said, he rose to call the attention of the House to the very unsatisfactory manner in which certain joint-stock companies had, for the last eight years, performed the functions entrusted to them of supplying irrigation to public lands in India — from their own funds—so far as the pecuniary results of their operations had been communicated to Parliament. The Question he had to submit to the House was, Whether the Secretary of State for India ought to be permitted to advance to private adventurers enormous grants of public money for the prosecution of schemes which were hopelessly discountenanced by all financial societies and bankers? He thought he should be able to show in the two instances to which he would refer that, while schemes involving an outlay of something like £4,000,000 had been undertaken by private adventurers within the last few years, for their sole profit, these works had been aided by profuse grants of public money without any sufficient security for ultimate re-payment. This course had been pursued, too, at a time when the Financial Secretaries whom we had sent out to India during the last few years had been cudgelling their brains to devise new taxes to impose upon the people of India, and although the Governor General had protested in the most emphatic manner against those adventurers being assisted in enterprises which created great complications, and embarrassed the general policy of the Government. The House would recollect that, at the commencement of the Session, he (Mr. Smollett) asked the Secretary of State for India whether he was a party to the offer to purchase the stock of a company called the East India Irrigation Company at par, with the full knowledge that that stock had For the last two years stood at 25 per cent discount, and had become almost unmarketable. The right hon. Baronet gave him an evasive answer, stating that an offer somewhat in the terms indicated had been made, but that he could not then tell precisely what it was. The right hon. Gentleman further said, upon that occasion, that the offer could not have been an exorbitant one, inasmuch as it had been declined. He (Mr. Smollett) demurred to the opinion that the offer could not have been exorbitant because it was declined. He admitted that the offer was refused; but why, he asked, was it refused? Because certain astute gentlemen in the City of London were prone to regard the Secretary of State as being made of very soft and squeeezable materials, when they found him offering a high price for stock which was practically unsaleable in the market. Those astute gentlemen were not deceived. The Answer of the right hon. Baronet was very evasive; because he forgot to mention the fact that he had been for two months negotiating a large loan of the public money to those adventurers. Now, as he was one of those who considered that to lend the public money to such persons was a much greater act of impropriety than if the Government had purchased the whole concern outright, he had felt constrained to bring the matter forward and, if be did not obtain a satisfactory explanation upon this matter, he was determined, if that moribund House would give him any support, to press the Motion be was about to make to a division. The principle of conceding to private adventurers the public duty of carrying out improvements on the lands of the Government in India was one which had only been admitted in recent times. About fourteen years ago, some unscrupulous adventurers at Bombay proposed to embark in works of this nature, but the Marquess of Dalhousie, the then Governor General of India, set his face against the project. Indeed it was the opinion of all practical men, excepting some scheming engineers, that concessions to private adventurers for the carrying out of works of this character were simply mischievous, and should always be discountenanced. No one had enunciated this proposition more forcibly or more frequently than Sir John Lawrence. If he (Mr. Smollett) were permitted to give his own opinion upon the matter, having had some experience of such works, he would say it was absolutely impossible for any company of adventurers of the City of London to carry on enterprises of this character to a successful issue. The necessary arrangements which they involved could only be made by the Government establishments on the spot, acting under definite rules and definite powers. From his own experience of the country, he felt certain that it was impossible for any body of men in London to organize a collection of water-rates or water-cesses from 500,000 or 600,000 poor cultivators in India. That collection could only be made by a Government establishment armed with adequate authority. But he would not argue this point at length; for the experiment had been tried on a large scale, under the most favourable auspices, and it had proved a gigantic failure, and would, he believed, never be repeated. An impulse was given to the adventures of these joint-stock companies by the publication, in 1854, of a Madras blue book, purporting to be the Report of the Public Works Commissioners at Madras. That book was composed very much in the style of a romance, and in fact it was a romance. The Commissioners reported on all the irrigation works which the Madras Government had been engaged in during the previous twelve years, and asserted that, though some of them were failures, they had in the aggregate given an average return of 100 per cent from the date, not of their completion, but of their commencement. They selected for special laudation the prosperity of the irrigation works on the Godavery, and stated that, although they had cost £200,000, and took four years to construct, they had yielded a return of £300,000, in some mysterious manner, during the process of construction and before irrigation was applied to the soil, thus re-paying the cost of construction and placing £100,000 in the Government Exchequer. But the Commissioners went on to state of this work that if the Government only charged one-tenth of the value of the water it supplied for irrigation purposes, it would continue to receive a profit of £300,000 per annum, upon an outlay of something less than that sum; while the people whose lands were irrigated would be benefited to the extent of £3,320,000 per annum by the increased value of their produce. When calculations of this sort — calculations not merely of grandeur, but approaching to sublimity—were published by the Madras Government, it was not to be wondered at that the cupidity of certain gentlemen in London was excited, and that they should yearn to embark in enterprises like those to which he had referred, which seemed to offer such stupendous returns from a comparatively insignificant outlay. But the Madras Government, he regretted to state, continued to publish the most deceitful statements of profits derived from irrigation works in India. He held in his hand a Return which had been placed on the table of the House at the instance of the hon. Member for Stockport (Mr. J. B. Smith)—a Return of the Works of Irrigation executed in the Madras Provinces during recent years. It appeared, according to the statement contained therein, that the whole cost of one of these works was about £23,000, and that the Returns in the years of 1853–9, amounted to £159,000, being a net profit of 664 per cent, and in 1859–60, £175,000, or at the rate of 720 per cent per annum. Now, he (Mr. Smollett) took the trouble of sending to Madras to ascertain whether those Returns were true or false, and, in reply, he was furnished with official documents, informing him that they were entirely false and fallacious. Without pursuing this particular subject, the unravelling of which would consume much time, he should pass on to the consideration of those particular works which were the immediate objects of his Resolution. These schemes, although they were both under one managemement, coached by the same financier, yet, as the accounts were kept separate, he should treat them separately. The first of those works was the Madras Irrigation Works, which came into being in the following way:—At the end of the year 1858, a deputation of adventurers waited upon the then Secretary of State for India, at his office in Cannon Row; they brought a prospectus with them, which purported to show that the proposed works would yield at least 100 per cent per annum, and, that as the Government were then busily engaged in the effort to suppress the rebellion in India, and therefore could not turn their attention to the carrying out of those works, they were ready to invest £2,000,000 which they had at their command in their execution. This deputation represented that before spending so large a sum of money for such a purpose it would be absolutely necessary that they should obtain a concession from the Government, and a contract by which their rights would be defined. The noble Lord the Member for King's Lynn (Lord Stanley), who was then Secretary of State for India, received that deputation of adventurers with great unction, and lent a willing ear to their proposals. Now, if Her Majesty had been graciously pleased to appoint him (Mr. Smollett) Secretary for India—and greater numskulls than he was had been appointed to that office — he would have treated that deputation in a very different way from that in which the noble Lord the Member for King's Lynn had dealt with them. He would have told them that if their prospectus were true, and that by an outlay of £2,000,000, they would become the greatest millionaires in the City of London, he should require from them a very large bonus indeed for the concession which was to place them in that condition. On the other hand, he would have told them if their prospectus were false that the matter required the most mature consideration of the speculators, and that this question should be well-considered before they again applied for assistance to the Government. That would have been businesslike advice, but noble Lords and right hon. Baronets were not men of business. The noble Lord told them he was ready to use any influence he possessed to get them the concession, and under the auspices of the noble Lord this concession was granted gratuitously, and the required contract was entered into. According to the terms agreed upon, the Company were to enjoy this concession for a period of twenty-five years—to draw and enjoy all the profits of the works up to 25 per cent per annum, The Government were kindly permitted to enjoy any profits above that percentage, and to have the right of purchasing back the concession at the end of the twenty-five years by buying the whole capital stock of the Company at the average price at which the shares had stood for one year previous to the offer of the purchase. In addition, the Indian Government granted a supplemental concession, by which they had charged themselves with the payment of 5 percent upon the first £1,000,000 spent on those works, and this was not to continue merely for a year or two, but was to be continued until the speculation yielded more than that amount. In May and June, 1859, Sir Charles Wood, who had succeeded the noble Lord the Member for King's Lynn, as Secretary of State for India, went even further than the noble Lord, for he offered, on the part of the Government, to pay interest at the rate of 5 per cent on the first £1,000,000 proposed to be invested, not from the date of its being spent on the works, but from the date at which it was paid into the public Treasury. Although, up to that time the credit of the adventurers was below zero, yet as the credit of the Government stood high, the whole £1,000,000, or nearly so, was in a short period paid into the public Treasury, and the Company then broke ground in the district of Kurnool, in the Presidency of Madras. Amongst the first works executed was that of a stone weir across the river Toomboodra. But it was found to be so faultily constructed that the Company were compelled to remove it. They made channels into which the water would not flow; because their engineer appeared to be ignorant of the fact that water would not run up a hill. No blunders of this sort were, however, allowed to transpire. On the contrary, it was stated from the very commencement that these works were proceeding in a most favourable manner. He (Mr. Smollett) had long taken a great interest in works of irrigation in India, and from the beginning he had not hesitated to express the opinion that those particular works would come to grief. He had believed that the project was a great swindle, and he now knew it. On the 22nd February, 1865, he asked Sir Charles Wood, the then Secretary of State for India, how the Company was progressing; and the reply he received was that the Company were carrying on their works prosperously, having expended about £700,000, and dug channels and irrigation works extending sixty or seventy miles. Sir