asked the Under Secretary of State for Foreign Affairs, If he will state to the House the nature of the communications received from the Government of France in reply to the protest made by Her Majesty's Government on the 24th of February last against the levying of differential duties on merchandise imported into France under the British Flag, and the demand then made to place British Shipping on the "most favoured nation" footing?

The French Government maintain that there is no treaty engagement between this country and France which precludes the levying of the duties in question, and have hitherto declined to accede to the application made by Her Majesty's Government. The representations made on this subject last February have been renewed, and the subject is still engaging the attention of both Governments.

asked the Vice President of the Council, Whether it is the intention of Her Majesty's Government to advise Her Majesty to signify Her Assent at the close of the present Session to the scheme prepared by the Endowed Schools Commissioners for the management of Greycoat Hospital; or whether, seeing that it affects the interests of the working people of Westminster, who have not fully considered its provisions, he will recommend delay until the commencement of next Session?

found from the best legal advice that there was practically no discretion with the Government in the matter. It was their duty to recommend Her Majesty to consent to the scheme of the Endowed Schools Commissioners, as there had been two months during which Petitions might have been presented to the Education Department, and the scheme had lain 40 days on the Table of the House. He was sorry to hear that any persons were dissatisfied with the Greycoat School Scheme, and could only state that the particular objection to which the hon, Gentleman alluded never came before, the Education Department during the time when they could have considered it; and, in fact, it had never come before them officially.

asked the Under Secretary of State for India, Whether Mr. Denis FitzPatrick, who in 1864 was Judge of the Small Cause Court at Delhi, and Agent to the Government of India in defending two suits brought against them in the Deputy Commissioners' Court at Delhi by the representatives of the Begum Sombre, and who, as it appeared by evidence in that Court, in the same year was found to have abstracted papers from the Public Records in the Government Collector's Office at Meerut, is the same Denis FitzPatrick who for upwards of three years has been, according to the Indian official Civil List, receiving a salary of £1,600 a year for superintending the said suits in this country on the part of the Government of India?

, in reply, said, the Question had taken him very much by surprise. He had that morning made every possible inquiry about the matter, and found that no one at the India Office had ever heard a whisper of such a story. He was told that Mr. FitzPatrick, whom he never saw, and about whom he knew nothing whatever personally, had the highest reputation for honour. It was a very great pity that the right hon. and gallant Member, before he asked a Question reflecting upon private character, did not think it desirable to give the representative of India in that House a somewhat longer Notice; especially as Mr. FitzPatrick had been employed to watch a case adverse to the right hon. and gallant Member's private interests.

said, he knew nothing about the details of the matter. He had merely been asked to put the Question, and he did not think the hon. Gentleman had answered it. The hon. Gentleman had not said whether this was one and the same person who was mentioned under these two heads.

stated that he knew nothing whatever about the matter; but he believed that if the right hon. and gallant Member, who was represented by the hon. Member, had made the statement contained in the Question in some place where he was not protected by the privilege of Parliament, he might possibly have found himself a defendant in a civil or a criminal proceeding.

observed that it seemed to him a great stretch of the privileges of the House that any hon. Member should be entitled to put Upon the Notice Paper a Question which conveyed a libellous imputation. Of course, their privileges of freedom of speech in that House entitled them at any time to make any statement they pleased in debate as to the conduct or character of any person, whoever it might be; but that privilege was subject to the Rules of the House, and also to the duty of any Member of the House to substantiate the statements he made by proper evidence before the House. He did not think, if it was strictly consistent with the Rules of the House to make that sort of imputation in a printed Question, that those Rules could be correct. He was of opinion that there ought to be some mode of revising the Questions put upon the Paper, and that it should not be in the power of any Member of the House to convey libellous imputations upon the character of a person who was a stranger to the House, and who had no means of meeting statements so placed upon the Paper.

wished to explain that his share in the matter had been conforming to a request of one of the oldest and most respected Members of that House, and he thought the House would be of opinion that he acted rightly in complying with such a request. He had no personal knowledge of this subject; he had never heard of these parties before; and he could offer no further explanation; but it appeared to him that his right hon. and gallant Friend had merely inquired as to a matter of fact.

remarked that he was much mistaken if, a quarter of an hour ago, he had not seen the right hon. and gallant Member who had placed this Question on the Paper in the lobby of the House.

wished to express his concurrence with the right hon. Member for Kilmarnock (Mr. Bouverie). He had repeatedly called the attention of the House to the system of putting Questions on the Paper; it was calculated to lead to very great misapprehension, particularly as the House had no control whatever over the Questions that were placed upon the Paper.

rose to a point of Order, and wished to ask a Question respecting his Motion on the Indian Budget.

said, the House would probably be of opinion that one Question as to a point of Order should be disposed of before another was raised. The Question put by the hon. Member (Mr. J. Lowther) impugned the character and the conduct of an individual in the public service, and he (Mr. Speaker) was bound to say that any Question of the kind should, according to his judgment, be in the form of a distinct Motion. If his attention had been called to the nature of the Question, he should have advised the hon. Member who gave Notice of it to put it in the form of a substantive Motion to the House.

apologized for having unconsciously deviated from the forms of the House. Hon. Members were probably aware that for many weeks he had had a Motion down on the Paper to the effect that he should move a Resolution relating to Indian Finance, on the Motion that the Speaker leave the Chair, in order that the House might consider the Indian Budget in Committee. He knew he was in Order in giving Notice of such a Resolution, because two years ago he adopted a similar course after consultation with the late Speaker. He must complain of the Notice given by the Government last night that the Government would propose that the Speaker should leave the Chair in order that the Government might move certain Resolutions in relation to Indian Finance. Such a proceeding was never adopted before, and it ought not to have been done without Notice. But that course having been adopted he wished to ask whether his Resolution had been got rid of, and whether it would be impossible for him to move the Resolution of which he gave Notice as an Amendment to the Motion that the Speaker do leave the Chair?

On the Order of the Day for the consideration of the East Indian Revenue Accounts a Motion may be made that I now leave the Chair, and upon that Motion it will be open to the hon. Member for Brighton to move the Amendment of which he has given Notice.

With reference to the Question put to me on the 17th June by my hon. Friend the Member for York (Mr. J. Lowther) touching some complaints which were preferred by three regiments of Militia then encamped for their annual training on Brackenber Moor, near Abbleby, I have to state that I have received the Report of the Court of Inquiry appointed to investigate the circumstances of the ease, and regret to learn from it that the complaints to which the hon. Gentleman has drawn attention are, to a certain extent, founded on fact. Owing, it appears, to the almost continuous rain, to the partial failure of contractors, as well as to the difficulty of supplying deficiencies by local purchases, the regiments in question were for some days after their arrival exposed to more inconvenience than usually attends troops under canvas, and various breaches of discipline unfortunately occurred. After carefully weighing the evidence taken by the Court, I cannot but consider that the Control officer in charge failed on some occasions to exert himself sufficiently to meet emergencies as they arose, and I have consequently ordered a reprimand to be conveyed to him. It is, at the same time, but fair to this officer that I should state that on the only occasion on which supplies were deficient—namely, on the day on which the South Durham Militia marched into camp, not only was no requisition for rations sent to him by the regiment, but he was unable to elicit from the adjutant, to whom, in default of the quartermaster he addressed himself, a satisfactory reply to his verbal inquiries whether the regiment had been already rationed for the day at headquarters, or whether they would require rations in camp. Further inquiries on this subject will be instituted by the Inspector General of Auxiliary Forces. The main cause, however, both of the breaches of discipline and of the Control difficulties was, in the opinion of the Court, the want of brigade organization, and orders have consequently been given that whenever camps of this nature are formed in future care shall be taken to place a brigadier in command.

asked the right hon. and gallant Gentleman whether he had heard of great disorder having again occurred in that place in another regiment of Militia, and whether the matter was being inquired into by the military authorities?

said, his Question had reference to two Cumberland and Westmoreland regiments; whereas the right hon. and gallant Gentleman's reply referred to breaches, of discipline which occurred, not in those regiments, but in the regiment mentioned in the Question put by the hon. Member for Kendal (Mr. Whitwell).

My answer was made more with reference to the South Durham regiment than to the others. In reply to the Question of the hon. Member for Kendal, which refers to another regiment—the North Durham—in the same camp, I have to state that my attention has been drawn to certain reports which have appeared in the newspapers, and that I have ordered inquiry to be made into the correctness of those reports.

I think it right to state that Mr. Aston has addressed a letter to me, which it may be proper on my part to read to the House. Mr. Aston does not state for what reason he has addressed it to me. I have had no communication with the Bounty Office, or any of its officers, in regard to the Bill—the Ecclesiastical Dilapidations Act (1871) Amendment Bill—in question, nor has Government taken any share in the discussion upon it. Probably the reason is, that it was I who suggested to the House last night the adjournment of the discussion on the question whether Mr. Aston should be called to the Bar. The letter is as follows:—

"Bounty Office, Westminster, Aug. 6.

"Privilege Question—Ecclesiastical Dilapidation Act (1871) Amendment Bill.

"Sir—Allow me to ask the favour of your conveying to the Honourable the House of Commons an expression of my regret that the lithographed letter in which, influenced by the urgency of the Bill passing this Session, I yesterday asked Members to remain to the close of the Sitting, was so worded as to be liable to be misunderstood. I have written an explanatory letter to the hon. Member for Barnstaple, and I now most distinctly state that the words to which exception was taken were not intended by me in any way to apply to the hon. Member, or any other hon. Member; but the words referred solely to parties outside your Honourable House. I beg to apologize most respectfully to your Honourable House if I have inadvertently transgressed any of its rules and proceedings.—I am, Sir, &c."

So far as the allegation against Mr. Aston goes it appears to me that he has said in this letter probably as much as he would be able to say in case he were called to the Bar. Of course, however, if the House thinks it necessary to proceed further in the matter it can do so.

I have no personal interest in this matter any more than any other hon. Member. Offensive expressions were used, not of individual Members of the House, but of Members who were not named, and I thought it my duty to bring the matter to the cognizance of the House. If the House approves, I am willing to accept the apology as amply sufficient, and I hope that so important an institution as Queen Anne's Bounty will in future be more careful.

could not have voted for summoning Mr. Aston to the Bar, no breach of privilege having in a technical sense been, in his opinion, committed. A libel on the House generally, or on any hon. Member in the discharge of his duties, was, undoubtedly, a breach of privilege, rendering its author liable to be called to the Bar; but the letter, offensive and improper as it was, was not an imputation on the House at large, or on any particular Member for his conduct in the House, but referred to money lenders and agents. No doubt, the proceeding was a highly improper one. Mr. Aston was Secretary to an important public Board of which he (Mr. Bouverie), as a Member of the Privy Council, happened to be a member. It was to be condemned that any responsible officer of a public Board should think it right to write canvassing letters to the Members of that House, and particularly canvassing letters in the terms of Mr. Aston's. He thought the superiors of Mr. Aston would not properly discharge their duty to the public uuless they severely reprimanded that gentleman for the course he had taken in that matter, because it would be observed that the letter was dated from the Bounty Office, and signed by him as Secretary to the Board, so that he had used the name of the Board, and had committed that important public commission to the language and terms of that letter, which he (Mr. Bouverie) was quite sure the individual Members of that Commission would never for one moment justify. He hoped the House would follow the advice of the right hon. Gentleman the Prime Minister, and that they would hear no more of the matter.

said, that having been requested by the Archbishop of Canterbury, on the part of the Governors of Queen Anne's Bounty, to take charge of the Bill in respect to which Mr. Aston's offence arose, he thought it right to state that that letter emanated entirely from that gentleman himself. Mr. Aston neither consulted him nor gave him any intimation that he intended to ask hon. Gentlemen to come to the House to support the Bill last night.

said, he rose to Order. He had distinctly understood the Speaker, in answer to a Question put by him, to say that on the Motion for going into Committee he would be at liberty to move the Amendment of which he had given Notice.

The hon. Member for Elgin rose to address the House, and, as I understand, proposes to conclude with a Motion.

