save the cost of transporting troops between India and this country.

said, there was no doubt, as the hon. Member for St. Ives (Mr. Magniac) said, a large growth of opium in China, but this was because we would force opium on the people of China; for the Government and the ruling classes still strongly objected to its use, and were willing to give up all Revenue from it. The Friend of India stated that the Excise were encouraging the opening of unnecessary shops in India; and, looking merely to the increase of Revenue, were deliberately encouraging drunkenness. The quotation was endorsed by Baboo Keshub Chunder Sen. Last year that House had unanimously decided that the Excise in this country should not be permitted to pursue the same policy, and he hoped that what was too bad for the people of England would not be allowed to flourish in India.

hoped the supply of military stores, torpedoes, coals, and other munitions of war would be pressed, and kept up to a sufficiency to meet sudden emergencies and possible retardation of replenishments hence. Comparing the taxation of India with that of the mother country, he found it was a very few shillings per head—only about a fifth of what the people of the United Kingdom had to bear.

said, he thought that there ought to be a reform in the Council of India, and he would urge the expediency of taking steps to promote the cultivation of silk in India.

said, that the discussion had wandered over even more topics than was usual in this always the most miscellaneous discussion of the whole Session, and he would try, as briefly as possible, to reply to the various speakers. First came his hon. Friend the Member for Penryn (Mr. Eastwick). Well, with what his hon. Friend had said about the want of an efficient control over expenditure by the Financial Department at Calcutta, he to a great extent agreed. He thought there should be more control, and that that Department should be more in the position of the Treasury at home. At the same time, the difficulties were very great, historical difficulties arising from the relations of the Government of India with the subordinate Governments, and material difficulties arising from the immense number of treasuries scattered all over India through which business was carried on. Then his hon. Friend spoke about the Persian opium trade. He (Mr. Grant Duff) by no means overlooked its importance. He had alluded to it last year; but on this occasion he had wished to confine himself to the purely Chinese part of the subject. Then, as to sending out an independent financier, of course, that would be an excellent thing if you could first catch him, and then keep him alive, as we had unfortunately failed to do in the case of Mr. Wilson, until he had gained his experience and done his work. Next as to the Secretary of State sending out direct orders for expenditure. His hon. Friend was quite mistaken in supposing that the Governor General and his Council had not been aware that arrangements had been going on with the Admiralty about the employment of Her Majesty's ships in the Indian seas; employment which would, of course, lead to expense. He congratulated the hon. Member for the East Riding (Mr. C. Denison) on having shown very clearly that, to expect that the Indian Accounts made up to the 31st of December could be discussed in the House of Commons in the February next following, was to expect an impossibility; as soon might they look to see the Ganges running uphill to its source. The hon. Member had, however, fallen foul of the India Office as being secret, despotic, and bureaucratic. Of course it was despotic, for our government of India was a despotism, whatever it might one day become—an enlightened and benevolent despotism, but a despotism nevertheless. As to its being bureaucratic, of course it was bureaucratic; what Office was not bureaucratic? For an Office not to be bureaucratic was a contradiction in terms. As to its being secret, he knew nothing of an undue secresy. Of course, all official business must in a certain sense be secret till the proper time. But he was sure he could take hon. Members who had had any business to do with the India Office to witness that, since he represented it in that House, he had done everything he possibly could to give to hon. Members every information of which they stood in need; laying on the Table every Paper asked for which he could lay without impropriety; and, when sometimes a Paper could not be laid, allowing hon. Members to have access to it under the usual honourable understanding which prevailed in that House. The hon. Member, in declaiming against secresy, had chosen a most unlucky illustration. The hon. Member had not sat in the last Parliament but one, or he would have known that the Paper on Material and Moral Progress, which the India Office was accused of keeping back, was his (Mr. Grant Duff's) own particular pet and bantling. It was he who had, by pointing out to Sir Charles Wood that that Paper had not been produced, as it ought to have been produced, under the clause of an Act of Parliament, which had become a dead letter, first got that Paper presented under the Administration of Earl De Grey in 1866. Ever since he had been at the India Office, he had been trying to have that Paper improved, and this year he was confident that hon. Members would think that it had considerably improved in the hands of Mr. Sturt, who had drawn it up. As for keeping it back, he could only say that he had, for many weeks, made that gentleman's life a burden to him by constantly urging it forward. The fact of the matter was, however, that some of the most important Papers abstracted in that Report had not even come from India until after the day on which it had been laid pro formâ on the Table of Parliament in compliance with the Act. Then the hon. Member said that the Indian Government kept too large a balance at home, and did not get enough interest for it. But, first, it did not keep a penny more than it could help; and, secondly, if the hon. Member would give a little more interest for it than the Government got in the market, he was very welcome to the use of the money. As for declining to give information to the Government of India on financial matters, the India Office never dreamt of anything of the kind. It never kept back a scrap of information, unless when it happened to know that certain information was no real information, but would only mislead and bewilder. The hon. Member then explained the arrangements with the Great Indian Peninsula Railway Company which had been objected to, and road the following memorandum:—

