asked the Secretary of State for the Home Department, Whether, on Friday, August 6th, on one John William Wilkins, at West Hartlepool Police Court, refusing to take the oath and claiming to affirm, under the circumstances contemplated by the Evidence Amendment Acts 1869 and 1870, the evidence of the said John William Wilkins was not rejected by the magistrates because he had stated that he was a freethinker; whether, in consequence of this refusal, a prisoner charged with theft was not released for want of evidence; whether, shortly previously, at Huddersfield, the evidence of one Samuel Poppleton was not refused by the Huddersfield magistrates under similar circumstances; whether, in each case (having in view the decision of the Court of Queen's Bench in re Woolrych ex parte Lennard), the refusals by the magistrates respectively were not illegal; and, whether the magistrates ought not to have allowed each of the said witnesses to give evidence on making the solemn declaration or affirmation provided by "The Evidence Further Amendment Act, 1869?"

, in reply, said, that he hoped that the hon. Member would not think him guilty of any want of courtesy when he pointed out to him that his Question was one that should not have been put to the Secretary of State for the Home Department, it being founded upon a misapprehension as to what the functions of the Secretary of State were. The Secretary of State, by virtue of the Prerogative of the Crown, had control over sentences, but had no control over the administration of the law. That duty was governed by the law, and by those authorized to declare what the law was—namely, the Judges and the Courts of Law. If he were to express an opinion upon a purely legal Question of this kind, he should be exercising a jurisdiction that did not belong to him. If the magistrates had done wrong by admitting evidence improperly, that could be cured by appeal; if they had improperly refused to receive evidence, that could be cured by mandamus ordering them to admit it. Questions of this kind ought to be decided by a Court of Law; and if he took it upon him to decide the question he would assume an authority which did not belong to him.

asked the Under Secretary of State for Foreign Affairs, Whether, in view of the frequent loss of life outside the port of Jiddah, and of the facts that half the expense of the Consulate of Jiddah is borne by India with reference to obtaining pro- tection for Her Majesty's Indian subjects resorting to that port as Ma-hommedan pilgrims, and that heavy duties are levied upon Indian imports at Jiddah, the Government will press upon the Porte the obligation of reducing, as far as possible, the great dangers which beset the navigation of that part of the Red Sea?

The subject mentioned by my hon. Friend is under consideration. It is important, but surrounded with difficulty. The utmost attention will be given to the point raised by him.

asked the Under Secretary of State for the Colonies, Whether he will lay upon the Table of the House the recent Despatch of the Secretary of State for the Colonies, on the subject of the Constitution of Natal, referred to by Sir Bartle Frere in his Despatch of July 6th, 1880; and, whether it is contemplated to make any important changes in the Constitution of that Colony?

The system which existed in Natal before the Act of 1875 will presently revive on the expiration of that Act. Confederation being in abeyance for the present, no further immediate change is contemplated. The despatch for which the hon. Baronet asks will, I hope, be in his hands this week.

asked the Secretary of State for the Home Department, If his attention has been called to the following account appearing in the "Birmingham Daily Post" of Saturday July 24th:—

"Lichfield. An Election Assault Case. At the City Police Court, on Thursday, before the Mayor (Alderman Morgan), and Messrs. Coxon, Hinckley, and McLean, an assault case arising out of the recent election was heard. Henry Baker summoned Patrick Lafferty for assaulting him in Bore Street on the evening of the loth inst. There was a large crowd present during the affray, and many witnesses were prepared to give evidence in defence, hut were not allowed. One witness, however, testified that he heard Alderman Coxon inciting Baker to fight, and saw him strike at someone with a stick, hut, missing his aim, hit Baker instead, who fell and received his injuries. Alderman Coxon, retaining his seat on the bench, denied that he did anything of the kind, and said he had no stick in his hands. He continued then to adjudicate upon the case, and finally the magistrates, refusing to adjourn the case in order to allow Lafferty to obtain a solicitor, sentenced him to a month's hard labour without the option of a fine;"

if he is aware that two of the magistrates who adjudicated in the case were seriously implicated in the proceedings which were investigated in the course of the trial of the Election Petition before Mr. Justice Lush and Mr. Justice Manisty; that the evidence of one of them, Alderman Coxon, on an important matter of fact was rejected by the Judges, and that the other, Mr. Hinckley, was severely censured for conduct described by Mr. Justice Lush as

"Approaching dangerously near to the line which separated legitimate from illegitimate influences, if it did not overstep it;"

and, whether, considering the partizan character of the bench, and the degree of punishment awarded for the offence, he will not institute an immediate investigation, with a view to the mitigation of the punishment and the release of Lafferty from prison?

, in reply, said, that an examination of all the facts of the case led him to believe that the punishment awarded to the prisoner was too severe, and he ordered a remission of the rest of the sentence on Friday last.

asked the Secretary of State for India, in reference to the East India Home Accounts, p. 20, Whether the loan of £13.000 to the Maharajah Duleep Sing was made in pursuance of any, and, if any, which Treaty or engagement; whether there has been any Correspondence as to the conditions upon which the said loan of £13,000 has been made, and as to the eventual repayment thereof, and as to any security for such repayment; and, whether there is any objection to lay such Correspondence upon the Table of this House?

The loan of £13,000 to the Maharajah Duleep Sing has not been made in pursuance of any Treaty or engagement. The House is probably aware that the Maharajah Duleep Sing has been for some time in embarrassed circumstances, and much Correspondence has passed between himself and the India Office with regard to his financial position. That Correspondence is still continuing, with the object especially of securing the effectual repayment of the loans which have been made to him; but until the negotiations are completed I do not think that it is desirable to lay that Correspondence upon the Table.

asked the Vice President of the Council, If any, and what number, of the carcases of the 137 cattle from the United States of America, reported in 1879 to be affected with pleuro-pneumonia, and of the 84 cattle so reported between January 1st and February 20th, in 1880, were sent out from the markets under the supervision of the Privy Council, undistinguished from healthy meat, as food for the people; and, whether the carcases of the animals lately slaughtered at Birkenhead on report of Texas fever have, in every case, been destroyed; and, if not, whether any and what number have been passed into the meat supply of the population?

, in reply, said, the Privy Council had the duty imposed upon it of only keeping out diseased animals. The duty of preventing the sale of unwholesome food devolved upon the Local Authorities. With respect to the carcases of cattle slaughtered upon report of Texan fever, they were destroyed in all cases except the first five. In these cases the carcases were removed from the wharf, and the Privy Council had no information whether they were seized by the Local Authorities or not. All the others were destroyed.

asked the Vice President of the Committee of the Privy Council, Upon whose authority he made the statement that some of the cattle landed from the steamship "Iowa" were suffering from Texan fever; and, whether the disease was not really splenic apoplexy, caused by overheating and change of food?

, in reply, said, the authority for his statement was Professor Brown, and he had reported that the disease was Texan fever—a malady which was more fatal than cattle plague. He should give the House what further information he had on the subject. It seemed that the cargo of the "Iowa" was shipped at Boston, and there were 848 cattle shipped. 43 died on the voyage and were thrown overboard; I was landed dead; and 804 arrived alive. Since their arrival 13 had displayed fever. The Department sent down one of their best Inspectors who had more knowledge of splenic and Texan fever than any other man, and when he arrived on Friday these cattle had been slaughtered 30 hours. He made a postmortem examination, and the cattle showed the ordinary indication of splenic apoplexy; but the Inspector said that many of the characteristics of splenic apoplexy and Texan fever are very similar. He was not prepared to say whether it was or was not Texan fever. The post-mortem appearances resembled splenic apoplexy in this country. All the animals affected were from one consignor; but it was an undoubted fact that Texan fever had got a stronger hold in the North of the United States, and required to be watched with a great deal of care, for it was a very dangerous disease.

asked Mr. Solicitor General for Ireland, Whether his attention has been called to the case of Hamilton versus the Attorney General and others, which has just been tried by the Vice Chancellor, and to a Petition presented to this House in July 1879, the question involved being the right of the people of Rush and Skerries to take the seaweed on the seashore boundary of Mr. Ion Trant Hamilton's property at Skerries in the county of Dublin; whether he has seen in the Dublin papers a report of the Vice Chancellor's judgment, in which it is stated, with reference to the charter of James I., "no express grant was made in that charter of the lands between high and low water mark," that the title to the Foreshore "must be in the Crown or some grantee of the Crown," and that "the Attorney General had made no claim on behalf of Her Majesty;" whether the present Attorney General instructed Mr, T. E. Hamilton, B.L., through Mr. N. Hamilton, solicitor, not to contest the claim of Mr. Ion Trant Hamilton to the foreshore; and, if not, whether he will now take steps to assert the rights of the Crown in this matter; whether the allegations contained in the Petition as to the refusal of the local magistrates, and the appointment by the late Government of stipendiary magistrates, to try the persons summoned for asserting their right of way, and the employment of a police force of over a hundred men "minding the seaweed on the foreshore for a period of about three months," are correct; and, whether he will, in compliance with the prayer of the Petition, which is signed by 150 of the inhabitants of the districts of Rush and Skerries, lay the Papers asked for upon the Table of the House?

My attention was not called to the case referred to in the Question of the hon. Member; but I have read in the Dublin papers of the 9th of this month the judgment which the learned Vice Chancellor is reported to have delivered in the case. The Attorney General requests me to state that no instructions whatever were given by him; and, therefore, if any instructions were given on the part of the Crown, it must have been before the present Government came into Office. The Petition mentioned in this Question was presented to the House so far back as July, 1879; and after this lapse of time it would, in my opinion, be unwise to re-agitate matters arising out of a question of disputed right which has now been adjudicated on by the Vice Chancellor, and one branch of which appears to be still pending in the Queen's Bench in Dublin. The Vice Chancellor is reported in his judgment to have been of opinion that the patent from the Crown, under which the plaintiff claimed, contained general words sufficiently comprehensive to pass the disputed foreshore between high and low water-mark, and that the evidence established that the plaintiff and his predecessors were in possession of it. If so, there are no rights of the Crown to be asserted in the matter; and, in these circumstances, I cannot undertake to produce the Papers asked for by the Petition.

asked the Vice President of the Council, Whether Government has yet arrived at a definite decision as to the course to be pursued with respect to the Educational Endowments (Scotland) Bill?

Last week I received a requisition signed by a considerable number of Scotch Members, asking me to name a day for the second reading and another for the Committee on the Educational Endowments (Scotland) Bill. I promised to do my best to obtain these days from the time at the disposal of the Government; but in view of the present state of Public Business, and of the opposition—although the opposition is of a very small minority—to the Bill, I see no chance of proceeding with it this Session, and I propose to discharge the Order to-day.

asked the Secretary of State for India, Whether the advance of General Burrows on the Helmund was ordered on the responsibility of the late or present Viceroy; whether when the order was given the forces of the Wali were supposed to be friendly to British interests; whether at that time it was known to the Viceroy that in case of a disaster the forces at Quettah were not in a state of preparation immediately to advance to the relief of the small garrison of seventeen hundred men which was left in Candahar; and, if there was any reason against ordering General Phayre to march towards Candahar when it became known to the Viceroy that the troops of the Wali had mutinied and become enemies instead of friends?