Charles Wood added, however, that he regretted to state that as yet no profits had accrued—there never were any profits from this sort of works—but that he still had every expectation that the money advanced by the Government would be recovered, for he was credibly informed that there were 10,000 acres of land then under irrigation. In 1866 Sir Charles Wood was pitchforked into the House of Lords, and his mouthpiece in this House was the hon. Member for Halifax (Mr. Stansfeld) who was then Under Secretary for India. He (Mr. Smollett), put a number of questions to the Under Secretary upon the subject; but when a man had a very shaky case he was generally very taciturn in answering Questions; and the hon Member for Halifax, who was a perfect master of fence, gave the shortest and most curt replies. On the 11th May, 1866, the hon. Gentleman stated that the works were going on successfully; that £200,000 had been advanced by Government in interest; that the total sum expended had been £1,214,000, but that there had been no profits. The 10,000 acres of land, of which so much had been said fifteen months before, had vanished. From the terms of this Answer he felt persuaded that something was in preparation, and he was not deceived; for, on the following day, a notice appeared in The Times' City article, that this prosperous Company had entirely collapsed. Astonished at the announcement, he asked the hon. Member on the 15th of May whether the statement was true, and he replied that it was perfectly true. The Company had announced that they were not prepared to advance the second £1,000,000, on the faith of which amount being forthcoming the Government had given the guarantee on the first £1,000,000, and that they could not sell a single share in the City. They, therefore, requested that they might be aided from the public purse to carry on their joint-stock speculation. The Secretary of State for India, finding himself in this unpleasant predicament did the best he could under the circumstances. He offered, in lieu of a guaranteed stock, to give the holders of this security £1,000,000 of Government paper, with 5 per cent interest, if the Company would hand over to the Government of India the works which nominally belonged to them, but which had really been executed with public money. But those crafty gentlemen declined to accept that offer. And why? Because the chairman, the directors, and the secretary were well-paid officers, and they knew they would have lost their salaries if they had assented to the transfer. They therefore declined to do anything of the kind, and again demanded to be subsidized with cash. The Secretary of State foolishly yielded to their demand, and the Under Secretary informed the House on the 15th May that a contract had been signed that afternoon before he came down to the House, by which the Government undertook to find £600,000 of the public money for the support of this private adventure, from which the shareholders were to derive 25 per cent profit, and the Government to get nothing. It was a very strange proceeding, to say the least of it. The money was to be advanced in the shape of debentures for five years, at 5 per cent interest, secured upon works which up to 1865 had not returned 1s. profit; which had yielded no receipts up to the present time, and which, from private accounts he had received from Madras, he believed never would return a profit. He would undertake to say that if the Secretary of State had advanced £600,000 on debentures to the London, Chatham, and Dover Company, financed by Peto, Betts, and Co., he would have made a better speculation than in advancing the money to the Madras Company. The reason the Secretary of State for India was able to do those things was because that House took no interest in the finances of India. Those things were done in secretary and silence. This was a gross job. It was perpetrated on the very day the Question was to be put to the Secretary of State, and it was only known to the country when the jobbery was consummated. By the end of 1871 no less a sum of public money than £2,250,000 would have been advanced upon this private adventure. The Government had become responsible for £1,000,000 sterling. They were paying 5 per cent, interest on this sum, which would amount to £600,000 at the end of 1871, and by that time they would have besides advanced £600,000 on debentures secured on works that do not yield 1s. profit. The Resolution be intended to propose would stigmatize that transaction. He would now turn to the East India Irrigation Works, the twin adventure with the Madras Works. The East India Irrigation Works were certainly in a better category than the Madras, because some effort was made to start it on the principle of a real and bonâ fide joint-stock company 50,000 shares of £20 each were taken, making a paid-up capital of £1,000,000. Of that sum about £740,000 had been expended in works, and £150,000 had been spent out of capital to pay interest on advances for calls made to carry on the works. It was, however, unguaranteed; and unguaranteed works had always a shady look on the Stock Exchange. Monied men disliked amazingly enterprises which it was said would yield 100 per cent per annum, and consequently the stock had always been at a small discount. The discredit of the stock gradually increased till 1866, when it reached 25 per cent, at which price he believed it was in the market in May, 1866. On the 15th May—the funds of the Company exhausted and its credit shattered—he (Mr. Smollett) enquired of the Under Secretary of State what arrangement he proposed to make with the adventurers? In reply, the hon. Member for Halifax explicitly stated that there was not the smallest intention on the part of the Secretary of State either to purchase the works or to supplement the Company with Government money, and for the obvious reason that it was an unguaranteed company. From the terms of that Answer he believed that the Company would be left to stand or fall according to its own resources, or he should have brought the matter before the House, but he was deluded and befooled. Twelve months after there was a new Government, and a new Secretary of State for India came into office, who was as unscrupulous in dealing with the finances of India as his predecessor. He (Mr. Smollett) found that an offer was made by the Government to purchase the works; not at the price they bore in the market, but at 25 per cent above it, and when that was not accepted, a negotiation was entered into for granting a sum of money to this Company, in the same manner that was adopted in the case of the Madras Company. The offer was made in this way. It appeared that on the 16th of May, 1867, the Governor General wrote from Simla a despatch, which was signed by every member of his Government. In that despatch Sir John Lawrence stated that he had never concealed the fact that he looked on concessions granted to private parties for irrigation purposes as mischievous; that they gave rise to the greatest complications. Unless the Government had on absolute control, it was impossible to carry on the works. He had supplied the Company, he said, with upwards of £100,000, otherwise the works would have come to a perfect standstill, and the establishments have been dispersed over the country. The time, Sir John Lawrence said, had arrived when something should be done in the matter; and as the Company was in a state of utter ruin, having no credit in India or England, he thought the opportunity was favourable for the Government to propose mutually advantageous terms with them. Sir John Lawrence's proposition was that the Secretary of State should endeavour to purchase the stock at par, and give the directors £50,000 by way of bonus, to enable them to wind up creditably. That, in his opinion, was a munificent offer. It was, in fact, an offer to put £250,000 into the pockets of the shareholders, with £50,000 more if they accepted the offer. The letter containing the proposal came to the India Office towards the close of last year, and he would do the Secretary for India the justice to say that he appeared to have acted with a great deal of forethought and honour in that particular instance. The right hon. Baronet kept the despatch a profound secret, thus preventing the jobbing which might have occurred on the Stock Exchange (at that time the stock was at 25 per cent discount), and he only communicated the offer to the public through the medium of The Times newspaper on the 18th or 19th of November. The effect was electric. The stock immediately jumped up to par, which was tantamount to putting £250,000 into the pockets of these adventurers. Surely the munificent offer of the Government ought to have been accepted with gratitude, and accepted as it would have been, if the right hon. Baronet the Secretary of State for India had had the courage of a mouse, and had declined to enter into negotiations with those adventurers—if he had told them, "This is our offer; it is the only one we will make, so you may make up your mind." Had he done this, they would have accepted the offer. But Parliament was sitting at the time, and the right Hon. Baronet entered, unfortunately, into negotiations with the directors. Public and private interests were brought to bear upon the right hon. Baronet, and no doubt a great deal of "lobbying" went on. Afterwards the right hon. Baronet was induced to give way and to offer other terms which he will possibly explain to the House—terms which the Company consider more advantageous to their interests than an absolute purchase. Independently of any public or private pressure, letters were inserted in the public prints setting forth the claims of the Company to compensation. On the 13th of January a letter appeared in The Times, from the practised pen of a gentleman who was supposed to exercise a great deal of influence in Indian matters, and who was known in Manchester as a great authority upon all matters connected with irrigation and the spending of money—he meant General Sir Arthur Cotton. That letter was written in a tone of arrogance which deserved exposure; and he would endeavour to expose it. The munificent offer of the Government was actually denounced by General Cotton as a conspiracy to defraud the noble band of adventurers of the profits to which they were legitimately entitled — as a plot, boldly contrived to drive away all interlopers from India, and to reverse the policy inaugurated by Lord Canning. Now, who was the arch plotter; who the base conspirator? — why, the Governor General of India, a man whom Sir Arthur Cotton spoke of with scorn, describing him as the last possible Viceroy of the "Old Indian School." Sir Arthur Cotton proceeded to assail the Indian Secretary and his Council in similar terms of abuse; he spoke of them as worn-out and contemptible functionaries, whose existence could not be prolonged beyond the present spring; men who must be forcibly removed and their places filled by gentlemen whom he almost designated gentlemen of the "Young Indian School," men who looked up to Sir Arthur as "their guide, philosopher, and friend." God protect an office filled with pupils of Sir Arthur Cotton! And why was all this vituperation levelled at Sir John Lawrence? Simply because that high functionary had made a suggestion which had had the effect of putting £250,000 into the hands of the shareholders. This was the head and front of his offending. But Sir Arthur knew well the faint-heartedness of the Home Government of India. The gentlemen of the India Office quailed under his castigation. They kissed the rod he had applied so mercilessly to their posteriors, and they gave these adventurers better terms than the Governor General had proposed. Acts of such great impropriety and injustice ought not to be tolerated. He had shown that works that were brought forward as calculated to pay cent per cent had not yielded anything for the last five or six or seven years, and that they were brought forward in the first instance under false pretences. He had also shown, in the course of his speech, that the first works, which were declared to be works brought forward by private enterprise, had cost the Government £2,250,000, for which they had no security but the works themselves, which were either valueless or were works from which, if they should ever prove remunerative, the private adventurers would receive dividends at the rate of 25 per cent, while they had been constructed without the expenditure of a shilling raised at the risk of the speculators. With reference to the East India Irrigation Works the offer to purchase stock at par had never been withdrawn; and probably, at no distant day the Government would take the works at that or at a larger price. He thought these were acts of great impropriety, and therefore he should move the following Resolution—not an abstract one, but one which went direct to the point:—