then said: I regret that the hon. Member for Brighton has not thought fit to accede to the suggestions that have been made to him; because the course he proposes to take will put many hon. Members to much inconvenience. To me, personally, that course is neither convenient nor inconvenient; but it obliges me to modify the usual order of proceedings, and to make some observations in moving that you do now leave the Chair which I would, in the natural order of things, have made in Committee; since, if I were not to do so, the House would be put in the strange, and indeed impossible, position of being asked to pass a Resolution about Indian Finance before it has the least idea what the state of our pecuniary affairs in India really is. Hon. Members will, I hope, give me their indulgence, and I shall do my best to be brief. Even under other circumstances I should not have felt justified in trespassing at any great length upon the attention of hon. Members; because, while a Select Committee is sitting on Indian Finance and Financial Administration, controverted questions must be considered as referred to its judgment and reserved for its decision. Without further preface, then, I proceed to state the largest, and only the largest, financial facts of the past few years in India; speaking, as usual, first of the year of Actuals—that is, of the year which ended on March 31, 1871; secondly, of the year of the Regular Estimate—that is, of the year which ended on March 31, 1872; and, thirdly, of the year of the Budget Estimate—that is, of the year which will end on the 31st March, 1873. It has twice been my lot to move the Budget Resolutions when I could give no very cheerful account of our pecuniary circumstances. It has once been my lot to do so when I could give a tolerable account of those circumstances, and it is only fair that on this, the fourth occasion, the destinies should have been more propitious, and should enable me to give what I may call by comparison a very cheerful account of our actual state and immediate prospects. First, then, let me compare the accounts of 1870–71, as they actually turned out, with the Regular Estimate which we offered to this House in May, 1871. We expected then to receive in the financial year 1870–71, £51,017,000—we actually did receive £51,413,000—so we were agreeably disappointed by more than £396,000, thanks almost entirely to cautious estimating under all heads. On the other hand, we expected to pay £49,933,000—we did pay £49,930,000—so that we were again agreeably disappointed by £3,000, thanks to the same cause. The general result was then this: We expected a surplus in the year 1870–71 of £1,083,000. We bad a surplus of £1,482,000. Next I will compare the actual receipts and disbursements of the year 1870–71 with those of the previous year 1869–70. In the year ending 31st March, 1871, we received £51,413,686. In the year ending 31st March, 1870, we received only £50,901,081—so that we were, as a Government, better off last year than we were the year before by £512,605. This relatively favourable result was chiefly due to increase under Assessed Taxes, Excise, Customs, Salt and Stamps. In the same year—the year ending 31st March, 1871—we paid £49,930,696, while in the previous year we paid £50,782,412, so that we paid less in the year 1870–71 than we did in the year 1869–70, by £851,716. The decreases of expenditure were, of course, numerous, the largest being under Public Works Ordinary—that is, public works of comfort and convenience, for which we do not think ourselves entitled to borrow. The general result was, therefore, as follows:—In 1870–71, we had, in round numbers, £500,000 more Revenue, and £850,000 less Expenditure than in 1869–70. Passing now from the year of Actuals, I come to the year of the Regular Estimate—the year for part of which we have accounts to go upon, but for part of which we have only calculations and conjectures. It appears from the Estimates recently laid before Parliament that the Revenue is expected to be fully £50,000,000 (£50,013,686) and the Expenditure £47,282,356, or £47,250,000, leaving a surplus of £2,700,000. I come now to the present financial year—the year of the Budget Estimate. The Financial Member of Council expected on 6th April to receive during this financial year £48,771,000—say £48,750,000, and to pay £48,534,000, say £48,500,000. The anticipated surplus was, therefore, about £250,000—that is, rather less than the amount of surplus for which the Secretary of State in Council desires to see the Budget framed. The only items of anticipated receipt to which I think it necessary to call attention, are, first, Opium, from which less is expected than we have received in 1871–2, thanks to the short crop of last season, and to the state of the market; secondly, Assesed Taxes, on which a falling-off of £254,000 was expected by Sir Richard Temple, partly in consequence of the minimum income assessed to the income tax being £100 a-year in 1872–3, as against £75 in 1871–2. With regard to items of expenditure, it will probably be sufficient to point out that there is a large increase in the grant for charges connected with the collection of the Revenue, chiefly in the Opium department. There is a slight increase of £71,000 in the Military department; an increase of some £66,000 on Provincial Services; a decrease of about £100,000 on Public Works Ordinary; a decrease of about £96,000 under the head of Interest on Debt, owing to the conversion of the Five Per Cent, or Mutiny Loan, of £16,250,000, into a loan bearing interest at the rate of 4½ per cent for seven years, and thereafter at the rate of 4 per cent only. It remains to ask and answer the question—How much bad India at her bankers on the 31st March, 1872? India had at her bankers on that date, £24,983,440, of which £22,162,349 was in India, and £2,821,091 in England. That is an exceptionally large cash balance, so large as to have given rise to a good deal of remark. The explanation is, however, easy to give. About £1,300,000 of this is merely money lying in our Treasury, the property of certain persons who, having been holders in our Mutiny Loan—which, as I have mentioned, was recently converted into a loan bearing less interest—have elected to receive their money for the purpose of investing it elsewhere, but have not yet actually received it. About £2,500,000 is money raised by loan, and intended to be laid out on that class of public works for which we pay out of loans, but which has not yet been paid away. And the residue, so far as it is in excess of the normal £15,000,000 in India and England, is chiefly the result of our large surpluses of 1870–71 and 1871–72. Our usual practice is to aim at a cash balance of, say, £12,500,000 in India, and one of £2,500,000 in England; but as the chief cause of the present state of things is our exceptional prosperity, and our caution in not pressing on extraordinary works without proper deliberation, it is not to be considered, as one newspaper did seem to consider it the other day, as anything very calamitous. I may observe, in passing, that nothing is commoner than to hear complaints of our too large cash balance in England These complaints proceed from persons who do not know how very large, how frequent, and how uncertain the payments made on account of the Government of India by the Secretary of State in Council really are. We could not possibly get on with less. If we tried to do so, the Secretary of State would certainly be unable some fine morning to meet his liabilities without borrowing. Every care is used to utilize the balance by lending it in the City; and if anyone thinks that the interest we get is not sufficient, just let him go and try to get more interest. He will find it anything but an easy operation. There is little doubt, I fear, that our exceptionally large balance at our bankers will not long continue. Be this as it may, it is, at least, clear that we shall not be forced by our necessities to borrow for any purpose during the financial year now in progress, either in England or India. The facts which I have cited, will, I think, be held to entitle me to say that the immediate pecuniary prospects—the pecuniary prospects of the year passing over our heads—are very good, and that the pecuniary results of the three previous years were also good. But now let us look a little further back. If we take the years 1867–8, 1868–9, 1869–70, 1870–71, for which we have actual accounts, and the year 1871–2, for which we have Estimates approximating to actual accounts, and ask what is the general result as to surplus or deficit on our ordinary account—our accounts, that is, exclusive of expenditure on extraordinary public works—we come to the following results:—The two first years mentioned were years of deficit, and show £3,781,725 to the bad. The next two years were years of surplus, and show £1,601,659 to the good. The fifth year—the year of the Regular Estimate—was a year of surplus, and shows £2,731,330 to the good. That is, it swept away the balance of deficit on the previous four years, and gave us £551,264 to carry on to help the year now in progress, for which we, as at present advised, expect a surplus of not less than £237,000. And now let us look a little further back still. The abnormal state of things caused by the Mutiny ended with the financial year 1860–61. Prom the 1st May, 1861, up to the 31st March, 1873, we have received—or have good reason to expect to receive—£569,193,362, and we have paid £576,578,142—that is to say, including all our public works ordinary and extraordinary, paid out of loan, and not paid out of loan, we shall only have overspent our income by £7,384,780. Now in return for that sum, what will the people of India have got in actual property? for I put aside for the moment all questions as to improved government, education, civilization, and so forth. It has got, in round numbers, £37,500,000 worth of property in the shape of public works which India must have, if it is to be a civilized instead of a barbarous portion of the world. This £37,500,000 is thus made up:—£7,500,000 have gone in Roads and other means of communication, exclusive of Railways; £8,000,000 in Canals and other Works of Agricultural Improvement; £1,750,000 in Harbours, Reclamations of Land from the Sea, &c.; £6,500,000 in Civil Buildings, Court Houses, Police Stations, and the like; £11,000,000 in Military Buildings, Barracks, Fortifications, and so forth; £2,750,000 in State Railways. Now, let anyone make any deduction he pleases from the £37,500,000—which, be it understood, is wholly exclusive of the cost of Repairs, Establishment, Tools and Plant, together with the whole purchase-money of the services done to India by all the Guaranteed Railways paid for by Government on behalf of the people of India in the shape of Guaranteed Interest, less net traffic receipts—let him say the barracks are bad, or the fortifications bad, or that anything else is bad; but, if in his senses, he will admit that a vast portion of this sum was expended for things which are a distinct addition to the wealth of India. Then let him put the amount he leaves against the £7,500,000, and India has an enormous sum to the good. Hon. Members will observe that some of the figures I have just cited—those for the year ending the 31st March, 1873, and those for the year ending the 31st March, 1872—are taken from the Budget Estimate and the Regular Estimate respectively; and they will remember that complaints are often made that Indian Estimates are exceptionally inaccurate. All Estimates are inaccurrate; and Indian Estimates are inaccurate; but is it true that they are exceptionally inaccurate? It is not true. Take the past 10 years of the Indian Budget, from 1860–61 to 1869–70. The average difference per annum between the Budget Estimate and the completed accounts has been £1,798,830. That may sound a very large amount; but what do you think the average difference has been between the Budget Estimate and the actual accounts of the United Kingdom, upon not very much larger figures, during the last 10 years? It has been £2,149,600; and remember, that the second largest item of Indian receipts is Opium, which rises and falls in a way which has hitherto proved utterly inscrutable to human intelligence, depending as it does upon the vicissitudes of seasons in India, and upon a whole group of causes in China and elsewhere, of which we only catch glimpses now and then. Then consider the facilities which there are for estimating in England compared to what there are in India; consider that the English Chancellor of the Exchequer is working a system which has existed for generations; that the Indian Chancellor of the Exchequer is working a quite new system, invented only the other day by a man whom, perhaps, half of us remember in this House before he went to India. Then remember how near everything is in this little island. Contrast this with the enormous distances which separate the different persons in India with whom it is necessary for the Indian Chancellor of the Exchequer to communicate before he can make his calculations; and I think the Committee will be of opinion that there is something to be said for him as against his English brother. I have been defending hitherto our Budget Estimate. Now for the Regular Estimate, which gives our views as to what the results of the year will be after we have the approximate actual figures of six or eight months before us. It has been said that this Regular Estimate is just as misleading as the Budget Estimate; but is that true? The figures show that in the 10 years ending with the 31st March, 1870, the Regular Estimate was wrong by only £875,204—that is to say, it was nearer right than the Budget Estimate by an average of £900,000. No English Chancellor of the Exchequer will stand up in this House and say that he could make, after six or eight months Actuals were known, a better Regular Estimate than is made in India. The experiment has not been often tried; but when it has been tried the success has not been extraordinary. There are one or two other matters about which hon. Members usually like to hear a little on this occasion. For instance, they like to hear what was the amount of our troops, European and native, by the last Returns. The number of our European troops by the last Returns, was 63,036, of which 4,388 were cavalry, 46,347 infantry, 12,036 artillery, 265 engineers, with 348 field guns. The number of our native troops by the last Returns was—cavalry 19,657, infantry 111,250, artillery 1,680 with 32 guns; total, 132,187. These 195,223 troops, assisted by a relatively inexpensive police, preserve order amongst 150,000,000 of men, aid your policy in preserving it amongst 50,000,000 more, keep all enemies far from your borders, or chastise, as in the recent case of the Looshai raids, any rash disturbers of the great British peace—the first and the greatest of the innumerable blessings which British rule confers upon India. It is the fashion of the hour to depreciate these blessings; but if our rule produced no one blessing to India but the blessing of peace, it would be splendidly beneficent. Remember, that when not a few Gentlemen now in this House were boys at school the state of anarchy in India was such that one of the few British poets who have been inspired by India, can make his hero, speaking of those times, say with perfect faithfulness to historical probability—

"My father was an Affghan, and came from Candahar,

He rode with Nawab Ameer Khan in the old Mahratta war,

From the Deccan to the Himalay, five hundred of one clan,

They asked no leave of King or Chief, as they swept through Hindustan."

Then hon. Members may like to hear a word or two about the progress of those public works for which we borrow. Some years ago, during the American War, this was a most popular topic; but now the development of the resources of India is no longer a phrase to conjure with, and our critics are much more prone to shake their heads over the public works we are making than to incite us to make more. The Government of India, at home and abroad, shares the fashionable depression as little as it shared the fashionable enthusiasm. It is going on with its State railways and its canals as quickly as it can with due regard to the state of the labour market, and to other considerations which must govern the action of a Government in such matters. Then there is another matter about which there has been some little talk of late, on which hon. Members might like a little reassuring—I mean our local taxation. Now, when people hear of Indian local taxation, they no doubt think of something like our English local taxation, and a terrible array of figures rises up before them. So let me say at once that the whole local taxation of India—equal in size, remember, not to little England but to all Europe save Russia—is, only on an outside estimate, somewhere about £5,000,000, and this after the passing of the new Acts, which considerably increased the said local taxation. A great part of this local taxation is levied through municipalities for municipal purposes—say, nearly £1,500,000; and the whole of the £5,000,000 is levied for and spent on local purposes—such as roads, police, hospitals, bridges, cleansing of towns, ferries, educational and charitable works. Is there anything alarming either in the amount raised, or the objects for which it is raised, even if it were to be thought of as Imperial taxation under an alias, which is not the case? But having made these very few remarks to correct some prevailing misconceptions, I must admit that local taxation in India requires the closest watching; and I trust that the Finance Committee will go fully into the subject next year. The Imports and Exports of India fluctuate, of course, a good deal; but the annual average since the American War, as stated by Sir Richard Temple, is £102,000,000 as against £52,500,000, the annual average of the five years before that War. It would not accordingly be a great exaggeration if I were to say they had almost doubled since the great demand for cotton, caused by the Confederate struggle. How far this very high figure will be maintained is of course doubtful, and many good authorities hold that the reviving prosperity of the Southern States will make Manchester draw her supplies ever more and more from the West. The Suez Canal, which is bringing back animation to the Venetian lagunes, is doing much, and will do more, for the trade of India. 155 vessels, with cargoes valued at £13,000,000, passed, according to Sir Richard Temple, through the Canal to Calcutta alone in 1871. We continue to receive very cordial and useful aid from Dr. Hooker, of Kew, in the introduction of medicinal plants into India, and in many other ways—as, for example, by the publication of the first part of The Flora of British India. The Indian Exhibition at South Kensington contrasts, as it seems to me, favourably with that of last year, and will, I hope, do something to increase the taste for Indian manufactures in this country. The cotton collection, illustrating everything that relates to that important plant—from the soil it grows on, to its appearance in the shape of Dacca Muslin—is singularly complete, and creditable to all concerned in getting it together. I am assured by competent authorities that our sanitary publications keep up their high character; but the great work of Dr. Fayrer on Indian venomous snakes is our chief contribution of the year to scientific research. The state of the Indian Funds is most satisfactory, and must almost, one would think, break the heart of the enemies of the Government of India. The louder they complain of Indian financial mismanagement, the higher the Funds are quoted. If Sydney Smith thought so badly of the intelligence of the Three per Cents, what must these persons think of the Indian Fours? When I have congratulated hon. Members upon the prosperous conclusion of the little war which was made necessary by the incursions of the wild Looshai tribes, and the prompt suppression of the Kooka disturbances—a suppression which would have deserved high commendation instead of censure, if wise and moderate counsels had guided the persons engaged in it when the disturbers of the peace were at their mercy—when I have noticed the fact that not even the terrible tragedy of Port Blair created the very slightest political eon-fusion, and that the Government has arrived at the conviction, after most careful investigation, that the murder of Lord Mayo had nothing whatever to do with politics, hon. Members will be prepared for the very few words I have to say as to the general state of India. No one is fit to have anything to do with the affairs of that country who is not thoroughly impressed with the belief that whatever fate may have in store for us the time has not yet come when we can say that all is safe and quiet beneath that volcanic soil. Possibilities of danger are always around us, and he must have read Indian history to little profit who is surprised if at any moment some unregarded trifle leads to infinite trouble and alarm. Having once made that admission, I wish to give the most emphatic and categorical denial possible to the statements that one sometimes hears in society, or reads in the Press, to the effect that India is in an exceptionally discontented or unprosperous state. India, thank God, is usually kept out of the vortex of party here; but party passions in India rage as furiously as they do in any country. Nine hundred and ninety nine alarmist statements out of a thousand which are repeated amongst us with regard to Indian affairs are the mere exaggerations or fabrications of persons who are disgusted at not seeing their own particular views adopted or their own particular interests forwarded by the local authorities. The letters and articles of such persons find their way to this country, and are taken au grand sérieux by those who do not know the secret sources of their discontent. My noble Friend at the head of the India Office is, from the nature of things, in the closest communication, private as well as public, with those who have in their hands all the threads of Indian government, and who know whatever is to be known about the state of India. That being so, I assert, in the most unqualified manner, that if India is in a bad way, it is a fact quite unknown to the persons in India who are directing her destinies from Simla, or Calcutta, or Madras, or Bombay. The revival which has been going on in many religious communities since the end of the last century has extended to the Mussulman world, or has, to speak more correctly, had its antetype there. That is an element in Indian affairs not to be neglected, although it would be easy, very easy, to exaggerate its importance. The strange recrudescences of fanaticism which have so often been seen in non-Mussulman India are assuredly not yet over. The influence of extended education and of contact with Europeans is beginning to show itself in the stirrings of what it would be premature to call Indian public opinion, but of what may be called native class and sectional opinion, with which it is quite necessary to reckon, though we must take care not to confound it with the opinion of the dumb millions when they have an opinion. To their interests it is often violently opposed. The railway and the telegraph have vastly increased our power; but they have also to some extent increased the power of those who love us not. An enormous stride forward has been made in legislation during the last 10 years, and perhaps the time has come for a period of repose, a time when—sinere res vadere ut vadunt may not be the least wise motto for a statesman. There are symptoms that we have been improving India not too fast, but perhaps faster than we can consistently with that perfect financial ease and comfort which is so great an element of power. These are only a few of the more important considerations that are present to my mind when I say that in India we should walk warily, and not boast of the morrow. And having noticed them, I once more assert that the great experiment of governing India—the greatest and most beneficent experiment in government that ever was made—is going on as satisfactorily as reasonable persons who know its difficulties can expect, and that there is not more but less occasion for anxiety as to the immediate future than is usually the case. And now I might sit down if it were not for the Resolution which the hon. Member for Brighton has put on the Paper. That Resolution divides itself into three parts. The hon. Gentleman lays a foundation by quoting some words of Lord Mayo, he then expresses a strong opinion about the Indian Income Tax; and, on the foundation of the words of Lord Mayo and his own opinion about the Indian Income Tax, he builds a conclusion as to what we ought to do with regard to the Indian Income Tax in the coming year. First, then, as to Lord Mayo's opinion. The quotation which the hon. Member makes from the late Viceroy's Minute is quite correct. I have no doubt that if Lord Mayo were here, and could stand up again amongst us as so many of us have often seen him stand, he would put upon his words a construction very different from the one which the hon. Gentleman attaches to them. But let that pass; no part of my argument will turn upon that supposition. My argument will turn on the answers to two questions which I am just going to ask. First, what was the date of the document from which the hon. Gentleman quotes Lord Mayo's opinion; and, secondly, were there any peculiar circumstances which made it natural that Lord Mayo should have recorded the opinion which he did record at that particular date? Now, to these questions I reply, the date was the 3rd October, 1870, and the circumstances were such as to make it natural that Lord Mayo should at that particular time record the opinion which he did record. Let us see what were the financial circumstances of the 3rd October, 1870. They were most peculiar. Lord Mayo landed in India in the beginning of 1869. The income tax, which had been abolished some years before, was non-existent. Lord Mayo and his advisers—as I think wisely—reintroduced the income tax. Six months after Lord Mayo and his advisers suddenly—to the regret but with the acquiescence of the Secretary of State in Council—doubled the income tax and increased the salt tax. Six months after that again, in the spring of 1870, Lord Mayo and his advisers—with the reluctant acquiescence of the Secretary of State in Council—still further increased the income tax—raised it, in fact, to the normal English rate. The Minute from which the hon. Gentleman quotes was recorded by Lord Mayo in the autumn of 1870, when Lord Mayo, looking back on his own financial administration, could not but observe that in about 18 months he had reintroduced, had doubled, and had trebled the tax which of all others in India is most obnoxious to the persons who make opinion—that is, to our own European officers, to the head men in villages and the like, and, above all, to the whole class which owns, writes in, and influences the newspapers. Lord Mayo, who was always observant of what was passing around him, was very much struck by the way in which the irritation of those persons who paid the tax, and therefore quite naturally hated it, was communicated all over the country to hundreds of thousands who did not pay the tax; and the words quoted reflected very fairly what I know to have been the prevailing mood of Lord Mayo's mind when he thought of financial subjects in the later autumn of 1870. But, unfortunately for the hon. Gentleman's argument, I am acquainted not only with what Lord Mayo thought about the financial situation, and about the nature of the grumbling or discontent arising from taxation in the later autumn of 1870, but with what he thought about it under the altered circumstances of 1871. And I know that before this time last year Lord Mayo was perfectly reassured about the discontent to which he had alluded in his Minute, which forms the foundation of the hon. Gen-Gentleman's Resolution. The House will remember that the hon. Gentleman brought on a discussion about Indian Finance in June of last year. Now, if Lord Mayo could have taken part in that discussion, I can tell the House with absolute certainty the substance of what he would have said. He would have said something to this effect—"I trust that the hon. Member will withdraw his Motion. If anyone states that general discontent as to our financial position now prevails among the natives, he asserts what I believe to be absolutely contrary to the fact. Great discontent did, doubtless, prevail last year; but, since the income tax has been reduced, the state of things is quite changed." If such were the views of Lord Mayo a year ago—and I repeat that I am absolutely certain that they were his views à fortiori—would he have held views at least as encouraging now, when the limit of assessment of the lowered income tax of 1871 has been altered so as to make it strike a much smaller number of persons, and when the general financial situation is very decidedly improved. But if this is so, what becomes of one-half of the foundation upon which the hon. Gentleman's Resolution is based? It is sapped and destroyed, leaving the unhappy Resolution in the extremely evil plight of having no relation at all to the actualities of 1872, however much it might have been, I do not say fit to be discussed, but not obviously, and at the very first glance unfit to be discussed, while the circumstances of 1870 continued. Now, then, for the second half of the foundation. One-half of the hon. Gentleman's Resolution rests, as I have shown, upon opinions which would not have been those of Lord Mayo at present, and had long ceased to be his opinions when he met his death. The other half of it is just about equally stable. It is the assertion of the admitted un-suitability of the income tax to the circumstances of India. Now, I flatly deny that its unsuitability is admitted. For every opinion as to the unsuitability of the income tax that the hon. Gentleman can bring forward, I can bring an opinion at least as good in favour of its suitability. Out of a whole pile which I have here by me, and which I could inflict on the House if I were sufficiently cruel, or it sufficiently patient, here are two only. The first is from a native paper, one of the best in the Bengali language, The Shôm Prakâsh—

"We learn that the Anglo-Indian cries against the income tax have by this time reached England, and that probably it will be reduced, if not altogether abolished. We are further informed that a London newspaper has denounced this tax as unsuited to our countrymen, natives of India. We are thankful to that newspaper for pleading on our behalf; but, in reality, we poor natives have very little to do with the income tax. This tax has the merit—as we have frequently pointed out—of leaving the lower orders completely intact. We have shown in a former issue that it affects 1 only in 400 of our countrymen, and that it is the most equitable of taxes, inasmuch as it takes from those alone who are able to give."