The advance of General Burrows on the Helmund was ordered upon the responsibility of the present Viceroy. When the order was given the forces of the Wali were supposed to be friendly to British interests; but no great reliance was placed upon the assistance which it would be in the power of the Wali to give to the British troops. The hon. Gentleman asks—

"Whether at that time it was known to the Viceroy that in case of a disaster the forces at Quettah were not in a state of preparation immediately to advance to the relief of the small garrison of seventeen hundred men which was loft in Candahar?"

I am not able to state what was known at the time as to the state of preparation of the force in Quettah. I do not know how many reinforcements had reached the line of communications; and, therefore, I am not able to give an answer to that Question. The hon. Gentleman further asks—

"If there was any reason against ordering General Phayre to march towards Candahar when it became known to the Viceroy that the troops of the Wali had mutinied and become enemies instead of friends?"

Of course, it was necessary for General Phayre, being in command of the forces, to maintain the communications with Candahar, and not to despatch such a body of troops as might unduly weaken that line of communications. As the reinforcements arrived from Scinde, it was, no doubt, the duty of General Phayre to send them on to Candahar. That was done, as I stated yesterday, and one or two regiments, probably two, have already arrived at Candahar.

When did they arrive there?

I am under the impression that I mentioned the date of their arrival yesterday; but I have not the Papers with me at this moment.

The noble Lord stated yesterday that General Phayre was expected to arrive at Candahar on the 20th.

I stated that General Phayre's force would be able to advance to the relief of Candahar about that date; but I added that one Native regiment, if not two, had by this time arrived at Candahar.

I wish to ask the Chief Secretary to the Lord Lieutenant of Ireland a Question I think I am justified in asking, although I am one of those who never ask Questions of the kind if I can possibly avoid doing so. The Question is, whether the right hon. Gentleman has seen in the papers of Monday, the 16th August, the following speech made by a Mr. Dillon, who I find is the Member for Tipperary, at a meeting held in the County of Kildare on Sunday last? It is as follows:—

"Let them get two active young men, who were not afraid of any one, and let those young men go to every farmer on the townland, and see whether he would join the League. Then if any man did not join, when he got into difficulty they would leave him in his difficulty. If an attempt was made to evict a man who had joined, the members would have a meeting called to denounce the landlord who had put him out. The Land League would take care of the man, and see that he did not starve. Then it would be the duty of those organizers to tell how many men they could march to a meeting, and they should march these men like a regiment of soldiers. [Cheers.] There was more effect in 200 men marching to a meeting than a great deal of speaking. Such action, if carried out through the country would make the landlords a great deal better. [Cheers.] The League was almost in its infancy, and the people had not been sufficiently made aware of its objects; but he would tell them what the League would do if the landlords refused them justice. After another six months or a year, when they had enrolled in Ireland, as he hoped they would have before long, 300,000 members of the League, and if the landlords persisted in resisting justice and to moderate their claims, they would give out the word to the people of Ireland to strike against rent entirely [Loud cheers], and to pay no more until justice was done to them. With 300,000 Irishmen enrolled in the National Land League all the armies in England would not levy rent in that country. [Cheers.]"

As I believe the attention of the right hon. Gentleman must have been drawn to this speech, I beg to ask him what steps he intends taking with regard to language which amounts to a direct incitement to criminal violence and organized rebellion?

Before the right hon. Gentleman answers the Question, I wish to ask the hon. and gallant Baronet the Member for West Sussex whether, in conformity with the rules of courtesy in this House, he has communicated to my hon. Friend the Member for Tipperary his intention of putting this Question to the Chief Secretary?

rose to answer the Question, when—

said: Before the right hon. Gentleman addresses the House I wish to point out that the hon. and gallant Baronet has not answered my Question.

I have been asked a Question, and it is my duty to reply to it. I am not surprised that the Question should be asked. I read that speech yesterday morning; and the fact that it was made by a Member of this House does not take away from whatever of importance may attach to it, but rather increases its importance. It was a speech, with regard to which I should have expected Questions to be asked me, whether made by a Member of the House or not. I can hardly say how strongly I felt upon reading that speech, not merely with regard to its imprudence—I might use a much stronger term than imprudence, and say its wickedness. I think we may make a mistake in overrating the effect that such a speech may have even upon an excitable population, and it would be a great mistake to overrate it. But, so far as that speech can have any effect at all, I can hardly suppose that the hon. Member for Tipperary would have thought it could have any other effect except in inciting men to break the law. The hon. and gallant Baronet asks me what steps the Government will take. Well, I cannot give him any precise answer with regard to that Question, because we must remember this—that our laws are made, and we pride ourselves on our laws being made, to protect freedom of speech, and it is possible for an ingenious man to take advantage of these laws in order to make speeches which ought not to be made. I do not imagine that anything would delight the hon. Member for Tipperary more than a prosecution in which, owing to his taking advantage of our laws giving freedom of speech, the Government should fail; and I do not intend to give him an opportunity of bringing about that result. On the other hand, I may state that that speech, and speeches like that, are carefully watched by the Government, and it is their duty to watch them. I must repeat what I said before with regard to such speeches as this. Its wickedness can only be equalled by its cowardice—the cowardice of tempting excitable men in a way which is likely to lead them to break the law by the use of language which is ingeniously framed to secure the speaker from prosecution.

In answer to the Question of the hon. Member for Galway Borough (Mr. T. P. O'Connor), I beg to say that I have not written to the hon. Member for Tipperary. In all ordinary circumstances, and on all ordinary occasions, I should have felt it my bounden duty to communicate with any person in the position of the hon. Member for Tipperary on putting a Question of this kind; but the speech appeared in all the papers throughout the country, and was not contradicted. I therefore thought that this House was the proper place to put the Question; and I had hoped that the hon. Member would have been in his place to answer it.

I will not trouble the House with more than two or three sentences; and I hope I shall not be put to the necessity of making a Motion. I do not think the statement of the hon. and gallant Baronet at all excuses his conduct. The charge he brings against my hon. Friend, and which has been repeated by the right hon. Gentleman the Chief Secretary for Ireland, is a very serious and a grave charge. ["Hear, hear!"]"Well, being serious and grave, the least that courtesy and justice could have demanded would be that the hon. Member should have been asked whether the report was or was not correct, and, if correct, whether he had any explanation to offer on the subject. A delay of two or three days would have been quite sufficient to allow this course to be followed; and from what I know of my hon. Friend I know that he would have been indisposed to shrink from affording an explanation to anybody as to whatever course he may have deemed it proper to pursue. I wish to say, in conclusion, that if violent language were the usage on platforms in Ireland—if exaggerated hopes were encouraged and violent action resorted to, it is because you insist on keeping up a state of things——["Order !"]

The hon. Member is not in Order in making a speech. There is no Motion before the House, and he is not entitled to reply on a Question.

Then I shall conclude by saying that so long as the centre of political gravity is removed outside of Ireland, and the appeals of the Irish people are set at naught, you must have agitation of a violent character.

May I ask the Chief Secretary for Ireland the grounds on which he believes the report of the speech of the hon. Member for Tipperary to be accurate? The right hon. Gentleman has charged with cowardice an hon. Member of this House, whom I have the honour to call my friend, and who, I should say, would be about the last person open to such an imputation.

The report was the same in several papers yesterday morning, and the report was of such a nature that I could not help believing the speech had been delivered. If the hon. Member had not delivered the speech, he would, no doubt, have contradicted it, and denied responsibility for it.

May I ask this Question? Is it not a fact that one reporter sometimes attends a meeting and sends the same report to several newspapers?

The reports I saw so varied that I do not think that can have been the case.

asked the Chief Secretary for Ireland, If he could afford the House any information with respect to the firing by the police and the consequent loss of life at Dungannon on Monday last; whether it was true that the disturbances were in consequence of an attack by a number of Orangemen on a small party of Catholics while returning home; whether the police, instead of dispersing the offending party of Orangemen, charged the Catholics; whether they used buckshot; and, whether the unfortunate man William O' Rourke, who was shot dead, and the others who were seriously wounded were all, without exception, Catholics?

also asked, Whether the Chief Secretary had any information to give the House as to the disturbance at Ballinkerry; and, whether it was true that several houses had been wrecked there?

I may have information with regard to the last Question. Where is the place?

It is in the North.

I received last night a telegram which states that there had been most serious rioting yesterday in Dungannon. The police being attacked and fired on several times had to fire in return. It was believed that several persons were wounded, and one was said to be dying. I have telegraphed again to Dungannon this morning, but have not received any further information. I have to-day received a telegram from Belfast, which states that a large Nationalist procession, about 6,000, with banner and bands, left Belfast yesterday morning, and returned in the evening without molestation, being effectually protected by the police and the military. While the processionists were going out of the town, a public-house belonging to a Roman Catholic in the suburbs, at some little distance from the line of route, was attacked and gutted by a Protestant mob, who overpowered the 10 police there on duty. At about 2 o'clock yesterday, a sudden raid was made by a Protestant mob on a Roman Catholic street in the suburb, near Shankhill Road. The police were for the time overpowered by the mob, who smashed the windows in a number of houses, one being a public-house, from which liquor was taken. After the return of the processionists, large mobs of the opposing parties assembled between Falls Road and Shank-hill; some stone-throwing took place. The parties were kept asunder by the police. The Riot Act was read, and the excitement subsided at 10 o'clock last night, since which time no renewal of the disturbance has occurred. I received that to-day. Perhaps I may be allowed to state that I cannot really understand how it is that every man of importance, every man of influence, and every minister of every religious denomination in the North of Ireland, do not meet and agree to set their faces against the foolish processions which lead to this miserable rioting. They are of no great national importance, because we know that they pass off in a day; but the consequences to which they give rise are a perfect disgrace to a civilized country, and a disgrace to the Province of Ulster.

said, that in consequence of the reports which had reached them from Ireland that day, and of the concluding observations of the right hon. Gentleman, in which, as an Irish Member, he concurred, he wished to give Notice that, as it was proposed that there should be some lengthened discussions on the Estimate for the Irish Constabulary, he would call the attention of the House to the periodical collisions between religious factions in Ireland, and the interference of the Constabulary with the people, and would ask whether the Government would not, on an early day, consider the best means of bringing them to an end?

said, that in consequence of the state of Ireland, disclosed in the Questions, and the answers which had been given that day, he should on Thursday ask the Chief Secretary to the Lord Lieutenant of Ireland, Whether it is the intention of Her Majesty's Government, before the prorogation of Parliament, to ask that additional and exceptional powers should be conferred on the Irish Executive for the preservation of peace and for the better security of life and property in Ireland; or whether, in view of the state of that Country, as disclosed in the official statements made in the House from time to time by the Chief Secretary to the Lord Lieutenant, the Government propose to rely during the coming autumn and winter on the protection afforded by the ordinary Law?

gave Notice that, after the noble Lord's Question had been put, he would put to the noble Lord the Secretary of State for India this Question—Whether, with reference to the refusal of the House of Lords to pass a Bill demanded by Her Majesty's Advisers as a help to carry out the Law and preserve the peace, and to the effect produced in Ireland by that refusal, he will help to elicit an expression of opinion on such action by facilitating the discussion of a Motion on the Order Book in reference to hereditary and irresponsible legislators?

asked the Secretary of State for India, Whether his attention has been directed to a telegraphic summary of a speech by the Lieutenant Governor of Bengal in the "Times" of the 16th instant, in which a recent letter on the alleged abuses of Land Law Administration in Behar is spoken of as the work of a "very inexperienced" officer; whether it is not the fact that the officer in question has spent several years of service in the districts referred to, and is the author of three volumes of Reports on Behar in the official "Statistical Account of Bengal;" and, whether he can inform the House that a thorough and searching investigation has been ordered into the Land Law Administration of Behar?