"That, in the opinion of this House, the advance of £600,000 of public money on loan to a private company of adventurers styling themselves the Madras Irrigation Company, granted on the 15th day of May 1866 for their sole benefit, and likewise the offer of a large loan on similar terms announced by the Secretary of State on the 20th day of February last as contemplated to be given to the East India Irrigation and Canal Company, are acts of impropriety, are mischievous in policy, and should be discontinued."

He offered that Resolution, not in the spirit of party or of faction, but in the interest of honesty and straightforward dealing, of which he saw very little in the conduct of these adventurers. He offered it also to protect the just power of the Governor General of India, whose suggestions and recommendations had been set aside to suit the private policy of these people; and he proposed it in the true interests of the India Office, which was surrounded by jobbers, from whom the Council of the Secretary of State were unable to free themselves, and whose importunities they could not resist.

said, he regretted that the hon. Member had changed the terms of the Resolution he had placed on the Paper. He regretted that the hon. Member had done so without giving notice of his intention to call attention in such a specific manner to the transaction which he had in the first instance referred to—namely, the loan of £600,000 to the Madras Irrigation Company. He regretted it the more because the hon. Member for Halifax (Mr. Stansfeld) was not in the House, and he had some reason to believe that that hon. Gentleman was under the impression that this particular transaction was not to be called in question.

said, he had acquainted the hon. Member for Halifax with his intention of bringing in the matter under the notice of the House.

