said, he would beg to ask the right hon. Baronet the Secretary of State for India, Whether he is going to proceed with the East India Loan that evening? An important statement had been made by Mr. Laing on the 27th of April, a report of which had arrived only that day, and it was desirable that Members should have time to peruse it.

said, he intended to proceed with the measure that night. When he had made his statement the hon. Member would see that, whatever Mr. Laing had said, it was quite necessary that the measure should not be delayed.

said, he would beg to ask the First Commissioner of Works, Whether there is any truth in the report that he has granted permission to the Royal Agricultural Society of England to hold their annual Show in the Regent's Park; and if so, whether he has restricted them either as to the space which they are to occupy, or the time during which it is to be so occupied for the erecting and taking down the sheds and other fittings?

said, he had no doubt that the general opinion of the Metropolis was in favour of giving facilities for holding the Agricultural Show next year in London, and that great dissatisfaction would be created if the offer of the Agricultural Society upon that subject were refused. Proper sites were provided and subscriptions were raised in every provincial town in which those shows were held for the purpose of ensuring their satisfactory progress; and he thought it would be derogatory to the intelligence and liberality of the Metropolis if the facilities given in other towns were refused in London. The Agricultural Society found that the north-western portion of the Regent's Park would be very convenient for their purpose, and he did not know any central place in the Metropolis where the holding of the show would be more acceptable to the public at large. A space of twenty-six acres was available in that quarter, without encroaching on the public convenience. The show would occupy a week, and the Society would be required to make the necessary preparations in the shortest possible time.

said, he wished to ask the Solicitor General, When he intends to proceed with the Criminal Laws Consolidation Bills?

said, he was sorry to say that in the present state of the public business it was not possible for him to name a day—certainly not an early day—for proceeding with those Bills. But after the careful consideration they had received from a Select Committee of the other House last Session, and of a Select Committee of the House of Commons in the present Session, he hoped that no great time would be required for their consideration. He should bring them forward on as early a day as the state of the public business would permit.

said, he wished to ask the Lord Advocate, Whether it be his intention to introduce a Bill this Session to increase the salaries and to improve the position of the Parish Schoolmasters of Scotland?

said, he proposed to bring in a Bill that evening for increasing the salaries and improving the position of Parish Schoolmasters in Scotland.

said, he would beg to ask the Secretary of State for Foreign Affairs, Whether Her Majesty's Government will exercise the discretion which by the Law of Nations they possess to prevent privateers sailing under the as yet unrecognized flag of the so-called Southern Confederacy from bringing their prizes into any port of Her Majesty's Dominions? He did not ask this question with regard to privateers sailing under the flag of the United States, simply because he had no expectation that any Letters of Marque would be issued by the United States' Government.

Sir, my answer must be rather wider in extent than the question which the hon. Member has put to me. The whole matter has been considered by Her Majesty's Government, and it has been determined, after consulting the Law Officers of the Crown, that orders should be given to interdict the ships of war and privateers of both parties from entering the ports and harbours of the United Kingdom, or of the Colonies and Dependencies of Her Majesty, with prizes. In order to make the matter more clear the House will perhaps allow me to read an extract from the despatch which has been sent to the India Office and to the Governors of the Colonies—

"Her Majesty's Government are, as you are aware, desirous of observing the strictest neutrality in the contest between the United States and the so-styled Confederate States of North America. With the view more thoroughly to carry out that principle we purpose to interdict the armed ships, and also the privateers, of both parties from carrying prizes made by them into the ports, harbours, roadsteads, or waters of the United Kingdom or any of Her Majesty's Colonies or Possessions abroad."

The orders went out to the colonies on Saturday last, and they have gone to India to-day. I may also state that we have during the past week been in communica- with the French Government upon this subject. I stated to the French Ambassador the view taken by Her Majesty's Government, and asked him what course the Government of France intended to pursue with regard to this subject. The French Ambassador has informed me that the French Government propose to act in conformity with the existing law of France. That existing law is founded upon an ordinance passed in the year 1681; and the rule is that in case of a war in which France is neutral, no privateers are allowed to bring their prizes into the ports or harbours of France or its dependencies for a longer period than twenty-four hours. They are not allowed to sell the cargoes, or in any way to dispose of the prizes which they have taken; and after the twenty-four hours have expired they are obliged to leave the port. Therefore, the course pursued by France is not very different from that which we intend to adopt.

said, he wished to put a question to the noble Lord the Secretary of State for Foreign Affairs in reference to a statement which he saw in the newspapers of the day. It was said that the Government of the United States had expressed their intention of recognising the declaration in reference to privateering made at the period of the adoption of the Treaty of Paris in 1856. He wished, therefore, to ask the noble Lord, Whether Her Majesty's Government have received any intimation to that effect from the Government of the United States; and, if so, whether he can state what effect it will have on the policy which Her Majesty's Government have announced with regard to the belligerent rights of the Southern States?

Sir, the only answer which I can give to the right hon. Gentleman is that propositions have been sent to America founded upon the Declaration of the Treaty of Paris. Those propositions were made in concert with the French Government, and are restricted in concert with that Government. We have not as yet received any answer to those propositions. They have been gone, I should think, a fortnight, and I expect soon to receive some reply to them. Until that answer is received I cannot pledge the Government as to the course which they will pursue.

said, he wished to ask the noble Lord whether the course now proposed to be adopted of prohibiting the vessels of war and privateers of both parties from bringing prizes into the ports of the United Kingdom was not different from that which had in former times been pursued by this country?

said, he wished to know whether the law of France, as stated by the noble Lord, applies to the vessels of States, or is confined to privateers?

I stated that that law is applicable to privateers only.

said, lie asked what measures have been taken by the Government to inform British seamen who are at present at sea that it is their policy to observe a strict neutrality between the parties to this contest. Unless a notice was affixed to the mainmast of every British trader ["Order, order!"]

said, he must inform the lion. Baronet that he was not in order in entering into an argument.

A Proclamation has been issued by Her Majesty, declaring her neutrality in this contest, and of that proclamation, which has appeared in the Gazette and in all the newspapers, the crews of vessels calling at ports would receive intelligence.

Will the noble Lord lay upon the Table a copy of the despatch from which he has read an extract?

Yes, in a day or two.

said, he would beg to ask the noble Lord the Secretary of State for Foreign Affairs, Whether it is true that the Members of the International Commission appointed to settle the affairs of Syria have since their arrival at Constantinople agreed to the appointment of a Maronite Governor for the Lebanon, who should be independent of the provincial Government of Syria; and if so, whether Her Majesty's Commissioner has been a consenting party to that agreement?

Sir, the representatives of the great Powers at Constantinople have had two meetings, the second with the assistance of the Minister for Foreign Affairs of the Porte, but they have not agreed to the arrangement which the hon. Baronet has mentioned. The whole matter has been discussed, but we have not yet heard that any proposition has been agreed to, and certainly Her Majesty's Ambassador is not empowered to consent, that there should be a Maronite Governor in the Lebanon. I hope that before the end of the week I shall be able to state at what decision the representatives have arrived.