, in reply, said, that his attention had been called to the telegraphic summary of a speech by the Lieutenant Governor of Bengal in The Times of the 16th instant. It would not be possible for a considerable time to receive a full report of that speech; and, therefore, he could not give the hon. Member a full answer to-day. It was a fact that the officer referred to in that speech had spent several years of service in the districts alluded to; and it was also the fact that he had been employed in collecting materials for a statistical account of Bengal in the same capacity as other officers in the districts to which they were attached. He had already stated that the subject of Land Law Administration of Behar had been undergoing a thorough examination, and that a Bill was in course of preparation as the result of the Report of the Commissioners appointed for that object. That Bill related to the recovery of rent in the Presidency of Bengal, and embraced, he believed, the leading provisions referred to in the Question.

asked the Secretary of State for War, What has been and what is proposed to be done as regards certain retired Officers of the late Indian Ordnance Corps, whose Petitions for inquiry into their claims against the Army Purchase Commission have lately been presented to Parliament?

In reply to my noble Friend, I have to state that the retired officers to whom he refers have made no representations to the War Office; and until I read the Question I had no knowledge of the grievance complained of. I have communicated with the Commissioners, and I am bound to say that I see no valid ground for disturbing their award. There is no appeal from it except by passing a fresh Act of Parliament. But if my noble Friend will call on Sir Edward Lugard, who is the Chief Commissioner, he will, with much pleasure, explain to him the exact foundation of the award. I, as Secretary of State, have no authority in the matter whatever.

said, a Petition on that subject had been presented to the House.

said it was a most inconvenient practice for retired officers having pecuniary claims on the Government to present Petitions relating to them to that House, instead of first memorializing Government to the Department. If they applied, in the first instance, to the proper Department, and were dissatisfied with the answers they received, they could then have recourse to Parliament.

Sir, in moving that you do now leave the Chair, and in taking this opportunity of making a Statement upon the subject of the Finance Accounts and Estimates of India, I feel that I stand in a somewhat exceptional and peculiar position. It is usually the duty of the Minister for India, when he makes this Statement, to present to the House the Accounts and Estimates which he has himself sanctioned, which he has approved, and for which he has made himself responsible. Both the current Estimates and Accounts, although exception may be, and frequently is, taken to the con-elusions drawn from them, usually contain within themselves all the data which are necessary for the formation of a correct opinion upon them; and, if exception is taken to the conclusions drawn from them, they contain within themselves the materials for criticism and dispute.

But, on this occasion, it is my duty to present Estimates for which I am not responsible, which are to a considerable extent vitiated by the results of a policy which I have not ap- proved, and which, as a matter of fact, I have condemned. Although we, unfortunately, now know that, to a very great extent, the Estimates I have to lay before the House have, in one important particular, because of the War in Afghanistan, already proved to be inaccurate, I cannot hold myself, even now, responsible for stating to the House precisely to what extent they are inaccurate, or how far the corrections which I shall have to apply to them can be held to be adequate and final. All, therefore, Sir, that it is possible for me to do on this occasion is to lay before the House, as clearly and impartially as I can, the Accounts and Estimates which were prepared by the late Government of India, and submitted to the late Government, and to apply to them such corrections as may be in my power; but which, I have already said, I cannot hold myself responsible for presenting to the House as absolutely adequate corrections. Although I am perfectly aware of the objections which exist to, and the tendency to financial laxity which is en gendered from, a separation of Ordinary from Extraordinary Expenditure, I do not think that on this occasion I have any alternative. If the House is not to be led away—as I do not desire to lead it away—in taking too gloomy a view of Indian Finance generally, I have no alternative but to give the House the Accounts and Estimates apart altogether from the charges for the War; and then to give separately, as fully as I am able, the charges which, as far as I know, will be imposed on the Indian Revenues in consequence of the War.

I shall proceed, then, to lay before the House, in the first place, the Ordinary Accounts for the year 1878–9. Those Accounts show about the same surplus of £2,000,000 which was estimated for in March, 1878. The Budget Estimate presented in 1878 was an Estimate of Revenue of £63,195,000, and Expenditure £61,039,000, giving a surplus of £2,156,000. That surplus was reduced in the regular Estimate of 1879 to £1,452,000, in consequence of the charge for the war then anticipated; but the final Account shows a Revenue of £65,199,000, against an Expenditure of £63,165,000, or a surplus of £2,034,000. The surplus, therefore, as shown by the Account, is very nearly the exact amount anticipated in the Budget two years be- fore. But, Sir, though the surplus was so nearly anticipated, these very Accounts appear to me to show in the most striking manner the uncertainty of Indian Finance, and the necessity, even in ordinary times, of cautious and prudent Estimates. The figures—if the House has followed me—upon each side of the audited Account, exceed by about £2,000,000 the sums estimated in the Budget two years before. On the Expenditure side, only £676,000 is due to the extraordinary contingency of the War; and, therefore, but for the unexpected improvement in the Revenue, the receipts for the year would only have given about £700,000 surplus, instead of £2,000,000, over the ordinary Expenditure of the year. Now, Sir, let the House consider how this unanticipated increase of Revenue has been obtained. £1,150,000 of it was an increase on the Estimate of £8,250,000 from the opium revenue, or 14 per cent. That, as I need not tell the House, is a most uncertain and unreliable source of Revenue. Therefore, although the result has proved so satisfactory, it shows how unsafe it would be to place reliance upon such a source of Revenue. But, taking the Accounts as they stand, and adopting the system I propose, after deducting the charge for the War which fell into the Account of 1878–9, and allowing for a receipt of about £100,000 from the railways and telegraphs, in consequence of the military operations, the result would have been a surplus of £2,610,000.

I now come to the year 1879–80. The Budget Estimate, framed in 1879, calculated the Revenue at £64,562,000, against an Expenditure of £65,917,000, showing an estimated deficit of £1,355,000. According to the Regular Estimate formed in February of the present year, when the results of the greater part of the year were known, the estimated Revenue amounted to £67,615,000, while the Expenditure was estimated at £67,285,000, showing a surplus of £330,000, instead of a deficit of £1,355,000. In my opinion, these Estimates, again, show the uncertain character of Indian Finance. The Revenue in the year 1879–80 has increased by £3,053,000 over the Budget Estimate of the year before. The increase in the Expenditure is chiefly due to the extraordinary charge for the War; but the manner in which the Revenue has been increased is worthy, I think, of the attention of the House. The chief source of the increase is, again, the opium revenue. That shows an increase of £1,459,000 on the estimate of £9,000,000, or 16 per cent; while the charges in connection with its collection were reduced from an estimate of £2,500,000 to £2,059,000, a reduction of £441,000, giving altogether an improvement in the net receipts of £1,900,000 on an estimate of £6,500,000, or 29 per cent.

The only other item in the Regular Estimate upon which I need comment is, I think, that of the Public Works. There is an improvement on the Regular Estimate, as compared with the Budget Estimate, of nearly £1,500,000; and of this very nearly £500,000 is due to the reduction of expenditure upon ordinary Public Works such as buildings, roads, and so forth; but £1,000,000 is due to the increase of Revenue derived from Productive Works, of which half arises from the guaranteed railways and half is due to transfers from land revenue. Adopting the same system as before, of excluding the charge due to the War, which is given in the year under review at £3,208,000 for military operations, and £1,324,000 for Frontier railways, and deducting £300,000 for increased receipts anticipated from the railways and telegraphs during the War, there would, but for the War, have been a surplus of a Revenue over Expenditure, of £4,562,000.

Sir, I now come to the Budget Estimate for the year 1880–1. As compared with the Regular Estimate of the past year, the Revenue is estimated at £66,746,000, against £67,615,000; whilst the Expenditure is estimated at £66,329,000, as compared with an Expenditure for the past year of £67,285,000, giving an estimated surplus for the coming year of £417,000, as compared with an estimated surplus in the past year of £330,000.

The House will see that in these Estimates there is a decrease of nearly £1,000,000 on each side of the Account. In Revenue the principal alterations which I will mention, without going into any detail, are these. The net Revenue from productive works is estimated at an increase of £899,000; the salt duty, of £194,000; provincial rates, 55,000; while the land revenue shows a decrease of £370,000. And I may here stop to explain that the falling off in the land revenue, as compared with previous years, is, I believe, entirely due to the cessation of the collection of arrears in consequence of the recent Famine. The assessed taxes are less by £247,000, and Customs by £59,000; while the opium revenue is very prudently estimated at a reduction of £1,150,000 below the amount stated in the preceding year. On the Expenditure side there is a diminished net charge of £358,400 for interest; for Famine relief, £94,300; for the Army—including the War and Frontier railways—£566,500; Provincial balances, £381,000; whilst exchange is estimated to cost more by £310,000; ordinary public works, by £45,000; and miscellaneous items, by £278,900.

It will be seen that a considerable reduction in Expenditure for the present year has been estimated for; and this may, perhaps, be the most convenient opportunity for me to refer to the Statement, which, as no doubt many hon. Members will recollect, was made by the hon. Member for Mid Lincolnshire (Mr. E. Stanhope) last year with regard to the intention of the Government with respect to this reduction. The hon. Member stated that the Government had arrived at the conviction that a reduction, on a very considerable scale, was necessary; and he indicated a large reduction in the expenditure of borrowed money on Public Works, to which I will refer by-and-bye. But he also anticipated a further reduction upon other expenditure, amounting, I think, to something like £1,000,000. It is very difficult, from the form of the Accounts, to ascertain precisely how far that anticipation has been realized; but I do not think, though I fully admit the sincere desire which was entertained both by the Government at home and the Government of India last year, to effect reductions upon the Ordinary Expenditure—I do not think it will be found possible to make such reductions upon the Ordinary Expenditure as were anticipated a little more than a year ago by the hon. Member. It appears that something like a reduction of £400,000 has been made on the item of Public Works. I cannot speak positively; but, although in one exceptional year or two a reduction of that sort may be made, still I am very much afraid that it will not be possible greatly to reduce the usual expenditure on Public Works; and a saving in one year is only too likely to be compensated for by the necessity for additional expenditure in another.