said, that if that were so it was not his hon. Friend's fault that the hon. Member for Halifax was absent. He (Sir Stafford Northcote) could only say that he was less able to give an explanation of the transaction than the hon. Member for Halifax, under whose authority and that of Earl De Grey and Ripon the loan was made; but he believed that the circumstances were substantially as follows:—The Madras Irrigation Company was originally established as a company guaranteed by the Government. It was formed for the purpose of undertaking a work of very great importance to the interests of India, and the House should bear in mind that the work performed by these Irrigation Companies ought to be measured, not by the amount of the return they immediately produce, but by the amount of the benefit they confer on India by the accomplishment of works of an important kind for the improvement of agriculture and the better sustentation of the people. That was a point which the hon. Member for Dumbartonshire (Mr. Smollett) had too much overlooked. Now, looking at the matter from this point of view, it was not so necessary for the Government to ask whether this or that work would be immediately remunerative, as it was to ask whether it was a work which it would be desirable to encourage, for the general interests of the country committed to their care. There could be no doubt that it would have been well worth the while of the Indian Government to incur considerable loss in the direct pecuniary expenditure, for the sake of accomplishing great works which would be advantageous to the country. No one, for instance, would have found fault if the Government of India had undertaken to construct canals and irrigation works out of the public money, in the same way that they had constructed roads, for the general benefit of the country; and no one could doubt that those works would, in the long run, he extremely remunerative to the Government and to the people of India, though it was quite possible they might not realize the sanguine expectations of those who undertook them. He supposed, however, that the House had no desire to enter into a discussion of the merits or demerits of works of irrigation; for he believed all who had paid attention to the subject concurred in admitting the advantages arising from them. The only question for consideration, therefore, was the best means of carrying out such works. As the hon. Member for Dumbartonshire (Mr. Smollett) had truly remarked, this Company was established in 1858, under the auspices of his noble Friend the then Secretary of State for India; but he believed that, in point of fact, the system dated from a somewhat earlier period, and that it was under the old Court of Directors that the first Resolution was passed to the effect that works of this kind might be entrusted to a private company. As the House was aware, the finances of India were frequently overburdened by the claims upon them, and great difficulty was experienced in finding money out of the taxation of the country for carrying on works which were not likely to be immediately remunerative; and it was felt that, if irrigation was to be carried on on a really satisfactory footing, it would be desirable to introduce private capital and private enterprise into India, for the purpose of executing works, which would certainly be advantageous to the people, and which might be profitable to the individuals who undertook them. This Company was therefore formed by gentlemen who looked, no doubt, to a large remuneration from the capital they were about to expend, but who, he thought, had also other and higher objects, as they believed they were undertaking a work which would tend to the advantage of a most important portion of the population of India. They advanced a sort of moral claim on the Government for such assistance as the Government could give them. They asked for a concession and for a guarantee. It was not his present duty to discuss whether the Government were right in giving them that support or not. Under all the circumstances, he hardly ought to say that the Government were wrong, though he confessed that his own opinion, formed on a good deal of experience during the last few years, was decidedly against the system of granting guarantees. Under such a system, if the works turn out very profitable, the company have all the advantage; while, on the other hand, if they prove unprofitable, the Government have to bear the loss. That was the rationale of the system of guarantees, which he should be glad to see either restricted or abolished. When, however, this question was brought forward in 1858, experience had not been acquired in respect to the guarantee system, and the Government had then to consider the mode in which they could best facilitate the object of bringing private capital and enterprise into India. They were told that if they gave a guarantee it was probable that the works would prove so profitable that other companies would follow the example of this, and would, without guarantee, bring private money into India and be able to execute these great works of irrigation. In this respect he believed the scheme was not unsuccessful, for it was in consequence of this Company having begun to work, and having at first held out encouragement to the public, that the second undertaking referred to by the hon. Gentleman was set on foot without any guarantee. And certainly we owed to the gentlemen who took part in the formation and promotion of the twin Companies a debt of gratitude for the exertions they made in raising a sum approaching £1,000,000 of capital without any guarantee on the part of the State. We are also bound to acknowledge our obligations to them for the character of the work they had accomplished in Orissa, and, he believed, in the Madras Presidency; for the two Companies were, in fact, one, although it had two distinct and unconnected undertakings. After the Company had commenced their works and carried them on to a certain point, they made the unfortunate discovery that they had not capital enough to carry them on further in a proper manner, whereupon they asked Lord Halifax (then Sir Charles Wood) for assistance; but he declined to sanction an alteration which they wished to introduce into the terms of the guarantee. Subsequently, however, Lord De Grey and Ripon consented to advance them a loan on the security of their works, which were admitted to be good and well-executed works as far as they went. In taking the works as a security the Government were of opinion that they were making a very good bargain. Indeed, if the Government had not done so they would have been placed in a position of great difficulty. They had undertaken to guarantee the Company, and were paying interest; and the question was whether they were to be relieved from the payment of that interest. It was clear that the Government could not be relieved till the Company made profits; and it was made clear to Lord De Grey that the Company would not make any profits without further assistance from the State. Lord De Grey therefore thought it was for the interest of the Government that he should advance the loan. On this point, however, the hon. Member for Halifax would be better able than he to give an explanation. He (Sir Stafford Northcote) believed Lord de Grey had exercised a sound discretion; and he felt sure the hon. Member for Dumbartonshire did not mean to impute anything like jobbing or improper conduct to his Lordship or to the hon. Member for Halifax. With regard to the other undertaking, and the transaction in which he (Sir Stafford Northcote) had been himself engaged, it was of course due to the House, after the statement of the hon. Gentleman, that he should offer an explanation. The second undertaking was divisible into two. There was an undertaking by the Company, called the East India Irrigation and Canal Company, to irrigate a portion of Orissa, and there was the further undertaking to irrigate a portion of Behar. Now, the hon. Gentleman had lost sight of an important clement in one part of the transactions—namely, the concessions made to this Company with regard to the irrigation at Behar. While objecting upon principle to Government guarantees generally, he particularly objected to guarantees in the matter of irrigation works; because, by allowing a company to undertake them, Government exposed itself to difficulty and embarrassment, and it was the duty of Government to keep them in its own hands. Otherwise, difficult questions bearing upon the land revenue, the condition of districts irrigated, and the relations between and landowners and between landowners and the Government, were infinitely complicated by the obligation of Government towards an irrigation company. Any one who would follow up the matter would see that it was almost impossible satisfactorily to work a system of irrigation in a large district—especially in one in which there was no permanent settlement of the revenue—by means of a company. The questions raised, such as who was to have the control of the water, what was to be the price fixed, and what were to be the stipulations with the Zemindars as to the alteration of the assessment, were in themselves so difficult and involved such delicate considerations, that it almost amounted to a dereliction of of duty on the part of Government to give up the control of an irrigation system to a company, and particularly to a guaranteed company. He meant no disrespect to the Company in question by expressing these views; and his great regret that that Company had obtained the concessions and the position it had obtained in Orissa and in Behar, and more particularly in Behar, because the Company had the exclusive right to irrigate a very important district, and they had not the means of doing it. They simply kept others out, and prevented the Government from undertaking the works. The Company, having obtained its concession, laid out a large sum in works which had been warmly approved by the authorities and by the independent investigators of the Orissa famine, which was, no doubt, locally mitigated by the works, while the Company's officers behaved with great liberality and did much to alleviate distress. These facts, and the necessity of finding some employment for the people of Orissa, at the time of their suffering, were the occasion of the advances to which the hon. Member referred. Having been told in the House that the Company was not to be assisted, the hon. Member seemed to think he had been deceived by the Secretary of State, and his council; and he seemed to think that that was owing to some proceedings on his Sir (Stafford Northcote's) part, but the advances were made by the Governor General in India without consulting the Secretary of State, and it seemed to him that they were rightly made, seeing that there was a means of profitably expending the money. If employment had not been provided in this way it must have been done by setting the poor to dig holes one day, and fill them up the next. It appeared to him that having the machinery ready to hand for the profitable expenditure of money the Government were quite right in so laying it out. Accordingly, about £120,000 was advanced on the understanding to which he had referred. When the Company were asked to undertake the work they said they were ready enough to spend the money, but they did not wish to make the additional outlay on their own account. They, in fact, found that their water was not taken so rapidly as they expected, and that their works were not producing a profit; and therefore it was not in their power, in the then state of the money market, to go on with their works. They, therefore, proposed to lie on their oars, and wait till the works which they had executed began to be profitable, when the public would come forward and provide the funds necessary to complete the works. The Government said that might be perfectly legitimate on the part of a company, but it did not at that time meet the wishes of the Government, who could not wait; and it was under these circumstances, and looking to the circumstances he had mentioned, that the Governor General wrote the despatch the hon. Member had referred to. This brought up the history to the point at which it became the duty of the Secretary of State in Council to act. The Governor General had written an elaborate despatch, pointing out that the Company had failed to realize the great profits they had looked forward to, referring to the complications that had arisen between the Company and the Government, and proposing to buy up the interests of the Company, not at par, but in 5 per cent stock, which was then at 110, terms which would have been the means of increasing the value of the Company's stock considerably more than the 25 per cent which the hon. Member had spoken of. That despatch came into his (Sir Stafford Northcote's) hands, and the Council decided that it would be right to offer to purchase the Company's works; but that conclusion was not come to without much hesitation, and after full consideration of all the circumstances he had stated. The Government felt that it was important for India that these works should be carried on, though the Company had not the means of carrying them on with activity and success; and her Majesty's Government resolved not to entertain the question of a guarantee. There was such great force in the argument of the Governor General, as it related to the works that were not completed in Behar, that they would have been prepared to offer almost any terms to get them into the hands of the Government; but with regard to Orissa it was of less importance to the Government to purchase the Company's lights because a considerable amount of work had been actually executed. On careful consideration of the whole question, they came to the conclusion that the terms proposed by the Governor General were excessive. The hon. Member had said that the Secretary for State was—he would not repeat the elegant expression of the hon. Member—but he was weak, and his council was at the mercy of jobbers and speculators, and that they had made an extravagant and improvident bargain. But looking to the Correspondence, which was in the hands of the public, he could see no evidence whatever to support such a charge. The Governor General proposed the purchase on certain terms. The Government determined not to offer those terms but lower terms. They said, "We will give you the amount which you have expended, and £50,000 over." It was said that the stock of the Company was at a large discount, and that those terms were therefore unreasonably high. But it should be borne in mind that the Company had bonâ fide raised this money, that they had expended it in good work, and that, though it was not now profitable, the Government had reason to believe that when the system was completed it would become profitable. They, therefore, thought it fair to give back to the Company the whole amount they had expended, with a certain sum over and above to compensate them for any inconvenience which might result from parting with a portion of their establishment, and in consideration of any just claims they might have arising from the expectation of future profit. There was no doubt that, as far as they had gone, the Company had done a good work for India; though whether they had done a good work for themselves was another question, into which he would not enter. Having made this as a final offer, after full consideration, the Government thought it right to make known on the same day, through the public Tress, before even the directors had received the official communication, the nature of the offer that was made. The effect was that the shares, which had been at a discount, rose to par; but he was told that this was nothing more than a nominal quotation, and that, pending the proceedings, little or no business was done. It had been stated that the offer of the Government was not favourably received by the Company. He did not know whether it had been refused or not; but he had heard that the offer was received at the meeting of shareholders as not only unsatisfactory but insulting. Indeed, quite as strong language as had been applied to him by the hon. Member (Mr. Smollett) had been applied to him by the shareholders. He had received letters from various persons, in which he was accused of a desire to "rob" the shareholders; and he did not know what motives had not been imputed to him, or what language had been used to describe his "audacity" in making an offer which the hon. Member had fairly admitted to be very liberal. He was told, "You know the position of the Company, and you are going to take the profits out of our mouths and transfer them to the Government." The directors had been instructed to ask the Government to alter the terms; but the Government had always refused to do so, and would not give a guarantee. But they also said that they neither had the means nor the wish to force the Company to sell to them; that they made the offer from no feeling of ill-will or wish to disparage what had been done by the Company. There, however, was the fact—while in Orissa the Company had done a good deal, in Behar they had done nothing; and it was the duty of the Government, for the interests of the people of India, to carry these works on either themselves or through others. If the Company were able to carry on these works, let them do so; if they were not able, the Government were prepared to complete them, and it was their duty so to do. In Orissa the Company might possibly be able to carry on the works; but in Behar there really seemed no chance of their being able to raise money and carry on the works for a long time, if at all. Meanwhile, here was a large and important district from which the Government was excluded because this Company had got a concession which they could not use. Under these circumstances the Government said, "If you will give up the Behar works we will make no further proposal respecting Orissa; but we will assist you to complete these works by lending you £500,000, at 5 per cent, upon the security of the works." Now the works had cost £700,000 or £800,000, and it would be a condition that the loan of £500,000 should be further expended upon the works. If the Company were to make default in payment of the interest or in re-payment of the principal, the works would, no doubt, be a perfectly good security for the advance. But, so far as he had been informed, the directors did not consider these terms acceptable, and thought it would not be reasonable that they should give the works as security for the loan. In that case, of course, it was for them to refuse the loan. A meeting was to be held very shortly, and then the proposals of the Government would be considered, and they would receive a final answer. Meanwhile, it was right that there should be no mistake. The Government had made an offer which would still hold good as far as the Indian Council was concerned; they had never varied the terms of the offer, and did not intend to do so. It would be for the Company to consider whether these terms were fair, and, if not, what course they would take; the Government, recognizing in them fellow-workers in the performance of a most important duty, had no wish to interfere with any fair profits they might derive from works which they undertook, no doubt, as much from patriotic motives as from a wish to make a good investment. But he was sorry that the Government had ever entered into engagements with private companies. If they had kept these works of irrigation in their own hands they would have avoided great complications. For a length of time, however, the Government had great difficulty in finding money to carry on such works. It was not easy to extend taxation in India, and it was only lately that the Government had adopted a decided policy in borrowing money for works of this kind. Now, money would be borrowed freely for works which could be shown to be of a good, substantial, and profitable character; and he earnestly hoped that, whether through their own agency or that of others, this great and important field of labour would be properly cultivated. He had no wish on this occasion to trespass further upon the general question which the hon. Member for Perth (Mr. Kinnaird) proposed to raise hereafter, in connection with works of irrigation. He would only say with regard to the Motion that he hoped it would not be pressed. It was one which would be delusive in its character, and probably the object of the hon. Member would be sufficiently attained by the discussion which it would elicit.