The second is from a speech by Mr. Ellis—

"He (Mr. Ellis) had received letters from General Barrow, the Chief Commissioner of Oudh, now in England, who said that since his return to England he had had many correspondents amongst his native friends in the Province, upwards of 40, if he (Mr. Ellis) was not mistaken, and these not of one class, but including taluqdárs, merchants, and others, all liable to payment of the income tax. General Barrow stated that his correspondents had written to him freely and unreservedly, and told him all the grievances of themselves and other people in regard to decisions of the Settlement and Civil Courts, their disputes among one another, and other matters public and private, but not one of these correspondents had ever mentioned a single grievance in connection with the income tax."

If General Barrow—who is one of our greatest authorities on native opinion and native feeling—is next year well enough, I will ask him to come before the Finance Committee to give evidence to the following effect:—that it is absurd to try to make out that the outcry against the income tax is a "native" outcry, and that it affects our hold in India, when, as a fact, the whole arises from the objections raised by Europeans, and that it is absurd to believe those who cry out about the oppression. He will, further, I believe, say that those people pursue a mischievous course who tax the native collectors with oppression; that they would do more to make the Government popular and our rule safe if they took the opposite view of native character; that to treat them as rogues is certainly not the way to win them over; that, as a rule, the native tehsil-dars do their work well; that exceptions to the rule do not go undetected; and that in his experience natives are ready enough to talk of oppression if it exists. Observe, I am expressing no opinion whatever of my own as to the suitability of the income tax to India—

"Adhuc sub judice lis est."

It is a most hotly controverted question; but what is the use of appointing a Committee upon Indian Finance and Financial Administration, if without asking it for its opinion as to the suitability or unsuitability of an income tax, we are to decide so important a question off-hand before the Committee has heard almost anything that is to be said in defence of that tax. Hitherto, the attitude taken by the Government upon the Finance Committee has been this—it has done all it could to get clear explanations of our Indian receipts and expenditure laid before the Committee; it has done its best to encourage persons who had anything to say by way of criticism on its financial administration to come forward and state it to the Committee; but it has reserved all its most important defensive evidence for next Session, being desirous, of course, to hear all that could be alleged against it before it made its defence. The hon. Member for Brighton will, no doubt, say that most of the witnesses were officials. Of course they were officials, for no others could explain the facts of receipt and expenditure into which the Committee was examining; but they were not officials called to defend the policy of Government, and in repeated instances they took a view, and stated a view, that did not correspond with the view of Government. The Committee may take it from me, who am responsible for the management of the Government case before that Committee, that on no one controverted point of importance has the Government fully or authoritatively stated its policy before the Finance Committee. Why will the hon. Member be always backing out of the lists which were arranged to a great extent for the purpose of enabling him to show his prowess against the Indian Government? If the income tax is such a bad tax, let the hon. Gentleman try to get the Committee to report that it is a bad tax. If the hon. Gentleman is dissatisfied with the Report of the Committee after it has reported, then let him come down to this House and appeal to it against its own Committee; or if he is dissatisfied with the action of the Government of the day, whatever it may be, on the Report of the Committee, let him come down and appeal to the House against the Government of the day; but surely it is little short of an insult to the Committee, and not very just dealing by the House, to come down now and to ask the House to pass a judgment upon such a subject as the Indian income tax, before the Committee has had an opportunity of saying one word to the House upon it. So, then, the second half of the foundation of the hon. Gentleman's Resolution crumbles like the first. But even if the foundation had been stable the superstructure would have been bad; for the hon. Gentleman asks us to pass a Resolution to the effect that the income tax should not form a part of the Ways and Means of the coming year. Why, who knows what will be the financial circumstances of the coming year in India? I am sure I do not, and I am sure no mortal can do more than vaguely guess at them. Sufficient to the year is the finance thereof; and yet the hon. Gentleman's proposition to the House is not only to give the go-by to its own Committee—which has expressed no opinion on the income tax—but to take the administration of the finance of next year out of the hands of the persons whom Parliament holds responsible for Indian financial administration—the Viceroy with his Council, and the Secretary of State and his Council. I am convinced that no House of Commons which ever existed would pass so wild a Resolution even if that Resolution had been founded upon realities, and not upon a total misconception as to the facts with regard to Lord Mayo's opinion, and a further misconception of the facts as to the state of the controversy with regard to the income tax. The House will see that I am most careful to confine what I am saying to the finance of the present year. I have not the least idea what view the Committee may take about the income tax when it reports—as I presume it will report—at the end of next Session, nor have I the least idea what view Lord Northbrook may take about the income tax in its relation to the Ways and Means of the coming year. I know that Lord Mayo, in his very last days, after passing through various phases of opinion about the income tax, inclined against it as a permanent element of Indian finance; but I also know that he considered that the income tax stood only third in the order of the things which he wished to see changed in Indian Ways and Means. Lord Mayo, if the state of things in India had continued as prosperous as it was when he sailed for the Andamans, would possibly have tried to get rid of the income tax, if he had remained long enough in India, after he had dealt with the salt line and equalized the salt duty; but certainly not till then. His views as to that are on record in a Paper which has been laid before the House; but I may add that to my certain knowledge Lord Mayo, within three weeks of his death, expressed his general concurrence in the views which I have quoted as those I should expect General Barrow to state before the Finance Committee. Lord Mayo never believed a tithe of the stories about the oppression caused by the income tax, and quite believed in its justice even when he inclined against its expediency as a permanent element in our Ways and Means. Now, without expressing either agreement or disagreement with Lord Mayo's earlier or later views as to the income tax in India, I will venture to say that they are views that are sure to be carefully and respectfully considered by Lord Mayo's successor. They are views adverse to the perpetual continuance of the Indian income tax, but not adverse to the continuance of the Indian income tax as part of our Indian Ways and Means for a considerable time to come. They may be right views or they may be wrong views; but they at least show that Lord Mayo would have had no sympathy whatsoever with the hon. Gentleman's wish immediately to do away with the Indian income tax. I venture, then, to submit to the House that the superstructure which the hon. Gentleman has raised in his Resolution is as crazy as the foundation on which he has raised it; and that the House will act more in accordance with its traditions if it passes no opinion at all, favourable or unfavourable, upon the Indian income tax, until it has heard the views of its Committee upon that subject. As to the very last words of the hon. Gentleman's Resolution they are mere surplusage. That the picture or the book would have been the better if the artist or the author had taken more pains is very old and meagre wisdom. That taxes might be reduced in India as in all other countries if Governments were wiser, and that the first taxes to be reduced are the exceptionally burdensome taxes is a most respectable platitude, but not one the assertion of which will very much mend matters. The history of British rule in India is the history of the remission of exceptionally burdensome taxes. The patient labours of the Finance Committee, and the sort of stir which these great periodical Committees, which have ever formed part of our Parliamentary supervision of Indian Government, always cause, will, I should hope, be of considerable use in helping Lord North-brook, than whom no one is more anxious to reduce expenditure and to have safe finance; but I fear we shall not gain much dry light from listening to the views of the hon. Member for Brighton, which he has formed upon very imperfect knowledge of the facts, and which he proposes now to enunciate in defiance of the recommendation of the Finance Committee, which is worded as follows:—

"No just opinion should be expressed or can be formed on allegations which have been made before your Committee respecting important financial affairs, until the requisite explanations have been afforded, and the evidence relating to them is complete."

In opposition to that recommendation the hon. Member divided, not, I hope, for the last time, in a minority of 1. After an expression of opinion so distinct from a body so authoritative as a Select Committee, any further protest from me would, of course, be unavailing; but I cannot help pointing out, in conclusion, that all our business in this House is arranged on the understanding that we are to be guided to a very considerable extent by the opinion of our Colleagues, and that the minority must bow to the decision of the majority. Any half-dozen Members taking the course which the hon. Gentleman is about to take, and absolutely refusing to be bound by this understanding, might make business impossible.

rose to move—

"That this House, considering the statements of the late Lord Mayo that 'a feeling of discontent and dissatisfaction exists among every class, both European and Native, in our Indian Empire, on account of the constant increase of taxation which has for years been going on,' and that 'the continuance of that feeling is a political danger the magnitude of which can hardly be over-estimated,' is of opinion that the Income Tax, which is generally admitted to be unsuited to the people of India, might during the coming financial year be dispensed with; and that other Taxes exceptionally burdensome to the people of India might be Country were administered with adequate care and considerably reduced, if the finances of that economy."

He rose, he need scarcely say, with some little trepidation, after the Under Secretary of State for India had announced, in prophetic language, that anything he (Mr. Fawcett) could say on this question could not be of the slightest consequence or importance. He thought, however, that it was only due to the House that he should state at the outset a few words in justification of the course he was about to pursue. If he required any justification for that course he should find it in the late period of the Session at which the Indian Budget was introduced. No one who was acquainted with the feelings of the Indian people would deny that this shelving of the Indian Budget till the fag-end of the Session would be interpreted by them as a determination on the part of Her Majesty's Government to treat the affairs of India with neglect. The Prime Minister, when pressed to give a somewhat earlier day for the discussion of the Budget, had declared that it could not be discussed till all the essential business of the Session had been disposed of.

said, he stated no such thing. What he said was, that after the business essential to the winding up of the Session the Indian Budget would be taken—having reference, as the hon. Member must know, to those Bills the House intended to pass, and the introduction of the Appropriation Bill, which would require a certain number of days for its passing.