As to other economies in administration, I do not think that they can be estimated at more than £70,000; but this is a subject upon which, perhaps, it is more for the hon. Member for Mid Lincolnshire to speak for himself. I only refer to it, because I must say, so far as I am able to see, I am not sanguine, without an entire change of policy, that it will be possible to make any great reduction in the normal expenditure for the Civil administration of India.

Apart, no doubt, of the economies which I have mentioned, especially in Public Works, has been effected by the Local Governments owing to pressure applied to them by the Supreme Government—pressure to which they have most loyally responded, but against which some of them have, at all events, protested. In the discussion of the Budget of February in the present year, the Lieutenant Governor of Bengal protested against what he called the squeezing to which the Local Governments had been subjected by the Supreme Government, and disputed the necessity for it in the face of the flourishing condition of the Revenues of India. The policy of enforcing this reduction upon the Local Governments may be open to question in times when the financial interests of India do not absolutely require it; but I think that, in view of the revelations which have been subsequently made, the Local Governments will themselves be the first to admit that the necessity for at least the reduction demanded has been clearly established by the Supreme Government.

The hon. Member for Mid Lincolnshire spoke at the same time of the Commission which has been appointed to inquire into the organization of the Army, and to ascertain if it was possible to recommend a reduction of the Military Expenditure. That Commission has made its Report; and I need hardly say that, under the pressure caused by the War, both in India and at home, it has not been possible thoroughly to consider the recom- mendations of that Report. A copy of it has been received; but the opinion of the Indian Government has not yet been communicated to me, and I do not think it would be of any use to enter into a discussion of the recommendations of that Commission at present. No doubt, the recommendations will have received the most careful consideration; but I must warn the House against any sanguine hope that large measures of economy in respect of the Army, and especially respecting the Native Army, can be immediately initiated, as it is evident that, after the severe strain which has been placed upon the Native Army by the War in Afghanistan, it will require very careful, very considerate, and, I may add, very generous treatment. As I have said, I give full credit to the late Government, both in India and at home, for a sincere desire to enforce economy, and to effect a reduction in expenditure. I give them the fullest credit for that desire. But I believe, as I think the hon. Member opposite has himself indicated, that the proposed economies cannot be carried to any great extent at present. If we are to look for any considerable reduction, it must be to agencies only of gradual operation, such as further decentralization, and the increased employment of the Natives of India. Some progress has been made in that policy, and it will be continued. But the immediate economy effected by it will, of course, be small, and it will only gradually be brought into operation.

Adopting the course to which I have before referred, and summing up the anticipated results of the year 1880–1, exclusive of the War, I find that the estimated charge for the War proper will be £2,090,000; the cost in respect of Frontier railways, £2,040,000; giving a total of £4,130,000. After making the necessary deduction of £600,000 on account of the railway and telegraph receipts, the amount remaining is £3,530,000, and the net result, but for the charge of the War, would be a surplus of £3,947,000.

Well, Sir, the results, then, are, that in the years 1878–9, 1879–80, and 1880–1, there would have been—thatis to say, it is partly proved by the Accounts and partly estimated that there would have been—but for the War, surpluses of £2,610,000, £4,562,000, and £3,947,000, giving a total of £11,119,000. Sir, it is quite true that those surpluses have been, in part, obtained by the new taxation which was imposed in the year 1877–8 for the purpose of creating what was called a Famine Insurance Surplus. The taxes imposed for that purpose produced in 1878–9, £1,228,000; in 1879–80,£1,184,000; and in 1880–1 are estimated at £982,000—the total amounting to £3,394,000. Supposing that the original purpose of the Government in 1878–9 had been carried into effect, and the sum of £1,500,000 had been annually devoted to the extinction of Debt, or to the construction of works which were supposed to be of an especially protective character against the occurrence of Famine, a sum of £4,500,000 would have been devoted to purposes of that kind; and the remaining surplus, over and above that which the Government in 1877–8 estimated as absolutely necessary to secure this insurance, would have been £6,619,000.

I do not intend to discuss on this occasion at any length the policy, which has been so frequently discussed, of this Famine Insurance Surplus. I fully admit that the fundamental idea of that policy appears to me to have been a sound one. It was that famines cannot be considered as altogether exceptional calamities, and must be expected to recur at uncertain intervals; and that the expenditure that was forced upon the Government of India by these constantly recurring could not be met without plunging the country more deeply, from time to time, into debt, except by securing a surplus in normal years amounting to at least £1,500,000, in addition to that surplus of £500,000, which the most ordinary financial prudence would indicate as the smallest which would show a satisfactory financial position. That seems to me to be a sound policy, to recognize that an occasional Famine charge is one to be provided against in ordinary years. But when we come to the measures proposed, the new taxes which were imposed, the provision which was made, the promises and engagements which were held out, I must say that the policy appears to me to be more objectionable. It seems to me to show the weakness of every plan ever invented for a Sinking Fund, and to have encouraged the delusion which is at the bottom of all these Sinking Funds, that it is possible by any arrangement, by any contrivance, by any preconceived scheme, to pay off debt and to improve your financial position, while, on the other hand, circumstances, whether within your own control or not, whether justifiable or not, may be counteracting your Sinking Fund plan, and forcing you to borrow on the one hand more than you are saving on the other. It is true that Sir John Strachey maintains that the Famine Insurance policy has been completely successful, and he appears to think that it is sufficient to prove its success if he is able to show that the taxes which have been imposed with this object have been received, and that the retrenchments made for this purpose have been effected. The argument is that, but for the receipt of these taxes, and but for the economy effected, our financial position would have been so much worse; and that although it is not possible to pay off Debt, or to make protective works, as was intended, yet the Famine Insurance has answered its object by preventing by that amount the accumulation of additional Debt. I am ready to concede to him that, undoubtedly, our financial position would have been worse if it had not been for the imposition of these taxes and the enforcement of this especial retrenchment. The merits of the policy consist in the recognition of the necessity of an annual surplus; but it is my duty to show that during the three years of the existence of this policy an annual surplus has not been obtained, but that, on the contrary, there has been a deficiency. I am not going to enter into the question—whether for adequate or proper purposes or not—but as the recognition of an annual surplus is the basis of the policy, and as it has not been maintained, I must hold that the policy has not been successful, but has failed. I am not surprised, taking this view, that a great number of Natives of India are dissatisfied with the Famine Insurance policy, and contend that the licence tax ought to be remitted, because the special object has not been attained for which it was imposed. It is not my duty, on this occasion, to anticipate the Budget which will have to be brought forward next year by the Government of India and by the new Finance Minister. But the Viceroy and the new Finance Minister are of opinion that the time has come for a full review of our financial position, and that, if possible, a new departure should be taken in Indian Finance, both with regard to the liability entailed upon India by the recurrence of famine, and also from the point of view of the additional charge in which India may be involved as the consequence of the present War in Afghanistan. Under these circumstances, it would obviously be impossible for me to say one word which would indicate an intention on the part of the Government to remit any branch of the Revenue which appears to us to be so necessary as the licence tax at present is for the security of the financial position of India. The oppressive character of that tax has, I believe, been greatly mitigated by raising the minimum limit of incidence from 100 to 500 rupees. All I can say, at present, is that it does appear to me very strongly that if it is necessary, as I fear it may be, to continue that tax, the original intention of the Indian Government ought to be maintained; and I can see no reason why that original intention of extending it to official and professional incomes should not be carried into effect.

So far as I have at present proceeded, I have taken no account of the sums which have been expended in productive works, and raised from borrowed money. The sums expended in three years have been as follows:—In 1878–9, £4,381,898; in 1879–80, £3,564,140; and in 1880–1 the estimated cost of such works is £3,312,000. The total amounts to £11,258,038. I do not think the House will desire that I should explain at any length the policy which has been held to justify the Indian Government in borrowing money for productive Public Works. Certainly, in no country, as far as I know, have works of this class been constructed out of Revenue. In this country there has been an expectation of a return sufficient to secure the construction of works of public utility of this class by private capital without the assistance of the Government; but whether in India, if the Government had abstained from entering the field, capital could have been induced to enter upon it, and to create these works, it is no use for us to discuss at present. It is, I think, certain that Public Works, so complete as those which are now being constructed, would not have been carried out by any agency, other than that of the Government, and that, at all events, the policy, once taken, seems to be one from which it is almost impossible to retire, and, whether right or not in the beginning, it is almost a waste of time now to inquire; but, no doubt, if there had never existed any probability that these works would ultimately become remunerative, there would have been no justification for constructing them from borrowed money, however necessary they may be both to the military security of the country and to open up the resources of the Empire. It would have been necessary either that they should have been constructed out of Revenue, or else that the construction should have been longer delayed. Although I still wish on this point to speak with some reserve, it appears to me that the productive Public Works' expenditure has for a long time been a very heavy charge upon the resources of India. The time is now very nearly arrived, if not actually, when the turning point has come, and when these productive works will no longer be a charge, but, on the contrary, may be expected to be a source of revenue to India. The House may like to hear what is the capital sum which has been spent in productive works. This includes the whole expenditure upon railways and expenditure by the Government upon irrigation works. The capital outlay on the East Indian Railway is, down to the Estimate for the present year, £31,691,000; on the guaranteed lines, £66,949,000; on the State lines, £26,554,000; giving a total of £125,194,000. Upon irrigation and navigation works there has been spent—upon State works, £13,168,000, and on the Madras Irrigation Company, £1,000,000; giving a total on irrigation works of £14,168,000, and a grand total upon productive works of £139,362,000.