said, that they had been accustomed in that House to some of the older Members, such as the late Colonel Sibthorpe, assuming a certain licence of speech, and using sometimes offensive expressions in which none of the other Members indulged. But he was surprised at the repetition of this by the hon. Gentleman opposite (Mr. Smollett), who had employed language in that discussion which it was hardly proper to use in that House." The hon. Gentleman had talked of "adventurers;" and had said that the Madras Irrigation Company was "a great swindle." Upon reflection, he would, he was sure, regret that he had been led into the use of such language. The hon. Member had also attacked by name the noble Lord the Member for King's Lynn (Lord Stanley) who was then Secretary of State for India, and under whom the scheme of irrigation had been carried out. But the House knew very well that of all those who were engaged in the conduct of administrative Departments under the Government of Lord Derby there was none more able or more painstaking than the noble Lord who was then Secretary of State for India; and he (Mr. Kinnaird) believed that the noble Lord retained now precisely the same opinion, which he held when in office, as to the wisdom and propriety of promoting works of irrigation. The immense advantage of these works was not so generally admitted at that time as it was now, and therefore the noble Lord deserved the greater credit for what he had done. Was it a proper thing, then that the Gentlemen who had forwarded these works should be accused of "lobbying?" He hoped the House would not treat those who had done such service to India in the spirit the hon. Member had done, And were they going to refuse any guarantees for irrigation works, after all the millions that had been advanced in spreading railways over India, and when everyone acknowledged now that under no other system than that of guarantees could India have been so effectually and speedily covered with those great works? The hon Member had read an extract from a despatch of Sir John Lawrence, from which he had made it appear that the Governor General undervalued the works in question; but he (Mr. Kinnaird) would like to read two extracts which would show that the contrary was the case, and that in the frightful famine which came upon Orissa it was the Governor General who made the first offer to the Irrigation Company. And what did the Commissioners' appointed to inquire into the causes and extent of the late famine in Orissa report, and especially Mr. Campbell? They bore testimony to the admirable nature of the Company's works, and to the fact that if such works had been earlier attended to, the loss of nearly a million of lives during the famine would never have occurred. The Governor General, in the despatch to which he had referred, said—

"You are aware that, notwithstanding the strong opinions which we hold as to the inconvenience of the arrangement that has been entered into with the Company, it has been our earnest wish to do all in our power to facilitate the operations of the Company, and to act fully up to the spirit of any actual, or implied engagements entered into with them in past years. If it be necessary to adduce any distinct proof of this disposition on the part of the Government of India, we would refer to our recent resolutions to in to this Company the execution of the Soane Canal project, and to make grants of money to aid in the construction of the works in Cuttack, the Company's funds having proved insufficient to secure their prosecution with that activity which, in the altered condition of this province, we deem so desirable. And we may assure Her Majesty's Government that it will continue to be our desire to act in this same manner so long as the present arrangements between the Government and the Company shall be maintained.

"But the terrible calamity which has recently fallen on Orissa and Western Bengal has forced upon us the consideration of the question, whether we can any longer with propriety permit the existing arrangements to continue in force, if it be possible to induce the Company to give up their right under their contract.

"We entirely disclaim the intention of making any reflection on the Company for the manner in which their operations have been hitherto carried out, or for the mode in which they have raised or applied their capital. It is incontestable that a large sum has been raised and spent, and it is even probable that had the Company not come forward, the Government would, up to the present time, have done much less than has been done towards the construction of irrigation works in Cuttack. But the position of the Government with relation to the execution of irrigation works has, within the last year, become entirely changed, and our business is no longer with the past but with the present, and the immediate future, and it is impossible for us to avoid the conclusion that, for the reasons we have above given, the means of the Company henceforth will not only be relatively far inferior to those of the Government, but absolutely insufficient for the real necessities of the country."

And as to the nature of the works the Governor General said—

"We may mention, however, that the works have been visited by Colonel Morton, R.E., an officer of great experience in irrigation works, and also by Colonel Nicholls, R.E., the Chief Engineer of Bengal. Both these officers and also Mr. Crommelin, the Superintending Engineer in the service of the Government at Cuttack, agree in stating that the works are good. These statements have not been made on any critical examination nor in any official Report; but we are satisfied that, in a general way, they are correct. In the same way we learn that in point of actual cost—that is, of the actual outlay upon the works themselves—they are cheap. So far, then, we have some grounds for believing that the Government would not pay any extravagant sum in taking over the works as proposed."