said, he would gladly accept the explanation of the right hon. Gentleman, because if there was any truth in the statements he was about to bring forward there could be no doubt that the discussion of the Indian Budget was essential to the winding-up of the Session, The delay of the Government on this subject would probably be attributed by them to want of time; but that plea was of little avail when it was remembered how many evenings were frittered away on the Royal Parks and Gardens Bill, a measure which, according to the Government's own confession, had left the question more complicated than it was before. Now the time that was lost in a series of contradictory proposals with regard to illiterate voters might have been given to a consideration of the affairs of a great dependency. The Government were able to devote the whole of an Evening Sitting in July when they wanted to obtain money to defray the expenses of ex-Governor Eyre, and many questions had been disposed of that should have been looked upon as of secondary importance rather than incur the suspicion of treating the affairs of India with neglect. It might be said that he was adopting an unusual course; but the unusual course adopted by the Government in bringing forward the Indian Budget on the 6th of August fully justified what he had done. It was true that he was a Member of the Select Committee; but if that were to preclude him from speaking on this subject he would at once cease to be a Member of that Body, and to his colleagues on that Committee he had given full notice of what he intended doing. The time had come when Indian affairs must be discussed, and he meant to discuss them; and it was only due to the House that what he had to say upon the subject should be first stated in that House rather than on the platform. The Under Secretary of State had stated that out of the vast amount of expenditure in India of £36,000,000, there was only a deficiency of £7,500,000. £7,000,000 deficiency meant as much borrowed money, the remaining £29,000,000 being provided out of the revenues of India, and these revenues meant taxation, which already pressed so heavily upon the people of that country. The Under Secretary insinuated that he was the spokesman of certain discontented persons in India. All he could say in answer to that was, he would not even refer to one of their complaints, but rest his assertions solely on the highest official authority. His only object was to direct attention to the fact that the Government were maintaining a financial policy that had produced great dangers in the past, and was calculated to perpetuate and increase those dangers in the future. This was the characteristic feature of Indian finance—the revenues were inelastic, while the expenditure was elastic, for two reasons: 1st, the cost of administration; and 2nd, the general rise of prices. The land, the most important item of revenue, yielded about £21,000,000 in gross, and £18,000,000 net. At least one-fifth of this, that yielded by permanently settled districts, was absolutely fixed; the rest was settled for 30 years at a fixed rent, and could only slightly be increased as the estates fell in. Mr. Campbell, Lieutenant Governor of Bengal, had said this increase would be counterbalanced by a reduction of revenue in Madras, the land of which was let direct to the ryots, who were too highly assessed. Salt was the next great source, yielding £6,000,000 altogether, and every eminent authority agreed that the duty on salt could not be further increased; in fact, a belief obtained among those authorities that it would be desirable to reduce the amount of the present duty, as in all probability a larger revenue would be the result of such a policy. This tax varied from 500 to 2,500 per cent on the original cost of the article—an impost upon a prime necessary of life never before heard of in the history of the world. Opium, which produced £6,000,000 or £8,000,000 a-year, was a very uncertain source of revenue, as already stated by the Under Secretary. The Indian Government had obtained the highest price for this article, because they traded in it quite as much as an ordinary merchant would do; but, according to Sir Rutherford Alcock, our late Minister in China, no revenue could be more precarious than that obtained from opium. Although desirous of dealing with opium as a financial question only, he could not refrain from expressing the fear that some might think us hypocritical in forcing a deleterious drug upon the Chinese in our anxiety to obtain revenue and profit from opium, while Members of the Legislature permitting it made moral speeches and took infinite credit for restricting the sale of intoxicating liquors at home. Sir Rutherford Alcock stated the Chinese regarded our cultivation of opium with great jealousy, were increasing the cultivation of it themselves, contemplated prohibiting its importation in the hope of stopping its growth, and now taxed it 100 per cent; the reduction of this tax he assumed would inevitably reduce our revenue, and he concluded by stating that had he been able to make concessions in the shape of restricting the importation of opium from India he might have secured almost any terms from the Chinese in the treaty he was negotiating as regards "admitting English commodities." Nothing, therefore, could be more uncertain than the revenue from opium. The other source of revenue was £2,250,000 from excise on spirits and drugs, and £2,750,000 from Customs, which could not be materially increased. If Customs duties were increased, foreign importations would be checked, so that little additional revenue would be yielded by an increase. The £750,000 raised by stamps could not be increased, and it was impossible to increase a similar amount from tributes. It was clear from this review that the revenue was inelastic. The expenditure, however, was extremely elastic, and these two facts gave the clue to the financial difficulties of India. The Army nominally cost about £16,000,000, but that was not all. Adding indirect expenditure for medical and ecclesiastical charges, on military roads, and on railways—the latter being used mainly for strategic purposes—the total expenditure incurred by the Army was no less than£18,000,000. One startling fact was presented by this expenditure of £18,000,000, that the Government, owning the greater part of the land in India, absorbed the whole of its net value in military organization. But the cost of the Army had increased, and was likely to increase. War equipment was becoming more elaborate and costly. This could be proved, for between 1863 and 1871 the Indian Army was reduced by 13,000 Europeans and 4,000 Natives—that is, about 20 per cent of Europeans; but the expenditure had increased from £14,800,000 to £16,600,000. But the elasticity of expenditure in India was still more strikingly shown when they examined the various items of civil administration. Mr. Harrison, the Controller of Accounts at Calcutta, was examined for several days on those, and at last they found that it was a repetition of a twice-told tale. Certain items of expenditure in 1856 were so many thousands of pounds; in 1871 the same items had increased by 70 or 80 per cent. If the change was one connected with the Presidency of Bombay, the increase was usually yet greater. For example, the cost of printing in 1856 was £90,500, and in 1870 it was £233,000. The Bombay establishment in 1856 cost £208,000, and in 1870, £365,000. The household charges of the Governor of Bombay in 1856 were £7,000, and in 1870, £21,000. The charge for the Secretariat of the Public Works Department in 1856 was £14,000, and in 1871, £31,000. The medical charges in 1857 were £157,000, and in 1870, £523,000. Similar instances might be multiplied indefinitely, and they all showed that an inevitable tendency was at work in India making administration more expensive. Possibly, that might be due to the fact that they governed India more carefully or better; but, whatever the cause, the fact remained, and it was powerfully assisted by a general rise in the price of commodities; which meant that all the materials the Government were obliged to buy were dearer, and also that if the cost of living rose there must be an ultimate increase of salaries. Some of the subordinate salaries already had to be considerably increased. Sir Bartle Frere, Sir Robert Montgomery, and a host of other authorities admitted that the rise of prices in India during the last 20 years amounted to something like 40 or 50 per cent, and they further acknowledged that it must add greatly to the cost of Government. The statistics of the trade of India would show the cause to which that rise of prices was chiefly due. During the last 11 years the exports from India amounted to £541,000,000, and the imports to only £311,000,000, leaving the enormous balance of £230,000,000 due to the country. That had been partly liquidated by an excess of import of treasure over export of £172,500,000. The remaining £60,000,000 might probably be taken as some measure of the sum which India had to pay England for the expenses of the Home Government, for pensions, salaries, and other sources of income to residents in this country. Of the £172,500,000 of specie which had been poured into India during the last 11 years, a considerable portion had, of course, been added to her circulation. That had naturally produced a rise in prices, and a similar effect had followed the increase of the paper currency consequent on its being made a legal tender. From the peculiar nature of Indian trade, it seemed almost certain that the importation of specie would continue, and if so, the rise in price would also continue. That rise in price would be assisted by the general rise in prices now going on throughout the world, which was due to the depreciation of the precious metals—a fact now admitted by almost every economist and financier of eminence. Moreover, in India expenditure was far more affected by a rise in prices than revenue. In India there had been constant deficits during the last 11 years, and the greatest difficulty in making both ends meet. Sometimes when there had been a surplus it was purely fictitious, and obtained by devoting capital to income. It might be said that the difficulty of balancing revenue with outlay was greatly owing to the natural increase in the cost of administration and the general rise of prices to which he had referred, and which could not be controlled by the Government. That, however, only made the proposal before them all the more alarming. Waste, mismanagement, and extravagance could be easily prevented; but, so far as the difficulty was due to natural causes, it could only be met by rigid economy, by checking expenditure, and by the House of Commons doing all in its power to express disapproval of a policy which was certain to land them in increased liabilities. There was a cardinal distinction between the financial position of India and that of England. If £5,000,000, £10,000,000, or£15,000,000 of additional taxation were required to meet a national emergency in this country, the money could easily be obtained. The tea, sugar, or malt duties could be increased, or the income tax raised to 8d. or 1s. in the pound. But in India they had no available source of fresh revenue left. They had forced up every tax there to a maximum: their only desperate reserve was the income tax, and if they wanted to raise an additional £5,000,000 of taxation next year in India for a national exigency, he ventured to assert, after careful inquiry and consultation with many great financial authorities, that no person who knew anything of the present condition of India would have the temerity to say he would raise that £5,000,000 and at the same time answer for the peace of that country. He would support what he had stated by a quotation from one who was practically well acquainted with India. He could not give a more striking corroboration of his argument than by adducing the testimony of Mr. Mathie. He said rigid economy was absolutely necessary in India because of the inex-pansiveness of the revenue. If in the slightest degree they outran the constable they must land themselves in a deficit. They had used up all other sources of taxation for the future, and they had no other recourse but the income tax. But if the revenue was inexpansive; if there were no new sources of revenue; if taxes had been imposed up to the maximum, did it not become absolutely as certain as the demonstration of a mathematical proposition that if we did not curtail the expenditure, and change our policy, in a very few years we should want £5,000,000 of additional taxation? And where was that taxation to come from except from the income tax? Now, the income tax, as he should show, had been condemned by a most extraordinary consensus of opinion; and we should come to this conclusion—we had to look forward to this—unless we checked expenditure that we should be met by increased taxation, and that this taxation must be provided for out of the income tax. A simple comparison of revenue and expenditure for the last few years in India would give no adequate or correct idea of our financial position there. So desperate had been our position, so difficult to make both ends meet, that, like embarrassed traders, we had been constantly appropriating to capital what should have been employed to reduce debt. In fact, we had been performing that financial operation which was known as discounting the future. He would give some remarkable instances of this. In the accounts of 1869–70 there was stated as an item of income a miscellaneous receipt of £427,000. After a good deal of cross-examination it was found that this sum represented the accumulation arising from the sale of waste lands. The land was virtually the property of the Government, and, therefore, at the very time that they were pursuing a policy of borrowing they sold property and used the proceeds as income. Again, certain Civil Service and military funds had been handed over to the Government, and these either had been or were proposed to be devoted to income. The Controller of Finances admitted, among the miscellaneous receipts of 1869–70, that an item of £240,000 was part of the capital which had thus been appropriated. Therefore, this sum, instead of being in any true sense of the word income, was simply a measure of the prodigality with which the Government was spending its capital. He would give another instance, which, though the sum in question was small, was very significant. £115,000 of borrowed money had been expended by the Indian Government in the Alexandria and Malta Telegraph. The telegraph, turning out a failure, was afterwards sold at a great discount, and the proceeds of the sale were appropriated as legitimate income. So that if £1,000,000 had been borrowed for the construction of some public work, and if it was afterwards sold for £750,000, that sum would be appropriated to income, and might be used to secure an apparent surplus. No mercantile firm could carry on business in that way; if they did, they would quickly find themselves in the Insolvent Court. In the annals of railway mismanagement we had striking examples of the results of the policy of applying capital to income. There might be a few years of meretricious prosperity; shares might be at a premium, large dividends might be paid, but the day of reckoning must come. It might be said that India, in this respect, was only following our own Government at home; but there was an essential distinction between the two countries. India was carrying out vast industrial undertakings in the construction of railways, irrigation, and other works, which in this country were done by private traders or companies. India should, therefore, be bound by the same considerations as bound ordinary mercantile transactions. With a slowly increasing revenue, and a rapidly increasing expenditure, India, after using up all the capital that could be got hold of, had no other resource but an increase of taxation. That state of things was sufficiently serious in a country like England; but it was a hundred times more serious in India, where there was no article of general consumption that could be taxed. He would quote the testimony of Lord Mayo on that point. Whether Lord Mayo condemned the income tax in India or not he could not say; but, at all events, he was entitled to the benefit of the language of the noble Lord when he said that the tax had given rise to great discontent in that country, and created a political danger, the magnitude of which could scarcely be over-estimated. The increase in this tax was going on year by year. One striking peculiarity of Indian finance was lately pointed out in one of a series of most able articles that had appeared in The Times on Indian affairs—namely, that she had no financial reserve. Even in times of peace her resources were strained to make both ends meet. Three successive Finance Ministers—Sir Charles Trevelyan, Mr. Laing, and Mr. Massey—had been most strongly opposed to the continuance of the income tax in India as a dangerous impost. The only conclusion that could be drawn, if the Government persisted in saying that the income tax could not be dispensed with during the present year, was that our financial situation in that country was desperate. But this was not all; if this tax were our last desperate resource in time of peace, it must be our chief reliance as expenditure increased. It might be fairly said that those who asserted that the income tax need not have been imposed during the present year, and that other taxes might have been reduced by a judicious curtailment of expenditure, were bound to show how the attainment of that object might be practically realized. Before commenting on specific acts of waste and extravagance, it might, in the first place, be remarked that the Government of India was so arranged as to reduce the guarantees for economy to an absolute minimum. In the days of the East India Company, India was, to a certain extent, protected by the self-interest of the proprietors—at any rate, they would have seen with jealous watchfulness that India was not unfairly charged for many things for which England ought to pay. Under the present system there were four or five distinct persons who could spend. There was the Secretary of State, the Governor General, the Governors of Bombay and Madras, and the Lieutenant Governor of the North-West Provinces. Thus there was no individual responsibility and no distinct control. There were also various great spending departments. It was impossible to define the powers of the Secretary of State. It was, of course, maintained that the ultimate control of all financial questions was exercised by the Secretary of State; but directly that Minister began to know his work he might have to retire, or he might be shifted into some other department; and, moreover, as India was not represented in that House, her public opinion was but lightly regarded. Thus India might be neglected, her money might be wasted, her affairs might be mismanaged; but unless the interests of party were affected, this mismanagement would scarcely raise a ripple on the surface of politics. A recent Finance Minister had distinctly stated in a letter to The Times that the finances of India were repeatedly sacrificed to the wishes of the Horse Guards and to the exigencies of English Estimates. Thus, India had been obliged to pay two-fifths of the cost of an almost worthless telegraph cable laid down between Alexandria and Malta; she was made to pay an extravagant price for recruits; she had contributed a large part of the Abyssinian Army; and she was made to pay for the Persian Mission and for the Consulate charges in China, in which she was in no way interested. When the Sultan visited our shores a niggard hospitality was relieved by a splendid banquet at the India House; and, by a masterly stroke of injustice and meanness, this was charged to the Indian accounts. When a Royal Prince visited India the expenses of his travelling companions were defrayed from the same source. Every gentleman must be ashamed of these facts, and also that there was no sufficient pressure of public opinion in England adequate to protect the interests of India. Her interests had been sacrificed when they clashed with ours, either politically or commercially. India seemed to be regarded as if specially created to increase the profits of English merchants, to afford valuable appointments for English youths, and to give us a bountiful supply of cheap cotton. Twenty years ago we commenced the system of guaranteeing 5 per cent on railways and other public works in India, and it was impossible to devise a scheme which would more inevitably lead to waste and extravagance. On the Great Indian Peninsular Railway, it was reported that 2,000 bridges, viaducts, and other masonry works would require reconstruction. Up to the present time about £90,000,000 had been spent on guaranteed railways, and the amount of interest which the Government had had to make good up to the present time had been £33,000,000. The contracts were arranged on conditions the most unfavourable to India. Government could at any time be compelled to take over a company and to repay to the shareholders, not the actual value of the line, but all the capital which had been wasted on ill-constructed works. On the Calcutta and South-Eastern Railway about £600,000 was expended; on this outlay 5 per cent was guaranteed; this scheme proved a disastrous failure; and the Government took it over at par. On the Jubbulpore branch of the East India Railway £3,000,000 was expended; 5 per cent was guaranteed, and the line only just paid its working expenses. On the Scinde, Punjab, and Delhi Railway £8,000,000 was expended; the net returns were about £50,000, and the Government annually lost about £400,000 by this undertaking. Yet, disastrous as it had been in itself and to those who had to pay for it, it was remarkable that the guaranteed shares of the company were marked at 6 per cent premium; of course they paid 5 per cent dividend regularly. Again, some years ago, £1,000,000 was expended on the Madras Irrigation Board, at a guarantee of 5 per cent. He need not say that the actual cost of the works exceeded the original Estimate by £600,000, and no doubt before all was finished the sum would be equal to £2,000,000. Those works had not yet paid a single farthing profit, and he was told that they were not likely to do so; yet the shareholders in it had been receiving their 5 per cent regularly; the whole burden of it had fallen on the people of India. Again, in the case of the Orissa Irrigation works, £1,000,000 had been raised by a private company; yet the shares went rapidly down, as it was natural that they should, and stood at 60 in the Stock Exchange list, and were, he believed, unsaleable even at that. But what did the Government do? They took over the company at par, giving £100 for every share that was marked at £60; and, in addition to that, they paid a sum of £50,000 to be distributed among the employés of the company. Surely the directors and shareholders who had just made so good a bargain might have borne that small expense among themselves. To the Calcutta Port Fund was advanced £200,000, which had been written off as a bad debt. In the Port Canning scheme £250,000 of public money had been Lost. It was difficult to form an estimate of the loss which would result from the taking over of the Elphinstone land scheme. Many other instances might be given, yet he feared that there were signs that the policy of carrying out public works by State expenditure was to be persevered with. No wonder that, under such a system, it was difficult to make both ends meet in India. England should at least remember this—if no higher arguments could induce her to direct her attention to the matter—that not less than £180,000,000 of English capital was invested in India and her securities. England should also remember the critical position of Indian finance. Let them also remember that, in regard to the money that had been advanced on Indian securities, there was no moral or legal obligation on the part of this country to be responsible for them. If anything should go wrong in India those who had invested their money in Indian securities would have to run the risk. It was desirable that that fact should be plainly stated; because he thought that a contrary impression had got abroad, owing to the Act passed a few years ago, by which trust moneys were allowed to be invested in Indian securities, the conclusion being drawn in consequence that England was, directly or indirectly, responsible for them. He saw no end of the difficulties that we might incur in connection with our Indian guarantees, as the whole subject was well worthy of the most serious attention. Another great source of revenue was our military force in India. Mr. Massey had endorsed the opinion that probably £1,000,000 might be saved by a more systematic revision of the Estimates; and Lord Sandhurst, when retiring from his position of Commander-in-Chief in India, said that economy and increased strength would result from merging the two armies of Bombay and Madras. But perhaps the most essential service which that House could render to India was to express its opinion on the policy which the Government seemed determined to pursue of carrying out a great system of public works with borrowed money. As long ago as 1863, Sir Charles Trevelyan said—

"Has the Government yet to learn that it is beyond their power to furnish a proper industrial outfit for such a country as India? The limits have already been passed when they can exercise an effective control, and with regard to works carried out directly by the State there was certain to be careless and wasteful mismanagement through an inattention to details."

Were such warnings as those to be disregarded? They were threatened with an expenditure of £30,000,000 upon State railways, and by whom would the money be administered? It would be administered by a department which allowed a vast outlay to be made on barracks, some of which, as soon as they were built, tumbled down, and others were so faulty that they were pronounced useless. The expenditure of the money would be watched over by a department whose accounts were, by its own confession, in inextricable confusion. Mr. John Strachey, the moving spirit of the Department, admitted that the accounts were not kept in such a way as to enable an intelligent person to ascertain whether works called reproductive were really so. It could not be told whether the money voted for them was actually spent in them. The Under Secretary had said that the effect of the Amendment would be to repeal the income tax in India; but that was not so; it would only serve to draw attention to the subject. The great truth to be remembered in our rule of India was that we governed her too expensively. She was a poor country; we often forgot how poor she was. It was a country in which labourers were paid at the rate of 4d. a-day, and land let for 4s. an acre. This was the country that we were saddling with all the waste and expenditure inseparable from a system of State subsidies. Railways and other public works might be extremely useful in themselves; but if they were carried out on too costly a scale, if there was no effective supervision, and if there was that careless and wasteful management through inattention to details which Sir Charles Trevelyan spoke of, the most useful works might become extremely unprofitable. The Under Secretary had quoted a native paper—The Shôm Prakâsh—and General Barrow in favour of the tax; but officials connected with the Finance Department were surely those who should be consulted, and he would appeal to three successive Finance Ministers. Sir Charles Trevelyan left office rather than bear the responsibility of levying it. Mr. Laing said there was no worse or more obnoxious impost; that it was un-suited to the Oriental mind; that it exercised a demoralizing influence, and that for every rupee it yielded at least two rupees were taken by extortion and corruption from the people. Mr. Massey condemned the tax even more strongly, saying that the people looked upon it with dread, and regarded it as a great machine kept in reserve for the purpose of extorting money; and he added that no power on earth should induce him to continue Finance Minister in India with the duty of levying the income tax as an ordinary source of revenue. Except Sir Richard Temple, no Finance Minister could be quoted on the other side. According to the Lieutenant Governor of Bengal, it fell most heavily on the poor ryots and small cultivators, some of whom, spite of the antipathy of Hindoos to migration, threatened to migrate to avoid it. Mr. C. H. Campbell, the Lieutenant Governor's brother, collector in the district round Bengal, stated that no measure had ever produced so deep a dislike to English rule; and Mr. Ingles, speaking in the Legislative Council of Calcutta, said that though only one in 300 was legally liable to pay it, at least half the 300 were exposed to annoyance and pressure when the preliminary lists were made out; at least 20, too, being improperly assessed for one legally liable. The Lieutenant Governor, on examining a host of officials, found this opinion unanimously confirmed. Mr. Robinson, another member of the Legislative Council, had also spoken of the sullen discontent which the tax had produced throughout the Empire. After hearing these opinions the House would come to the conclusion that the Government were in a dilemma, because either their resources were at present so severely strained that it was absolutely necessary for them to maintain the income tax with all its disadvantages in order to obtain £500,000, or else the finances of India were in the prosperous condition represented by the Under Secretary and the tax might be dispensed with. But in the face of the official warnings he had mentioned, such a tax would not be maintained if the Government could do without it, especially as Lord Mayo, who was no theorist or alarmist, but distinguished for his common sense, and, as proved by his untimely end, was courageous to a fault, had pointed out that the increase of taxation had produced a political danger the magnitude of which could not be over-estimated. He himself believed the tax could this year be easily dispensed with—namely, by introducing a different system of government, checking the expenditure on public works, and revising the military expenditure. Not only could the £500,000 be thus saved, but the salt duty and other taxes which pressed hard on the people might be reduced. As to public works, private enterprize was extinguished, when a little pressure would effect a guarantee or State aid; but English capital went freely into every quarter of the world, including hazardous speculations like American mines, and it was a reproach to Indian administration to assert that it would not go to India. When a deputation applied for a guarantee or for expenditure on a public work they should be invited, if they believed it would be profitable, themselves to undertake the enterprize. What India required above all things at the present moment was rest. She was worried by constant proposals for new taxation; and the rest of which she stood in need nothing would be so likely so secure her as a firm resolution that there should be no more guarantees, and that for some time at least no public works should be constructed except from any surplus which might be saved out of ordinary revenue. The next subject to which he wished to refer was the decentralization scheme of the Government, which would throw several charges which had hitherto been Imperial on the Provincial Governments. A fixed sum was in the first instance to be voted from Imperial funds for those charges; but the sum was at the outset confessedly inadequate to meet them, and the charges were certain to increase. The deficiency, therefore, would have to be met by a constant augmentation in provincial taxation. Now, we were beginning to recognize the fact that the growth of local taxation in our own country was one of the most serious questions which could engage our attention; but local taxation in India would soon become of far greater importance. The growth of local taxation there was less visible than that of Imperial, and was, in consequence, a more insidious evil.

moved the adjournment of the debate, on the ground that the Bill with its Amendments had only been printed an hour ago and just placed in the hands of Members. When the Bill first came down from the Lords it contained 34 pages; it now contained 49. It then consisted of 62 clauses, which were now increased to 87. Under these circumstances, he thought that they could not go on with the discussion upon the Bill satisfactorily, and this was the ground upon which he moved the adjournment of the debate.

seconded the Motion.

said, that he had put a Question at 2 o'clock to the right hon. Gentleman (Mr. Bruce), and from what then took place he thought that the general feeling of the House was that the consideration of the Bill should be proceeded with now. He trusted, however, that if there should be any serious miscarriage on the Report the Home Secretary would not object to the re-committal of the Bill on the third reading, so that the miscarriage might be amended. He therefore thought they ought to go on with the debate.

was of opinion that they ought to go on with the Bill, as there were very few points now about which any great difference of opinion existed.

said, he had seconded the Motion for the adjournment of the debate because he thought that by doing so, and taking the discussion to-morrow, they would facilitate the progress of the measure. He could not understand how the hon. Gentleman (Mr. F. S. Powell) could say that the feeling of the House was that they should then proceed with the Bill, seeing that it was only about five minutes since it was placed in their hands in its amended form. He thought if the Bill were taken the first thing tomorrow, the progress of the measure would be expedited instead of delayed, because to go on with it then would only be to invite Amendments to be brought forward on the third reading.

reminded hon. Members that a great deal of time had already been spent on the Bill, and thought there was no reason to complain of the want of opportunity for settling Amendments.

rose to explain, and said that upon consulting with several Members he found that there was a strong feeling to proceed with the Bill forthwith.

said, the position of the House every day became worse. There were very few Members present to-night, and there would be still fewer to-morrow at noon. He was, therefore, in favour of going on.

said, it would be impossible to go on with the Bill. It had been understood that it would be printed at 12 o'clock; but it had not been printed until 7 or 8 o'clock, and there would be no time, if they proceeded with the measure, to see the effect of the Amendments.

was at a loss to understand why there should be any strong desire for making alteration in the clauses which had been passed and been added to the Bill, seeing that there had been sufficient opportunity for considering them on the previous night.

said, that having listened to the debate, he had come to a conclusion which he thought would meet the case, although he believed it would not meet with the consent of the majority of the House. The state of the case was this—Here was a Bill of great importance. It had been discussed with ability, with a great expenditure of time, and in very minute detail in Committee, and it had undergone large alterations and extension. It had just been reported, and the Government had proposed to go on with it immediately, and before it was possible, perhaps, for Members to examine it sufficiently. Having heard several Members express a difficulty in regard to going on to-night, and being at the same time aware that the feeling of the House was against any delay, he thought it would not be altogether just for the mere majority to decide to go on. Members who desired it ought to have further time to examine the Bill, and the present stage ought not to be taken unless the House were unanimous. In the circumstances he thought the best course would be to fix the Bill for 12 o'clock to-morrow, but on the understanding that after the Report the third reading would then be taken. Of course, the Appropriation Bill would come on first.