It is not my intention, Sir, on the present occasion to go at any length into the general question of Indian finance. It will be my duty to do so later in the Session, but at present we have not that information which it is indispensable to possess, in order to do so with advantage. The finance accounts for 1859–60 are on the table of the House, but they are not printed or in the hands of hon. Members. Those accounts differ certainly very considerably from the last Estimates sent home by the Government of India. Both the revenue and the expenditure are considerably higher than we were led to expect; but the despatches explanatory of the difference have not yet reached us, and, of course, in the absence of those documents, it would be impossible to go into the question of past expenditure. In like manner, although we know by telegram that Mr. Laing has made his financial statement for the year 1861–2, we are not in possession of that statement. Although we know, from private letters and from the telegram, that the statement is satisfactory, we do not know what it is, and it would be premature to attempt to enter into the details of future expenditure. One fact we know, that Mr. Laing has felt himself to be in a position to reduce the duties on yarn and twist from 10 to 5 per cent, and, therefore, that circumstances must have justified that reduction of duty. It is, however, necessary to make some statement on the financial prospects of India. I am anxious to make it as short and clear as I can. I have been accused of being at one time too gloomy and at other times too sanguine. I hope to be able to satisfy the Committee that I have spoken accurately as far as the information which I possessed at the time enabled me to be accurate. The Committee will see that the only sources of information which I can have are the despatches from India, and every hon. Member of the House can test my judgment, because they have now in their possession all the despatches in reference to the general finances of India received from or sent to India since the last Session Parliament. The first of those papers is a despatch addressed to the Government of India in August last, and those who have paid attention to the subject will find in it the most complete view which we were able to form of Indian finance. I allude to it because I think the form adopted is the best for affording full information. The other despatches are those which have been received from or addressed to India up to February last. Those despatches will show the grounds upon which I made a statement early in the Session, which is supposed to have been more sanguine than I was justified in making. The actual deficit for the present year at the commencement was £5,500,000, and I anticipated that if no unforeseen circumstances occurred we might look forward to no deficit in the course of this year, and, therefore, no necessity for a loan. That statement was founded upon an anticipation of an increase of taxation to the extent of £2,500,000. The original estimate by the Indian Government of the whole increase was £3,500,000, of which £1,000,000 was realized; and it followed that if the estimate wore correct there would be an additional £2,500,000 to be received in the course of the present year. I find on reference to these despatches that even at a later period, when the Government of India took a more gloomy view of their finances, they estimated the increase at £2,200,000. In March they anticipated it would be not much less than what I stated in the preceding February. That reduced the deficit to £3,000,000, and I anticipated a reduction of expenditure to the extent of £3,000,000. Every letter which I have received since assures me that the reduction will, at least, amount to that, and, therefore, the Committee will see that it was not without satisfactory grounds that I made the statement which is thought to have been too sanguine. An unforeseen circumstance of considerable importance, has, however, occurred since I made that statement. I refer to the famine in the North-West Provinces, which will necessarily cause some loss of revenue. The Lieutenant Governor of those Provinces expects that the deficiency will fall almost entirely upon the year 1861–2; and, of course, the expenditure for the relief of sufferers from the dearth will also fall, chiefly, upon the early part of this year. Should any deficiency occur it will, therefore, be owing to an event which I had no reason to anticipate when I made my statement to the House. In the despatches from India we find very different estimates of income and expenditure. In the first series of despatches the apprehension is expressed that increased taxation will be only sufficient to make up for the falling off in revenue, while in the subsequent series it is said that an increase of about £1,000,000 is to be anticipated in the revenue of 1861, but the ultimate result of both seems to point to a deficiency which will certainly be under £2,000,000. That, however, is the worst view which can possibly be presented. Even if there should be a deficiency, I do not think we shall have any reason to complain, considering the enormous expenditure on account of the mutiny which has just been wound up. We have never ceased to urge upon the Government in India a reduction of that great source of expenditure—the Native army of India. A large body of armed men cannot, however, be suddenly disbanded without causing great dissatisfaction; and an immediate reduction would, therefore, be exceedingly dangerous. The Native troops must be quietly and gradually absorbed into the population. I have received information from Mr. Laing which shows that the Government of India is entering on a new career. Mr. Laing states that the balance in the Indian Treasury, which he had estimated at £11,500,000, will, in all probability, amount to £12,500,000 on the 30th of April. The inference, therefore, is either that the expenditure must have been diminished or that the revenue has increased considerably. Mr. Laing hopes that by the 1st of January, at the latest, he will be able to bring the income and expenditure to an equilibrium. A telegram which is published in to-day's papers reports Mr. Laing's satisfactory announcement that he anticipates no deficiency at all on the present year. Apart, however, from the necessity of providing against a possible deficiency, the loan is required on various grounds. Whatever may be the condition of the Indian finances towards the close of the year, it is quite certain that there will be a pressure for money in the early part of the year. As I have stated, the diminution of revenue and the heavy expenditure on account of the famine will fall on the summer months. And further, it is usual for a reduction to the amount of about £3,000,000 to take place in the balances in the Indian Exchequer during the first six months of the year, which is recovered during the six months following. Looking to the pressure which must arise from providing relief for the sufferers by the famine, and carrying on the railways and other works which we had ordered not to be stopped, I felt it to be my duty to purchase £1,000,000 of silver in this country, part of which has already been sent to India. Even if I could draw money from India at the close of the financial year, on the 30th of April, I should be sorry to do so, on account of the great public works which we are carrying on. At any rate, it is impossible for me to draw any money from India now, and yet money must be provided for the payments I shall be called on to make in this country in the early part of the year. The resources to which I look for that money are the payments from the railway companies, or, in default of these, a loan. As hon. Members are, no doubt aware, the expenditure for railways in India is paid by advances from the India Treasury, while the expenses of the Home Government are defrayed from the sums paid by the railway companies into the Treasury in England. Indian finance is so much mixed up with payments on account of railroads, that in a general statement it is almost impossible to disentangle them. In the early days of the railway companies they paid in large sums to the Home Treasury, and the expenditure on account of them was comparatively small. The consequence was, that there were considerable balances of railway money in the Treasury in England. We have always held it desirable to have about three months expenditure in hand at the end of the year. Up to the present year, indeed, we have generally been in possession of more than that amount. All, however, who are versed in railway matters, know that towards the conclusion of such undertakings there is generally some difficulty in raising funds. That has been the case in regard to these Indian lines. In the beginning of the year 1860–1 we expected that about £7,000,000 would be paid into the Home Treasury on account of the Indian railways. The anticipated expenditure amounted to £7,000,000, or rather more. In point of fact, the expenditure in India has been upwards of £8,000,000, and the payments into the Home Treasury less than £6,000,000. During the last few years the balances of railroad money in the hands of the Home Government at the end of the financial year have been as follows:—1856, £3,265,000; 1857, £3,136,000; 1858, £2,750,000; 1859, £3,846,000; 1860, £2,220,000; and this year, according to a statement which is partly estimate, it is only £370,000. Therefore the House will see that I have not an overwhelming amount of money from which to meet any demands upon the Home Treasury. Further than that, the state of the money market at home, and especially the raising the rate of discount by the Bank of England a day or two before the payments were to be made, have prevented my receiving the gums which I anticipated from the railway companies. It will be remembered also that—as I have already stated—I sent £1,000,000 to India, to enable the Government there to meet the demands likely to be made upon them in the early part of the year, and that has further diminished the means at my command to meet the demands upon the Home Treasury. Under these circumstances I have no alternative but to appeal to this House for power to raise money; and the only question really is, what sum I should borrow. Hon. Gentlemen will see from the despatches that the estimated expenditure in England on Indian account,—i.e., for the interest of debt, payments for stores chargeable to Indian account, and the service funds—will amount to £9,500,000. There is also to be paid on account of railroads about £1,800,000; making together, to be provided for payments in this country in the course of the year, £11,300,000. The mode in which that amount will be provided is as follows:—The probable expenditure on account of the railroads in India during the year will be at least £7,500,000, and, as some little balance must be provided, I may state the expenditure in the course of the year 1861–2 at £8,000,000. Of that sum about £530,000 has been raised, and there are available calls upon shares to the extent of £1,300,000, so that £1,830,000 may be considered as more or less provided for, and the balance of rather more than £6,000,000 is what must be raised by the railroad companies in the London money-market between now and April next. Speaking in round numbers, £6,000,000 will be required for expenditure in India, and £2,000,000 in this country. The amount required to be expended in India is the measure of the sum available for the Home Treasury, because, come what will, the Indian Treasuries will provide this £6,000,000 for the railway expenditure in that country. Deducting that, therefore, from the £9,500,000, which is the amount due from the Home Treasury for various purposes, there remains to be raised £3,500,000. I may probably in the course of the year obtain the repayment of the advances made in India on account of the China expenditure, which are estimated at about £1,000,000; but at the same time I cannot be quite sure that the railway companies will provide all the money which they ought during the year, and, therefore, I propose to borrow a sum of £4,000,000. What it may hereafter be necessary for me to do I am not at present in a position to state. If the railway companies raise in the course of the year a sum sufficient to meet the expenditure in India it will not be necessary for me to borrow a shilling more. If, on the other hand, they cannot pay in the amount required to meet the expenditure on railway account in England and India, I may have, as I did last year, to ask Parliament for power to raise money for railway purposes. This is a subject of such vast importance, and it is in my opinion so desirable that the country should know what is the full extent of the demand which may be made upon it, that I will with the permission of the Committee state the general position of railroad finance in India. Previous to the breaking out of the mutiny several large and extensive railways were sanctioned. Without going into details, I may state that according to the Indian estimate the amount required to construct railways already sanctioned is £56,000,000; according to the English estimate it is £54,600,000; but, judging from past experience, I am disposed to think that the Indian estimate is the more correct of the two. There has been guaranteed up to the present moment £36,556,000; there has been paid up £32,190,000; and, according to the last account from India, which is not of very recent date, there had been expended £30,802,000. It follows that there will have to be raised before the railways are completed a sum of about £25,000,000 more. I have no doubt that, had things gone on as prosperously as they were before the mutiny, there might have been no difficulty in raising the money; but, on the one hand, the expenditure arising from the mutiny has rendered it necessary to borrow from £40,000,000 to £50,000,000, which have made Indian securities more plentiful than is advantageous in the money market; and, on the other, the present state of that market, owing to the uncertainty which exists as to what may happen in Europe, keeps interest at a rate which is not favourable to borrowing money on a large scale. There is not much use in discussing that subject now. Government is pledged to this extent; that sooner or later these undertakings are to be carried out, and the only question is, what practical steps it is necessary to take at the present juncture? I have no hesitation in saying that it is our interest to finish those railroads which are now in hand as quickly as possible. The shareholders receive 5 per cent whether the works are finished or not, and altogether irrespective of the existence of any receipts from traffic. A strong opinion exists in India with regard to the management of railroads, but it is not necessary that I should go into that question now. As far as pecuniary interests go, it is the Government rather than the shareholders who are concerned in the early completion of these lines, because until they are completed no returns can be expected from traffic, and it is to that source that the Government look for a diminution of the heavy payments of interest they have guaranteed. The Government of India feel that so strongly that they are willing to recommend what, otherwise, would be a most objectionable proceeding—the raising of money in India, to be expended with this object. I believe it would be far better on all accounts that the money should be raised here. At present we are paying no less than £2,000,000 per annum for guaranteed interest; that amount is of course increasing every day, and we cannot hope to put an end to this growing charge till the railroads are actually completed and at work, when we may be able, to some extent, to recoup ourselves. Those which we have determined on pushing forward with the utmost despatch consistent with the proper execution of the work are lines which in the present crisis in America must be looked to with the greatest interest. One pierces the cotton district, and the other skirts its very edge. The only delay which will arise will be occasioned by the natural obstacles that present themselves. There are other railroads on which no capital has yet been paid up, and on which, therefore, we do not pay interest; we propose that the commencement of these shall be postponed. I by no means say that their completion will not ultimately be of importance, for they will fill up gaps in the communication, but, generally speaking, they pass through rather a desolate country, and, therefore, they are not so pressing. The demand, then, for this year will be £8,000,000, and the indispensable requirements for the next two years will be £6,000,000 or £7,000,000. In all, allowing for contingencies, £24,000,000 or £25,000,000 will be required for the completion of the lines of Indian railway which have been laid out, and which are requisite for the development of the resources of the country. Some gentlemen did me the honour of calling on me, and of represent- ing that large sums ought to be raised for the prosecution of public works in India. I apprehend they were hardly aware that, directly or indirectly, the Indian Government is responsible for the large amount to which I have referred. And I must say that I do not believe we could apply money to any purpose so profitably as to the completion of those railways. Other undertakings may be more immediately remunerative; but we are pledged to the railways, and by completing them we shall be relieving ourselves from annual payments in respect of guaranteed interest, the amount of which may then be applied in reduction of duties justly complained of as oppressive, or in the advancement of other public works, the advantageous character of which may be hereafter urged upon the Government. Another question to be considered is whether, in the present state of the money-market, we should be justified in asking for a larger sum between the Government and the railway companies than £12,000,000, the interest of which, if we obtain it, the Committee will bear in mind is £600,000. I am told, indeed, by some of my friends that the more I ask the more I am likely to get; but I do not think the experience of last year justifies such an expectation, and the City authorities whom I have consulted do not lead me to entertain that opinion. I believe the wise course is to ask for that which will meet the present emergency, and see what its result will be, and then in more favourable times to renew our demand upon the money market. I am aware that the object which these gentlemen hare in view is the vitally important one of developing the resources of India. But that is a question to which I have not at any time been blind. When I first became President of the Board of Control, railways in India were in their infancy, and it was suggested that the main lines should be treated simply as experimental lines. After having put myself in communication with my lamented friend the Marquess of Dalhousie I determined that they should be completed as soon as possible. The opening of the Godavery was also a project of which I early saw the importance, and I ordered a survey of it, believing that it was capable of being made a great high road of traffic to the interior. But all the plans for the improvement of India were most lamentably interfered with by the Sepoy mutiny, and it is not likely that so great a storm could have passed over, or have calmed down, without leaving traces of its mischievous effects, and one of those is the interruption of public works. Happily the accounts which we receive of late show that its injurious results have nearly expired, and in the course of this year, or at any rate at the beginning of next, I hope the Indian authorities may turn their undivided attention to peaceful pursuits, and to the amelioration of the internal state of India. I am fully aware of the importance of the subject of the production of cotton in India, and it is one in which I have always taken a deep interest. I have been in communication with many gentlemen who have a commercial interest in it, and all I can say is that they shall receive the support and heartiest co-operation of the Government. I think that they are now taking a correct view of the subject, and nothing that the Government can do in this respect shall be wanted. I have already stated that we have urged the completion, as rapidly as possible, of those works which, by improving the carriage down, will bring the producing country into convenient connection with one of the best harbours on the west coast. With respect to the Godavery, I think, myself, that it is better in the hands of the Government, and that is the opinion of Sir William Denison, a most experienced engineer officer. The House may rest assured of this—that no unnecessary delay shall take place; but that the Government will do all in their power to accomplish the opening of that river. I am not very likely to overlook what I may call a pet project of my own. The loan which I am about to ask power to raise is required for home expenditure. I should be very glad to leave as much money as possible in India for the purposes of public works, for I believe it can be applied with more advantage there; but whether there be a deficiency or a surplus in India, it is equally necessary that I should be supplied with means of meeting the demands for the home expenditure on account of the Government of that country. It is, therefore, that I propose a Resolution as a preliminary to a Bill to empower me to raise a sum of money. The sum I propose to ask for, and which I shall put in the Bill founded on this Resolution, is £4,000,000. The right hon. Baronet concluded by proposing—

"That it is expedient to enable the Secretary of State in Council of India to raise money in the United Kingdom for the service of the Government of India."