I have already admitted that this expenditure has, for a long time, been a very heavy charge upon the resources of India; and, no doubt, if we were looking at this question as a mere matter of business, it might be right to add all the interest which has had to be paid to the capital sum I have mentioned. But I do not think it is necessary to look at it in that point of view, because the loss, whatever it has been, has been borne by India from the Revenue, and we are in possession of a property which has been constructed out of this capital, and I think it will be sufficient if I show to the House what the estimated result of this capital will be in the present year. It is estimated that the receipts from railways, under which are included the net traffic receipts of the guaranteed lines and the gross earnings of the State lines, will, after deducting an accidental gain of £33,000 on the East Indian Railway this year, amount to £7,512,000; while the charges, in which are included the interest and surplus profits on the guaranteed lines, and the working charges of the State lines, will amount to £6,447,000; but to that has to be added the interest on the capital expended on the State lines, £1,157,490, giving a total of £7,604,490. The receipts from irrigation works are estimated at £1,383,000, while the charges of maintenance are £443,200; and the interest on the State works' expenditure£569,655; making a total of £1,012,855; and the net result as to the irrigation works is a surplus of £370,145, and on the whole productive works a surplus of £277,655. I admit that in that surplus on the irrigation works is included a sum which has been transferred from the land revenue. Of course, I am not in a position to state how far the transfer was a legitimate one; but I am inclined to believe that if the Accounts were accurately adjusted between the land revenue and the irrigation works, the former would very probably be found to owe a still greater amount to irrigation expenditure than is charged against it. This subject is so important that perhaps the House will allow me to put the case to them in a somewhat different form. The result of the system on which productive works are now constructed may be thus summed up. In 1868–9, the net charge on the Revenues of India for interest on Debt, interest and other charges for guaranteed companies, and working expenses and maintenance of State railways and irrigation works, was £6,859,000; in 1880–1, it will, according to the Budget Estimate, be £3,301,000, or, in other words, while there has been a capital expenditure of £37,000,000 on State works—down to the end of March, 1880—in 13 years, the net charge for interest on Debt has increased during that time by only £482,860; while the net receipts from guaranteed and State railways and other productive works have increased by £4,040,666, showing a net improvement of £3,557,806. If allowance were made for this item of £703,000, to which I have already referred as credited to the irrigation works by the land revenue, the net improvement would be about £2,855,000.

The Select Committee which sat last year adopted the view which has already been adopted by the Secretary of State in Council, of fixing a sum of £2,500,000, as that which might properly be laid out each year from borrowed money in the construction of productive works. It has been held that this sum should be exclusive of any capital required for the East Indian Railway, which has only recently become the property of the State by purchase, and the Government of India have also been allowed to re-allot in the coming year any expenditure which was sanctioned last year, but not spent, so as to secure, on the whole, an average expenditure year by year. Thus the outlay provided for 1880–1 is as follows:—The general assignment is £2,500,000, for the East Indian Railway £630,000, and the unspent balance in 1879–80 £182,000; or a total of £3,312,000. The hon. Member for Mid Lincolnshire (Mr. E. Stanhope) referred last year to the reductions in the Public Works, consequent on this restriction of productive Public Works' expenditure. These reductions rendered necessary a diminution of Establishment, and offers were made to induce many of the civil engineers to retire; under the conditions offered, 243 civil engineers and 109 subordinate officers of the executive branch have retired, besides 42 from the accounts branch; the yearly saving of salaries is £247,500; but pensions amounting to £59,700 have been granted, and £266,100 paid for gratuities and capitalization of pensions. It is intended hereafter to resort more freely to the system of constructing works by contract, so as to avoid the necessity of increasing the Establishment. The saving produced by this reduction on the Establishment is one from which the Government of India has not hitherto derived much benefit; but the benefit, in years to come, will be a considerable one.

I have now, Sir, to turn from the results, I think eminently satisfactory results, which would have been achieved, as the Accounts and Estimates show, during the last three years, but for the unfortunate expenditure caused by the Afghan War. Whether the House considers the policy of spending an annual sum on productive works from borrowed money to be sound or not, I think that a surplus of £11,000,000 of Revenue over Expenditure in three years is a result which does not indicate, at all events, an unsatisfactory position in India. But, Sir, as I have said, these results have been entirely vitiated by the War in Afghanistan; and I must endeavour to show, first, what was the expenditure estimated in February of this year as the cost of the War, the amount to which the Estimate has subsequently been increased, and the way in which, as far as I am able to say, this great error has occurred.

According to the system of Military Accounts in India, it appears that Military Expenditure is not included in the Accounts of the year until it has been audited and brought to account; and the result of that system is that the Military Expenditure of the last three months of the financial year usually remains in the Suspense Account, and is not brought into the Accounts until the following year.

Ordinarily, the expenditure of the last three months of one financial year is very much the same as the expenditure of the last three months of the preceding financial year; and, therefore, the accounts framed in this manner of the Military Expenditure are fairly, and, in fact, almost exactly, accurate. But in time of war, of course, this is entirely changed. In the first three months of 1879—the last three months of the financial year 1878–9—a very much larger Military Expenditure was incurred than in the corresponding months of the preceding year. Therefore, a very much larger amount of unadjusted advances was to be accounted for in the succeeding year than had to be carried into the Accounts of 1878–9. It appears that a sum of £2,300,000 ought to be added as the expenditure which was really incurred, as proper to the War, in the year 1878–9; that has to be added to the £676,000 charged for the expenses of the War for that year. Of course, the same thing occurred in the year 1879–80, and it occurred in an aggravated form; for, in consequence of the pressure of the War in all Departments, it appears that the audit of the Military Accounts fell into considerable arrear, and at the close of the year 1879–80 more than the usual three months of arrear of Military Accounts remained. Therefore, more than three months of Military Expenditure remained to be audited in the year 1880–1; and it now appears that, while £3,216,000 appears in the Regular Estimate as the War charge of 1879–80, a further sum of £3,200,000 has to be added as the charge actually incurred for the War in that year.

Further, the Estimate of charge for the War in India for the present year 1880–1 has been, as it is now admitted by the Indian Government, very greatly under-estimated. It is stated by the Indian Government that the Estimates for the past and present year have been based upon the audited expenditure of the cost of the War for 1878–9 and 1879–80, so far as it had been audited. That is the statement of the Indian Government. If that were the basis which had been taken, what I have shown is that it is insufficient and untrustworthy; but the examination I have been compelled to give to the Estimates, as framed by the Indian Government, does not confirm us in the opinion that any basis even so accurate as that was adopted by the Indian Government. They seem to have been satisfied to frame their Estimates on the basis of the Estimates they had thought sufficient for the last year, without making any inquiry whatever into the amount actually expended. As I have said, the Estimates for the present year were framed on a wrong and insufficient Estimate—as I think, not even upon such data as were available. The result has been that there is a great under-estimate in the expense of the War, which will fall within this year. To the £2,090,000, which was estimated in February as the cost of the War, the further sum of £3,500,000 will have to be added. I get, therefore, the following as a summary of the War Expenditure, taking the figures as presented in the Accounts and Estimates, with the additions for each year, which it is now found necessary to make, and the total results. The Accounts for 1878–9 show an audited charge of £676,000 for the War; to that it is necessary to add £2,300,000, giving a total of £2,976,000. For the year 1879–80, the Regular Estimates provided a sum of £3,216,000; to that has to be added £3,200,000, giving a total of £6,416,000. For 1880–1 the Budget Estimate made provision for £2,090,000; to that has to be added £3,500,000, giving a total for 1880–1 of £5,590,000. The total estimated cost of the War in February last was £5,982,000. To that an addition of £9,000,000 has to be made, bringing up the total estimated Expenditure of the War to £14,982,000, or, roughly speaking, £15,000,000. If this War Expenditure had been known and calculated in each of the years, the finance of which I have been discussing, the year 1878–9, instead of closing with a surplus of £2,000,000, would have closed either with an equilibrium or a slight deficit; the year 1879–80, instead of closing with a small surplus, would have closed with a deficit of nearly £3,000,000; and the year 1880–1, instead of being estimated to close with another small surplus, would have closed with a deficit of about £3,000,000.

Well, Sir, I have already told the House how I arrive at the conclusion that, but for the War, an aggregate surplus of £11,119,000 would have been obtained in the three years under review. Taking now the Expenditure proper to the War at £14,000,000—and it is only estimated now at £14,000,000 instead of £15,000,000, because it is expected that the War will pay for itself to the extent of about £1,000,000, through the increased profits from the railways and telegraphs on account of the War—Ihave omitted this exceptional source of Revenue in calculating the surpluses, and, therefore, it is but fair to omit them also from the charge for the War;—taking, then, as I have said, the Expenditure proper to the War at £14,000,000, and the charge for Frontier railways, the greater portion of which is treated as War Expenditure, at £4,184,426, we get, as the charge incurred by the War, £18,184,426, and, deducting the supposed surplus of £11,119,000, we get a deficit on the three years of £7,065,000.

I have already stated how this enormous error of £9,000,000, on an expenditure now estimated at £15,000,000, has occurred. It has occurred, according to the statement of the Government of India, through taking the Accounts of a portion of the year as the basis of the Estimates. The despatch, which will be found in the further Papers presented to Parliament on June 7 from the Government of India to the Home Government, gives us some reason to show why, even upon that inadequate basis, the Estimate which was framed of the cost of the War in the last and present financial year was a grossly inadequate one. Assuming, for a moment, that the Government of India were misled—as I do not think they ought to have been—by the untrustworthy basis on which they framed their Estimate, let us inquire for a moment whether there was not actually to their hands a more trustworthy basis on which to estimate. At pages 18 and 19 of the further Correspondence presented to Parliament relating to the Estimates of the War in Afghanistan will be found two statements appended to the Minute of Sir John Strachey, showing the actual disbursements from the Civil Treasuries to the Military Department in India, and at pages 6 and 7 of those Papers is a description of them by Sir John Strachey himself. He says—

"I now invite attention to the two appended statements marked 'B' and 'C,' being Returns of (B) the net Military Expenditure in India as recorded in the Finance and Revenue Accounts, month by month, from April 1869 to February 1880, which is the latest month for which the Accounts are complete, with an Estimate for March; and (C) the net disbursements from the Civil Treasuries in India to the Military Department, month by month, from April 1869 to April 1880. The entry for March is, however, only an Estimate. We know that the net amount disbursed in March was £2,082,500; but we do not yet know the sets-off still to come, in the shape of excess payments made during the year by the Military Department on account of the Civil Department, and the like, which still await adjustment in the Accounts of March; such sets-off will certainly be large. I have, therefore, entered £1,750,000. If these two statements be compared, it will be found that, until the end of 1877–8, the recorded net Military Expenditure was invariably more or less in excess of the net disbursements to the Military Department; the explanation of this excess is that, besides the sums withdrawn from the Civil Treasuries, the Military Department spends some portion of the departmental receipts, including money which it receives for remittances to families in England, and so on. Till the end of 1877–8, if allowance be made for the aforesaid normal difference, the two accounts corresponded closely; clearly, with a few appropriate adjustments, the Treasury accounts might till then have been substituted for the accounts of audited and classified Revenue and Expenditure, without substantial or ultimate inaccuracy; but apparently till the end of 1877–8 little would have been gained by such substitution. From the beginning of 1878–9, these normal conditions were reversed, the net disbursements having, since the beginning of 1878–9, constantly exceeded the net recorded expenditure; and from October 1878 this excess became constantly larger and larger."