, in continuing his speech, said, he entirely agreed with one part of the speech of the Under Secretary for India. That hon. Gentleman had expressed in forcible language his opinion of the great services which Dr. Hooker had rendered to India, and that House could not do better than recognize those services. He (Mr. Fawcett) further thought that the Government would only have pursued a course which was due to the House of Commons if they had offered hon. Members an opportunity of expressing their opinion as to his services rendered not only to India but to England also. As to extravagance, it was the same with individuals as with Governments; when there was absurd extravagance in large matters there was equally absurd economy in small details. Royal entertainments might be given in this country at the expense of the Indian people, and £155,000 might be expended to build a country house for a local Governor; and this could be done by a Government which, as if waking from a dream, said that we must be economical. It was scarcely necessary for him to observe that the particular saving which had been adopted had led to a keen sense of injustice among the people of India. A few years since, in order to enable the natives of India to compete in this country in the Indian Civil Service Examinations, scholarships were established of £200 each, which had enabled many most distinguished natives of India to obtain high positions in the Indian Civil Service. Those scholarships had now been abolished, and the result was that a net saving of one-fifth the interest on the sum expended in erecting a local Governor's palace had been effected, greatly to the disgust of the Indian people. The promise which had been made to give annually a certain number of natives direct appointments in the service had been allowed to become a dead letter. He earnestly entreated the House of Commons and the country not to delude themselves with the belief that such things as these were not commented upon and noticed by the people of India. In that country millions of human beings felt that they had been unjustly dealt with, and a spirit was rising which it would take all our wisdom and statesmanship to allay. He was aware that it was a somewhat thankless task to bring a subject such as this before that House. The subject was a great one, and it required the labour of years to obtain anything like an adequate knowledge of it. For some years past he had devoted all his spare time to the study of the subject, and yet the only result of his endeavours to bring it under the notice of the House had been to excite the Under Secretary for India and to subject himself to Ministerial rebukes. But no feeling of irritation on the part of the Under Secretary for India—no Ministerial rebukes—could be of the smallest consequence to him compared to the importance of the subject itself and with the duty he felt incumbent on him to do all that lay in his power to improve the position of the people of India. His experience in that House had taught him this lesson—that when a Minister was very angry it was but a clear invitation for the offending party to persevere in the course that provoked that feeling. He intended to persevere in what he had undertaken with regard to this question, and he trusted that he had cleared himself from the reproach that he was afraid to speak his mind in the House of Commons. It was not his fault that he had been obliged to utter his sentiments before a thin and exhausted House on the 6th of August; the fault rested with the Government, who had determined not to bring in the Indian Budget until every important matter connected with this country had been disposed of. We had been taunted with the fact that Indian affairs were better understood in Germany than in this country, and he was afraid that there was much truth in the assertion. In his opinion, the loss of India would be the greatest dishonour that could befall this country, that it would be fatal to our prestige, and the greatest misfortune that could happen to the people in India. Fifteen years ago the Queen issued a Proclamation, which occasioned one universal feeling of interest throughout India, Her Majesty having therein said—

"We hold ourselves bound to the natives of our Indian territory by the same obligations which bind us to our other subjects, and by the blessing of Almighty God those obligations we will faithfully and conscientiously fulfil."

Those pledges had never since been carried out. A large and unnecessary expenditure was still carried on without any check or hindrance—a state of things which produced a wide feeling of discontent and a condition of political dangers, the magnitude of which could not be over-estimated. The hon. Gentleman concluded by thanking the House for the patience with which they had heard him.

rose to second the Motion of his hon. Friend in compliance with his desire that he should do so, though he did not affect to entertain the same convictions of the pre-eminent mischief of the income tax, or the same hopes of the benefit that would accrue from its abolition. With recent mitigations and exemptions this obnoxious impost, it was calculated, would yield more than £500,000; and he could not but ask himself the question, would the alleviation of fiscal burdens to that extent appreciably tend to lighten the springs of Indian industry, or to allay social and political discontent? He wished to state, without exaggeration on the one hand, and without extenuation on the other, the true relations financially existing between Parliament and the people of India. Fourteen years ago, Parliament had advised Her Majesty to assume the responsibilities of executive rule in Southern Asia. They had pledged themselves in the most solemn manner—not by specious words merely spoken in debate, or by Resolutions that might be neglected or forgotten—but by the solemn terms of a statute, that every year the account of public receipts and disbursements for Government purposes in India should be laid upon the Table, together with a full statement concerning the moral and material condition of that vast dependency. But was the bundle of unexplained facts, and loose Estimates, flung down at random by Government, and summarized rather than explained by the Under Secretary of State in an empty House on the 6th August, a faithful or substantial compliance with that mandatory law? He was not about to criticize the speech of his hon. Friend (Mr. Grant Duff.) It was no doubt his duty to make the best case he could for the Administration he served. But if, with all his ability and assiduity, what they had heard that day was the best that could be said for the financial condition of India, how unsatisfactory was that condition, and how imperative was the duty of Parliament to ponder deeply its immediate causes and imminent consequences; not for the sake of India only, but of England likewise. When the present Government came into office the Duke of Argyll inaugurated his administration of the Department by in-diting an elaborate despatch, in which he laid it down broadly that the military expenditure had become excessive; that the financial burdens it entailed were incompatible with the public welfare; and that reductions to the extent of £1,600,000 ought to be forthwith begun. Had his Grace enforced his own behests, or had he not suffered the efforts made by the late Viceroy to comply with them to be systematically frustrated and foiled, there would have been no deficits to be made good and no pretence therefore for an income tax. But, unfortunately, this had not been done. Lord Mayo—as the published despatches of 1869 and 1870 proved—was even more anxious than the Secretary of State to cut down excessive expenditure. What he could venture to do, within the bounds of his own discretion, he did with promptitude and success; and for reductions on a wider scale he sent home not merely one or two distinct schemes of retrenchment, but no less than four separate plans for the purpose; all of which, on one pretence or another, were negatived by the India Office. After taking counsel with Sir Henry Durand and Sir William Mansfield, and many of the chief officers in subordinate command, the late Viceroy recommended that fewer English regiments should be kept in India, and that many native regiments should be disbanded. Sir William Mansfield did not hesitate to place on record his opinion, when holding the office of Commander-in-Chief, that the Army was greatly over-officered, and that, consequently, reduction might, without compromising its efficiency, be made in the staff. But when Lord Mayo recommended economy which would have had the effect of reducing materially the military patronage of the India Office and the Horse Guards, his advice was set at nought; and the actual figures in the public accounts for 1871, confess an Army expenditure of upwards of £16,000,000. Of four years talk about economy that was the sum. The Secretary of State had denounced it as unnecessary; the Governor General had deplored it as excessive, and had tried hard to get leave to cut it down. But there it stood unlopped of any material branch or bough overshadowing the industrious and peaceful capabilities of the land. When the Company bore rule, the annual cost of the Army was no more than £12,750,000. With the Mutiny came a period of exceptional increase; but in 1862 the normal condition of things as regarded expense had been resumed, and the charge was brought within the amount of £13,000,000 a-year. Peace had prevailed ever since then, yet here we had the actual outlay on bayonets and sabres last year, £16,074,000. There was, indeed, a promise in the current Estimates of a reduction of £250,000; but a similar promise had been held forth for the year ending in May, 1871, which had not been realized; and the unreliability of Indian Estimates was too notorious to allow them to reckon with any confidence of the hope now held out being realized. He (Mr. Torrens) had heard with astonishment the allegation made by the Under Secretary, that whatever the late Viceroy may have said in 1870 respecting the evils of excessive expenditure and the dangers of excessive taxation, there was reason to believe that he had altogether changed his opinions; and, because he had acquiesced in the prolongation of the income tax and the cost of the Army, that he had ceased to regard either with disapproval. He (Mr. Torrens) challenged the accuracy of these assertions, and, happily for the memory of his noble Friend, there existed ample means for their confutation. Sudden and unexpected as had been his removal from the scene of his official labours, he was not left without a testament or a political executor. Three months after his death, an elaborate account of his administration, and of the principles on which he was known to have acted, was prepared by Mr. John Strachey, who throughout had been associated with him in the preparation of measures, and the observation of their working. In the form of a Minute, that account had been submitted to the Supreme Council at Calcutta, and adopted by them without hesitation or reserve. It was to be regretted that so important and instructive a document had not been laid before the House with other Papers; but he held a copy of it in his hand, and from it he would read two or three sentences, which he thought would settle the question as to what were Lord Mayo's unchanged opinions. Mr. Strachey said—

"He repeatedly declared that it would be impossible to continue for any long period to tax the people of India for an Army which was not required;" and "it was with deep regret that he found himself compelled to maintain a military expenditure which he believed to be excessive."

The blue-book laid upon the Table contained not a syllable justifying the supposition that the late Governor General had recanted his former sentiments in favour of economy. Mutilated and mangled as was the Correspondence laid before them, it pointed the opposite way, and what it was produced for, side by side with unreduced Estimates, it was impossible for the uninitiated mind to conceive. For himself, he often wondered what the India Office meant by forcing on primary education and encouraging great masses of the people to learn how to read and write, when the inevitable result must be to let them know, as otherwise they could not, the capricious injustice with which they were ruled, and the deplorable neglect of its protecting functions by Parliament. What must be the effect in India when, through the columns of a free Press, it became known that not one day would Ministers grant for the discussion of the fiscal grievances and complaints of 150,000,000 of people, until the Session was virtually at an end? With what feelings would they learn that during the statement of the Under Secretary in bringing forward the Budget, and of his hon. Friend the Member for Brighton when impeaching it, not 30 Members were present? In the name of humanity, of policy, even of decorum, he would ask was this the way in which the Ministers of the Crown obeyed the statutable mandates of the Legislature, and vindicated the plighted word of the Queen solemnly given in 1858, that her subjects in Asia should be governed with the same consideration and regard for law as Her subjects in England? Could any demagogue scatter seeds so prolific of disaffection and distrust? The fault he found with this Budget was not of detail or of minutiœ but that it was, in truth and fact, no Budget at all. It left all the admitted-evils untouched; it left all the admitted perils unabated. What were the excuses set up by the India Office for retaining the Army of Madras at its present unnecessary-strength? For many years that Army had not seen a shot fired in anger. Recruited from a population born under a tropic sun, and inured to the higher forms of discipline by none of that experience which their comrades in the other Presidencies had frequently been exposed to, it was notorious that the native soldiery of Madras did not stand on an equal footing of hardihood with that Army of the North, who had to keep watch and ward along an extended frontier overlooked by the fierce tribes of the desert, and liable to be brought at any moment face to face with the well-armed highlanders of Nepaul. There were obvious reasons for not reducing the native forces of the North-West Provinces; there were no reasons equally obvious for maintaining the Southern Army of Madras. Yet whenever the Viceregal Executive proposed to cut down the latter the answer of the Secretary of State in Council seemed—either reductions pro rata in each of the three presidencies, or else no substantial reductions at all. There was, indeed, a dark and sinister reason suggested in one of the Minutes of the present Commander-in-Chief, which could not be passed over. Without provocation, as far as they knew, and apropos of nothing that went before, Lord Napier of Magdala, when called on to advise about reductions, deemed it his duty to remind the British Government that some day the Madras Army might have to encounter in the field the forces of the Nizam, whose dominions constituted the chief native State of importance in the Madras Presidency. For generations the Court of Hyderabad had lived in amity unbroken with the paramount Power in India. In the day of our sore trouble, when defection from British alliance would have been a serious matter, the Nizam remained staunch and unsuspected. His able Minister, Salar Jung, a man of rare qualities, natural and acquired, had been decorated and thanked by the representative of the Queen, and it was only the other day that from limited resources the sum of £1,000,000 had been voluntarily subscribed by the Nizam to make a railway through his dominions, on which our Government had set its heart. In the face of these facts, and in the absence of a single circumstance indicating insincerity or hostility, what could have been the motive which induced the Secretary of State to publish to the world such a suggestion as that which he (Mr. Torrens) had just quoted from a confidential paper by the Commander-in-Chief in India? Was this the way to cherish or to establish native confidence in British professions of forbearance or of good faith? The Nizam's territories were completely surrounded by ours. His isolated Army, however brave and well equipped, could not be a cause of serious anxiety or misgiving. Why, then, wantonly poison the relations heretofore subsisting between the deferential Court of Hyderabad, and the overshadowing might of the Supreme Council at Calcutta? For himself, he agreed in every word of the admirable speech delivered by Lord Mayo in the Durbar of Ajmeer to the assembled Princes of Rajpootana, in which he declared in terms of impressive earnestness, unqualified by any reservation, that "the days of annexation were passed;" and that the Imperial Sovereign would scrupulously recognize all the separate and local rights of native Princes, on condition that they kept the general peace, and ruled their people with justice and humanity. But how could Hindoo or Mahommedan chiefs rely upon promises thus emphatically made if they were forced to read them by the light of such commentaries as that which he had cited? For his own part, if he must choose, he preferred to ascribe the perverse maintenance of the Army of Madras on a scale which the general taxation could not afford, rather to the unworthy desire of keeping up patronage, than for unacknowledged purposes of further annexation. Closely connected with this subject, he wished to say a word or two as to certain alternative methods of economy which he knew had been sometimes recommended, but which he believed would prove most scandalous as well as most costly expedients in the way of retrenchment. He alluded to the design ascribed to former Viceroys of cutting down the pensions and stipends guaranteed to native Chiefs by express terms of Treaties, or by other public engagements on the part of the paramount Power. No saving thus effected could ever prove otherwise than ruinous in the long run as a financial speculation; and, looking back at the whole course of our dealings with the States and with the rulers of Southern Asia, it was deplorable to think that men were still to be found in high places who could think of harbouring such schemes. When the Crown took upon itself the Government of Hindustan, the chief plea urged was, that the territory acquired by the Company was grown too vast to be fitly or efficiently ruled over by an association of merchants. They lacked, it was said, the elevation of ideas, the breadth of view, and the magnanimity of soul which should animate and regulate Imperial rule. Part of their income was derived from the profits of indigo, silk, and tea—articles of comfort and luxury, ever increasing in demand, and all consumed within our own confines. But what had happened? Why, that the Government of the Crown, instead of trading in these articles, had taken to the monopolies of manufacturing salt, and cultivating and crushing opium The former were, at all events, innoxious trades, but they were permanent staples of much value; whereas nothing could be more uncertain, and few things more immoral, than the stimulated traffic to the amount of millions sterling in a drug which no human being pretended was useful as an article of popular consumption, and which many regarded as pestilent and poisonous. Nevertheless, well-nigh a fifth of the whole income of India was dependent on this miserable trade. What would be thought if the Chancellor of the Exchequer should come down to the House and propose that the Treasury should turn maltster and distiller? No qualm of political conscience would stand in the way; for the First Lord of the Admiralty had told them not long ago that the prosperity of the people was measurable and provable by the increased consumption of gin. Compared with reliance on a crop which an untimely shower might destroy, a revenue derived from corn would be tolerably safe; for with open ports, there was little danger of our being left without barley, or some other grain fit for the production of alcohol. Nor was the idea altogether new. In the course of the present Session it had been gravely propounded in "another place" as worthy of consideration by a noble Lord who had been Secretary of State, and who was the near relative and friend of one of the present Cabinet. But the instincts of right and of prudence he trusted would always withhold the House of Commons from the ruinous expedient of substituting Imperial trade for Imperial taxation. Such expedients were to be deprecated in every shape and in every form; for they were utterly at variance with every sound principle of national economy: and if they were wrong in England they could not be right in India. It was a grave error to suppose that the system of finance which incessantly landed the Indian Government in deficits only to be met by unpopular taxes or expensive borrowings, was no concern of the taxpayers of England. It was emphatically and essentially a matter of deep concern, even in a pecuniary sense, to the people of England; not only because of the innumerable ramifications of commerce, whereby the mercantile community in both countries were inextricably bound together, but because it was a mere illusion to suppose that the public credit of the Indian Department of the Government could be suffered to fail, while the domestic Department of the Treasury was able to make good the loss. It was all very well to talk of the separate Exchequers of Whitehall and Fort William; and it might be convenient and right as matter of account to keep up the distinction between the liability of Asiatic revenues to pay the interest on loans contracted for Asiatic objects, and the liability of the Home revenue to meet the charge for the European debt. But from the day when by statute our possessions in the East were taken from the Company of Merchant Adventurers, by whom they had been acquired, and incorporated as part and parcel of Her Majesty's dominions, governed by the advice of Ministers appointed by Parliament and by officers, civil and military, named and paid by the Crown, the possibility of maintaining in the last resort financial severalty and reciprocal unaccount-ability, came to an end. So long as they were able to wring from the natives of India money enough to pay the interest on the Government debt and the Government guarantee of Indian railways, the question in a practical shape might not command general attention here. But should the day unfortunately ever come, through the failure of the opium trade, or from political causes, that the credit of the Calcutta Treasury was shaken, in one shape or another aid would be prayed from the British Treasury, and aid would inevitably have to be given; for the Indian debt, whether funded or for public works, was not held by Indians or in India, but by Englishmen in England. Small as the exception to this rule had heretofore been, it was annually becoming less and less; and, sooner or later, they must make up their minds to an obliteration of a fictional severalty of the liabilities which both, as a matter of debit and of credit, were the same. A curious and instructive precedent existed in the records of Imperial finance for treating the subject in the manner he proposed. When Mr. Pitt sought to persuade the taxpayers of Great Britain to agree to the absorption of Ireland into the corporate unity of the Empire, he thought it expedient to set up the whimsical form of two separate revenues, two separate debts, and two separate Exchequers, under one Crown and one Parliament, For 16 years after the Union this twofold mechanism was kept going. But money could not be borrowed on Irish account at the same rate as on English; and the Revenues of a disaffected and dejected community could not be relied on with certainty to provide for the Vice-regal expenditure, military and civil, and to pay the interest on the debt which the Government continued to contract in Ireland. In 1817, the farce could be no longer tolerated, and a statute was passed consolidating the two debts and the two Exchequers, even though, for some years longer, the two Revenues were not assimilated. He (Mr. Torrens) believed that what had been done with regard to Ireland would have to be done with regard to India; and if it had the effect of rousing the Parliament and people of this country to a livelier interest in affairs now unhappily too much neglected, he thought it would materially tend to the consolidation and the safety of our Oriental Empire. There was a feature in the present Budget wholly novel, but one which deserved to be noted with jealous care. He meant the omission of certain large items, such as those for education and the administration of justice, which it was proposed to hand over to the provincial authorities, with an allotment of about £4,000,000 in all, from the general Revenue, upon the condition that should the sums thus allotted prove insufficient, local cesses and taxes should be imposed to make up the deficiency. This was called a measure of financial decentralization; and if the provincial or municipal councils were really free to choose what they might do, and how to do it, he, for one, would not object to the change. But constituted as these bodies then were, he was certain that the amount of expenditure and taxation would be really fixed by the official subordinates of Government who everywhere dominated in them. The danger was, that thus imposed the taxes in question would be less regularly and less willingly paid than they had been to a less amount under the Supreme Council. Meanwhile, the items would be withdrawn in the annual Statement from the cognizance of Parliament, and another step might be made in the wrong direction—that of irresponsibility. They could not regard the normal condition of native opinion as safe or satisfactory. Last year, the Under Secretary had tried to lull them to sleep by assurances that India was contented and calm. In the interval that had since elapsed, Chief Justice Norman had been assassinated in broad day on the steps of the Court House; the Viceroy had been struck struck down in the midst of his guards; and to quell a tumult in a remote and obscure district, it had been declared necessary to blow from the mouths of guns 49 disarmed prisoners without trial. Such a state of things one might have thought would have deserved the consideration of Parliament for, at least, one summer's day while Parliament was still at the full. But Ministers had overruled all remonstrance and importunity on that score. Something else was always declared to have a prior claim to legislative attention; and the Petitions and complaints of 150,000,000 of people were not worth being listened to until there were scarce a quorum left to listen. In his judgment, this was a sad and disreputable spectacle; and if next Session anyone would move that the first Supply night after Whitsuntide should always be devoted to the Indian Budget, he would be happy to second the Resolution. He trusted that next year a real and not a sham Budget would be submitted, and that the example of England as to how the accounts of a great country might be safely conducted would be followed in India.