"The Company's debt to Government was for unliquidated arrears of guaranteed interest, plus simple interest thereon, and amounted to between £4,000,000 and £5,000,000 sterling. The only means of paying off such arrears prescribed by the contract was appropriation by Government of one moiety of any surplus net earnings over and above 5 per cent on the capital that might be realized in any half-year. Of course if the arrears should over be completely paid off, Government would no longer be entitled to any of the surplus profits, which would thenceforward be divided exclusively amongst the shareholders. Under the new arrangement one-half of the surplus profits was to be made over to Government for ever, or as long as the Company endures.
"So that what in the House of Commons and elsewhere has been termed a renunciation by Government of its claim for debt was in reality an engagement on the part of the Company never to cease making to Government precisely those payments to which it would have been liable if the debt had continued for ever. The only possible objection to this arrangement from the Government point of view was that Government, in return for the concession made by the Company, waived the option it previously had of buying up the Railway at the end of the first 25 years—i.e., in 1874. But it was considered that this was an option of which it would not be advisable for Government to avail itself at so early a date. It was thought that Government would have quite enough to do for some years to come in managing the Railways which it was itself about to construct, without undertaking in addition the management of those of the Guaranteed Companies. In waiving its right to purchase in 1874, it was considered therefore to be merely waiving a right which at any rate, it would not be inclined to exercise."
Next came the hon. Member for Stockport (Mr. J. B. Smith), who, as usual, sang the praises of the Godavery works. He (Mr. Grant Duff) could only say that he wished he could share the fine enthusiasm of his hon. Friend, no referred his hon. Friend the Member for Ayrshire (Sir David Wedderburn) to the recent speech of the Duke of Argyll as to the barrack policy. He could assure the hon. Member for Manchester (Sir Thomas Bazley) that the question of creating a Department of Agriculture and Commerce, or some other department closely answering to that description, was engaging the anxious attention of the Secretary of State and of the Government of India. As to an engineering College, the present system had utterly broken down; the so-called competitive examination was, from the great inferiority of the candidates who came forward, a mere low pass examination, and the creation of an engineering College, into which young men should be drafted by competitive examination, had become a matter of paramount necessity. While he wished to speak very highly of Sir Richard Temple's many abilities and aptitudes, he must point out to the hon. Member for Perth (Mr. Kinnaird) that he had done his friend a most cruel kindness in obliging him (Mr. Grant Dull) to point out that the surplus or equilibrium of the year 1869–70 was obtained in consequence of the measures adopted while Sir Richard Temple was in Europe, by the Viceroy and his Council. No definite resolution had been come to about altering the Indian gauge, and consequently the protest of which the hon. Member spoke would be quite premature, although, of course, Mr. Hawkshaw's opinion would always be valuable and interesting. In reply to the hon. Member for Kendal (Mr. Whitwell), who thought that the time had come for establishing a local Army in India, he must say that that time was not in the future, but in the past, and the shadow did not go back upon the dial. He would now proceed to deal with the speech of the hon. Member for Brighton (Mr. Fawcett), which, although made on going into Committee, ought to have been made in Committee according to the usual practice of the House, and which had been made in a quite different spirit from that of all other hon. Members who had spoken. Whereas the hon. Member had asserted that they had, two months ago, been told that the deficit would be £1,500,000, no such statement had been made upon authority. The expected deficit, as laid before Parliament in May last, was, as he had already explained, something over £500,000. With respect to the Home Military Charges, if the hon. Member would get the English Treasury to abate its claims from the Indian Treasury, he (Mr. Grant Duff), of course, would only be too happy. The whole question of the Persian mission was being consi- dered by a Select Committee, and the India Office would be only too delighted if, should the present arrangement continue, it could get off contributing to the expense of that mission. So with regard to the Chinese mission and consulates. The hon. Member, instead of rating the India Office, should draw
"Iron tears down Pluto's cheek,"
and make the Chancellor of the Exchequer relent. As to errors in the Home Accounts, he had to explain that the error alluded to by the Duke of Argyll had been quite misconceived, and was a very venial error after all. It was not an error of account, but a failure of Estimate — the increased charges that would be caused by an entirely new system of furlough rules. That a mistake in such a matter should be made the first year was not very surprising, and, such as it was, he was bound to say the mistake was in no way attributable to the Finance Department at the India Office, which, whatever might be said about the Finance Department in India, was presided over by one of the ablest and most thoroughly satisfactory officials who over managed any Finance Department in any country. He could not say less in justice to Mr. Seccombe. As to the Store Department, which the hon. Member attacked, that Department was presided over by Mr. Talbot, a gentleman of much ability, and of the highest honour. He (Mr. Talbot) was perfectly satisfied that the Department was working satisfactorily, audit must be remembered that all stores collected, and sent out to India by that Department, were subjected to most jealous criticism in India, so that anything wrong would be very speedily detected. At the same time, he was sure that Mr. Talbot, as well as the Duke of Argyll and himself, would welcome any inquiry, if the hon. Member, instead of confining himself to vague and random accusation, would attempt to bring forward facts. All human institutions were imperfect, and a Store Department was just the kind of Department about which the heads of an Office could very rarely in the nature of things know much. He must point out the ignorance displayed by the hon. Member for Brighton in what he said about salt, the duty on which varied from ½d. to 1d. in the pound in various parts of India, and was the only tax to which the really poor contributed in that coun- try at all, taking the place, as it did, of the taxation on tea, coffee, &c. With regard to the remarks of the hon. Member on the Duke of Edinburgh's presents, he had to say that the visit of His Royal Highness had been a great pleasure to the people, and had produced the most excellent political effect. No equal sum of money that had recently been spent in India had done so much good. While the hon. Member had been making his unfortunate remarks, an Indian Prince, the nearest surviving representative of Sivajee, the founder of the Mahratta Empire, had been looking on from the Gallery, and he blushed to think what an impression His Highness must have carried away as to the amount of insight into the feelings of his countrymen possessed by the hon. Member for Brighton, who put himself forward as, forsooth, a great authority on Indian affairs.