said, he proposed to make a few remarks on that portion of the statement of the right hon. Gentleman which affected the commerce of India. The northern part of the United Kingdom might probably soon be embarrassed by the want of raw material, but independent of that no new-horn zeal induced him to claim justice for India, and the development of the vast resources of that dependency. The resources of India were daily becoming more apparent, but, as an agent for their full development, the establishment, of public works was indispensable. He considered that the statement which the right hon. Gentleman had made, considering the difficulties which surrounded him, was eminently satisfactory. As the first agent of progress the means of communication were required. At present they were so lamentably deficient, that they had neither the means of taking their manufactures to the interior of the country, nor of bringing the productions of the country to the seaboard for transmission to this country. Indeed, BO difficult was the access, that the funds which had been charitably subscribed to relieve the famine in the North-West Provinces were mostly expended in the transit, so that if a gentleman subscribed £50 to the fund, £40 of it would be expended in carriage. A gentleman writing from India said, had there been cheap and easy communication the famine now raging would not have existed. Again, for the cotton coming to the London markets the ryots received only 2d. per lb., while the price here was 6½d. What would our agriculturists say if the carriage of their produce was 200 per cent on the value in this country? As between the price of cotton in America and the sum which it cost here there was only the difference between 7d. and 8d. or 12½ per cent. He believed that under a proper system cotton could be had from India at as low a rate of carriage as from the United States; but railways of themselves would not afford the best means of carriage. The canals and rivers were the natural channels of communication for heavy traffic, and he hoped canals would be established both as means of communication and for purposes of irrigation. He wished he could induce the Minister of India to come forward and ask for such a sum as would give them roads and canals within a short space of time. There was another subject of much importance. He alluded to the land tenure in India. He hoped the sys- tem would be improved so that property could be passed from hand to hand as it was in this country. Though on the railways the cost of carriage would still be relatively high, still, on present rates, it would be a great reduction. He hoped, however, that the railways would not charge more than one-third of a penny per mile on cotton making its way to the seaboard. One-eighth or one-tenth was the rate charged on the Mississippi. His personal knowledge of the subject induced him to say that, with improved cultivation, India could produce cotton as good as the American, but from the agricultural Returns he perceived that 12s. an acre was the whole pecuniary produce in India, while in America it was £12 per acre. He regretted that greater exertion was not made to induce a larger production of cotton in India. Last year our consumption of the raw material was 2,500,000 bales of cotton obtained from all sources. Of that quantity 85 per cent came from the United States, 8 per cent from Egypt, Brazil, and other foreign sources, and only 7 per cent from the East and West Indies. The disproportion between our colonial and our foreign supply would appear still greater, when they took into consideration the question of value. He calculated that last year we paid America £26,000,000, and Egypt and Brazil £2,500,000, while we only paid £1,500,000 for the cotton which we received from our own possessions. The Indian mutiny had unfortunately led the Government to take a step which he deeply deplored. Before that event the import duty upon British goods was 5, but afterwards it was raised to 10 per cent. The result had been to encourage the establishment of rival manufactories in India to an immense extent. Within the last few days a gentleman had told him that there were at present eight new and extensive spinning and weaving concerns in Bombay, and that there were already 4,000 power looms at work. All that had been done in the face of immense disadvantages. For instance, machinery which in Lancashire or Lanarkshire would cost £100,000, would cost £300,000 in India; and coal, which could be had in England for 10s. per ton, sold in Bombay for £3. There was, however, an immense saving of wages, for while a very moderate concern in Lancashire would expend £400 a week under that head, the cost in India would only be £100. That saving of £300 a week in wages could not but hold out a very great inducement to speculators to establish mills in India. It was, however, only just to the Indian Government to say that they had reduced the duty on cotton yarns 5 per cent; but he trusted that before long there would be no duty at all on goods imported from England. Our exports to India during the last year had amounted to £18,000,000, while our imports from it were only worth £15,000,000, showing thus a large misdirection of energy and capital. If, instead of that excess of three millions in their imports, the capital in India had been applied to the development of the natural resources of the country, an immense advantage would have accrued both to the natives and to us. They had great and varied resources, which a wise Government would labour to develop instead of encouraging the formation of resources which were merely artificial. He was sorry to say that our exports were diminishing, a fact that must produce a depressing effect upon our manufactures. Since the commencement of the year they had, in fact, fallen off to the extent of 20 per cent as compared with the same period of last year; and that fact, coming at a time when a large expenditure had been incurred in the erection of new mills, was very disappointing. The history of the American cotton trade afforded strong grounds of hope for India. It was only seventy-five years ago that America entered upon the growth of cotton, and it did not succeed without great outlay and exertion. The labour was not aboriginal, and the plant was not indigenous, nevertheless, the cotton trade of America had become one of the wonders of the world. The value of the cotton of America was £45,000,000 per annum; and a similar triumph was in store for India if similar means were taken to develop its resources. America had largely benefited from her intercourse with this country during the last two years. Last year we imported from her £20,000,000 worth of corn, and £26,000,000 worth of cotton, making a total of £46,000,000; whereas our exports to her had been only £24,000,000. This year those exports, he was sorry to say, were rapidly diminishing. In cotton goods alone we had sent out 25 per cent less in the first four months of 1861 than we did in 1860. The total exports of the United Kingdom last year amounted to £136,000,000, of which the cotton trade alone furnished £52,000,000—a fact alone sufficient to show the vast magnitude of that industry, and the necessity there was for providing a requisite supply of the raw material. He viewed with some alarm the present aspect of affairs, though not perhaps to the same extent as the hon. Member for Inverness (Mr. Baillie), for he still hoped that means might be found to arrive at an amicable settlement, in which case we might not suffer any serious inconvenience, while at the same time we should have learned the lesson not to extend our commercial operations too rapidly, and not to vaunt too highly our great prosperity. During the first quarter of this year we received 7½ per cent less of cotton than we had during the first quarter of last year. There had been lately, however, an increase in the number of mills, and our increased power of production could not be less than 10 per cent, so that embarrassment and confusion would be the result. Up to the present time we had received a less supply of cotton by 15 per cent than we did during the same time last year. Therefore, our condition seemed to be one of increasing difficulty and embarrassment, and called for greater exertions on our part to obtain somewhere new supplies of cotton. He hoped the Indian Government would look seriously to this matter, and encourage to the utmost the cultivation of cotton in India, whence abundant supplies might be had. He trusted that some one would inquire of the Indian Minister whether the beneficent proclamation of Her Majesty had been carried out, and whether the admirable Minute of the noble Lord (Lord Stanley), touching the sale of waste lands, had been acted upon? He feared that the answer in neither case would be in the affirmative. If, however, the acts of the home Government and of the Government in India were not in harmony, they could not expect satisfactory results. It was quite true that there were other places from which we might expect supplies of cotton. Many of our colonies were admirably adapted to its growth; in fact, we had more cotton-growing territory than any other Power in the world, and yet we only received 7 per cent of our supply from British territory. We had the West India Islands, which were lying comparatively idle. We had also a vast and magnificent territory in Australia—namely, Queensland, which was under the care of a most enlightened, able, and energetic Governor, Sir George Bowen. He (Mr. Bazley) could state, from his personal knowledge, that no cotton that was ever grown was comparable in point of quality to the cot- ton of Queensland, and we might have any quantity of it. For his own part, he had always been of opinion that it would be unwise for a great manufacturing country like England to depend upon any one particular locality for her supply of cotton, even though that locality might be within her own territories. The greater the number of our sources of supply the greater in that respect our security, and he must do his friends in Manchester the justice to say that they had made no slight exertions with the view of increasing the quality of cotton to be obtained from new fields. Six thousand bags of cotton, indeed, he believed, had reached this country last year from twenty-four new fields, and of that quantity a very considerable portion, equal to the average New Orleans cotton, he was glad to find, came from Western Africa. He had, in conclusion, simply to express a hope that our attention would be turned to the cultivation of the land which lay ready to our hands in India, and if we did so the object which we sought to attain would, he felt assured, be achieved at no distant day.

said, he only rose for the purpose of making one or two remarks on the question which had just been brought under their notice. It was obviously impossible to criticise at once the proposition of the right hon. Gentleman. It was never wise to attempt to enter into a minute examination of any financial scheme until time had been given for its consideration, and in the present case it was clearly impossible for the House to discuss the general state of our Indian finances, because they could not regard a telegraphic summary of the statement of the Finance Minister in India as that statement itself; and although his right hon. Friend had given them all the information he possessed himself upon that subject, everybody who possessed any acquaintance with India was aware how uncertain were all financial estimates and anticipations in that country, how widely they sometimes differed from the actual results, and how impossible it was to speak of financial totals in such a case until all the figures were produced. It was clear, therefore, it would be necessary that an opportunity for the full discussion of the proposition of the right hon. Gentleman should be furnished at a later period of the Session, and, that being so, he should not trouble the House by dealing with it at any length that evening. He might, however, be permitted to observe that there was one remark made by his right hon. Friend which he had heard with great satisfaction—he alluded to the statement that the military expenditure of India was this year being rapidly reduced, especially in the case of the Native army. Upon that reduction all our prospects of equalizing revenue and expenditure, he felt confident, hinged; for any retrenchments which could be effected in the salaries of the civil servants, or by putting a stop to the prosecution of unnecessary works, would be found to be comparatively insignificant, and would by no means greatly alter the general result. The question, indeed, had long been regarded in that light; for ever since the pacification of Oude had been accomplished, the reduction of the Native army had been continually pressed on the attention of the Indian Government. That that reduction should be carried out to a large extent he thought the House had a right to expect. The danger, it was true, of turning loose on the country a number of men accustomed to the use of arms, and naturally indisposed to take up any other profession, was not to be altogether lost sight of; but when the present state of India was taken into account; when one reflected how completely her internal peace had been restored; how well-disposed the Native princes were towards us, and how thoroughly our power had been re-established and consolidated in that quarter, it would, he thought, be admitted that we should be able to carry on our administration there with a much smaller military force than we had hitherto deemed it necessary to maintain. He might add, with respect to the loan for railways, that the right hon. Gentleman was, in his opinion, perfectly right in proposing to push on those works. Indeed, in the actual state of affairs, the only option loft to the Government was either to assist the railway companies by the resources of the Government, or to leave the railways in an unfinished state, when they would be likely to suffer to such an extent from the action of the elements and other causes, that the cost of restoring them to their present state would in many instances be as great as that of carrying out the original plan. It would be idle in dealing with that particular point to raise the question whether it was desirable, with the view to the promotion of the interests of India, that the railways should be completed, or canals and works of irrigation taken in hand in the first instance, because, so far as the Home Government were concerned, they were pledged in a manner quite irrevocable to the adoption of the former course, by the fact of the guarantees that had been granted unless they were prepared to sacrifice the interest on all capital which they had already guaranteed. But he regretted to hear his right hon. Friend state, if he understood him rightly, that he was inclined to keep in the hands of Government officers those other works which they all knew were so necessary in that country-such works as canals, works of irrigation, and the opening of rivers. It seemed to him quite clear that the Government, having undertaken the construction of railways to an extent involving an outlay of between £20,000,000 and £30,000,000 for the benefit of India, would have no money available for the prosecution of any other works not absolutely necessary. Canals and works of irrigation, therefore, must either be neglected or some means must be adopted of committing their construction to private hands, different from any to which we had hitherto had recourse; for he regretted to say that the only one public work which had been undertaken in India without a Government guarantee, and which would not involve a loss of one shilling to the Government in the event of its failure, appeared to him—and he had looked into all the circumstances of the case—scarcely to have been dealt with in a fair or friendly spirit. He did not, however, rise to discuss the affairs of any particular company, and would simply add that he thought the Government would find that they had as much work as they could accomplish in the completion of railways in India, and that the construction of other works of importance must either be suspended altogether or intrusted to private individuals. Taking it for granted that they would not, in agreeing to any Resolution on the subject that evening, be pledging themselves to the amount of the loan, he should reserve any further observations which he might have to make for a future occasion.