thanked hon. Gentlemen for the excellent speeches they had made on this subject. He could not, however, support the Motion of his hon. Friend the Member for Brighton (Mr. Fawcett). He (Mr. Fowler, admitted that it would be well if an income tax could be dispensed with in India. People would be glad to get rid of it in this country; but it having been reduced to a moderate amount, there was no hope of its abolition, and though its pressure was probably more keenly felt in India, the outcry against it appeared to proceed from Europeans rather than natives. Opium was, however, a more objectionable source of Revenue, both on financial and moral grounds. Mr. Laing and Mr. Massey looked upon the Revenue derived from opium as satisfactory, because, in their opinion, it was permanent. But to his mind it was most precarious, for what guarantee had we that the Chinese might not grow sufficient opium for their own consumption? But apart from such considerations, he considered that the raising of our Indian Revenue by this means was one of the most disgraceful passages in the history of England. The highest authorities had condemned it. We raised our Revenue by the sale of a poisonous and deleterious drug to another country, though we did not allow the Indian subjects of Her Majesty to use it. Was that creditable to us as a civilized and Christian people? Was it right that we should get money into the National Exchequer derived from the poisoning the natives of a friendly and neighbouring country? To such a question it seemed to him that but one answer could be returned. In regard to the tax upon salt, the moral objection was not so strong; but to say the least, it was very unfortunate that a tax should be levied which occasioned such great hardships on the native population. He knew that it was said that it was the only form in which they contributed to the Imperial Revenue; but on the same ground that in England the Corn Laws were objected to—because they were a tax upon the food of the people—must the salt tax of India be condemned. It was an impost on a necessary of life, and he deeply regretted that no better substitute for it could be found. The hon. Member for Brighton had referred at great length to the question of public works in India. It certainly was disappointing that so many of those works were unproductive; but it must be remembered that they had been undertaken for the good of the people of India, and that in the long run they could hardly fail to be highly beneficial to the native population. In India, as in England, the railway enterprise had doubtless been costly; but that was an evil that could hardly be avoided under the circumstances. He joined with the hon. Member for Brighton in regretting that the Indian Financial Statement had been deferred to so late a period of the Session. The House ought to give a practical, not a nominal, attention to the affairs of India, or the happy consequences anticipated from the abolition of the East India Company would never be realized. He hoped that in future years the Statement of the Indian Minister would be made at a much earlier period.

said, that the evidence hitherto given before the Committee on Indian affairs had been so contradictory that he should make no reference to it on the present occasion; but it would be very unfortunate if the fact that the Committee was sitting was held to exclude a full and fair discussion of Indian topics by the House. The income tax had undoubtedly occupied the minds of our Indian subjects beyond any other question. The Under Secretary had spoken rather disparagingly of the feeling in that country against it, stating that while there were three classes who were opposed to it—namely, the Europeans, the great landowners, talookdars, and zemindars, and the leaders of public opinion, the masses of the people had no feeling on the question. But could the hon. Gentleman have said anything stronger in condemnation of the tax, and did either the Irish Church Bill, the Reform Bill, or the Ballot Bill come before the House of Commons backed by any stronger support? It might be taken for granted, he thought, that the tax was viewed with profound dissatisfaction through the length and breadth of the land. When the income tax was originally levied by Mr. Wilson, the people generally believed that it was levied upon them for the attempt made during the Mutiny against the Government. But when they saw it levied without any distinction they then felt that it was an imposition. It was the fact in India, that any person who went to serve a Government schedule against anyone made some claim on his own account—it might be a handful of rice only, but still he obtained something from those to whom he was sent. This gave rise to great oppression. The tax was also made the means of gratifying religious spite, which could be easily done by those who had the charge of the schedules. It had also a demoralising effect, because the vice to which the people of India were most subject was the vice of deceit, as there was a system going on throughout India of double book-keeping, the false set of books being intended for the evasion of the income tax. According to the Report of Sir Richard Temple, this tax was forced on the people of India for the sake of obtaining a paltry sum of £500,000. When Government was dealing with a Revenue of £50,000,000, it struck him as but poor financiering not to be able to meet £500,000 either by additional receipts or reduced expenditure, so as to get rid of a tax against which there was so much strong feeling. If they deducted the amount derived from the income tax from the current Revenue, there would be a deficit of £250,000, and this income tax was levied to create the deficit into a surplus. Sir Richard Temple had estimated the receipts at too low a rate. Not only had he done that, but in the case of opium he had estimated for a much lower amount than it would produce. He had better have risked a deficit than forced on the people so unpopular a tax. Government had been extending the cultivation of opium in Bengal, and he believed that the income tax had been levied simply and solely for the purpose of developing and increasing the opium cultivation in India. He was sure there was not one who had the slightest wish that the money of the Indian or the English people should be invested in the furtherance of the opium trade. What would they think if the Chancellor of the Exchequer put on an income tax of 1d. in the pound to form a profitable investment in some foreign gambling tables? Yet the case was really not very dissimilar. The moral of the Motion of the hon. Member for Brighton (Mr. Fawcett) was that taxation in India had increased, was increasing, and ought to be diminished. Now, he could not support the proposition that taxation was increasing. The taxation of India had been placed on a sounder basis. The greatest amount of the Revenue was derived from the land. At the present moment the cultivator did not pay more than one-sixth of the produce of his farm to the State; whereas under a native Government he would have to pay considerably more—probably upwards of one-half. But there was something more to look at, and that was the purpose for which taxation was levied, and the purpose to which it was applied. In former times the whole of the taxation beyond what was necessary for the military keeping down of the people was devoted to the luxury, the extravagance, and the sensuality of the man at the head of the Government; but now the Revenue raised from the people of India was devoted to the development of the resources of the country. Although he did not agree with the hon. Member for Brighton that taxation was increasing, he believed that more attention ought to be paid to a re-organization of the resources of India. The two principal subjects which had been alluded to in the course of this discussion were the opium Revenue and the salt tax. With regard to the opium tax, he thought it most objectionable. At the same time, we could not adopt the principle of Free Trade, because that would only increase the amount of demoralization. It was a question to be seriously considered whether it would not be possible to alter our system of traffic in this drug in such a way that we should only levy a duty on the opium and not be partners and confederates in the cultivation of it. We advanced money to the cultivators of opium, and obtained a profit on that cultivation. The Revenue derived from the Bombay trade was £2,500,000, and the expenses were nominal. The Revenue derived from Bengal varied from £3,500,000 to £5,250,000; but this amount was only obtained by means of investments amounting to something like one-half of the revenue eventually received. Both the Chinese and the Burmese people suffered very much by our encouragement of the opium traffic. He believed that the only way in which they could avoid responsibility in the matter was by acting as collectors of an Excise duty, in which case he thought they would get as large an amount of revenue as they did now. The only other question he wished to touch upon was that of the salt duties. It was said that those duties could not be raised, and in a great part of India that was, no doubt, true; but he felt sure that great economy might be exercised and a much larger Revenue obtained if the salt duties were equalised all over India, instead of differing in the various Provinces. If that were done we should not need to keep up the large and expensive staffs which we were now obliged to maintain in order to prevent smuggling. One other point on which he wished to say a word was with regard to the Government of India itself. That Government was often spoken of as though it consisted of a body of men half of whom were imbeciles, while the other half had no object in life except to "shake the pagoda tree." As a matter of fact, however, there had never been a Government in India which had shown more intelligence and more disinterestedness than the Indian Government of the present day, and the one great feature which had characterized them had been their respect for private rights and property.

The hon. Member for Brighton has drawn a gloomy picture of the financial condition of India; he has used darker colours than I should have done, but I believe that the general outline is correct. He seems, however, to have laid too much stress upon the evils of what may be called the Imperial income tax in India. As it now stands, at a greatly reduced rate, and with a minimum for assessible incomes of 1,000 rupees (£100) a-year, it is by no means open to the same strictures which were justly passed upon it when it was first imposed. On the other hand, the so-called "non-agricultural cess" of Bombay has intensified all the evils of the old income tax. It is a local impost of 1 per cent upon all non-agricultural incomes above 50 rupees (£5) a-year. Now, 50 rupees is as small an income as it is possible for a man, having anyone dependent on him, to live upon, even in India; and the total estimated returns from this tax are only six lacs of rupees (£60,000), paid probably by about 600,000 taxpayers. Thus for a paltry sum a great hardship is inflicted upon a large population, to to say nothing of the power of oppression placed by this tax in the hands of subordinate native officials. Altogether, it appears to be certain that the limit of taxation in India has been already reached, and the one thing needful in order to make the two ends meet is retrenchment. There is no danger in India, either political or military, except such as is involved in the financial difficulty. With the increasing price of the necessaries and luxuries of life, we cannot attempt to effect any considerable reductions of the salaries or pay of those whose services the Indian Government really requires. On the other hand there are changes, now rendered practicable by the progress of events, which would result in very large saving of expenditure. Now that our dominion extends throughout India, and the various Provinces are connected by telegraphs and railways with the central Government, all necessity for independent Governments of the minor Presidencies has passed away. The Governors of Bombay and Madras might very well be placed on a similar footing with the Lieutenant Governors of Bengal, the North-west, and Punjab, while their functions, and those of their Councils, should be executive merely, and not legislative. The existence of separate Commanders-in-Chief with their staffs in Bombay and Madras seems to be productive of great expense without any military advantage whatever. The House is perhaps not aware that these officers command the native forces only, and have nothing to do with the European troops. Then a saving might be effected by a revision of treaties with native Princes, under which treaties large bodies of auxiliary troops are maintained in various States. In many cases all necessity for these troops has passed away, and they are rather a source of inconvenience and danger. For example, in Cutch, the Rao is bound to maintain a regiment, intended originally to be available against the Ameers of Scinde, now one of our best affected Provinces. In all probability these native Princes would pay us considerable sums in order to be relieved of such burdensome obligations. Then considerable saving could be effected by a more general employment of natives in the higher branches of the public service. A certain number of Europeans in the Indian Civil Service is essential in order to maintain the high tone for which that service has long been justly famous, and it is also essential for this purpose—that the European element should be the very best obtainable. On the other hand, as Europeans are expensive, there should not be more than are absolutely necessary, and the burden of proof should be thrown upon those who would exclude natives from any appointment. At present, there are a few native gentlemen in the covenanted Civil Service, but these are paid at a needlessly high rate, as the best native talent can be secured on the spot at far lower rates. I would therefore suggest that a Civil Staff corps should be established, of limited numbers, and selected by competition as at present; that these Civil officers should receive fixed rates of pay, according to their rank in the service, whether specially employed or not. Then, all Civil appointments should be thrown open, and be paid at such fail-market rates as would secure the services of good native officials. When it was thought necessary to appoint a British official, he would draw the pay of the appointment, together with the staff pay of his own rank, while an outsider, native or European, would draw the pay of the appointment only. I believe that a similar system prevails in the case of engineers in India; an officer of Royal Engineers drawing the pay of his rank in addition to that of any appointment which he may hold. Under such a system economy might be combined with efficiency, and native officials might be amply paid without giving such salaries as would be objects of desire to influential, but ill-qualified Europeans. At present the Indian Governments are subjected to considerable pressure on behalf of gentlemen from England, who are not members of the Civil or military service, and are unacquainted with India. There are other points to which I would gladly refer; but I will content myself with offering these suggestions as to departments in which it seems practicable to combine retrenchment with reform.

Sir, I fear that, notwithstanding the very able and interesting speech of my hon. Friend the Under Secretary of State, and the able and incisive speech of the hon. Member for Brighton (Mr. Fawcett), there cannot be, on the present occasion, a full, satisfactory, and exhaustive discussion of the Indian Budget. Some hon. Members, who take an interest in the subject, and who are best entitled to speak upon it, have already gone away—as, for instance, the hon. Members for Gravesend (Sir Charles Wingfield) and King's Lynn (Mr. Bourke), and, in particular, the right hon. Gentleman the Member for North Devon (Sir Stafford Northcote); and few, I suppose, will give the same attention to it as they would have done had it been introduced at an earlier period of the Session, as was the case last year. This year, no doubt, the lamented death of Lord Mayo naturally caused delay; but next Session the Government will, I hope, revert to an earlier period, or rather I trust, if the present financial year is to be maintained, that some day between the 1st of May and the 1st of July will be fixed for the introduction of the Indian Budget, and that, in view of the great importance of the subject, nothing will prevent a day being allotted to it in that part of the Session. But I must own I see no reason why the suggestion made some time since by my hon. Friend the Member for Gravesend should not be carried out, and the Indian financial year be made to close on the 31st of December. The financial year would then coincide with the agricultural year, for the Kharif, or autumnal crop, is all got in by the 15th of December. If that arrangement were made, the Indian Budget might be brought in in April. There is another matter which, with all deference to the hon. Member for Brighton, should, I think, tend to restrict discussion on the present occasion—I mean the prolonged sitting of the Indian Finance Committee. That Committee has accumulated an amount of evidence which it will take months to digest; and I should think most persons would hesitate to express opinions which may be modified, or even completely altered, by further evidence, or by a more full consideration of that already adduced. It requires, too, almost an undue confidence in one's own views to assert them now, when they may turn out to be opposed to the general, or even to the unanimous voice of the Committee. I shall, therefore, reserve my opinion on most points connected with Indian finance; but there are one or two on which I feel bound to make a few observations. In the first place, I must say that I altogether dissent from the very unfavourable opinion which has been expressed in some quarters regarding the general character of this Budget. For instance, The Friend of India of the 12th of April last tells us that—

"In commercial circles in Calcutta there is but one opinion of the Budget of 1872–3, and that is, that it is the very worst that Sir Richard Temple has delivered."