He proceeds to show that, instead of the moderate excess of recorded expenditure over disbursements usual in the previous years, the net military disbursements from the Civil Treasury exceeded the net recorded Military Expenditure in 1878–9 and 1879–80 by £4,214,000. That, Sir, is the nature of the information as a basis of Estimate which was accessible to the Indian Government. Not until conviction was forced upon the minds of the Government of India that their Estimates were insufficient does it appear to have occurred to anybody to call for, or to inquire for, a Return of this description. That it might have been had, at any time, for use in the preparation of these Estimates is clear, because it has been obtained now. It was accessible then; but it does not appear to have occurred to anybody that the audited Accounts, much in arrear as they were known to be, did not form a proper basis for estimating the expenses of the War in which we were engaged. Sir John Strachey may be right in saying, as he does, at page 12 of the Correspondence, that the defect is due to the system of Military Accounts. He says—

"To sum up the whole matter, the error in the Estimates is, in my judgment, mainly due, not to any misapprehension as to the extent or character of the military operations, but to the fact that we were ignorant of the actual current cost of the War. I attribute this ignorance mainly to the defect which I have described in the military accounts, which, although themselves perfectly correct, failed to give to the Government timely information of the Expenditure which was really going on. In this respect, the whole history furnishes a fresh illustration of the fact that, in regard to such matters as keeping accounts and framing Estimates, it is never safe to assume that the care and intelligence of individuals will afford sufficient safeguards against the dangers of a defective system."

He may be right in placing the defect there. There may be something to be said in future as to the responsibility of the subordinates in the Military or Financial Departments. Both the system of Military Accounts, and the responsibility of those who are employed in their preparation, are the subject of inquiry now both at home and in India, and the responsibility, if responsibility is due to any subordinates, will, no doubt, be brought home to them; but, whatever responsibility may rest upon any subordinate members of these great Departments, I must say that I cannot hold the Members of the Indian Government free from negligence in the preparation of these Estimates, and of something approaching to blindness in supposing, or in allowing themselves to suppose for one moment, that operations of such a nature, of such magnitude, in such a country, carried on for such a length of time, could possibly be conducted at such a trifling cost as they estimated. Let the House remember that, in February last, when these sanguine Estimates were framed in India and sent home, we had an Army in Afghanistan, or on the line of communication, of certainly not less than 60,000 men. A great part of that Army was operating at a great distance from its base, in a country where the difficulties of transport and the difficulty of obtaining supplies was great, and known to be every day increasing; while, at the same time, it was known that large sums were being constantly expended in subsidizing the different tribes on our line of communication, or in the neighbourhood of our operations. Under these circumstances, it was impossible to suppose that the War, even if concluded, as was hoped, in the present autumn, could be concluded and terminated at a cost to the Indian Exchequer of under £6,000,000. I am very far from imputing any motive to those who are responsible for the framing of these Accounts. Certainly, I am very far indeed from imputing any political motives in that respect. In the first place, I believe that the character of all those who were engaged in framing these Estimates was such as altogether to preclude the possibility of suspicion in that direction. But, if I allow myself to put that aside for one moment, and to put it on a much lower ground, I do not believe that anyone for political purposes would be guilty of an act of such gross folly as that would be. I do not believe that Lord Lytton, or any Member of his Government, was under the slightest impression that the result of the General Election would be that which it was. I do not believe that they were under any impression that there was any necessity, in order to secure a successful result, that a prosperous Indian Budget should be obtained. At all events, there was a possibility that their friends would return to power; and I cannot imagine a blow more damaging to any Government than would have been inflicted if, during the tenure of power of that Government, disclosures of this nature and this magnitude had been made—disclosures which could not possibly have been long concealed.

But while, Sir, with the utmost sincerity and frankness, I abstain from imputing any motive of this kind, or any motives whatever, as the ground for this great miscalculation, I cannot help saying that it does appear to me that there has been, from the very commencement of this War, a determination which I must consider was reckless, if not deliberate, to under-estimate, not only in respect to finance, but in every other respect, the difficulties of the enterprize in which we were engaged. From the very commencement, and not in finance alone, the magnitude of the task has not been sufficiently estimated. I have stated the size of the Army now operating. So far as I am aware, no adequate reserve of British or Native troops for an Army of the size now operating under these conditions has ever been provided. From the very commencement it was assumed that we were engaged in an easy task. Lord Lytton assumed that the Ameer would receive his Embassy. When he refused, the invasion of Afghanistan was assumed to be an easy and simple task. Everything, it was supposed., would be satisfactorily concluded, after a short campaign, by the Treaty of Gandamak. After the massacre of Cavagnari, it was anticipated that it would be an easy matter to punish his murderers, and then to retire at once. At every step of these events, it seems to me that the difficulties in which we were involving ourselves have been either ignored or imperfectly appreciated. At the very moment when these sanguine Estimates were formed, in February of the present year, orders had already been given to General Stewart to commence to march with his whole division from Candahar to Cabul, and the Bombay troops which now form the garrison—I trust the adequate garrison—of Candahar, had been ordered to advance from India to replace the troops of General Stewart. Yet, when an operation of this magni- tude was contemplated, it was fondly hoped that the War would be over in the course of this summer, and that the troops would be able to return to India. As I have said, I cannot think that the Members of the Supreme Government would wish to hold themselves free from responsibility. Lord Lytton, as everyone is aware, not on account of this matter, but on account of the absolute divergence between his own views and those of the present Government, resigned his Office at once. Sir John Strachey, feeling himself identified with the policy of Lord Lytton, at once followed his example. Sir Edwin Johnson, the Military Member of the Council, although, perhaps, he cannot be held responsible to so great an extent for a matter of finance, has, as the House will see from the Papers presented to Parliament, taken upon himself the entire responsibility. After reading the Minute of Sir John Strachey, contained in the further Papers, the House may be of opinion that Sir Edwin Johnson took upon himself a greater share of responsibility than properly rested with him. Still, I cannot acquit him of some responsibility for the preparation of these Military Estimates. In his responsible position he ought to have been the man, above all others, who could form some idea of what provision was necessary for so great an Army engaged in so arduous an undertaking. I cannot acquit him of want of foresight and want of prudence in allowing an Estimate so palpably inadequate, and held to be inadequate everywhere and by everyone except the Government, to be prepared. The present Viceroy having informed him that the Government at home could not refrain from visiting upon him some part of the censure they felt rested upon the Government, he has also resigned his appointment.

I now approach the question of Ways and Means for the present year; and here, again, I must confess I speak with a great deal of reserve, and even now it is not in my power to give to the House as full an explanation as I should have desired. The House will have understood, from what I have said, that the error in the War Estimates is not an error in Estimates of future expenditure only, but is an error in the calculation of past expenditure. Of the £9,000,000 of excess to which I have referred, it is asserted that £5,500,000 has already been paid, although the Indian Government themselves were not aware of it. The obvious result would have been, one would suppose, that that excess of actual expenditure over estimated expenditure would have decreased the estimated balances; but the balance in India on the 31st of March 1880, which was estimated in February, before these errors were discovered, at 14 crores and 19 lacs of rupees, was only actually reduced in the result to 13 crores and 1 lac of rupees, so that the difference is only 1 crore and 18 lacs of rupees. How this difference between increased expenditure of £5,500,000 is to be reconciled with the actual reduction of balances of only £1,180,000 I acknowledge is even yet not absolutely clear; but I believe it may be accounted for by the fact—satisfactory in one respect, although unsatisfactory as to the system of finance of the Indian Government—that the estimated balances are framed by one Department, with the full knowledge, and in full view, of the condition of the balances as affected by the expenditure, while the estimate of military expenditure is framed by another Department upon a different basis. The difference is placed in what is called the Suspense Account, always very large, under the head of "Advances to Government." That ordinarily comprises the whole of the three months' expenditure, which, as I have endeavoured to explain, has not been audited and not brought to account. At all events, Sir, the Government of India have maintained, and still maintain, that the statement in this respect is an accurate one; and from the manner in which the errors have been discovered—namely, from an examination of the actual advances from the Civil Treasury to the Military Department—I think that it may be taken as a fact that this expenditure has actually been incurred, and that the balance of 13 crores on the 1st of April in the present year is a real balance, after the excess of expenditure to which I have referred. If that is so—and at the present time I have no other data to go upon—all that remains to be provided—always supposing that the Estimate made of the charge for the present year is ample—will be the £3,500,000 excess over the Estimate of £2,090,000. The loan which has been sanctioned for Productive Public Works, and which the House will remember in February of this year the Indian Government did not propose to raise at all, will produce 3 crores and 13 lacs of rupees. That sum, with the reduction of drawings by the Secretary of State in London for the Home Government from £16,900,000 to £15,000,000, which will give a relief of 2 crores 28 lacs of rupees, will raise the balance in India by 5 crores and 41 lacs. The balance in March, 1881, was estimated at 11 crores and 44 lacs; and by the loan for Productive Public Works, and by the reduction of the Secretary of State's bills, it will be raised to 12 crores, so that the Indian Government will, notwithstanding the expenditure which will fall upon them during the present year, be placed, at the end of 1880–1, in a slightly better position than was estimated at the beginning of the year. If the War, as is, unfortunately, possible, goes on, it will be necessary to provide additional funds; but there is no reason to doubt that the Indian Government will be able, if necessary—we trust it will not be necessary—to raise an additional loan. The estimated balance at home on the 31st of March, 1881, was £1,806,000. The reduction in drawings, which I have just mentioned, will, of course, absorb that balance, and assistance will be necessary; but the Government at home has power, if requisite, to raise £5,000,000 by loan. Looking, however, at the intended relief to be granted by the Imperial Parliament, to which I referred in answer to a Question some time ago, it is not now intended to make any permanent addition to the Indian Debt, and any assistance required will be of a temporary character. I said, on a previous occasion, that it is now impossible for the Government to make any proposition to the House as to the amount of assistance which we propose should be given to the Government of India. It is not possible to decide what the amount of that contribution shall be until we know exactly what the total cost of the War may be. If it were possible to make a final and reliable Estimate of the total cost, I do not think it would be desirable that we should name the amount of contribution we propose to make, until the Government, the new Viceroy, and the new Finance Minister have had time to consider in what form and manner the relief should be given; while it would be obviously undesirable, until we are in a position to make a definite proposition to the House, that there should be any communication of the exact amount or the exact form that that contribution should take. But, although I cannot state at present either the amount or the form which it is proposed our contribution to India should take, I think I may say one or two words upon the policy of granting a contribution in aid of the Indian Revenue. The chief arguments against the policy of giving assistance to India are set forth, very forcibly, in Sir John Strachey's Financial Statement made in February last, and they are pretty well summed up at page 10 of that Statement. There he said that the loss by India of her financial independence, and the acceptance by England of financial responsibility for her Indian Empire, would signify to India the loss of control over her own affairs in every Department of her Administration, and the substitution of ignorance for knowledge in her Government. I should be very much disposed to agree with Sir John Strachey if I thought that assistance from Great Britain could only be purchased at the price of additional interference by Parliament or the British Government in the internal administration of India. I think only extreme financial necessity can justify such a step; and I do not think the Statement I have made makes out any case of such financial necessity as would justify it. I do not think that anything which is wrong, or which is amiss, in the Government of India will be amended by increased interference by Parliament, or by our administration. I am aware that many Members point to the personal and bureaucratic form of the Indian Government; but I believe the remedy will be found, if a remedy is to be applied to a position of that kind, not in the increase of interference by Parliament, but rather in offering additional inducements and facilities to unofficial opinion in India, whether foreign or Native, to take a part and a greater interest in the affairs of the Government, and to come to their assistance. It is not, therefore, with any intention or idea of further internal interference in the administration of India that help would be given. That help ought, in my opinion, to be given unconditionally, and not as a matter of charity, but simply and purely as a matter of justice. It seems to me that in this case Sir John Strachey's argument falls to the ground, and that it will be in the power of every one of us to decide for himself, according to his own convictions, whether, to use again Sir John Strachey's words—

"The War in Afghanistan does or does not fall precisely within the category of wars which have been entered upon in defence of no Indian interest whatever, but in furtherance of the so-called Imperial policy adopted by Her Majesty's Government."