The Governor General, therefore, it would be seen had spoken highly and fairly of the Company's acts, and on the authority of two engineers had stated that the works were cheap; and yet the hon. Member had thought proper to denounce them in the strongest possible language. The hon. Gentleman was surprised that at a time of great commercial distress an enterprize of this kind had not paid, and he seemed to expect that the works should be remunerative the first year. But everyone knew that until irrigation works were complete they could not fairly be expected to be so. The right hon. Gentleman (Sir Stafford Northcote) knew that the whole thing was done openly and above-board. He would not enter upon the other topics adverted to by the hon. Member except as to one point. The hon. Gentleman had been pleased to speak in a way which was derogatory to Sir Arthur Cotton. But it was well known that Sir Arthur Cotton was a man of great practical ability, as well as that he had great enthusiasm in the work of irrigation; and unless great enterprizes were taken up by men of sanguine character they were not likely at first to be prosecuted successfully. Sir Arthur Cotton had been honoured by his Sovereign for having been one of the first who had directed attention to the necessity existing for these great works of irrigation, and the House would, he was sure, regret if, when such a man was attacked, no one had risen to defend him from false aspersions. Sir Arthur Cotton was perfectly unconnected with the company, he did not hold a share in it, and if he took an interest in works of irrigation it was solely because he was sensible of their great value in such a country as India.

said, he did not agree with the hon. Gentleman opposite (Mr. Smollett) in his views on the subject of irrigation. On the contrary, he believed that such works would be alike profitable to the Government and beneficial to the people of India. He had always contended that works of irrigation ought to be undertaken solely by the Government, and not by private individuals or companies. His reason for holding that opinion was this:—The land in India belonged to the Government and the number of tenants on the land to be irrigated was very great. It was therefore impossible to collect the water rates except by the instrumentality of the Government, and as these works yielded great profit the Government were acting as agents for, and were collecting large sums of money merely to hand over to private individuals. What he had long complained of was the dog-in-the-manger policy of the Government — namely, that they would neither execute the great irrigation works, which were so necessary to the welfare of India themselves, nor allow others to do it. At length, however, the noble Lord the Member for King's Lynn (Lord Stanley) made the experiment of granting a great work to the Madras Irrigation Company, and he was disposed to think that, at the time, this was a judicious course, as it afforded the opportunity of comparing the system of private works and Government works. He congratulated the right hon. Baronet the Secretary of State for India on the conclusions at which he had arrived—namely, that the construction of works of irrigation were of the highest value and importance to the people, and profitable to the Government of India—that it is most advantageous to both that they should be executed by the Government; and that for this purpose they should abandon the uncertain policy hitherto pursued of making reproductive works out of surplus revenue instead of raising public loans for this specific object and carrying out the works with as little delay as possible. This he (Mr. J. B. Smith) believed to be a sound course, and it was the one which he had advocated in that House during the last fifteen years.

then rose to move for the appointment of a Select Committee to inquire into the condition of Ceylon and the action of its Government. He hoped for the forbearance of the House, as Ceylon was not a very popular subject; but if he wanted any reason for asking the House to agree to this Inquiry, he would find it in the fact that the population of the country, if the Government Returns were to be trusted, had been reduced from 2,300,000 in 1863 to 2,000,000 in 1866, and this in the face of the other fact, which also appeared in these Returns, that there was an increase of births over deaths, which would show that the decrease was owing to emigration. When this question was brought forward on former occasions, the reply of the Colonial Secretary was that the island ought to be annexed to the continent of India. It was only a few years ago, however, that this question was fully discussed by a Committee of the House of Commons, and they came to the unanimous opinion that the circumstances of India and of Ceylon were so different that it would be highly inexpedient and unjust to annex the one to the other. The particular reasons he had for bringing this question before the House he might very shortly sum up. The Chamber of Commerce at Colombo and the Planters' Association at Kandy, both of them influential bodies, had requested him to take the matter up, as representations had been sent from the inhabitants of Ceylon, strongly backed up by the Press, unanimously urging that their grievances should be inquired into, and those representations had not been treated with respect. They did not ask the House to interfere until they had for many years vainly asked the Colonial Office to do them substantial justice. For the last ten years scarcely two had passed without memorials having been sent over from the Legislative Chamber, signed by official and non-official members alike, and often supported by the Governor, asking that they might have that control over the public works, and over the income and expenditure of the island, which was promised them in 1848 by Earl Grey, who stated that the time had come when full control over the expenditure should be given to the Council of Ceylon, and promised at the same time that a despatch should be sent out, laving down rules with reference to the taxation, the military expenditure, and other subjects of complaint. It had been said that the whole of the complaints arose from the desire of the colonists to shirk their fair share of colonial military expenditure, and to expend their whole income upon local purposes, leaving the defence of the colony to be defrayed out of Imperial taxation. He was sure that the right hon. Gentleman would not to-night use, or repeat any such argument. In justice to the men whose energy and enterprize had built up that noble dependency, he was sure it would not be urged by the right hon. Gentleman that their grievances were only traceable to the mean selfishness of seeking to avoid the payment of the military expenditure of the colony. On this subject he would read a letter from a gentleman who was formerly a Member of the House, and who was well known for his solid judgment and his intelligence (Sir James Elphinstone), who had large interest in Ceylon. In that letter he pointed out the necessity for railway extension and for a revision of taxation, and expressed a hope that he (Mr. Watkin) would persevere in his Motion for a Committee. Sir James stated that the colonists did not object to pay for a sufficient force for the protection of the island; what they did object to was that Ceylon should be treated as a garrison for Imperial purposes, and that they should have to support that garrison on a scale far beyond what was required for the purpose of internal or external defence. That they were denied a line of railway into the coffee districts, and that the rates on the railways now open were too high; a large duty was laid upon rice, which was the staple food of the people, and the taxes on land were so levied as to act as a discouragement to agriculture. In addition to this, Ceylon was called upon to maintain establishments at Galle and at Trincomalee which were for purely Imperial purposes. The disparity of numbers between the European and the Native population was no reason for witholding local self-government, since it was on the former that the prosperity of the island mainly depended. He felt assured that the House would weigh the strong opinion of Sir James. In the last three years there had been great depression. He did not mean to contend that that depression arose from causes all of which were under Government control. There had been great deficiencies in the crops; but most of the depression was caused by an injudicious system of taxation, and by incompetent government and Governors. Ceylon was the only country in the world where the greater portion of the revenue was raised from taxes on food. Now, taxing food in Ceylon was like taxing raw material — wages to a great extent were paid in food, and anything which advanced its price diminished produce and crippled industry. One-fourth of the revenue of Ceylon was derived from the tax on grain alone. The production of food in the country was decreasing, and this was traceable to the land tax, and to the gross neglect of irrigation. At one time Ceylon was the granary of the East; but it had not only ceased to be so, but it could not support its own population. There was this further evil, that taxation upon Native-grown rice was to this day collected by farmers. The vices of farming taxes were well known, and they had it upon the authority of Sir Emerson Tennent that, in Ceylon, the amount of taxation levied was double that which found its way to the Treasury. Then there was the question which they had already been in another case debating—the question of irrigation. Under the old Native system, works for the purpose of irrigation were kept up almost as roads were in England, under the "Rajah Karia" system—every district being compelled to keep its own irrigation works in repair. It was true there were abuses connected with that system; and under the English rule this forced system of labour was put an end to, and the irrigation works were left entirely to the good will and pleasure of the Natives. But the Natives had no capital with which to meet engineering difficulties, and unaided, could not combine, and hence important works were rapidly falling into disuse and decay; and from that cause there had been a falling off in the production of food of one-half or three-quarters; cultivation in some districts having in fact entirely ceased. Since agitation had commenced on this subject, efforts had been made to enable the right hon. Gentleman to say—as no doubt he would say—that Government was engaged in restoring these works. Yes, but what was the proposition by which the new system was to be maintained? It was to be met by a new tax on the food of the Natives; by increasing the burdens upon the labouring population. The unfortunate paddy-growers were already taxed to the extent of one-sixth of their gross produce. The planters of Ceylon had submitted to export duties on their produce, in order that the public works might go on with efficiency. That fertile island imported half its grain, and almost the whole of the labour employed in the cultivation of coffee; and its taxation amounted to nearly one-third of the gross produce of cultivation. He had no doubt the right hon. Gentlemen the Under Secretary for the Colonies would contend that as the revenue of the colony had increased it must be in a prosperous state. He had shown the House under what circumstances the increase had taken place, and for his part he thought that if the revenue of the colony had been diminished it would have been a better sign of prosperity than an increase, under such circumstances. Our revenue was increasing during the Russian war; and high taxation and prosperity were not synonymous. The right hon. Member for Oxford (Mr. Cardwell) the other night slated that Ceylon had the happiness to be governed by a man of the highest knowledge, capacity, and intelligence; but it should be remembered that the Governor of the island told the Colonial Office that, as far as regarded all the material parts of the complaints of the colonists, there was great foundation for every one of them. Surely that showed the case was one demanding an investigation. He knew that all official people were averse to inquiries; but he hoped the House would consider that the repeated complaints of the people, suppported in many cases by the opinions of the Governors themselves, made out a case for an inquiry. Year after year the colonists had sent home memorials, asking that the promises made them by Earl Grey, in 1848, should be carried out; year after year these memorials had been refused. Yet the colonists had never ceased to be loyal and true to the country and to the Crown. Last year Her Majesty was advised not to grant the prayer of the memorialists, and it was said that these planters wanted constitutional Government. But, in fact, they only asked for the fulfilment of the pledge which was made to them in 1848 by the Secretary of State for the Colonies. The mode of doing this they left entirely with Her Majesty. In the Governor's despatch Mr. Wall was not fairly treated. He was a loyal and an able man, and well capable, if in that House, of pleading the cause of the island. The wishes of the colonists having been for so many years refused by the Colonial Office, they had at last come to that House for redress. Our distant dependencies, he believed, could be retained by us in a satisfactory manner only through the cultivation among their inhabitants of two sentiments — namely, first a feeling of loyalty to the Crown and Government of this country, and next a conviction that, whenever they had real grievances to complain of, and failed to obtain redress for them in other quarters, that House would at least do them the justice of granting inquiry. The hon. Member concluded by moving the Motion of which he had given Notice.