The worst Budget, in my humble opinion, would be that which showed the greatest deficit. But, certainly, a Budget like this, which while showing a surplus of £237,000, proposes to meet the Extraordinary Expenditure of the year without raising 1s. by way of loan, and which announces a cash balance of £24,346,015, can hardly be a very bad one, if the figures on which it is based be correct. But the truth is, that the unpopularity of the present Budget—assuming it to be unpopular—is owing to the retention of the income tax—that bête noire of the Anglo-Indian press. That tax is now reduced to two pice, or 1/96th of the rupee—a little more than 1 per cent on all incomes of 1,000 rupees, or £100, and upwards, and will this year produce, it is estimated, £570,000. It will affect only 180,000 persons, or about 1 in 800 of the population of British India. Such a tax can hardly be very obnoxious to the masses of our Indian fellow-subjects, and it appears to me not quite candid to represent it as being so; but, at all events, pending the decision of the Select Committee, I think Sir Richard Temple was quite justified in retaining the tax on its present footing. As to the objections which have been urged by the hon. Members for Brighton (Mr. Fawcett) and Tyne-mouth (Mr. T. E. Smith) against this tax, they maybe classed under four heads—First. It is said why have this tax, when it yielded only about £500,000 sterling? That argument reminds one of the old saying—

"My wound is great because it is so small."

But I must remind the objectors that even £500,000 is not to be swept off from the receipt side of the Indian Budget, until provision is made, in some way or other, to meet the deficit. The next objection was, that this tax led to a deplorable amount of extortion on the part of the native collectors. The answer to this is, that there is no tax collected in India with respect to which attempts at extortion are not made. But a great deal of that extortion is now shut out by the minimum of taxable incomes being raised to 1,000 rupees, and severe repressive measures would soon put down the scandalous propensity of the natives to squeeze their poorer fellow-countrymen. The third objection is one which I must admit to have considerable weight—and that is, that while Europeans are led by a sense of honour and religious feeling to return their incomes correctly, the rich natives, not being swayed by those influences, systematically deceive the Government collectors, and defraud the Revenue. I cannot but acknowledge the truth of these assertions; but I do not think this objection is by itself of sufficient weight to oblige us to discard the income tax, when there are other no less weighty considerations for retaining it. As to the fourth objection—that it induced the natives to deceive, and encouraged them in keeping double books of account, one set for the Government inspection, and the other for themselves—I cannot attach much weight to that; for I regret to say that there always has been a class of men amongst the natives who are not at all ashamed of dissimulation, and who cannot be touched with a sense of shame respecting such matters, because there is nothing in their creed which denounces such frauds. It was, however, desirable to retain the income tax, because it was the only tax that could reach certain classes of rich natives, who, while possessing—some of them—millions of rupees, lived upon rice and a few condiments, went about half-naked, and spent nothing on taxable articles except salt. Another important consideration is that the income tax is the only tax that admits of ready expansion in case of any dangerous emergency. Having passed through much odium in introducing the thin end of the wedge, I think it would be very imprudent to abandon all at once, in consequence of a cry which has lost its vitality, a tax which might be our only resource in the event of a sudden and critical war. Further, I must say of this last Budget that, setting aside some minor defects—such as a not very lucid arrangement, and the incessant repetition, in round numbers, of every set of figures given—which seems to me a sure way to beget inaccuracies rather than precision—it is by far the best and most encouraging Budget that has appeared in the last seven years. But to whom are we indebted for its best features? I am sure they would be ascribed by those who know most about it—by Sir John Strachey, and by Sir Richard Temple himself—to Lord Mayo. In the three years before he became Viceroy there had been a total deficit of £8,200,000, of which only £2,000,000 were for Extraordinaries. The record of his administration will show that to his invincible determination to bring the public expenditure within the public income, and to nothing else, we are indebted for the announcement of a surplus in the present Budget. But, Sir, I go on to notice what is to me the most unsatisfactory part of this as of every Indian Budget. It is that which may be called the opprobrium, and in one sense the glory of Indian Finance Ministers—the opium revenue. Certainly, if ever there was a glaring instance of the uncertainty of this Revenue it was exhibited in the year just ended, 1871–2. In the previous year opium played, indeed, its usual rôle, for it changed the Budget surplus of £163,440—I am using the figures used by Sir Richard Temple—into a surplus in the Regular Estimate of £997,100, and an actual surplus of £1,482,990; but this change was effected in a sober, matter-of-fact manner, simply by the crop turning out larger than was expected, and thus yielding £1,074,519 more Revenue than was estimated. But in 1871–2 the alternation was far more startling, for the crop in Bihar fell off 14,743 chests, or 26 per cent, and yet the actual revenue from opium exceeded the Estimate by £1,845,100. Of course, this could be, and has been, explained. It being known that the crop was deficient, prices rose, and Government, having a large reserve stock from previous years, were able by watching the market, and feeding it cautiously, to sell as much as they wished at the enhanced prices. On the other hand, as the crop was deficient, the estimated sum for labour was not required, and thus £491,600 was saved on the side of expenditure. Still the fact remains, that the Finance Minister, with all the facilities for calculation which his position gives him, is unable to tell within nearly £2,000,000 what he will get from opium, the second largest source of Revenue that India possesses. Hitherto this uncertainty has turned out well; but it is an amphisbœna with two heads, and one may some day wound as the other has caressed us. In the Budget of 1872–3 the opium revenue is estimated at £1,553,400 less than the sum it reached last year; but all that can be safely predicated of these figures is, that from some cause or other they are sure to be wrong. Indeed, the Finance Minister himself has expressly told us that he can form no opinion about opium likely to be correct, for at page 7 in his Statement for 1871–2 he says—

"The improvement of the Indian opium trade in China must, of course, have had its causes, which causes may be connected with the condition of the indigenous culture of the drug in China itself; but what exactly those causes are I hesitate to state to the Council. I may have my opinion and conjectures; but I really do not know, and I have not heard of any one who does know."

Nothing can be more candid and convincing than this declaration of ignorance, and after hearing it, it is impossible to regard the estimates of opium revenue as anything better than guesswork. In short, opium is the real disturbing element in Indian Budget calculations; and while some persons may look for the mistakes which have occurred in one direction, and others in another, I am disposed to think that we shall never have a correct estimate as long as this drug continues to be one of the chief sources of Revenue. The great uncertainty of this large branch of Revenue must, I should think, force upon all minds the necessity of preparing for a sudden deficit as large as, or larger than, the surpluses which have hitherto accrued. I think, too—and here I agree with the hon. Member for Brighton—that it will be admitted, with equal unanimity, that this preparation can be made in only one way—that is, by further reductions and economies; for it is impossible to devise new taxes, the raising of which will not cause disaffection too serious to be voluntarily encountered. And it is only too true, as is here said at page 27 of the Financial Statement, that—

"The State income fails to evince that elasticity and tendency to rapid growth which we might desire to see, and which would be looked for if the requirements of progress in the expenditure are to be met."

Where, then, are these economies to be effected, in face of the continual rise of prices, and of the incessant extension of Public Works, which are called reproductive, and may be so as regards some people, but which, do not recoup Government by bringing into the Public Treasury as many rupees as they extract from it? After repeatedly examining the items of expenditure, I see nothing which admits of considerable reduction except the cost of the native Army, and there, I think, reduction should begin forthwith, not by all at once discharging a number of men to swell the ranks of discontent, but by stopping recruiting until our native Army of 130,000 men is reduced to 60,000. At the same time, I think we might fairly say to the three great Princes of Central India—Sindhia, Holkar, and the Nizam—"You are protected by us from foreign invasion; your forces are considerable, and you are absolutely safe from aggression—we shall look to you to take part in maintaining the internal tranquillity of India." I am sure we might safely rely on the loyalty of those Princes; and I believe that to place confidence in them, and to give them something to do in the general administration of the Empire, would bind them to us. It is, at all events, certain that the European force we have in India, supported by the 20,000 Englishmen employed there in other professions, is quite irresistible, and that from the Russian frontier to the sea there is nothing that could stand against it. What, then, is the necessity for a great native Army, when the duties which were once performed by sepoys are now sufficiently discharged by police? Rather, I would ask, is there not more danger than utility in such an Army? I say that there is, and must be; for without entering into the question of the fidelity of native troops, it is certain that if we go on taxing the people of India for an Army which is not required we must always be in a financial difficulty, and a financial difficulty will sooner or later beget a political difficulty. This, I believe, was the opinion of Lord Mayo, and I understand he advocated a far larger reduction of the native Army than has yet been effected. I appeal, therefore, to his authority in support of these views. On the subject of the Army, I will only add that the reply which is given at pp. 11 and 12 of this Financial Statement to Sir George Balfour's letter, published in The Times of April 13 last year, does not seem to me at all satisfactory. The fact remains that the expenditure on the Army in India is not less than in 1862–3, though troops that cost fully £2,000,000 have been reduced. The next thing I wish to notice is a statement, at page 29 of Sir Richard Temple's speech, that—

"The increase of £44,000 in political agencies is partly owing to important negotiations respecting territorial boundaries with the Shah of Persia."

Now, at page 42 in the Home Accounts I find that the expenses of General Goldsmid's mission are estimated at £11,747, which is but a fourth of the above sum. I should be glad, therefore, to know whether any additional charges have been incurred; and, if so, to what amount? At all events, it would appear that in 1872–3 Persia will cost India at least £30,000, reckoning the usual quota of £12,000 for the expenses of the Mission at Tehran—the almost equivalent sum for General Goldsmid's mission—the cost of the Residency at Bushahr, and the other charges usually defrayed by India. This is a fact which I think should be carefully recorded. One word now about railways, regarding which, at page 32 of the Statement, we read—

"On the whole, the conditions of the guaranteed railways during the year have added one more to the many anxieties of Indian Finance."

Sir, I must say the anxieties respecting State railways seem likely to be at least as great as those attaching to the guaranteed. We are told, at page 16, that—

"There has been expenditure on the lines between Lahore and Pesháwar, Delhi and Rewri, Agra and Ajmír, Multán and Kotri, Nîrwar and Indor, and Dharwar and Karwar."

I fear that the lines between Lahore and Pesháwar, and Multán and Kotri—which are by far the longest and most costly in this list—will for years to come entail a considerable loss; but I admit them to be necessary for political reasons. I do not, therefore, complain of their construction, nor do I find fault with their being made on the narrow gauge of 3 feet 3⅜ inches; because as these lines touch the frontier, the same reason may be urged for making them on the narrow gauge as for its adoption on similar lines in Russia—namely, that an invading Army would have the inconveniences of a break of gauge, and the resources of a foreign rolling stock would be unavailable in passing the frontier. But what I do think admits of doubt is, whether it was prudent to adopt the narrow gauge on the other lines I have mentioned which belong to the internal railway system of India, and more particularly on one which has been, for reasons to me unknown, passed over in this Statement—namely, the line from Khandwa to Indor, 84 miles in length, and for the extension of which to Ni-mach and Ajmír surveys are being made. Now this is a very important line, as it will shorten the distance between Bombay and Delhi by 300 miles, and a break of gauge upon it will be a most serious evil. Supposing, for instance, there was an urgent necessity for sending 10,000 men from Delhi to Bombay, or vice versâ, then, according to the calculation of one eminent engineer—Mr. Bidder—you would require changing stations for trains 10 miles long, and on such vast platforms the delay and confusion would be intolerable; and, besides, for this comparatively short narrow gauge line it would be necessary to have 2,000 carriages. On the other hand, the saving, as far as Indor at least, would be very small; and though in the level country it would be considerable, the question remains—could not nearly all that saving be effected without any alteration of gauge by using light rails and light rolling stock? The most eminent engineers affirm it to be so; and I should be glad to hear from my hon. Friend the Under Secretary of State why their advice has been disregarded? Sir, I have only one other point to mention, and that is the cash balance. I have seen it stated in several journals that our Indian cash balances are excessive, and certainly £24,346,015 is an enormous sum. It is true that this may not be a perfectly correct statement, for serious mistakes were often made by the officials at the head of the provincial treasuries in reporting their balances. So much was this the case, that Lord Canning sent round a circular calling on the Revenue authorities to attend to their addition. But assuming the amount to be correct, it must be remembered that in August, 1873, we have to pay off £5,000,000 of 5 per cent debentures, and in April, 1874, £12,000,000 of East India stock. In view of such liabilities, I think it highly desirable that the cash balances should be maintained at the highest figure possible; and without examining the advantage which Sir Richard Temple says trade derives, from our balances being so large, or inquiring whether that is a legitimate ground for keeping them so, I think that with reference to the enormous sums we have to pay before very long, and the desirableness of maintaining our credit at the highest point, in case we should have to borrow, that it was wise to show the cash balance which appears in the present Budget.

said, when he looked at the clock and remembered how many Gentlemen were kept waiting merely to make a House, he had some hesitation in taking part in the debate, but he felt it necessary to urge the claim of India to a fuller share of representation in Parliament. He thought it was desirable that our relations with the native Princes of India should be put on a better footing than at present, by something like the German Confederation being introduced, with the view of getting them to work along with us in the administration of the country. The Customs duties being levied for the defence of the whole country, ought so to be applied that native States should have the benefit of them as well as the territory under direct British administration. There should be only one Legislative Council, and England should be made to bear its share in the expenses of the Government.

entirely concurred with the hon. Member for Brighton (Mr. Fawcett) in his condemnation of the income tax as thoroughly opposed to the feelings of the people of India, and thought that, considering the small amount gained and the hardships arising from the system of collection, a substitute might be found for that impost. At the same time, he could not agree in the hon. Member's tirade against the only policy by which India could have been covered with railways. He instanced the deplorable results of competition in the construction of railways in England as powerful reasons in favour of the principle on which the Indian railways had been made.

argued that without the income tax it was impossible to have a just system of taxation in any country, and above all in India, where the existing taxation pressed with unusual weight on the very poorest classes of the community, and really exempted the richest.

did not think that in India the income tax could be made a fair and equal burden upon all classes. He hoped this would be the last time that so important a question as the Indian Budget would be brought forward at a Morning Sitting within the last few days of the Session.

said, that he had been anxious to press the matter to a division; but it would not be respectful to do so in a House of about 26 Members. He would, therefore, withdraw the Amendment.

said, it would not be expected of him that, at so late an hour, he should enter into the various matters which had been referred to by the hon. Gentlemen who had taken part in the debate. Much had been said about the inconvenience of discussing the question of Indian Finance at so late a period of the Session; but although he should prefer to have the discussion at an earlier date, yet he thought that the discussion of the present evening was the most interesting one at which he had ever assisted. He believed that next Session they would have the Report of the Euphrates Valley Committee, and he would then be able to state the views of the Government upon the subject.

Mr. Chairman—Before you put the Question, I should like to ask the Under Secretary of State for India a question relating to one item in these Finance and Revenue Accounts now before us. In the details of expenditure for the year 1870–71, I see at page 33, under the head of "Allowances in accordance with Treaties or other Engagements," that in the Province of Bengal credit is taken for £52,306, paid to the Nizamut Stipend Fund, among the items of the allowance made to His Highness the Nawab of Bengal. On referring to the Estimates for Bengal for this year I cannot find any similar credit. Perhaps the hon. Gentleman will be kind enough to inform us as to the nature of that Fund, and where credit is taken for it in the Estimates now before the House?

The hon. Member for Kilkenny County asks me what is the nature of the Nizamut Stipend Fund? For a considerable period of time it has been the habit of the Indian Government—not in accordance with the provisions of any treaty or agreement, but because it considered, on the whole, it was the right and the wise thing to do—to allot a sum of about £170,000 a-year to what it has been in the habit of describing as Nizamut expenses. These Nizamut expenses consist partly of a sum paid personally to the Nazim, partly of other sums paid to the Nizamut family, and partly of sums paid to a variety of other persons. But after all these expenses have been paid, a certain sum remains unpaid, which it has been the habit of the Government of India—and will continue to be its habit—to consider in each year as a liability which the Government of India will, one day or another, be obliged to liquidate. That money it has been in the habit of describing as passing into a fund; but that fund has never had any real actual existence at all. That fund is simply a book-keeper's expression for the aggregate liabilities which the Government of India have conceived they may sometime or other be liable to pay for the purposes of the Nizamut family. What those purposes may be, will depend entirely upon the view that the Government of India shall take of the whole sum of its relations to the Nizamut family, at the time when the present head of that family shall cease to exist. I do not know whether there is any other question the hon. Member would like to put to me?

I must apologize to the House for pressing questions at this late hour, but the answer of the hon. Gentleman is so very unsatisfactory about this Fund being a "book-keeper's expression," and on other points, that I must really beg the attention of the Committee for a few minutes to this matter. I intended to have brought the subject fully and more properly before the House at another period of the Session; but from the autocratic monopoly of time, which the Government have assumed, independent Members have not had the slightest chance of bringing forward any Motion. I have taken the trouble of going very carefully through the official accounts of the Bengal Nizamut for the last 12 years, and I should like—because this is really a serious matter—to make one or two observations about them. I hold in my hand a statement or analysis of these Nizamut payments extracted from the accounts annually laid before Parliament from 1859–60, which was the time when the Queen's Government came in and the East India Company went out; and one of the first items is a sum of £15,048 put down as paid to Munnee Begum, who died in 1813. That item is continued every year up to 1864–5. In 1865–6 there is nothing; but in 1866–7 it figures at £45,144. Again, in 1867–8, there is £15,048, the same in 1868–9; and in 1869–70, £13,794. But in 1871–2, for the first time, we find £52,306 credited to the Nizamut Deposit Fund. Well, I have also found that this Fund is not by any means represented by that small sum which I have mentioned, but amounts, in round numbers, to £850,000, mostly unaccounted for. I will be very brief with the Committee; but I must call attention to the proceedings of the India Finance Committee which is at present sitting upstairs, and of which the right hon. Gentleman the Chief Commissioner of Works is Chairman. They had under examination recently Sir John William Kaye, who is, I believe, the principal officer in the India Department. The Chairman put the following Question:—

(No. 7,328.) "With regard to the Fund which you have just mentioned—the Nizamut Fund—will you explain what is the amount of that Fund?—Yes; there is a sum of 20 lacs, 85,000 rupees"—

that would amount in English money to £208,500—

"which has been invested, and, out of the interest of the sum thus invested, our own British establishment, which we call the 'Agency,' is paid."