said, he could not but express his disappointment at the circumstance that the right hon. Gentleman the Secretary for India had, in proposing to raise so large a sum of money for railways, shown so little affection for what he called his "pet scheme"—the opening up the navigation of the Godavery river—a work which might be carried out by merely making an addition of 10 per cent to the amount now asked for the construction of railways. The Godavery led into the finest cotton districts of India—districts hitherto inaccessible except on those occasions when cotton stood at so high a price as to enable merchants to pay extraordinary sums for its carriage on the backs of bullocks. A few years ago some native houses under those circumstances made an attempt to convey cotton from Berar, a distance of nearly 600 miles, and 30,000 bullocks were employed for the purpose, but thousands of them perished of hunger and fatigue because sufficient provender could not be procured for them on the route. If New Orleans had adopted the same system as the Government of India had done, and been content with having its cotton brought there on bullocks' backs, instead of by means of the Mississippi river, it would never have been the great and flourishing place it had become. What was wanted from India was good cotton, and that would never be obtained until there should be a cheap conveyance for it. They would probably receive 1,000,000 bales of cotton during the present year from India, as all the rubbish that could be scraped together would be sent over now that the price had risen so high. But that was not the sort they wanted. They required good cotton, and good cotton could be got from India as well as from America if its carriage to market were equally cheap. Cotton was brought down the Mississippi 1,000 miles for half-a farthing a pound, and for the same price it could be brought 500 miles down the Godavery, if that river were made navigable. About a year ago a company proposed to make this river navigable; but at that time the right bon. Baronet the Secretary for India preferred that the work should be carried on by the Government, because it would be impolitic he said to impose tolls on the traffic, as a company necessarily must, to compensate them for their outlay. If it were thought advisable last year to open out the river, it had not been rendered less desirable by occurrences which had taken place since. No one could foresee what effect the events on the other side of the Atlantic might have on the supply of cotton. There could be no objection to the opening out of the Godavery on the score of the great expense of the work; and when the right hon. Gentleman talked of £8,000,000 for railways, £300,000 or £400,000 for opening the river constituted no immense expendi- ture for an undertaking which Sir Charles Trevelyan, who had travelled through the district and described it as one of the richest in India, declared to be of the highest importance to India, and claiming the first attention on the part of the Government. He believed that in a few years the opening out of the Godavery would yield the Government 100 per cent per annum on their outlay while the great increase in the consumption of salt, which was a Government monopoly, and the carriage of Government stores alone would nearly pay the annual interest on the outlay. He would mention an instance of the effects of cheap carriage: the Indus having recently been opened and steamers placed on it, a flax company in Ireland had been induced by these facilities to send an agent to India to obtain flax. The agent stated that when he got out he found that the flax grown was only eight to twelve inches high, he found that the land prepared for its growth was merely scratched with a stick, and that from generation to generation there had been the same seed without change. This gentleman tried the experiment of an English plough and ploughed a portion of the land, sowed it with fresh seeds from Europe, and had the satisfaction of finding that flax was thus produced four times longer than that previously grown. Similar results would take place from a better cultivation of cotton under English superintendence, and that better cultivation would come if only cheap conveyance were obtained. The right hon. Gentleman said that he was glad to see Englishmen going out to India to cultivate cotton. But, he would be mistaken, they would not go out because they could not successfully cultivate cotton unless he gave them conveyance to market equally cheap with America. On Friday last the Under Secretary for India (Earl de Grey and Ripon) stated in the other House that the Government had appropriated for Opening out the Godavery the sum of £30,000 during the present year. At that rate of expenditure it would take fifteen years to open out the river, whereas the work might be effected in two years if the Government authorized the engineers to set about it in different parts at once. He heard the other day a similar account respecting the improved growth of cotton in India to that which he had related respecting flax. An English gentleman in Madras turned his attention to the cultivation of cotton, and produced 1,000 bales last year of a quality worth 7d. a lb., double the price of ordinary India cotton; but not one pound of that cotton came to this country, the whole of it went to Calcutta for the Indian manufactures. He, therefore, had no doubt that if the attention of Englishmen were directed to the cultivation of cotton, and if they were encouraged to do so by the facility of cheap carriage India could be made to produce cotton equal in quality to that of America, and to as great an extent this country might require. He hoped, then, the right hon. Baronet would not take upon himself the responsibility of delaying the great work of opening up the Godavery for fifteen years, but set about it immediately. If the right hon. Baronet did not take that course, then he (Mr. Smith) would appeal to the noble Lord at the head of the Government. The noble Lord was distinguished at all times for protecting the persons and property of Englishmen in all parts of the world, and had even sent large fleets to collect money unjustly withheld from British subjects. He, therefore, did not believe that the noble Lord would at the present moment withhold from the English people the means of obtaining a supply of that most important article, on which the welfare of 4,000,000 of the population depended.

said, that notwithstanding the statement of the right hon. Baronet, and which he had introduced with one of his usual couleur de rose speeches, it appeared to him that on the whole it rather confirmed than otherwise the gloomy view which he (Mr. Vansittart) took of the state of our Indian finances last year. On that occasion he ventured to draw the attention of the right hon. Baronet to a speech of the late Mr. Wilson, which he delivered in the Calcutta Legislative Council, in the course of which he inquired "What is to be the state of our Indian debt, if we are to resort to the miserable disreputable expedient, of continuing to borrow in time of peace?" He regretted that that warning appeared to have produced so little impression upon the right hon. Baronet that, not satisfied with asking the House for power to raise a second loan this year in this country, he only so recently as on the 2nd of May last, in paragraph 33 of his letter to the Governor General, gave his sanction to his raising a loan in India. That seemed to him to be very much like burning the candle at both ends. If they required proof of the state into which the Indian finances were falling it was only necessary to refer to the correspondence contained in a Return which had been placed on the table during the last few days. In a letter dated the 5th of February, 1861, and signed by Messrs. Frere, Beadon, and Laing, and addressed to the right hon. Baronet, it was stated that "by the 1st of May of this year the cash balances in India will be reduced to the lowest point at which it is possible to carry on the government of the country;" that the deficit in 1860–1 amounted to £6,678,000; that, looking to the remissions of revenue which it would be necessary to make on account of the famine, and the disbursement of £664,000 on account of prize money, the current deficit would be in round numbers £5,000,000 (which was recognized in the 19th paragraph of the right hon. Baronet's reply, already referred to); that, with the exception of the licensing tax, no new taxes could be imposed; and, lastly, that no further reduction of expenditure was feasible. These gentlemen, moreover, verified the prediction which he ventured to make last Session in regard to the unproductiveness of the income tax. In their letter of the 5th of February, to which he had just referred, they

"Calculated that the full year's collection of the income tax for 1861–2, with the arrears of the previous half-year not collected by the 30th of April, would give a total receipt for 1861–2 of £2,500,000, or every £2,800,000, being £2,000,000 more than the receipt from the income tax in 1860–1."

But on the 13th of March, only five weeks later, these gentlemen wrote—

"We apprehend that our estimate of the produce of the income tax for 1861–2 may have been taken considerably too high; and we hardly venture now to place it at a higher figure than £2,000,000, or £1,200,000 above the estimated receipt for 1860–1, given in our regular estimate."

It would, therefore, appear that that odious and oppressive tax, by which it was supposed that the restoration of the Indian finances would be effected, barely yielded £2,000,000 a year, which had to be wrung from 200,000,000 of people, amid great discontent and sullenness. Then, again, there was a claim for £250,000, which had been alluded to that evening by the hon. Member for Inverness-shire. As he did not find that the right hon. Gentleman the Chancellor of the Exchequer had made any provision in his rash and improvident Budget to liquidate that claim of £250,000, the correctness of which the right hon. Baronet recognized in his letter in reply, and as no allusion whatever had been made in these estimates to the half-million which the right hon. Baronet had ordered to be paid to the Mysore family, he thought he would find that the pleasant dream of an equilibrium, in which he was so apt to indulge, was very far from being realized. Under those circumstances it appeared to him that the first thing to be done in order to place the Indian finances on a satisfactory footing was to restore that confidence in the Native mind in respect to the soundness of our financial and commercial schemes which we had lost since the mutiny. The late Mr. Wilson was of opinion that the existing railways ought to be completed not only at any cost, but quickly. It was, he believed, calculated that an additional capital of £24,000,000 would be required to be raised for that purpose, and that of the shareholders, numbering 17,118, only 336 were Natives. It was a notorious fact that the railway companies could not raise this additional capital, as they were unable to compete in the money market against the Secretary of State fox-India and his Council, although precisely the same terms, rate of interest, security, and guarantee were offered by both parties. If the right hon. Baronet was sincerely desirous to bring about a more favourable state of affairs, and to implant confidence in the Native mind, he should lose no time in introducing such a Bill—which should take precedence of all other Indian Bills—as would prove to the people of India that he was determined to uphold the power and credit of that country from home. Now that India had been made financially one with England he was bound to come forward with a bold and comprehensive Bill, explaining what our future financial policy was to be in regard to that country. He ventured to warn the right hon. Gentleman that he would not succeed in carrying out that object by simply coming down to that House year after year and asking for small irritating loans, which were only calculated to meet the exigencies of the present hour.

said, it was more desirable that the discussion should be confined to the subject before them than that they should enter into the whole question of Indian finance, Indian economy, and Indian everything at that time. The proposal of the right hon. Baronet was to ask the House to give him power to raise the sum of £4,000,000 sterling to make good a deficiency in the general balance of the Indian Exchequer; and if the railway companies should not be successful in obtaining the money necessary to enable them to carry on their works, then the right hon. Baronet said he was prepared to ask Parliament in the course of the Session for powers to enable him to raise the money for that purpose. It was clear to his mind that the right hon. Gentleman, in asking Parliament for the power to raise that money, would not place any additional burden upon the market. He would merely take power himself to do that which he apprehended the railway companies might not be able to do. The question was would the railway companies be able to raise the money? He had no doubt whatever that, if it were not for the state in which they found the money market placed, in consequence of the events occurring on the other side of the Atlantic, they would have no difficulty at the present time in raising all the money necessary for the purposes of the railway companies. He obtained power about a month ago for the company he war connected with to raise a sum of £1,000,000. He was proceeding satisfactorily with the operation, but two days before that on which it was to have been brought to a close, the Bank of England was compelled, in consequence of the advices received from America, to raise the rate of discount, which increased the value of money in this country, and but for that fact he had no hesitation in saying that he should have no difficulty in raising the £1,000,000. As it was, he should pay into the hands of his right hon. Friend on the next day very nearly £400,000. It must be clear to the minds of all those who watched the progress of events in India, and took an interest in this matter, that the security offered by the railways was not undervalued by the public. What the money market feared was these constant applications for money for the service of India. Year after year the Secretary of State asked for fresh powers to raise loans, and the public always doubted whether the last of these loans had been reached. He trusted, however, that after the statement of his right hon. Friend that evening, the public mind would recover itself, and that the value of these Indian securities would rise very considerably in the market. Reference had been made in a despatch from the Governor General to the extravagant system of expenditure on which Indian railways were constructed. It should, however, be remembered that the whole of the railway companies in India carried on their operations under the direct control and superintendence of the Indian Government. If any extravagance took place, therefore, it could only be with the concurrence of the Government, whose officers had the power of checking it. He did not, however, believe the statement. He doubted whether there would be found anywhere railways either of a better class, or constructed at a cheaper rate than those of India. He made that assertion with great confidence on the authority of persons who had seen the Indian railways. Nor was there anything in the cost of these railways that would justify so positive a statement as that made by the Governor General of India. The East Indian railway, in which he had an interest, connected the port of Calcutta with the imperial city of Delhi on the Ganges. The length of the line was 1,140 miles, and it would be opened, if not all the way, at all events Agra, 900 miles, by the end of next year. The Committee would bear in mind that there was not a single railway in existence of that length; and having regard to the physical difficulties in constructing a line of that extent in a tropical country, the various impediments in the way, and the time that had elapsed since the work was first undertaken, the result could not be regarded as unsatisfactory. Not less than 371 miles of the railway were in actual operation, and the average returns upon the cost of the line already opened were sufficient to pay the whole of the guaranteed interest upon that part of the line. He believed the time was not far distant when the railways of India, so far from constituting a charge on the resources of India, would, independently of the great collateral benefits to be derived from them, bring in a large annual sum in the shape of interest on the advances made by the Indian Government. His hon. Friend the Member for Manchester talked about the want of communication. On that subject, however, he would beg to recall to his attention a document published in August, 1847—the Report of a Committee appointed in the Bombay Presidency to inquire into the question of the cotton supply. The whole basis of that Report was the want of communication with the interior. 'Whatever the value of canals might be, there were no doubt many cotton districts which it was impossible to reach by means of canals. His hon. Friend had talked of the land tax, and was in favour of the system of redemption which had been proposed by the noble Lord (Lord Stanley). But when they talked of revising the land tenures, it must be remembered that India had been in a state of civilization for 3,000 years; and that the tenure and value of land in India rested on a basis as well understood as the tenure and value of land in this country. Again, these cotton lands were the most valuable in India, and it was not to be supposed that cotton was the most valuable production which could be raised there. In a densely populated country food was the most profitable article of cultivation. It seemed as though some hon. Members thought they had merely to express a wish for the growth of cotton in India, and the native would at once produce it, merely because we found it desirable to import large quantities of cotton into this country. The people of India could not be expected to put out of cultivation more valuable products to gratify our wishes in this respect. As to the supply of cotton from India, it might be observed that within the last year the whole supply to this country was 800,000 bales; whilst within the first five months of the present year the supply from Bombay alone was 550,000 bales. Large quantities were also exported from India to China, and it might be found desirable to import cotton from China to this country. Strange and paradoxical as it might seem, he (Mr. Crawford) believed that India produced, bale for bale, and pound for pound, more cotton than the United States. There were 200,000,000 of persons in India to be clothed, and though they might be very lightly clothed, still a large quantity of material was requisite to supply this demand. India supplied her own people and sent to this country and to China her surplus production, and in facilitating the export of that one of the main points for consideration by the Indian Government was the provision of railway transit between the seacoast and the cotton districts. His hon. Friend seemed to view with some apprehension the establishment of mills and manufactories in India as the result of the increase in the import duties there upon British manufactures. No doubt this might prejudice the interests of Lancashire; but every well-wisher of India ought to think that rather a matter for congratulation. With regard to the comparison instituted by his hon. Friend between the circumstances of India and those of America, in relation to the cotton supply, he thought no such comparison could be fairly drawn, seeing that America was comparatively a new country, while in India they had to deal with a well-established and ancient civilization. He was glad his right hon. Friend had announced his intention of coming to the House again to enable him to raise money, but he understood the additional powers he had referred to, were to be exercised only under the contingency of the railway companies not being able to obtain money for themselves.