said, the hon. Gentleman (Mr. Grant Duff) had accused him of making a speech which was rash, reckless, and erroneous. Indeed, the hon. Gentleman was so confident that this would be the opinion of the House that he did not deign to reply to that speech, but said he would leave other Members to answer it. In point of fact, however, all the independent Members who had addressed the House approved his speech, and his Resolutions, and were prepared to support him if he had gone to a Division. The Under Secretary had remarked that there was one fact which he (Mr. Fawcett) had developed from his inner consciousness. Well, that fact was derived from the speech recently delivered in "another place" by the noble Duke the Secretary of State for India. He felt confident that when he obtained the Committee which the whole House wished to see appointed he should be able to prove all the assertions he had made. In conclusion, he gave formal Notice, that on the earliest possible day next Session he should move for the appointment of a Select Committee to inquire into the financial and general administration of India; and also, that if next year the Indian Financial Statement was made as late as the 5th of August, he should ask the House to express its opinion on such a course of action.

said, he held in his hand the speech of his noble Friend the Secretary of State for India, and what the hon. Gentleman had stated about £1,500,000 was directly contrary to the facts of the case. The Secretary of State said—

"In March, when the regular Statement was framed on 10 months' of actual expenditure and an Estimate for the next two months, the Government of India were hopeful enough to think that the deficit would be little more than £500,000."
The mistake was made in the leading article of The Times the next morning, and the hon. Gentleman it was clear had trusted the statement of the leading article without having read his noble Friend's speech.

said, he had read both the speech and the leading article, and he was sure hon. Members would admit that, considering the general accuracy of the articles in The Times, he had not made the statement without foundation.

Motion agreed to.

Resolution to be reported To-morrow.