Sir John Strachey and the Government of Lord Lytton hold one opinion; we hold the other. We hold the opinion that this War cannot be said to have been entered into for the sole benefit of India; but was entered into for the furtherance of an Imperial policy. The matter presents itself in this way. This policy was initiated by the Government at home, in opposition to the opinion and the advice of those who were at that time responsible for the Indian Government. It was persisted in by the Government at home, and in that action they were supported by Parliament. The consequences of that policy, whatever may be thought of them in other respects—and I am not going to enter into that point now—must be admitted to have been financially disastrous to India. It seems to be, therefore, not a matter of charity, but a matter of justice, that the British Government and the British Parliament, and the British nation, which supported the Government in pressing this policy and its financial results upon the Government of India, should be held responsible, and that upon this country should fall some share of the cost of that policy which it supported.

It is usual, on these occasions, to give some account of the progress of commerce in India, and I will tell the House, very briefly, what has been the progress of trade in India for the last year. The import trade shows a revival in 1878–9 over the depression of the previous year. The total imports of all kinds in 1878–9 were valued at £44,000,000, and in 1879–80 the total value was £52,000,000. The value of the exports in 1878–9 was £64,000,000, and of those raised in 1879–80 £69,000,000.

I am afraid I have detained the House for a very long time; but before I sit down I will state, in one or two words, the impression that the general review which I have been enabled to make of Indian Finance leaves upon my mind. It seems to me that the large surplus of Revenue over Expenditure, apart from the War, shows a decidedly satisfactory financial position. I think, perhaps, the most satisfactory feature of that position is the increasing productiveness of Public Works to which I have referred. That is the most legitimate and most satisfactory feature in the situation, for it shows not only the financial position of India, but it shows also its industrial position. But, while there is this improvement, there is also much that is unsatisfactory, apart altogether from the extraordinary. War charges. A Revenue which depends so largely on so precarious a reserve as the opium traffic cannot be considered to be in a secure position. As I have pointed out, the Indian Government have estimated their receipts from that source at very much below what has been obtained in recent years; but, still, the Estimate is larger than any ever previously taken, and the Government of India have been informed that they are now relying more than is safe upon an item of Revenue which is so uncertain as this. That which must strike everyone who has given the matter any attention at all is that India has no reserve, no great reserve power of taxation. In India there is no tax like the Income Tax, upon which we can fall back in times of emergency, whether of war or of famine, and from which we can draw almost unlimited assistance. If increased Revenue is required in that country, it must be obtained by the imposition of new taxes, and by imposing new burdens on the great mass of the people, who are scarcely able to bear any more taxation. Again, Sir, it is unsatisfactory to consider the yearly increasing amount of the Home Charges. In 1870–1 the amount required for this purpose was £9,500,000; in the year 1879–80 it was £17,290,000, and in the present year it is estimated at £16,900,000. However necessary may have been the object for which this expenditure has been incurred, a drain of this magnitude from the resources of India, which is not, like the interest on the National Debt, paid to the inhabitants of the country, and spent in the country, but in its nature is more of a forced tribute, cannot but inspire any- body who is responsible for the finances of India with anxiety. Not only, as I have said, is it a drain upon the country, and not only are these large sums spent annually out of the country, but the increasing amount of these charges has a continually disturbing effect upon the exchanges, and tends to disturbances of a grave nature in the trade of India. I have no panacea to propose for this unsatisfactory condition. The lesson to be learnt seems to me a very simple one. It is, that we should spare no effort, while the Revenue is prosperous, to secure annually a substantial surplus; and, above all, the lesson is that we ought to avoid all unnecessary sources of expenditure. I do not doubt for a moment the ability of India to defend herself in times to come, as she has done in times past, against any dangers, external or internal, with which she may be threatened. But I think that India ought not to be called upon to do more than provide for her own security; and if she is to take part, or is to be called upon to take part, in great schemes of Imperial policy, on the merits of which I will not now express any opinion, then I think that Parliament and the country ought distinctly to understand that, whatever assistance India may render us in men or in Imperial resources, sooner or later it is on this country that the financial burden will have to fall, and that India cannot be, and ought not to be, expected to pay the cost of that Imperial policy.

Sir, I am aware that there are many subjects which ought to be referred to by the Indian Minister in a Statement of this kind, which are as interesting, or which are more deeply interesting, to many who are acquainted with India than the mere financial condition of the country. It is asserted by many who have a right to be heard with respect that there is much that is unsatisfactory in the agrarian and social condition of some districts of India. It is not possible for me, in an address of this kind, to express any opinion of my own on these difficult problems. The House will readily under-stand that coming, as I have done, only recently into the administration of this difficult Office, and having had some difficulties of a somewhat unusual and exceptional character upon my hands, I have not had much time to study these extremely complicated and difficult problems. Under any circumstances, I do not think that after three months' experience I should venture to intrude my views upon the House. But, Sir, I may state that I am aware that there are many of those in office in India whose minds are not so completely absorbed, as is sometimes supposed, in the routine of the official duty of their offices, that they do not keep their attention constantly fixed on these great and all-important questions. It may be that we have made changes in the laws, and with respect to the tenure of property in India, which have gone somewhat beyond the wants, the necessities, and the customs of the people of that country. It may be that we have adopted, rather too freely, our own views upon those questions, and have not always sufficiently considered the habits and customs of the people. Sir, these subjects are at this moment under the consideration of many of the ablest servants of the Indian Government. They have not occupied so much the attention of the Indian Government itself as could be desired during late years, and I think the reason is obvious. During a period of war it is impossible that the energies of almost the whole Government should not be absorbed in meeting the pressing necessities of the hour; and they have but little time to devote to those equally, and perhaps more, important questions affecting the well-being and prosperity of the people. I can only say, then, in reference to these subjects, that I trust it will be my duty, or the duty of whoever may succeed me in this Office, on a future occasion, to be able to devote a larger portion of this Statement to matters affecting the internal condition of India and the improvement and progress of its people; and I believe that the energy and ability displayed in our Indian Empire will not fail to eventually secure the happiness and prosperity of that great country.

, in rising to move, as an Amendment—

"That the public expenditure in India and the charges on the Indian Revenues defrayed in England are excessive; and that, in the in- terests of the people in India, it is desirable to effect a prompt and large diminution of such expenditure,"