said, the Resolution proposed by the right hon. Baronet the Secretary of State declared that it was expedient to borrow money in this country for the service of India. He, for one, was entirely hostile to that policy. According to the right hon. Baronet's statement the finances of India appeared so exceedingly prosperous that the income and expenditure would be balanced at the end of the present year, and, therefore, the right hon. Baronet now sought to borrow £4,000,000, and also expected at the end of the year to have to enter the market again for a similar purpose. That was a most extraordinary proceeding. The hon. Member for London had described the Indian railways as so flourishing, and their prospects as so excellent, that they would return a very large rate of interest, and yet the right hon. Baronet was now about to borrow £8.000,000 or £10,000,000, because the railway companies were unable to raise the money. Surely if gentlemen in this country thought that these Indian railways would return 6, 8, or 10 per cent they would be anxious to lend money for railway purposes; but the fact was that it was because the public did not believe the works would be reproductive, that the Indian Government had come into the market themselves to borrow £20,000,000 or £25,000,000. He (Mr. Smollett) was not one of those who thought there was anything unintelligible in Indian finance. In spite of the attempts at mystification to him it seemed to be quite clear enough; and, certainly, nothing could be clearer than that the present impecuniosity of the Indian Government was owing to the wasteful expenditure which had been going on for some time both at home and in India. Up to 1860 there were only four great sources of revenue in India—the land tax, which produced from £19,000,000 to £20,000,000; the two Government monopolies of salt and opium, £10,000,000; the Customs' duties, about £4,000,000; stamps and some other small items, which together, made up a total of £38,000,000. What was incomprehensible was that, with that amount of income, the Government did not make the two ends meet. That was a task which they ought to be called upon to perform, not only without aid from the country, but without imposing further taxation on the people of India. Instead of that, however, the opposite policy of constant loans with the imposition of new taxes was being pursued. In the year 1859, when Mr. Wilson went out to Calcutta, he told the public that in the year 1859–60 the expenditure was £47,000,000, and the income £38,000,000 showing a deficit of £9,000,000. In 1860–1, after every possible reduction in the Estimates, Mr. Wilson said that, supposing the income to remain the same, he could not anticipate a less deficiency than £6,000,000. Moreover, he repudiated the idea of having recourse to loans; yet we had had and were having constant loans. He insisted, too, upon the necessity of establishing an equilibrium between income and expenditure, and he showed how that could be achieved by an income tax, a tax upon trades and professions, by the introduction of a tobacco monopoly, and by raising the Customs' duties. He sought, in short, to raise the income to the level of the profligate expenditure which was then going on, instead of cutting down that profligate expenditure to the level of the income. But in this he was most unsuccessful; for in 1860–1 the income was only £39,500,000, yet the expenditure still remained at £47,000,000. Now, he (Mr. Smollett) agreed with the late Governors of Madras and Bombay in thinking that the proper policy would have been to have applied ourselves to the revision of our establishments, and not to the imposition of fresh taxation upon the people of India. In his opinion the taxation imposed by Mr. Wilson had been rash and unnecessary. It was certainly unnecessary; for if they turned back to 1856, when the Marquess of Dalhousie resigned the reins of Government, after all those annexations and spoliations for which his viceroyalty was notorious, he left behind him a minute in which he distinctly stated that for all ordinary purposes the ordinary revenue of India was then sufficient. At that period the revenue was between £33,000,000 and £34,000,000, and the Marquess of Dalhousie expressed his decided conviction that every possible exigency of the Govern- ment might be supplied with the sum of £34,000,000, including an expenditure of £2,000,000 or £3,000,000 for public works. What had since occurred to discredit or falsify that computation? Nothing but the mutinies. To suppress the insurrection in Bengal—for he took it to have been an insurrection of the people, not a mere mutiny of the army—£40,000,000 was borrowed, the interest of which was £2,000,000 per annum, and that £2,000,000 per annum was the penalty which the people of India were compelled to pay for what Mr. Wilson had termed their most foul and unnatural rebellion. But that was not the only penalty which they were paying. They were now required to provide for an expenditure of £47,000,000 sterling; or £14,000,000 more than the Marquess of Dalhousie thought to be amply sufficient to meet every exigency of the Government only four or five years ago. Surely the enunciation of such a fact was of itself sufficient to show the necessity of an urgent scrutiny into and reform of every branch of Indian expenditure. In his judgment a large sum might be saved in every department of the Government expenditure, and especially in the civil establishments, not by cutting down the salaries of individuals, though much might be done in that way, but by the introduction of new and improved fiscal schemes of administration in the country; by the introduction, for instance, into the territories of Madras and Bombay of the principles of that permanent settlement which Lord Cornwallis adopted in Bengal seventy years ago, and which was the foundation of the improvement and wealth of that portion of our Indian empire. The cry in India was always for more patronage, places, and situations, but, in his opinion, there were two many highly paid functionaries there already. Those parts of the country were best governed where there were fewest officials, and where power was centred in the hands of a small number of experienced officers, as for example in the non-regulation provinces. In fact, the ordinary administration had fallen into the utmost possible contempt in districts where appointments had been multiplied to the greatest extent. It was in the army, however, where the largest amount of reduction should be made. The maintenance of a force of 80,000 European troops in India was wholly unnecessary; 50,000 would be amply sufficient to preserve tranquillity if the country were only governed with justice and moderation, and endeavours were made to conciliate instead of to exasperate the inhabitants. But if the European army was to be maintained upon its present footing there was a great necessity for considerably lowering the pay and emoluments of the officers and soldiers. At present, when a regiment was sent out to India the pay and allowances were at once doubled, and the pay and emoluments of the superior officers became five or six times what they amounted to in this country. The time had arrived when that should be revised; when the pay should be rendered more commensurate with the duties performed, especially in time of peace, and be made nearly identical with the pay of regiments serving in our other tropical possessions. Then there were the staff appointments in India. Since he had served in India they had been multiplied five fold. Places had been made for men, not men selected for places. Last year the Secretary of State said there were 1,200 officers in the local Bengal army alone serving on the Staff, and this was mentioned apparently with the view of showing that the Queen's officers did not get their fair share of the plunder. A lieutenant-colonel presided over the stationary department; captains and majors on full pay superintended ragged schools; and not long ago an officer in the Madras Presidency was selected to be photographer to the Governor, probably to take likenesses of the notables of the Council and of the family of his Excellency. The sum paid for his chemicals and for this officer's general establishment was £1,600 a year. In former times the staff appointments were limited in India, and only a certain proportion of officers could be taken from the regiments; but since the amalgamation of the armies had taken place there seemed to be unlimited opportunities for multiplying these staff appointments. He feared they would be doubled in a few years, though he believed half of those which already existed were not needed. Then there was the Public Works Department, which seemed to be in such favour with lion. Gentlemen connected with Lancashire; though, after having watched it carefully for twenty-five years, he must say that he thought it one of the most expensive, corrupt and profligate organizations in the world. In this country where a work was undertaken by officers of the Government one generally looked for the maximum of cost and the minimum of profit; but how much more must that be the case in India, where every public work was done by Government officers, from clearing a drain to opening the Godavery. In the Revenue department when immense works were undertaken fabulous reports were spread of the enormous profits derived from them, but those anticipations were too seldom realized. He would instance the irrigation works of the Godavery, which had been often referred to as likely to produce enormous profit; they were begun in 1847 and opened in 1852 at a cost of £300,000. The normal land revenue of the district previously stood at about £200,000 a year, and from 1852 to 1857 it never rose above £204,000. The expenses of maintaining the works, superintendence, and the interest of capital sunk amounted to £40,000 a year, so that there was a clear loss of between £30,000 and £40,000 a year to the Government. And yet all this time the Government allowed their officers to state that the works had paid for this construction from the beginning, and that they were about to pay 70 per cent per annum to the Exchequer. It was now stated, on the authority of Lord Canning, that the public works of reproduction were stopped in India, but on looking into the accounts it would be seen that in 1859–60 £4,500,000 was ex-pended on public works, irrespective of railways, and the estimate for 1860–1 was £4,300,000. The salaries for establishments alone in 1859–60 amounted to between £600,000 and £700,000. These public works might easily be cut down to the level of the Marquess of Dalhousie's time. In the home expenditure very large sums were lavished unnecessarily in subsidies to companies in the City of London, got up, in his opinion, for stock jobbing purposes. The expenditure of £47,000,000 for the year 1860–1 was a great scandal. The interest on the public debt of India was but £4,500,000, and the rest of that large sum was spent—squandered to a great extent—on the civil and military services. Such an expenditure was altogether unnecessary if we governed the country with justice and moderation, but it was now required to be extorted from the Natives of India because we carried on our Government there on the principle of military dominion. That military coercion was the rule of our Government there was shown by the fact that the income tax had been brought down to salaries of £20 in civil life, while all highly paid military officials up to the rank of majors of the line had been exempted. Such an exemption was most unexampled, and could only proceed from a desire to conciliate the military service. So long as our rule was conducted on this principle, so long should we have there a harvest of discontent. The true policy was to reduce expenditure. The Indian Government ought to be compelled to remit money to England for the expenses of the Home Government, instead of the Secretary of State having to borrow it here, and he should certainly, therefore, vote against the right hon. Gentleman's resolution.

said, he was sorry to see that the right, hon. Gentleman the Secretary of State for India had inherited a very bad principle of the old East India Company, never to allow a private company to get too good a thing in India. In the instance adverted to by the noble Lord the Member for King's Lynn, a private company was raising money in this country for an object which would have been of great benefit to India, when the right hon. Gentleman turned round and retreated from the conditions to which he had agreed, or, at least, which he had led the company to believe he would agree to. This was the policy of the old company, and very injurious it had been to India, for it had prevented English capital from flowing into that country. The only exception was in the case of the Madras Irrigation Company, where the terms granted were fair and liberal, and the profits of that undertaking would be very considerable. The consequence was that the shares of that company had risen considerably. What they wanted to see in India was one or two companies which paid extremely well, so as to give confidence and enable them to raise capital without this extreme burden being cast on the finances. He believed that the more they reversed the old principles of Government the better it would be for India and for this country. The railways would carry anything but cotton. The ordinary carts might have been seen not long ago carrying cotton side by side with the Madras line. He did not know how far the change in the rates effected by Sir Charles Trevelyan had had the effect of altering such an extraordinary state of things, but he believed that even now other railways did not bring the products, to convey which was the great object of their being made. There had been a small beginning in a new system of finance. The right hon. Gentleman had introduced the income tax, which, in a poor country like India, was an extremely heavy impost, and extremely distasteful to the people. It would be dangerous to persevere in taxing personalty unless they removed the shackles which prevented the accumulation of capital, and the right hon. Gentleman had not taken measures to promote that great object. It was useless to send planters and seeds from South America, or to write despatches about the cultivation of cotton. The one thing needful was to alter the tenure of land. It might be quite true that, in some parts, the people were attached to the present system of tenure; but in such parts they need not alter it, as it was a great mistake to suppose that legislation must be uniform for the whole of a great continent. There were miles upon miles of waste districts adapted to the cultivation of cotton which were once fertile through the irrigation works of former Mahommedan princes. "Why were those lands not sold? He would give notice that dormant rights would be extinguished, and apply the same principle which had been successfully applied in America—of selling lands to settlers at low prices. The same cause which now attracted population to America and Australia would draw them to India, and make India prosperous. The parallel between the Godavery and the Mississippi had been questioned, but he had the authority of Captain Haigh, the engineer of the Godavery, who had seen the Mississippi, for saying that there were no more obstacles to making the Godavery navigable than to making any river in America navigable. The hon. Member had appealed to the noble Lord at the head of the Government as one imbued with the spirit of the age, and convinced of the necessity of going a little faster than people who lived in former times. He would ask the right hon. Gentleman the Secretary of State to take an example from his colleague the Chancellor of the Exchequer, whose alterations during the last seven or eight years had given satisfaction to the great mass of his fellow-countrymen? They did not want necessary reforms delayed for twenty years. The noble Lord the Member for King's Lynn (Lord Stanley) had been only a year in office, and he had made a beginning. The right hon. Baronet the Secretary of State had been two years in office, and he wanted to know how long it would be before he would decide on some bold and enterprising measures. If they had begun to govern India in the spirit and with the vigour which the Chancellor of the Exchequer had shown, they would never have had the mutiny. A miserable apathy prevented the cause being removed. They had paid dearly for it, but the same cause would lead to the same results. They would not only have a revolt of the army; but, if reforms were not adopted, they would have a rebellion, and they would lose India.