seconded the Motion.

said, that the hon. Member for Stockport (Mr. Watkin) asked that House to grant a Select Committee to inquire into the state of Ceylon upon two grounds. The first was, that certain complaints had reached this country from that island; and the second was, that the institutions of the island were decaying, and its population and prosperity were falling away, and that general misgovernment existed there. Now, as far as the complaints were concerned, they were amply discussed only four weeks ago, when the hon. Gentleman called the attention of the House to the petition which had been forwarded from Ceylon to this country. The hon. Member had not adduced any fresh complaint. Four hon. Members interested in Ceylon took part in that discussion. He (Mr. Adderley) then stated the views of the Government upon the subject, which were fully indorsed by the right hon. Gentleman the late Colonial Secretary, and the House seemed to think that no case whatever had been made out in support of the petition. The hon. Gentleman had now put forward statements of his own, alleging that the island was in a general state of decay. But he submitted that the hon. Member had altogether failed to change the issue of the discussion which had already taken place upon Ceylon. The sole ground of complaint was the military contribution which that colony had been called upon to pay. Now, the fact was, that the contributions which the colony had been called upon to make had been recommended in the Report of a Select Committee, who were of opinion that Ceylon ought to contribute towards the cost of the troops kept in that island. The hon. Member intimated that the colonists did not so much complain of the military contributions as of the number of troops. [Mr. WATKIN: I said nothing of the kind.] He had certainly understood the hon. Member to say so; and of the number of troops which ought to be maintained in Ceylon Her Majesty's Government was the proper judge. It was only when Ceylon was called upon to pay the military contribution that they heard of any complaints on the part of that colony. The statements of the hon. Member with reference to the mis-government of Ceylon and the decay of the prosperity of that island were not borne out by the reports which had been received in this country upon the condition of that colony. When it was proposed to place Ceylon under the Indian Government, there was a general outcry against the proposition. The hon. Gentleman stated that the population had fallen off. Now, the fact was that it was rapidly increasing, being 13,000 more than last year. Last year the births were 48,000, and the deaths 39,000.

said, that the colonial blue book showed that in 1863 the population was 2,342,098, whilst in 1866 it was only 2,088,027.

said, that the hon. Gentleman had, perhaps, selected a year in which there was a great mortality; but the last accounts showed a great increase in the population. The hon. Member had adduced the increase of the revenue as a proof of decay, inasmuch as he attributed that increase to the imposition of new taxes. The truth, however, was, that it was due to no such cause, but to the growing prosperity of the colony, for the taxes there remained the same as those which had been levied for the last ten years. The next complaint of the hon. Member was that the Government had unwisely interfered with the railway speculations of the colonists, and prevented railways being made into the coffee districts; but that, too, was a statement which was not supported by the facts of the case. When it was shown that the state of the funds for making the railway referred to was satisfactory, it was sanctioned by the Government. The hon. Gentleman also complained that large taxes were levied upon rice grounds; but these taxes had been brought under the consideration of the Government, who had ordered that an inquiry should take place with a view to ascertain whether a reduction in them might not be effected. The tax upon rice was a tax per bushel, and therefore the increased produce of the tax showed an increased production. [Mr. WATKIN: The tax is in proportion to the value.] The tax had not been altered. The question whether the naval stations for the purposes of the colony should be maintained at the cost of the British taxpayer he did not think it necessary to discuss. He had frequently heard the hon. Gentleman complain of the burden thrown upon the English taxpayer to maintain such stations for colonies, many of which were richer than England. Why should not the people of Ceylon bear their share of the taxation of the Empire? Was all the expense of the Empire to be borne by a particular part of it? [Mr. WATKIN: Certainly not.] Under all the circumstances of the case, he did not see any good that could be derived from granting the proposed Committee. Since the Report of the Military Commission in Ceylon, the colonists seemed to be perfectly satisfied with the terms which had been come to, and that Report, he believed, would be strictly adhered to. He did not, he might add, at all agree with the views of the hon. Gentleman as to the government of Ceylon. While the Governor was responsible for the good government of the colony, he must have ample discretion in the management of its affairs; and if, as the hon. Member proposed, the majority of Members in the Council were to be elected, the Governor would no longer be in the position which an autocratic governor ought to occupy, who, being fully responsible, should have the power of conducting his own policy. The hon. Member had also fallen into a mistake with respect to the intention of Earl Grey, whose despatch contained no such promise as that indicated by the hon. Member. Earl Grey expressed a wish that the colony might become more able to take a part in its own financial affairs, and it was rapidly exhibiting greater capacity in that respect, for it frequently controlled votes on financial questions. The hon. Gentleman talked, not in the interest of the great population of the colony, but in the interest of a small section — the English planters—who had ample influence in the Council. He thought that no case had been made out for the inquiry which the hon. Gentleman asked the House to sanction.

trusted that the Motion for a Select Committee would be agreed to. The Under Secretary for the Colonies had objected that the complaints came only from Englishmen in the colony; but Englishmen constituted the life and soul of the colony; and, if they complained, they ought to have a fair hearing. With regard to the population of the colony, it was true, as stated by the hon. Member for Stockport that its amount had diminished since 1863, though there had been some increase of population in 1866 over the amount in 1865.