Of course, there is no objection to that. But he goes on to say—

"Then there is another sum of between 10 and 11 lacs of rupees, which is kept in hand to meet extraordinary unforseen claims—according to the statement here, it is 10 lacs, 73,508rupees"—

which would am out to £107,350.

"These extraordinary expenses are the marriages of daughters and repairs to public buildings, and things of that kind." Then it goes on to say—"The other sum of 55 lacs, 33,261 rupees—referred to in the India Office despatch as accumulations, has, in reality, never been paid into any separate fund."

Now, the hon. Member for Brighton (Mr. Fawcett) puts a question to Sir John Kaye, as follows:—

(No. 7,329.) "When you speak of the Nizamut Fund, £850,000, what you mean is that there is a fund that ought to exist to this amount, but that £550,000 of that has been spent; and therefore instead of being a fund, so far as this amount is concerned, it is simply a liability?—It is simply a liability. The Government of India described it in past days as a book-debt."

I ask the attention of the Committee to this Question—

(No. 7,331.) "But to look to the future financial position of India, India is £550,000 worse off, and will be worse off, of course, than it, would appear from the statement that this £850,000 is a fund?—Most certainly the Government of India owes that amount to the Nizamut family."

Then the Chairman comes to the rescue, and asks this Question—

(No. 7,332.) "The Government of India does not consider itself under any obligation to account for that £550,000?—The Government of India do not consider themselves under any obligation to pay interest on that fund; but they do consider—because they cannot help it, by the terms of Sir Charles Wood's despatch—that they must devote the whole of that money, in some form or other, to the benefit of the family.

(No. 7,333.) "I understood that Sir Charles Wood's despatch was a suggestion, not an order?—I beg your pardon. It was, in the most emphatic terms, laid down in Sir Charles Wood's despatch that the whole of that money was the property of the Nizamut family; but it was suggested that the accumulations in that fund might be made a permanent provision for the family."

Very well. There is nothing in this Revenue Statement in 1870–71, or in 1871–2, to show the existence or disposition of this £550,000. From another source we are informed that there is a deposit of £550,000 which appears no- where in this account, and the hon. Gentleman gives us no information on the subject. Where does this money go to? To whom is an account of it to be rendered? I will ask the hon. Gentleman to state to the Committee how this money has been applied, and who is responsible for its disbursement?

Mr. Chairman—I have no remark to add to what I have said before. Some years ago the name of fund was very unfortunately used with regard to this liability of the Government of India, and it seems to have given rise, in the minds of the hon. Member and of some other persons, to the idea that there was somewhere a definite fund or sum, which, in some way or other, went out of the power of the Government of India and into the power of the person in whom the hon. Member seems to be interested—the Nawab Nazim. Nothing of that kind is the case. There is a much smaller amount, an invested fund—to which I do not understand the hon. Member to allude—a sum which has been invested, and the proceeds of which are regularly used for Nizamut purposes. But the large sum known as the Nizamut Deposit Fund is a mere liability of the Government of India to itself, which liability it will, some day or other, have to recognize and to pay as, in the whole or in part, a provision for this Nizamut family. If the Committee would like to hear a fuller account of the matter, I have, since the hon. Gentleman began to speak, procured an extract from a despatch of the Government of India—one of their most recent despatches on the subject—which gives, I think, a very full and clear, though somewhat lengthy, account of the matter. If the hon. Gentleman and other hon. Members would like me to read it, I will do so.

"The Nawab Nazim states that Lord Dalhousie wrongfully converted the deposit fund into a book debt bearing no interest; that the several funds were created by his ancestors for special purposes, and ought to bear, and have borne, interest; that the orders of the Government were that interest should be re-invested as received; that, in reality, the funds have been created (1) from lapsed stipends arbitrarily diverted for that purpose; (2) from family property to which the Nawab Nazim would have fallen heir; and (3) from a sum of two lacs a-year paid by the Nazim.

"Now, the facts are, that the fund consists of two parts: (1) invested, and (2) uninvested. The invested funds, to which the Nawab Nazim never contributed anything, but which, with exception of a portion of Munnee Begum's treasure, invested with the consent of the Nazim of the day, consists entirely of lapsed stipends, over which the Nawab Nazim had no control whatever, have always borne interest, and bear interest to this day. Part of the interest is devoted to the purpose for which the corresponding portion of the investment was originally made—viz., the agency establishments, although it is insufficient to meet the expenditure, and has had to be supplemented with grants from the other portions of the fund; and the remainder goes for Nizamut purposes over and above the payments made from the Government Treasury. If the interest of the Begum's fund has not been re-invested, as directed in 1823, it is because that fund never really came into existence, and the Nawab Nazim himself failed to carry out the arrangement by which he was to credit Rs. 56,000 a-year to the fund. He himself wrongfully appropriated the lapses, and so far from his having any claim, Government had actually to forgive him a debt of Rs. 2,70,137 on account of misappropriated lapses, and for this the Government of India incurred the censure of the Court of Directors.

"In regard to the uninvested portion, not only was it never intended that it should bear interest, but it would be contrary to all the Government rules regarding deposits, if interest were granted upon it. Deposits in the Government Treasuries do not bear interest except under specific arrangements made with the depositors. Since the first day of its formation the deposit has borne no interest. It was not Lord Dalhousie who made it a book debt; the uninvested portion of the deposit fund has never been anything else than a book debt ever since its formation in 1836. What Lord Dalhousie wanted to do was to abolish the fund altogether, and to re-credit the uninvested balance to Government; but to this the Court of Directors objected. If the fund had been invested it would at one time have been bankrupt. The demands upon it are heavy and fluctuating. A reference to the Report on the fund, which is enclosed in our separate despatch, No. 149 of this date, will show that it has not always been able to meet its liabilities. Between 1842 and 1851, for instance, there was a cumulative deficit varying from a quarter of a lac to nearly two lacs. Much confusion has, indeed, arisen from styling the balance of the 16 lacs a fund. The uninvested portion of the so-called fund is a mere account of certain liabilities which the Government of India may, at some indefinite time in the future, be called upon to meet. There is no obligation expressed or implied to give interest on this account; and on two occasions on which the present Nawab Nazim has brought forward his grievances, although apparently assisted by persons fully acquainted with all the facts of the case, he has not been able to adduce anything which implies a promise on the part of Government that interest would be allowed. This appears to have been the view of Her Majesty's Government in 1864. At that time interest had never been paid on the uninvested part of the fund. The Nawab Nazim complains that the fund was converted into a book debt by Lord Dalhousie in 1854. The despatch of June, 1864, however, says not a word about interest, but merely decides that the 'unappropriated portions from year to year of the 16 lacs stipend unquestionably belong to the Nazim and his family, and can properly be expended only for their benefit.' This is precisely the principle upon which the fund has been administered. The Nazim's interest in it consists in his right to have certain expenses defrayed out of it (subject to the approval of Government) which would otherwise have to be paid by himself out of his personal allowance. His family's interest in it consists in their right to have a provision out of it at his death, as Government may then consider proper. It is true that the balance is now large; but there can be no doubt that at the death of the present Nazim, which may, of course, occur at any time, very heavy claims will come upon it."—[3 Hansard, ccvii. 1152–3.]

I have really nothing more to say upon the subject.

I am not going to say a single word upon the Nawab Nazim. What I do want to point out—for I do not think we ought to allow these Accounts to pass this evening—is simply as to a matter of keeping accounts. What takes place? £52,000 is put down as existing income, and the Under Secretary admits that instead of its being income it is the exact measure of future liability. It is future liabilities which have been appropriated to income. In this one case he admits amounts of £52,000. This is an illustration of what I pointed out in the previous part of the evening—that the Government of India constantly devote capital to income; and if the Committee had sufficient time to go through these Accounts no doubt we should discover similar instances. The Under Secretary says—it is very improper to call this a "fund." Well, who calls it a fund? What can we think of accounts, when we find things constantly called a "fund" when they simply represent liability? And if it had not been extracted by the cross-examination in Committee, we should not have discovered that this "fund" to which the hon. Gentleman refers—which we supposed to represent a property of £550,000—was, in fact, a liability. I put this to the Committee seriously—Are we, at 2 o'clock in the morning, justified in passing accounts which are discovered to be kept in this way:—that a sum of £52,000 is put down as ordinary received income when, according to the admission of the Under Secretary, that sum does not represent income at all, but is simply a measure of future liability?

When this matter was discussed last year, the House refused to grant a Committee to inquire into the merits of the case of the Nawab Nazim of Bengal. But the statement made by the Under Secretary for India has left such a confused impression on my mind in regard to this matter, and as to the way in which this fund is dealt with, that if any steps should be taken to re-ventilate this subject at a future time I should certainly lend every aid in my power to unravel the mystery. I am convinced that a good deal of injustice has been done to an Indian Prince who is at present staying in this country for the purpose of obtaining remedy; and it is quite impossible for him to prove the merits of his case unless a Committee is granted. No one person alone, for instance, will be able to fathom the obscurities of this account, which—if I, as a man of business, may venture to pass an opinion—is one of those kind of things it is impossible to understand in its present condition. It is quite beyond my comprehension. I have, unsuccessfully, endeavoured to gather from the statement of my hon. Friend what has become of the money, balances, book-debt—or whatever else it is—of £550,000; because I find in this account submitted to the House a sum of £52,000 entered as transferred to the credit of the Nizamut Stipend Fund, which the hon. Gentleman confesses is no fund at all.

There appears to be some strange confusion in the mind of the hon. Member for Brighton. He is under the impression that this sum is a receipt. It is nothing of the kind. It is a sum which we charge as a disbursement—a charge to our debit. It is not a receipt, or anything in the nature of a receipt.

May I ask the hon. Gentleman another question? There appears to be no doubt that there is a sum of money somewhere, which has been received by somebody, and I suppose there are some accounts kept. May I ask the hon. Gentleman to state to the Committee where these accounts are, or to whom the Indian Government consider themselves to be accountable for them? Is it to the House of Commons, because no record of them appears in the Statement laid before us?

Mr. Chairman—Certainly the Indian Government is responsible for this sum of money to nobody but itself. From year to year the Government of India considers that the sum that is not paid in the course of that year for Nizamut purposes will some day or other, at some indefinite future period, have to be used for Nizamut purposes; and therefore it transfers that sum—it puts it aside—makes itself unable to meddle with it by putting it down in its accounts as a debit; and it carries it to the account which is one day or another to be settled with this Nizamut family.

I am still unable to understand this matter. I do not know whether it is that in consequence of this late hour my brain is confused. What I want to know is—what becomes of the money? It is spent, is it not? What is going to be done with this £52,000? understand it will be spent. "No, no!"] Where is the money? Mr. GRANT DUFF: The money is lying in cash.] Then, as I understand, these cash balances—according to what has been said this evening—are liable at any moment to be spent if war breaks out. What is the justification of this enormous sum of money—of £24,000,000 of cash balances? The only justification of them is that they represent a reserve which may be spent. We find that they are partly composed of these liabilities, and can be spent as any ordinary income. And, therefore, whether the Government puts it to ordinary income or to cash balances, it has appropriated money which represents future liabilities.

The hon. Gentleman distinctly admits to the Committee that there is a fund, and that whatever it amounts to it belongs emphatically and exclusively to the Nizamut family. I would ask him to be kind enough to tell me whether he does not consider that, under those circumstances, there is an obligation on the Indian Government to give an account of it, either now or at some future period, to the head of that family?

Before my hon. Friend answers the question, I should wish to say that in the discussion of a question of this kind in an irregular way, I think it extremely possible and probable that statements may be made and observations let fall which may hereafter be turned in a position adverse to the interests of the people of India. If you are to discuss this question of money it is extremely desirable that it should be discussed in a precise manner. Hon. Members below me have stated on two occasions—or rather put words into the mouth of my hon. Friend that I, sitting near him, did not hear him say. It has been stated that the amount of this fund represents a distinct and precise liability of the Government of India. My hon. Friend below me stated most positively that this amount represented an undefined liability. [An hon. MEMBER: But still a liability.] I think if the hon. Gentleman will take what I say in all good part, "undefined liability" and "liability" are two totally distinct things. An "undefined liability" is an unsettled account. A "liability" is a settled account. I think it is desirable that the question should be put precisely, because what falls from hon. Members may be used on a future occasion to the detriment of the people of India. As I understand the question, it is this:—The Government of India considers it advisable to apply to a fund—and to that it applies—a certain amount in regard to an undefined liability. It applies that amount, and it retains it in cash balances; but it does not go out of its pocket. It holds itself liable if hereafter called upon to pay; but as money, it does not go out of its own care. It comes to the same thing, as regards liability, whether it keeps no account and pays 50 years hence, or whether it treats it in the way named.

The hon. Member for St. Ives says this is an irregular discussion. I would ask my hon. Friend and the Committee whose fault is it? Not the fault of the hon. Member for Kilkenny; because he had a Notice down for Tuesday night, and was prevented from bringing it forward because the Government claimed Tuesday night for Government business. I agree with the hon. Member for St. Ives that this might have been raised in a better way by a regular discussion; but I venture to remind him that it is no fault of the hon. Member for Kilkenny that that has not been done.

I do not wish in the least to blame the hon. Member for bringing it on. I merely stated a fact.

What I wish to remind my hon. Friend is, that it was owing to the circumstances of the Session that the Government took that evening—very necessarily very likely; but I think the hon. Gentleman opposite is taking the only course open to him, when, owing to the period of the Session, he is deprived of the opportunity of discussing the question at the proper time, in raising this discussion on the Indian Budget.

Will the hon. Gentleman answer my question?

Whether the Government considers itself liable to give an account of this fund to the head of the Nizamut family? Most certainly not. The head of the Nizamut family is one of those persons who, by the favour and kindness of the Indian Government, have for the last 100 years enjoyed certain benefits. He is, on the whole, the most favoured—by far the most favoured member of that family, and receives very much the largest amount. The Government does not recognize in the head of the Nizamut family the very slightest right of any sort or kind to be consulted as to what is to be done with regard to this matter. It from time to time makes grants to the head of the Nizamut family of the day, and it has made very large grants to the present Nawab Nazim; but it never has recognized—at any moment, at any period of history—any right or title whatsoever in the Nawab Nazim of the day to give his opinion as to what it ought to do, or how it ought to apportion its grants.

Sir, I cannot sit here and listen to the doctrines laid down by my hon. Friend without strongly protesting against them. I deny, with all the emphasis of which I am capable, as a matter of fact, the accuracy of the Under Secretary's statement, that there is no right or title, further than that of a recipient of mere benefits or favours in the present head of the Nizamut family. I believe that is entirely contrary to the history of the case. I have taken no part in the discussion in this House upon the subject; but I venture to say that if you give a Committee—as I think you ought to have done last year, and as you have prevented the hon. Member for Kilkenny from asking this year—facts would be adduced which would change altogether the aspect of the case—as presented by the Under Secretary. I believe the facts to be that the present Nawab Nazim is the legitimate successor of the person with whom you made a solemn Treaty to surrender—first, the finances of his country; then the control over his army; and, eventually, the control of the territory of which we thus gradually became the possessors. And the condition on which that Treaty was signed, sealed, and delivered was, that there was a certain annual sum to be given to his posterity. I am quite aware that this is not the time to argue that question; but as it is so broadly stated that this is a mere benefaction and favour, I cannot, as an independent Member of this House, entertaining the opinions shared by many hon. Members near me, sit silent and let that statement go unchallenged. I think, on the contrary, the Nawab's title is a good and substantial one; and I think it most lamentable that the Government of a great country like this should set up special pleas of any kind, because they know that the person entitled to plead against them for a sum of money is helpless to enforce his rights. But this House has rights of jurisdiction which it can—and, I believe, eventually will—exercise above all Executive Governments; and I hope my hon. Friend (Mr. Bryan) will take this or some other opportunity before we separate, to show that he will next Session follow up this matter in the way in which he has begun it, when the whole mass of mystery in which it is enwrapped will be thoroughly investigated by a Committee of this House.

The hon. and learned Member seems to have admitted what is entirely destructive of his own case, because he admitted that if a Committee had been granted, there would have been brought forward facts which would have entirely altered the aspect of the case.

As presented by the Under Secretary.

I did not hear those words. The hon. and learned Member said—"Would have entirely altered the present aspect of the case."

The hon. Member has no right to put words into my mouth. I know best what I intended to say, and I am entitled to repeat or explain what I said; and he has no right to repeat afterwards that that is what I said when I have denied it.

The hon. and learned Member did not contradict my statement.

I did, distinctly.

I beg par don. My statement was, that the hon and learned Member said that he would be prepared to adduce facts which would alter the aspect of the case. The hon Member did not deny this, but he said he added the words—"as presented by the Under Secretary for India."

I was replying to the observations of the hon Member the Under Secretary of State for India. He put forward a case. I challenged that case. I repeat, Mr. Chairman, that it is not according to the courtesy practised in this House—in which I have perhaps had more experience than the hon. Member for Maidstone—for one hon. Member to persist in construing the intention with which another hon. Member used words, when he has explained that such was not his intention.

I do not wish to press the matter against the explanation of the hon. and learned Member below me. I was only explaining that I did not hear him say the words he uses now.

I did not say I used those words, but their equivalent.

Then I do not understand the point of the hon. and learned Member below me. He does not deny having said that evidence was producible which would alter the present aspect of the case. He appears to have used those words in some sense which I do not understand, and, of course, I accept his explanation.