said, that the subject of railways and cotton had an important bearing on the financial position of India. As to cotton, if the Ryot or farmer, who generally had a proprietary right in the land found that the cultivation of it would pay better than the cultivation of sugar he would grow it; lie was fully alive to the value of money, and was free from the obligation to raise certain crops in rotation like the English farmer. Experience showed that cotton of any quality could be produced in India. But its prospect of sale depended upon the cost of its transit to the coast, and it was of importance, therefore, to get the cotton conveyed to the coast in the cheapest manner, and, as water carriage was less expensive than the railway, the Government ought to improve the rivers and canals as much as possible. He observed that the Ganges Canal Navigation Company divided at the rate of 34 per cent on their paid-up capital for the half-year ending last December, and he had no doubt that the navigation of the Godavery, if properly carried out, might be rendered equally profitable. With respect to the question of the sale of land in fee simple; the Government had no power to sell occupied land as long as the land tax was paid; but Government might dispose of waste land in that manner with great advantage. That was not the time to discuss the question of finance; but the explanatory despatches laid on the table upon the subject were utterly inexplicable. Whether these despatches were intelligible or not, public works in India could not go on without the assistance of the Government; and he apprehended, moreover, that the right hon. Gentleman, before the Session was over, would have to apply for power to raise more money to pay the home charges of the Indian administration.

said, he must complain of the great hardship inflicted on trade by the 10 per cent duty which was charged on all goods, except cotton twist, entering India. It amounted, in fact, to a prohibition, and he hoped the Government of India would make a change in that respect.

said, he agreed with the noble Lord (Lord Stanley) in thinking that a discussion on the general state of the Indian finances would not be attended with any advantage until they had later and fuller information on the subject. As to the railways, the Government, after careful consideration, had come to the conclusion that it was better for them to assist the railway companies by advances of money, than to take the lines out of their hands and complete the works on their own responsibility. The Godavery was essentially different from the Mississippi, as extensive and costly works were required to make it navigable, and would probably require the construction of canals in three separate places. No doubt the report of Captain Haigh was a very valuable one, but it would be very imprudent to commence a vast work, such as rendering practicable at all times the navigation of the Godavery, without further inquiry; and, in corroboration of that, he might refer to the proceedings of the Madras Irrigation Company, that model company which had been mentioned by his hon. Friend. In the case of these operations, plans were prepared for the works in four sections, the whole cost of which was to be little more than a million, but it turned out upon more complete investigation, that the lower section of the work alone would cost about a million, and in the other sections the cost would at least be equal to the whole amount of the original estimate for the complete work. As to the danger of beginning works without a full survey, it appears that the same company built a dam across the river, in order to turn the water into a canal for irrigation, which had to pass over some high land, and when built it was found that the water would not run over the heights from that head, so that a new one had to be built eighteen miles higher up the river, in order to gain a sufficiently high level from which to take the water. Thus, from want of a proper survey, from inaccurate estimates and inadequate levels, a considerable loss had been incurred. The result of the operations of this company ought to be a warning to the Government. In his own opinion, if the Government had the means, it would be better for them to construct those works than private companies, because the Government only required a fair interest upon the outlay, while a private company, of course, wishes for a profit he-sides. With respect to the growth of cotton in India, he agreed that English superintendence would be useful, but the ryots only wanted sufficient inducements to cause them to grow cotton instead of other crops. It was not quite the fact that the want of means of transport at present prevented the extension of the growth of cotton, for cotton was now sent from India to China. Improvements in the means of transport were no doubt desirable, but, as the hon. Member for London (Mr. Crawford), had truly said, the ryots would grow cotton suited for the English market, if the price offered for it were sufficiently remunerative. English superintendence and direction in the various processes of cultivation, picking, and cleaning, would do much towards improving the quality; and within a year or two he hoped the means of communication would be improved, and the cotton brought down for shipment at a cheaper rate than at present. With reference to the duties upon manufactured goods, he hoped that before long they would be reduced to 5 per cent, as that upon yarn had already been reduced; but as a revenue was necessary, it was hardly fair to object to direct taxation upon land, and to indirect taxation by means of Customs' duties. In regard to the tenure of land in India, he had followed out the course adopted by his predecessor in office. It was not true that all the waste lands of India were the property of the Government, but in fact he never could see that the tenure of land was an insuperable bar to the cultivation of cotton, as had been represented, because leases for twenty or thirty years could be obtained. The proposal which he made had no reference whatever to the balance of income and expenditure of the year; he was not proposing to raise money to supply a deficit, but to supply immediate wants, because he had not, as he had during the last year, a considerable balance available for home expenditure. He was inclined to think that there would be no deficit at all in the course of the year, and, therefore, neither in the last year nor this, should he have to borrow a single sixpence, as he hoped, for the public expenditure of India. He might, however, have to borrow for the railroads. If the state of the money market enabled the railway company to raise the necessary capital for constructing the line, he had not the slightest wish to interfere, and he should only ask for power to raise money for that purpose, if the companies were not able to raise the necessary capital themselves upon reasonable terms.

in the Chair.

said, that they could only hope to draw attention to the Estimates by singling out items and dwelling on their details; and, therefore, he wished to say a few words on this Vote. For many years the Admiralty confined the manufacture of steam-engines for the navy to two firms. After knocking at the door of the Admiralty Session after Session, they were at length convinced that there were many other firms which could supply equally good engines, and it was then found that engines for which they had hitherto paid £70 to £80 per horse power could be built for £55 per horse power. But, even now, tenders might with advantage be received from a larger number of manufacturers. With regard to anchors one firm had held the contract for twenty years. For a certain number of anchors the Admiralty paid that firm £3,434, and these same anchors could be had from equally eminent firms for £1,428. In other words, they were paying nearly three times the market price for anchors. It might be said that the prices were subject to revision; but somehow, notwithstanding the invention of the steam hammer and other improvements, the prices seemed to be increasing. The noble Lord the Secretary of the Admiralty might wonder what was the reason of his hammering, year after year, upon this subject, and would, perhaps, think he had some interest in the matter. His personal feeling, if any, in the matter, was, however, in favour of the particular firm that had the monopoly of the anchors. He wished to know why the particular firm of Brown, Lennox, and Co., retained that monopoly—why the supply of anchors had not been thrown open to competition, and why other eminent manufacturers had not the opportunity of tendering? He had given notice that the Vote of £500,000 for the purchase of steam machinery for Her Majesty's ships should be reduced by £100,000; but before dividing the Committee on that proposal he wished to know from his noble Friend for what ships this steam machinery was required?

said, he could not understand why the supply of anchors should not be offered to competition. It was only necessary that the contractors should be under proper control. There was no difficulty about that. The contractors for the fortifications of Paris had been ruined because they had to complete their contracts under the superintendence of Government engineers. The great thing was to take care that contracts were not made with those who were incapable of executing them. He rose, however, more particularly to object to the system of iron-ship building. He should certainly, at the proper time, take the sense of the Committee on the Vote of £55,000 for steam machinery for iron-built ships, to see whether a wholesale system of manufacture was to be sanctioned by them or not.

said, that if the Motion to reduce the Vote of £685,000 for steam engines by £100,000 were put, the lion. Member for Brighton could not move the reduction of the minor item.

said, he should await the explanation of the noble Lord the Secretary for the Admiralty before he troubled the Committee to divide.

said, there was no item in the Navy Estimates on the expense of which he would place less stress than for anchors. But the Admiralty were sticking to the old heavy anchors, when the necessity for heavy anchors had gone by. For ships of 300 or 400 feet long, with such fine lines as they were now building, they required light anchors. Rogers's and Trotman's anchors were very much lighter than the Admiralty anchors. It was objected to those anchors that they did not bite; but having inquired into the subject he found their great defect was that they bit too sharp, so as to produce what was technically called "snubbing," when the ship being brought up too sharp, the cable broke, but not the anchor. He would give his support to the first part of the proposition of the hon. Member for Sunderland (Mr. Lindsay), but not to the second; for though eventually we should be obliged to substitute iron for wooden ships, the time for doing so had not yet come; and as, in case of war, we should look for a combination of the whole world against us, we should be prepared to put steam-engines in the ships now laid down. The subject of the reconstruction of the navy demanded at least as much consideration as was vouchsafed by the House to the establishment of country post-offices, or the expenditure of a sum of money on Kensington Museum. But what was now proposed was to alter the character of the navy in a wholesale way, under the direction of the Surveyor of the Navy and his assistants. He believed the country ought to have better advice than was to be found in the Surveyor's-office, and that the men most capable of dealing with the question and who had turned their attention to it in a practical manner, ought to be assembled immediately, and invited to give their opinion on this all-important question. The adaptation of the steam-engine to the sailing ship was merely a change of the motive power, and did not trench to any great extent on the qualities of the ship; but in iron vessels the primary principles of construction were unknown. The point had yet to be ascertained, at which specific gravity overcame flotation. A wooden ship would stagger and recover herself; but if the Warrior were sent to sea in a gale of wind, and she was pooped with one wave and caught on the lee bow with another, it was impossible to tell how she would act. In one point that vessel was singularly malconstructed, for she was wall-sided, and thereby exposed to danger from boarding, which he was informed by competent authorities would be only way of taking these iron-plated frigates.