thought the House had not only failed to dispose of the grievances of Ceylon, but had failed in understanding what those grievances really were. It was ridiculous to say that the matter had been fully discussed on a former evening, when, in point of fact, only four Members took part in the debate. Moreover, both the Under Secretary for the Colonies and the right hon. Member for Oxford (Mr. Cardwell) had misconceived the real ground of complaint. Although the statement that the military expenditure was not the real grievance had been proved during the former discussion, the right hon. Gentleman (Mr. Adderley) had repeated his former statement. The grievance was not confined to any particular expenditure. It referred to the general system pursued by the Colonial Office; and the complaint was that the Colonial Minister of this country expended £1,000,000 per annum without the slightest check or control from any person in the world. [Mr. ADDERLEY: No, no!] Well, was that expenditure controlled by the House? The state of the House when colonial matters were brought forward showed that hon. Members did not take the slightest interest in them; and it was almost impossible to discuss them except when a Vote was proposed in Committee of Supply. On the previous discussion the House would have been counted out but for the accidental circumstance that the Government wanted to pass a Vote in Supply, and the result would probably have been the same on the present occasion but for a similar reason. Not only was there no control by the House over the expenditure in Ceylon, but there was no control whatever. Now, what was wanted was that there should be an efficient control vested in the colony itself. It was quite true that there was a Legislative Council, and that money votes were brought before that Council; but of the sixteen Members who composed it ten were official servants of the Government, who were compelled to vote according to instructions sent out from this country. He strongly urged the Government to consider the question, and to devise some means for checking our colonial expenditure. He believed that representative institutions had been granted far too soon in many of the colonies, and there was great danger lest the refusal to redress real grievances might lead to an extension of that practice. There was first a refusal to listen to just complaints, and then violent agitation having been excited, extravagant concessions were made for the purpose of allaying that agitation. He did not believe that the Colonial Office was at all ill managed; but he did think that at a time like the present, when the House of Commons took no interest in colonial affairs, it was desirable to provide some machinery by which the action of the Colonial Office in expending a sum of £1,000,000 per annum should be effectively controlled.

objected to the assertion of the Under Secretary of State that the governors of the colonies must be autocrats. They could not expect any body of Englishmen to submit to a system of Government which deprived them of all real control over their expenditure. But that was precisely the state of things at present in Ceylon. There was a Legislative Council, but the Government officers by their votes rendered popular control impossible. He would ask, why were these Crown Colonies kept in the hands of the Colonial Office? The answer was, because of the patronage they brought in the appointments of governors, and judges, and others. The hon. Member for Stockport (Mr. Watkin) was undoubtedly right in the view he had taken of this matter, and in bringing it before the House.

agreed very much in the spirit of what had fallen from the hon. Member for Cambridge (Mr. Gorst) that it was almost hopeless to discuss any colonial question in the present state of that House. He also agreed with much that had been stated by the hon. Member for Stockport (Mr. Watkin). Ceylon had not undergone that rigid inspection by the Colonial Office which from time to time was required; and he strongly urged the desirability, if a Committee were not granted, of sending out a Commission to Ceylon to look very thoroughly into the whole system of administration there. Such a course would, he was convinced, be most beneficial not only to Imperial but Colonial interests. He believed the Government of Ceylon was not well administered; from careful inspection of official documents he could say that a great deal ought to be done with respect to the finance of the colony. But he should feel considerable difficulty in voting for this Motion, because it must be considered in connection with the Papers which had been laid on the table; and he was bound to say that those Papers disclosed such extraordinary doctrines that the House could not allow itself to appear to give any sanction to them. The whole of this movement was based on a Paper which emanated from the gentlemen who called themselves the Ceylon League. That Paper had been laid on the table, and he would quote only this one sentence from it—

"The public of Ceylon will, at present be satisfied with such a concession as will give them the enjoyment, through their Representatives in Council, of the constitutional right of full control of the local revenues, freed from the dictation of the Governor or the Secretary of State."

The meaning of that was, that representatives of the white population, consisting of 3,000 should have entire control over the revenues without reference to the wishes of the Native population, amounting to 2,500,000. He thought such a position would be monstrous, and he trusted no one on either side of the House would support such a doctrine. But if the Committee were moved for on the ground of the bad Government of Ceylon, he thought there was ground for supporting it. The secret of the matter was this. Until within a few years there was no agitation on the part of the people of Ceylon with respect to the financial administration of the colony. There had been a considerable surplus, which was accumulating. Some years ago a Committee of this House reported that the colony did not bear anything like its proper share of military expenditure, and that that share ought to be increased; and the Government wrote to the Governor to the effect that there being a large surplus every year a portion of it should be applied to relieve the military expenditure. The planters then urged the Governor to expend more money, and the real object of the agitation has been to obtain for them not the power of refusing expenditure, but of increasing it in spite of the Government. Now that was not constitutional. Even in that House they could not force upon the Government any particular course of expenditure. It was such a system which broke down the Government of Jamaica. The agitation going on at Ceylon was that of a minority to force the expenditure of money in the colony, and thereby to reduce the surplus, so that the colony should not have funds out of which to bear their share of the military expenditure. It seemed to him that, by countenancing such a movement Parliament would be adopting a retrograde policy. He thought the right hon. Gentleman might properly object to the Motion; but he hoped the Government would consent to send out a Commission of Inquiry.

said, the hon. Gentleman who had just sat down had hardly done justice to the Paper which he had quoted. The paragraphs preceding the extract which he had read considerably modified that passage. The spirit of the Paper referred to was this:—That the Government officials in Ceylon had an absolute majority in the Council with regard to the control of expenditure. Ceylon was too large an island to be placed on the same footing as some small West Indian islands, and the people of Ceylon wished that un-officials should have a majority in the Ceylon Council. They wished that should be effected in one of two ways—either by increasing the number of the unofficial men, or by diminishing the number of the official men. He thought that was a very fair proposal. A remark of the right hon. Gentleman opposite, that only a small minority supported this proposal, put him in mind of an anecdote which was related to him by Mr. Abercrombie, a former Speaker of the House. Mr. Abercrombie told him that at the commencement of the anti-Corn Law agitation a division took place in which only twelve Members voted in the minority, and that when he (Mr. Abercrombie), one of the minority, was marching out of the House to give his vote, he heard one of the Members of the majority say, "There are just a dozen of them, and they have not an acre among them." That, no doubt, was thought a conclusive argument by the Member who adopted it. He believed it was true, that the twelve had not an acre amongst them, but they had brains; and they inoculated the country with the truth of the proposition that they advocated. That truth prevailed; the majority of the House adopted it, and there was now no one on either side of the House who would say that they did not arrive at a right conclusion. It was vain to say as an argument against the demand of the Ceylon League, that only a minority were in favour of it.

said, that if the hon. Member did not go to a vote upon this question, he should, in future, walk out of the House whenever the hon. Gentleman brought forward any other Motion of a similar nature. He protested against the House being turned into a mere debating society. Hon. Members brought forward Motions of this description, and after they had impeded the progress of Public Business they withdrew them and the matter ended in smoke. He hoped that the hon. Member would press the question to a division. The very fact that the Under Secretary for the Colonies, and an Under Secretary under the last Administration, had combined in defending the present state of things in Ceylon, convinced him that there must be something rotten in the Ceylon Government.

said, that having spent some time in Ceylon, and having had in former times a pecuniary connection with the island, he felt an interest in its condition. Ceylon was a conquest of the Crown, and whatever might be the opinion of the gentlemen represented by the hon. Member for Stockport (Mr. Watkin), it was the duty of the Government to take care of the 2,500,000 of Natives, and not of the 3,000 Europeans only. In order to protect the Natives of the island, the supreme Government should be vested in officers who were responsible to the Crown, and not in a mock popular Council, selected from a few commercial European inhabitants. To place the supreme power in the hands of the Natives would only give rise to false hopes, and would be likely to lead to sedition and insurrection.

desired to state that he had said "Aye" to the Motion which involved the rejection of the Committee for which he had moved in the belief that he was supporting his own proposal. He had certainly intended to press the matter to a division.

stated that all the Members in his neighbourhood had shared in and acted under the same misapprehension.

, in moving that the Bill be now read the second time, said, that as any discussion of the measure would probably be on details, such discussion could best take place in Committee.

did not wish to oppose the second reading, but thought it right to tell Her Majesty's Government that in some parts of the North of England strong objections were entertained to the machinery of the Bill, especially so far as it related to North and South Shields.

objected to the principle of the Bill, which was to take away voters from the country and place them in the towns, thus eliminating the town voters, who were really the Liberal voters. Without going the length of moving the rejection of the Bill, he thought there should be further discussion on this stage, and therefore moved that the House do now adjourn.

did not think any one could object to the principle of the Bill, which was simply that boundaries should be altered.

said, he would withdraw his Amendment.