said, he quite concurred in the belief that, regard being had to the immense cost of these new frigates, it was almost impossible that the subject could be too fully considered. Very anxious attention, he knew, had been given to it by the noble Duke at the head of the Admiralty, and he had availed himself of the opinions of a very valuable committee, consisting of Sir John Hay, Dr. Percy, Mr. Fairbairn and other officers who had been for some time engaged in experiments with regard to the various qualities of iron, and had extended their investigations into still larger questions. A great deal of attention had lately been paid by foreign nations to the subject of iron-cased ships, and all the maritime nations to a greater or less extent were commencing the construction of this class of vessels. Her Majesty's Government, therefore, thought it necessary to increase our force in this respect. We had seven vessels of this description. The Warrior, BlackPrince, and the Achilles belonged to the first class, measuring somewhat about 6,000 tons. The two former were now nearly ready. The Achilles was about to be laid down at Chatham. [Sir JOHN PAKINGTON: But not actually laid down.] She would shortly be laid down, but a great deal of her material was ready, and when commenced it was hoped that she would progress satisfactorily. There were two others of the second class, the Resistance and Defence, measuring between 3,000 and 4,000 tons, and the remaining two vessels were of about 4,000 tons. These seven ships were now under construction, and in addition to them Her Majesty's Government had thought it wise that we should undertake the construction of five more iron-cased ships. It was a question whether they ought to be of iron or wood; but it so happened that they had the timbers of five line-of-battle ships of the latest and best 90-gun class, and it was accordingly determined that the whole of these vessels should be put up, lengthened about 20 feet, and cased entirely with iron plates. Midships they would be of the full thickness of 4½ inches, but at the two ends, with a view to their sea-going qualities, they would be somewhat less solid. It was intended that these vessels should each carry fifty guns, and the engines which it was intended to place in them would give them a high speed. He was not prepared to say that at a future time the Government might not be prepared to go on building iron-cased ships, indeed, he believed, they would be called on to do so, but what he had now stated was all that had been decided on up to the present time. The hon. Member for Sunderland (Mr. Lindsay) declared that his course with regard to the vote would be affected by the reply given to him with regard to the engines now in course of construction. Sixty-four engines were now being constructed for the Admiralty, but of these only one was for a line-of-battle ship, far advanced towards completion; and four were for other vessels in process of conversion, which he hoped would be out of dock during the present summer. The rest of the engines were intended for vessels of a smaller size. In reference to the anchor question, on which they had an annually renewed discussion, he could only say that if his hon. Friend the Member for Sunderland would give the name of any firm prepared to supply anchors such as the Admiralty could approve on terms greatly beneath those at present paid to contractors, the application should receive the fullest consideration from the Board. [Mr. LINDSAY: Why not advertise.] It was true they might advertise; but would the Government be justified in allowing strange parties to tender for the manufacture of first-class anchors any more than they would for first-class engines? The practice of the Admiralty was to allow firms who had submitted to have their yards inspected with the view of ascertaining whether they bad the requisite plant, to tender for the manufacture of engines of the lowest class, then if they built engines which gave satisfaction for those of a more powerful description, and. so on to the highest and best class of engines. He had received offers from one or two firms saying it was not worth their while to make the lowest class of chains, though they were quite prepared to tender for the best description. But it was a very grave question whether the Admiralty would be justified in departing from the rule they had hitherto acted upon. All he could say was that their case would meet with due consideration at the Admiralty. He hoped the hon. Member for Brighton (Mr. Coningham) would not persist in his threatened opposition to the Vote for steam machinery for the iron-cased vessels building at Chatham. The experiments going on at Chatham might or might not be successful. He was not prepared to say that the Government would build either better or cheaper vessels at Chatham, but when we wore embarking largely in the construction of iron-cased ships it was right that we should have at least one dockyard where we could repair them. Private builders knew that repairing old vessels was more remunerative work than constructing new ones, and the Government, in order to protect the public, wished to have a dockyard where they could repair iron-cased vessels when they had got them.

said, he had heard with considerable disappointment what had just fallen from his noble Friend with regard to the intentions of the Government as to the increase of the iron-cased ships of the navy. He wished he had been fuller in explaining what he proposed to do. He did not clearly understand what was to be the character of the five ships when completed, nor what was their condition now. His noble Friend had spoken of them as line-of-battle ships; but he (Sir John Pakington) apprehended from what he had heard elsewhere that they were to be cut down to ships of one deck.

They are not to be cut down, because they are not yet built up.

One of the questions which he was about to ask was, what condition those ships were in, or what progress had been made with them? The noble Lord had not told the Committee how far they were advanced, or what was to be their character when completed. He understood now that they were laid down as two-deckers—line-of-battle ships. ["No, no!"] Then his noble Friend had better explain, for he certainly could not understand what was meant.

explained that the frames of three of them were not yet laid down, but they would soon be so. The intention was to build them on the model of the Bulwark, which was the latest model of a 90-gun ship. Of the remaining two the frames were already laid down. At little or no expense the whole of them would be lengthened by 20 feet as compared with the Bulwark, and they would be built as iron-cased frigates carrying 50 guns.

said, the fact was that these ships would be built de novo, and would be all single deck ships. The important point at which they arrived was that it was the intention of the Government to add five iron-covered ships to the force in progress. Therefore, the iron-covered ships proposed to be given by the Admiralty, and already in progress, would be twelve. Now, after the information with which they had lately been furnished, he wished that the Admiralty had stated that they intended going further. He found that he had understated the case on Friday evening. He had omitted to mention one iron frigate called the Invincible, which had been launched at Toulon early in the last month. He had stated on Friday that Admiral Elliot had not visited Toulon; he was not aware, therefore, of more than La Gloire, La Savoie, and La Provence. The present strength of the French navy in these ships, either built or building, was fourteen frigates, two line-of-battle ships, four batteries, and five armour-covered gunboats. Our Admiralty thought that it was a sufficient answer in these circumstances to say that they would shortly have twelve vessels in progress. That was not satisfactory. It was not meeting the preparations of France) to the extent they ought to meet them, especially considering the formidable character of the French iron-cased vessels, and considering the large number of other ships belonging to the French Navy. He also regretted that the noble Lord had not given a clearer and more satisfactory answer to the hon. Member for Portsmouth with respect to the appointment of a competent Committee, not only to test the quality of the iron, but to ascertain, if possible, the best mode of constructing iron-cased ships.

said, he concurred with the right hon. Baronet in thinking the statement of the noble Lord hardly satisfactory, lie did not, see why the Admiralty might not act with more energy without putting the country to additional expense. We were told that our wooden fleet was of little use for coast defence. We had several large wooden three deckers; and he wished to know why some of the hands now engaged on wooden ships could not be set to work to cut off the upper deck of these three deckers in order to cover the lower decks with iron plates. Altered in that manner, those ships would defend our ports and coasts, although they might not be fit for long voyages. In company with officers of experience he had visited some of the iron-plated ships which we had in course of construction, and he was sorry to say that the opinion of those gentlemen was not very favourable. They considered that the Warrior, although a splendid model of a vessel, would not under certain circumstances be able to meet at close quarters a vessel like La Gloire. The latter had 34 guns under casemated batteries, while the former had only 26, and was perfectly exposed, fore and aft. She was too long for the defence of coasts, and would not be handy in such a service. He, therefore, hoped that the Admiralty would not depend on vessels of the Warrior class for our coast defences.

said, his noble Friend had talked of the observations of the hon. Member for Sunderland and the hon. Member for Portsmouth with respect to anchors as the "annually renewed discussion." It was true that the discussion was renewed annually., and he did not wonder at it, because after each renewal they appeared to leave off pretty nearly where they had begun. His noble Friend had told them that the Admiralty did not wish to shut up the contracts for anchors, and that those who tendered for anchors would be treated in the same way as those who tendered for engines; but if he (Mr. Bentinck) understood the matter rightly, those who tendered for anchors were not in the same position as those who tendered for engines, because the practice had been virtually to exclude all tenders, and leave the manufacture of anchors solely in the hands of one person. He had no iterest, like his hon. Friend opposite, in Trotman's anchors; but the case was simply this:—Some years ago Trotman's anchors were subjected with others to trial before a committee of scientific men, who pronounced Trotman's the best, and the Admiralty anchors the worst. The Admiralty might choose not to accept that as an authority, but the fact remained unanswered,—that Trotman tendered to construct anchors subject to the Admiralty test at a much cheaper rate than the contract now existing for Admiralty anchors, and that up to this time he had not been allowed to make the experiment. He (Mr. Bentinck) considerd, therefore, that the tender for anchors was virtually closed to the public. His hon. Friend the Member for Portsmouth, with reference to the iron ships, complained of the system generally. He (Mr. Bentinck) was inclined to think that there was a great deal in the present system that was objectionable, but his hon. Friend seemed to forget that they both had had the advantage of sitting twice a week on a Committee for the purpose of investigating the merits or the demerits of the present Board of Admiralty; and his hon. Friend would agree with him that a more hopeless task could not have been undertaken. He believed that the labours of that Committee would be perfectly ineffectual, and he could only repeat what he had said from the first—that he looked upon the whole thing as a broad farce. His hon. friend ought to remember when he was making those complaints that he was complaining in vain. Until they could arrive at some investigation which should bring the constitution of the Board of Admiralty before that House all complaints would be useless. He would suggest to his hon. Friend to give up the inquiry that was at present going on, and endeavour to institute one that was likely to lead to practical results. He hoped, however, that the Committee would not agree to either the reduction proposed by the hon. Member for Sunderland, or the one proposed by the hon. Member for Brighton, because it was quite clear that so long as the Board of Admiralty was constituted as at present, they must put faith in that Board. Under the present circumstances of the country and of Europe, any attempt to cripple them would be impolitic. He agreed with the right lion. Baronet the Member for Droitwich, that the exertions of the Admiralty with regard to the iron-cased ships, were not equal to the occasion. They ought to make greater exertions to put themselves on an equality with their Galic neighbours. They must all know perfectly well that there could be no object on the part of France in going to the enormous expense of ship-building, particularly of this new class of vessels, except that of obtaining and of maintaining a maritime superiority over this country. On the other hand, no man could believe, either in France or England, that there ever was or ever would be, an attempt on the part of this country to invade France. That was absurd on the face of it, because the number of troops we had were not sufficient for the defence of the country. It was only about one-fifth of the number in France. They were bound to consider that the only possible object of France in going to her present enormous expense in the construction of the new class of vessels, was to obtain a maritime superiority over this country, and the Committee ought to bear in mind that if the maritime superiority of this country was lost, the commerce of the country would be lost also; and if that power should be obtained by France, it would only be used for the purpose of invasion of this country.

said, that an attempt had been made by the right lion. Member for Droitwich to startle the country, but that attempt had failed. He hoped the noble Lord the Secretary for the Admiralty would avoid going on too rapidly in the building of iron-cased ships. Let the Admiralty first fairly try one of the ships and let the Committee now sitting consider the subject before more ships of that kind were built. If they proceeded deliberately in that way they might hope one day to have an efficient navy, but that object would never be accomplished by rashly building a new class of vessels for the success of which they had no security.

said, there was no doubt that the French iron-cased vessels would be more numerous than ours, but before we plunged into a vast expenditure for the erection of that class of vessels, we should have the best grounds for believing that they were necessary. He suggested that they should case with iron some of the wooden vessels that were in a forward state. At all events, it would be unwise to build more iron-cased ships till a fair experiment was made of their value.

said, he wished to correct an impression that seemed to exist that the Admiralty never consulted anybody but the Comptroller of the Navy in the construction of ships. They had consulted several of the most eminent shipbuilders, including Mr. Laird, of Liverpool, and Mr. Napier, of Glasgow, as to the construction of these ships. It must be remembered that they had had no experience to guide them, that they were groping to a certain extent in the dark, and that it was impossible to arrive at any certain result as to the value of this class of vessels till experiments had been tried. The hon. Member for Norfolk (Mr. Bentinck) found fault with the composition of the Committee now sitting on the subject of the Admiralty. It was an unfortunate circumstance that his hon. Friend did not regularly attend the meetings of the Committee, but he had no doubt that it would be able to arrive at important results. With regard to Mr. Trotman's anchors, all he would say was that he was not aware Mr. Trotman had offered to make anchors cheaper than the Admiralty now made them; but if he would make such an offer, he would take care to lay it before Board of the Admiralty.

said, that if the noble Lord meant to say that the contracts would be thrown open, that would meet all the objections that had been raised, and must be satisfactory to Mr. Trotman and his friends. He should not press his Amendment, hoping that his hon. Friend the Member for Sunderland would take the sense of the Committee on the essential question.

remarked, that he had always understood that when various anchors were tested, the reward of merit was given to Trotman's, as being that which exhibited the greatest amount of tenacity. Yet he had since been treated with the greatest discourtesy. He had been much impressed by the statement they had heard last Friday from the right hon. Gentleman on that great national subject. This country possessed great wealth, much exposed, and extensive colonies, and we must maintain our naval supremacy. They had heard on very high authority that the French were in advance of us in respect to their ironclad ships, and it became the imperative duty of any Administration to be on the alert, and to see that we were placed in a position to command and maintain that naval supremacy which was essential to our national independence. He thought the best way of proceeding was to go on building iron-clad ships on the best possible mode of construction, making them fully equal to compete with the ships of France. He could not help thinking that we were in a very perilous position, for he found it impossible to believe that France would make so great an effort to strengthen her navy as she was making had she not some ulterior object in view. If, under these circumstances, £1,250,000 of revenue by means of which we could build five ships of war of the best class every year had not been recklessly thrown away by abandoning the paper duty, what a benefit would have been conferred upon the country.

The subject which was started by the right hon. Baronet opposite (Sir John Pakington) is one of infinitely greater importance than the relative merits of different anchors, or the best mode of fitting steamships with boilers. It is, moreover, I can assure the Committee, a subject which has not escaped the notice of the Government, and which still intensely occupies their attention. It is, in short, a subject of vital moment, because—as everybody must see at a glance—if any other Power were to acquire a superiority to us at sea, the most vital interests of the country would be imperilled. The question, therefore, which presents itself to our consideration is—seeing that other nations, and especially our nearest neighbours, are making efforts to commence a career of very extensive construction of iron-clad vessels—what we can do to meet the corresponding demands of the country. The right hon. Baronet opposite stated the other day very accurately the number of iron-clad ships-of-war which the French Government had either already built or ordered to be constructed, the total number, as far as we are informed, amounting to fifteen. [Sir JOHN PAKINGTON: Sixteen.] The right hon. Baronet thinks there is another; and of the fifteen I have mentioned, the greater proportion have only recently been ordered to be laid down, so that it will be a very considerable time before the whole of these vessels are launched and ready for sea. We, upon the other hand, have at the pre- sent moment, either built or building, seven of these vessels, as was stated by my noble Friend the Secretary to the Admiralty, and the Government have considered which would be the best and readiest method for providing a large and valuable addition to our iron-clad ships. The most effectual and expeditious method, we thought, would be that which my noble Friend has stated—namely, to take advantage of the preparations which have been made for the construction of a certain number of wooden line-of-battle ships, to put five of these up and fit them to be clad with iron. By adopting this plan it is quite obvious we shall be saving time, because the materials are, in a certain degree, ready to our hand, and these five ships will, as a consequence, be fit for sea sooner than five iron ships now laid down for the first time. The French ships, I may add, are chiefly built of wood and cased with iron—[An Hon. MEMBER: All but two]—and the five vessels of which I am speaking will, therefore, be of exactly the same description as those which the French are building, while, armed as they are to be with guns of the heaviest calibre, they will be found very formidable, and, we trust, owing to the arrangements which have been made, good sea-going vessels as well as batteries. These five ships being added to the seven which I have already mentioned will give us twelve as against fifteen French vessels. France has, in addition, a certain number of floating batteries; but so have we, so that we may set those vessels one against the other. I wish the House clearly to understand that, although I have stated the measures which are now at once prepared to undertake, we do not consider ourselves precluded, by the adoption of those measures, from taking any others which we may deem expedient with the view of constructing ships of iron of a larger and more formidable description. It is evident, however, from what has passed in this discussion, that it would be unwise to launch at once into ordering a great number of iron ships of a new description until the Government has arrived at a clear and definite understanding as to what is the best manner and the best form for their construction. The building of such vessels would, of course, involve a large expenditure, and although that expenditure would be far from being thrown away in providing for the security of the country, yet it is expedient to ascertain beforehand, as far as possible, how the money may be laid out in the best way to accomplish the object which we all have in view. Ships of this description must be built by contract, mid before the Government undertake to give a large order for them they think it prudent to place themselves, by communications and experiments, in a better condition to know what are the best and most useful ships of the kind. The steps which we have taken will put us in possession of five iron-clad vessels of the best sort, armed with the heaviest guns; and my opinion is that those five will be ready sooner than any five of those which the French Government is beginning to lay down. We have the materials already provided, which it is to be supposed they have not, and we shall, I feel confident, find ourselves on a par with the preparations they have made.

said, he was sure that no Member of the House would refuse to sustain the honour and to promote the security of the Government. But underlying all these discussions there was one fatal feeling—a want of confidence in the administrative power of the Admiralty. They could not commence these operations without great preparation. With all deference to the lion. Member opposite (Sir Frederic Smith), he was surprised to find that Chatham Yard had been selected for the building of the first iron ship. The Government were compelled to come to the House for smithies, and a Vote of £180,000 had to be taken for iron and appliances for that purpose, and a staff must be organized as wooden ships only had been constructed there. Why was not Keyham selected? It was said that the docks at Keyham were not large enough. If so, they ought to be enlarged, if Keyham was to retain its position as the great steam building factory of the kingdom. With respect to the construction of these other five vessels to be clothed with iron, he should like to know in what yards the Secretary of the Admiralty meant to build them, because it was desirable to avoid creating large establishments in connection with these matters. What was really wanted was that the money granted should be applied in the best way. At present these vessels could not be built in the Royal dockyards without an enormous increase of establishment; and it was, therefore, the duty of the Committee to consider whether the better course to pursue was to build them by contract or in Her Majesty's yards. Let the House have the opportu- nity of calmly considering this matter, without rushing headlong into the expenditure. He deprecated the discussions which so often took place in reference to Franco, for he knew the feeling they excited in France, and he must say that the present French Government were doing nothing but what this country ought to have been doing long since. In 1858 they profited by the experiment that was made, and with great practical skill went on producing an iron navy instead of a wooden one. This country had enough wooden vessels to meet all the world, although those to whom she was likely to be opposed were building nothing but iron ships. They were desirous of strengthening the Government by adopting the most practical mode of obtaining the end they had in view. The noble Lord had had a great experience in official life, but he had not had much experience of commercial life. He (Sir Morton Peto) remembered the instance of a man connected with one of the staple manufactures of the country, who made a large fortune, and left it to be maintained by his sons after him. Relying upon the-reputation of his name, the business was continued, but the sons failed from want of practical superintendence and skill, allowing others to supersede them by improvements in fresh applications of machinery, while they relied on the machinery by which their father had achieved his success. That was just the position the Government were in at present. They went on perpetuating their expenditure in the old direction, because they were not subject to any commercial check, or influenced by anything like a commercial feeling; but now, for the first time, there was a ruler in an adjoining country who took a different course. Nothing in France was spent that could be saved, for every shilling was there applied with the best scientific skill to obtain the required result, and £5,000,000 or £6,000,000 was made to go further than £12,000,000 in this country. They must, therefore, take care that this nation did not go to decay in consequence of the want of sufficient energy to remodel the establishments, and place them in that state of efficiency which circumstances demanded.

said, that no doubt there had been an enormous change in the construction of the navy of the whole world. They had spent a largo sum on wooden ships, and now they found that they were compelled to build ships in some way connected with iron. The real question, then, was, how they could best build those iron ships—whether in Government dockyards or by private contract. He had no doubt that in this ease, as in many others, the truth lay in the middle; and that while the private establishments in the country might well be called in to aid, yet the Government of the country should have the means of exercising a certain control. But he wanted to know whether the Government were prepared to state to the nation the cost of the Achilles? Unless a good system of accounts were established, which would explain the entire cost of every one of these ships, he should hesitate before placing in the hands of the Government these millions of money. He was quite content that the Government should build a first-rate iron ship at Chatham; but upon the condition that they should be bound to explain to the House what they did with the money voted for it. At present the accounts were so kept that the cost of a ship built in the dockyards could not be got at.

said, that the hon. Member for Finsbury (Sir Morton Peto) was mistaken in supposing that these five new iron ships would cause an increase in the dockyard establishments. The wooden frames would be constructed by the ordinary artificers. The only extra sum required would be for the iron plates, which would be bought by contract. In answer to the hon. Baronet (Sir Henry Willoughby) he had to say that the Admiralty had directed stringent measures to be taken for ascertaining every element of cost in constructing the Achilles, with a view to a future comparison with vessels built by private contract.

said, he would remind the Government that unless they constructed those ships on proper principles they would be worse than useless and it behoved them, while those ships were being constructed, to have a committee of scientific men to consider such questions as to the form and rigging of the new vessels. The inquiry might be carried on simultaneously with the building of those ships. The country had ample resources, and if they gave the French six months' start they could easily overtake them. He was convinced that if such a report was made it would enable them not only to avoid in future all recrimination, but would form a groundwork for the reconstruction of the whole navy.

said, that he had taken particular care to be present at the Admiralty Committee when his noble Friend was examining the witnesses in the hope that he would elicit some information; but he had so signally failed in doing so that he (Mr. Bentinck) felt himself bound to express the opinion that the labours of that Committee would end in nothing.

said, it appeared to him from the statements which had been made, that a very alarming state of things was going on, for it was said that in France those formidable ships were springing up like mushrooms, and that in no country in the world could they build ships so fast as in France. Now, he had no hesitation in saying that in an emergency we could turn out six ships for every ship built by France in the same time; but where was this expenditure to end? If they were to build 100 ships, and France were to build 100, their relative position would not be altered. No doubt when the French heard of the debates in that House on Friday and that night, they would build ten iron ships more, and then the noble Lord would come down and ask for the means to build fifteen. He always maintained that they should be the first maratime power of the world. But he believed the necessity of that expenditure might be avoided by coming to an understanding with France. After the explanation of the noble Lord he would not divide the Committee on the whole Vote, but he should move that it be reduced by £200,000, which comprised £140,000 for two troop ships, and £60,000 for machinery. They had six troop ships at present. Four of them had been in China for the last three years, and two remained at home. He believed that six troop ships were ample, and he did not think they ought to spend more money for that purpose. They could hire ships for the purpose of conveying troops cheaper than they could build them, and that was the opinion of Sir Alexander Milne, who was a competent authority on such a subject.

said, he hoped the Committee would not agree to this Amendment. No doubt the ships which were hired for the conveyance of troops were sometimes cheaper, but the question was not whether contract-ships were not cheaper in the long run than Government transports. The Government had to find a large amount of tonnage for the conveyance of troops suddenly at all times, par- ticularly between the Mediterranean and the home ports; and if they were without transports of their own they would have no control whatever over the freight?. What they asked was simply that the Committee should keep up the transport establishment to what it was until recently. Two' had been lately lost, and the Himalaya and the Adventure, as well as another ship, required very extensive repairs. He might add, that if the Governments had no transports at all they would have no check at all on the price of the freight. It was always necessary to fit up troop ships with expensive fittings, and to employ merchant ships for short voyages would positively cost a larger sum than the Government troop ships.

said, he thought the Government did quite right in keeping a considerable number of transports in their own hands; but after what they had heard that night about the exertions necessary to get iron-plated ships, and of the chance that wooden vessels would be useless for war puposes, he was of opinion that they might take some of the frigates now lying in ordinary and employ them in conveying troops, applying that £200,000 towards providing another iron-plated ship.

said, he must complain that the hon. Gentleman opposite should have alluded to the evidence given before the Admiralty Committee while it was still sitting. It would have been better to have waited to see the effect of the whole of it before he expressed an opinion. Economy was, doubtless, a very good thing, but it was not the first consideration when the safety, interests, or honour of the country was concerned; and he certainly did not think that there was any economy in employing our men of war in conveying troops to stations only a short distance off. They ought always to have eight or ten troop ships in the hands of the Government.

said, he would support the Amendment, because he believed, in the present state of the mercantile marine, the Government could never be at a loss for trasport ships.

said, that no doubt they could always get plenty of merchant ships to convey troops on long voyages at a cheaper rate than the Government could, but taking the long and short voyages together, they did nothing of the kind.

said, he thought the noble Lord ought not to have asked for any Vote of this kind until the Committee had reported on the subject.

said, that the new frigates were an eminently useful class of vessels, which it would be a waste to turn into transports; and the old frigates were all sailing vessels.

said, there were plenty of steam-vessels in reserve, unfit for fighting purposes, which it would be as well to wear out in that way, while they were building the iron-cased ships.

said, the Vote contained items relating to Chatham which ought to be matter of further inquiry. He thought the whole matter ought to be submitted to a Committee.

said, he would move that the Committe report Progress.

said, he hoped the hon. Baronet would allow him first to state the object of the Vote. At present Great Britain had only 528 acres of dockyard accommodation, and 37 acres of basin accommodation, against 678 acres of dockyard and 188 acres of basin accommodation possessed by France. If the House of Commons decided to enlarge the dockyard and basin accommodation to the extent required by the wants of our fleets, it was considered by competent authorities that no better site could be found than that selected at Chatham. He would not for a moment conceal from the Committee that if they agreed to the Vote they would agree to the commencement of a great work, involving an expenditure of £902,000. The Government would offer no objection to the appointment of a Committee to inquire into the merits of the scheme.

said, he hoped that all the plans would be laid before the Committee.

observed, that the question was especially a ques- tion for the Executive Government to decide.

said, the Committee which sat in 1848 complained that the Keyham works had been commenced without the House of Commons having an opportunity of expressing any opinion upon them.

said he, for one, objected to the appointment of a Committee.

said, he should not resist the Motion to report Progress.