said, that the deception which had some time ago been practised in regard to Indian Finance had tended to shake the confidence of the House and the country in all financial accounts which came from India; and he should be glad to hear what answer the late Chancellor of the Exchequer and the late Under Secretary of State for India had to make on that subject. A more fatal error in policy was never committed than when a policy, directed by a supposed antagonism between this country and Russia in the barren steppes of central Asia was carried to a result which the greatest enemy of this country would most heartily wish, and the greatest friend of Russia could most heartily desire. He thought it most inconceivable that the late Government could have been misled to the extent of supposing that the campaign in Afghanistan could be carried on for anything like the sum they had named, having the experience of the former war in that country before them. So far from £15,000,000 being the price which they would have to pay for the War, he had no hesitation in saying, after consulting with those who were qualified to form some opinion upon it, that the sum would be much nearer £20,000,000. His noble Friend had given the House an able and lucid statement as to the finances of India; and he rejoiced that so important and so responsible a Department of the State as that now intrusted to his noble Friend had been committed to his hands. During the last 15 years the Revenue had doubled, but so had the Expenditure, and that, he considered, was a very serious matter. His noble Friend had alluded to the large increase in Home Expenditure, which had grown from £3,000,000 or £4,000,000 to nearly £17,000,000 a-year, and there was no doubt the latter sum inflicted a great burden on the people and finances of India, which was greatly augmented by the depreciation which had taken place in the price of silver. What appeared to him the moat serious part of the financial condition of India was this—that there was no means of obtaining relief by an augmentation of the Revenue. Neither the land revenue nor the opium revenue could be increased, and taxation generally had reached its utmost limit. If that was the case, where were they to look for those alleviations of taxation which were necessary? They were to be found in one way only—in a large reduction of expenditure. Nearly a quarter of a century ago he joined with the right hon. Gentleman the Chancellor of the Duchy of Lancaster (Mr. John Bright) and others, and founded an Association which endeavoured to promote economy in India. All the propositions they made to the House of Commons were derided and denied at the time; but, with a single exception, every one of them had since been carried out. The reductions he proposed depended entirely upon that which his noble Friend called an entire change of policy. He did not mean a policy of peace as against war; because he did not suppose that any Government in their day would attempt to repeat the folly which had been recently committed with regard to our Indian policy. The change of policy which he meant was with reference to our Military Expenditure in India, and the change that was necessary was a large reduction in that expenditure. Such a reduction, he maintained, was quite compatible with the safety of our Indian Empire. There must also be a large admission of the Native element into the government of the country. The European element which would proceed from this country to govern India must be made aware that the circumstances of the Service in India had so altered that the salaries paid must be consistent with the improved condition of things. They must have that which was most important of all; they must abolish the useless Governments of Madras and Bombay, and do away with the unnecessarily high military office of the Commanders-in-Chief in Bombay and Madras, and they must put those inferior Presidencies on the same footing as the North-West Provinces, and govern them by Lieutenant Governors or Commissioners, by which an enormous saving would be obtained. With regard to the Army, the expenditure had grown to an enormous excess over that upon any part of the Service. He had the opinion of those who had filled the highest offices in India, and who had given their opinion when India was passing through a very critical period. After the suppression of the Mutiny, Lord Canning said that the whole expenditure necessary for the Army in India ought not to exceed £12,000,000, and Lord Northbrook said £14,000,000 would he sufficient; but now it exceeded £17,000,000, and, with the extraordinary expenditure, it wouldreach£18,000,000 or £19,000,000. What conceivable advantage could there be to the State or to the people of India that there should be a Commander-in-Chief in Madras and another in Bombay, each surrounded by a most expensive Staff? This new military organization would effect a saving of £100,000 or £200,000 a-year, and it would be carried out at once by any other European country but our own. It was not the actual pay of the Commander-in-Chief, but the useless Staff and paraphernalia with which he was surrounded, that added so much to the expenses of the establishment. It was true that while we were engaged in a disastrous war in Afghanistan was not a time to urge a large reduction of the personnel of our Army in India; but it was right that hon. Members should remember that the number of our European Army there depended upon the number of Native troops maintained by the Native Princes; and if it were not for the Native Armies maintained by Scindia, Holkar, the Nizam, the Guicowar, and the Maharajah of Cashmere, we should be able to maintain a much smaller force. We should proceed by diplomacy, and, first of all, insist upon a fulfilment of the Treaties with them. It was said that, in some instances, these Treaties were evaded, and that Scindia had done with his military force as Prussia did after the Battle of Jena, and passed great numbers of men rapidly through the ranks. Their position, with reference to the Natives was an all-powerful one, and he thought they should use it to a good purpose. They were in a condition to tell the Native Princes that the Military Forces were too large, and to insist upon their being reduced. The moment such a reduction was effected a great benefit would be conferred both upon the subjects of those Princes and upon our own subjects. A policy of boldness in that respect would be a wise policy; such a course would be an enormous economy. Another point he wished to insist upon was the enormous expenses incurred by the country in re- spect of the changes of residence from Calcutta to Simla by the Viceroy. Formerly the Governor General resided in Calcutta all the year, with the exception of about two months. Now he resided at Simla all the year, except-about two months at Calcutta. As soon as he left Calcutta all, or nearly all, his expenses were thrown on the Exchequer, and did not come out of his salary of £30,000 a-year. Similar remarks might be applied to a smaller extent to the Governors of Bombay and Madras. The policy he advocated would effect a saving of £9,000,000 or £10,000,000 a-year. He thought, also, there ought to be a thorough reform of the Civil Service. The whole conditions of life had been altered since the Civil Service system and the salaries paid to Civil Service servants were first organized. It was then necessary to offer great inducements to obtain competent persons for the Civil Service. Life in India then involved a complete separation from their homes; now it was far otherwise, and it was possible to employ so short a period as two months' holiday in coming from India to England. Besides, the work of Civil servants could be done as efficiently by Natives, at a cost two-thirds less than was incurred under the present system. There had also been a needless expenditure, which might even be termed reckless, in the purchase of waterworks. It was said that the late Government were 'defeated in consequence of their Water Bill; but in Orissa, waterworks, whose shares were only £60 in the market, were purchased at the rate of £100 per share. Information on this subject was to be obtained from the admirable work of the Postmaster General, a work which all should study who wished to see how money was squandered in India. Passing by other instances of extravagance, he must ask the House to bear in mind the immense losses caused to India by the improvident manner in which loans were contracted. Mr. J. P. Mackenzie, of Kintail, in a letter to the Prime Minister, had shown that, with regard to the £17,000,000 loan issued in 1880, a saving of £200,000 might easily have been effected if steps had only been taken to lead to the formation of a syndicate to take up the stock. With regard to the £3,000,000 loan, a great blunder had also been committed in the institution of coupons payable to bearer. In consequence of this, but very little of the loan was subscribed in India, and nearly the whole of it was taken up by a syndicate of Paris bankers, with great profit to themselves, the loss to the Indian Exchequer being between £400,000 and £500,000. His noble Friend had shown that the charges on the finance of India were excessive, and had promised to diminish them; but had he the power to effect such a diminution as would bring about contentment in India? He sincerely trusted it might be seen that he had that power; for if they pursued a policy of reckless extravagance, of disregard of Native sentiment, and of unnecessary luxury, it would be impossible for them long to preserve their glorious Indian Empire. The hon. Gentleman concluded by moving the Amendment of which he had given Notice.

The statement to which we have just listened from the noble Lord the Secretary of State for India will be all the more re-assuring to the people of this country from the moderation of the terms in which the noble Lord expressed himself. In dealing with Indian matters we are always in danger of running into one or other of two extremes—either we are in a state of unreasoning apprehension, or we find ourselves in a condition of tacit acquiescence which is not far removed from apathy and neglect. I have, therefore, heard with great satisfaction the statement of the noble Lord to-day; for, although he expressed himself with a caution which was fully to be expected, he proved that, putting aside for a moment the extraordinary expenditure of the Afghan War, the general condition of the finances of India is undoubtedly prosperous. Having heard his speech I could not be expected not to refer to the statements of a few months ago, often made by people who ought to have known better, that the late Government had managed somehow or other to plunge the finances of India into great confusion. I hope that now, at any rate, we have heard the last of that, and that we shall be able to discuss the state of Indian affairs in an unprejudiced manner.

I think it best to allude at the outset of my observations to a topic which has been receiving great attention in the last few months—I mean the insufficient Estimate for the War in Afghanistan. It was my duty, not long ago, as representing the Government of India, to explain certain Estimates which were put forward by the Government of India as representing the cost of the Afghan War. Well, it unfortunately turned out that these Estimates were not only utterly inadequate, but were so completely out of proportion to the real expenditure as to make it difficult to understand how, under any system at all, so gigantic a blunder could have been perpetrated. I certainly am not going to extenuate or defend that blunder. It was not only a mistake of prospective Estimates, but it showed ignorance of past expenditure; and I attribute it mainly to the present method of estimating the cash balances, which has, on former occasions, also led us into difficulty. The noble Lord has not attempted to apportion the blame for this blunder among those upon whom it must ultimately rest. He awaits the results of further investigation. I can only follow the example of the noble Lord in that respect. One word only will I say with reference to Lord Lytton. No man in this country is more pained than he has been at the mistake that occurred, for his Government have been, undoubtedly, the means of misleading the people of this country; but, on the other hand, it is fair to remember that he and his Government were equally misled themselves. I cannot but deeply sympathize with one who, at the close of his career in India, in the course of which—in conjunction with Sir John Strachey—he has rendered financial services to India which the calmer judgment of a few years hence will lead the people of this country adequately to appreciate, has been startled by the discovery of a mistake for which he and his Government are undoubtedly responsible, but which came upon him and them as a complete surprise. I have seen it suggested, in some of the newspapers, that there was something very suspicious about the way in which the last Budget Statement of India was hurried forward. It has been suggested that it was hurried forward in consequence of some knowledge in reference to the date of the Dissolution which was likely to take place. As to that, I can only say that neither the late Viceroy, nor any Member of his Government, knew more about the prospect of an immediate Dissolution than any ordinary Member of this House; and this can be proved by the fact that notice of their intention to take the Budget at a somewhat earlier period than usual—in fact, about the middle of February—was given to us some six months before the statement was actually made.

But, as regards the position of the late Government in this matter, I have a few words to say, because it has been very much misrepresented. If this were a mere personal matter it would be of no importance. But a much larger question is involved; one that goes to the root of all Ministerial responsibility, and that is that this House should always be thoroughly satisfied that in any statement made by any Minister of the Crown nothing is put forward which is not absolutely justified by the information then at his disposal, and nothing kept back which is requisite for a clear understanding of the whole case, and can be told without injury to the Public Service. This is due to the House and to the country, and perhaps especially to those who, sitting on our own side of the House, gave us, on the faith of our statements, a constant and unswerving support.

I dare say that many hon. Members of this House are not aware that the financial control of India does not rest with the Secretary of State. The law rests it absolutely in his Council; and, therefore, all information, including all telegrams, relating to the cost of the War and other financial matters, are at once, and as a matter of course, referred to the Finance Committee of the Council, who hold special meetings whenever it may be necessary. These meetings are attended by the five Members of the Council nominated to serve upon it, by one or both of the Under Secretaries of State, by the Financial Secretary, and, during the last few months, by his Pre- decessor also, the present Assistant Under Secretary of State, for 50 years connected with the Department. This Committee drafts the answers to all telegrams and letters, and suggests any further orders or inquiries that may be necessary. Their suggestions are submitted to the Secretary of State, and afterwards, if time admits, receive the approval of the Council as a whole. And, therefore, to talk of secrecy, or of any attempt, or the possibility of any attempt, at keeping back financial information for political purposes, is to show an imperfect acquaintance with the manner in which the business of the India Office is conducted; and, also, whether the view taken of these Estimates was wrong or right, it was that taken by all of those responsible for the financial administration of India. And I hope that the House will keep clearly before it what war expenditure really means. It is, of course, not the whole cost of the troops in the field; but the excess of that cost over and above their normal cost in time of peace. Now, these are just the items upon which it is impossible to form a reliable opinion in this country, the price of food ranging in different localities to an almost incredible extent, and the cost of transport suggest themselves at once as items as to which no opinion formed in this country can be worth much. Upon such points the India Office must continue to rely upon the information which reaches it from India.

After the renewed outbreak of war in Afghanistan, occasioned by the massacre of Sir Louis Cavagnari, the first estimate of its cost which reached England was that made in India in December last. But on the 24th of February this Estimate was superseded by the publication of the annual Budget Statement, the text of which was not, however, received in this country until after the debate in this House on the subject. This statement showed, what is not now disputed, that there was a very considerable improvement in the general financial prospects of the year, and contained what professed to be a very careful estimate of the cost of the Afghan War, past and future. Put very shortly, it amounted to this—that the first Afghan War, brought to a conclusion by the Treaty of Gandamak, had cost £2,676,000; and that the second Afghan War, still unhappily proceeding, would cost £3,306,000. Now, what view ought to have been taken in England of these figures? It is very easy indeed to be wise after the event. It is very easy to say that the error might have been foreseen from the first; or, at any rate, that subsequent information might have given warning. But I will ask the House to try for a moment to put themselves in our position, and calmly and impartially to consider these figures. In the first place, there was nothing unreasonable on the face of them. It was quite true that more troops were being employed than had been in the field this time last year; but, on the other hand, it was understood that the loss of boasts of burden was considerably less, and the means of transport had been already and were daily being improved. The noble Lord (the Marquess of Hartington), indeed, has suggested that the late Government and the Government of India have throughout shown a disposition to underrate the importance and to minimize the difficulties of the War in which they were engaged. But I recollect that last year only, when we thought it right to propose a Vote of Thanks to those who had carried the War to a successful conclusion, and based it upon the importance and difficulty of the War, neither the noble Lord or any hon. Members on the other side of the House supported that view, but gave it, on the contrary, a very strenuous opposition. Secondly, they were confirmed by the accuracy of the previous Estimates, so far as the facts had then been reported to us. Let me ask leave to verify that statement very shortly. The first Estimate of all for the cost of the Afghan War was made in December, 1878, when it was stated that the sum to be charged to the financial year 1878–79 would be £940,000. In March, 1879, the Financial Statement for the year was published, and it then appeared that the charge for the year 1878–9 which could be brought into the Accounts of that year was taken only at £670,000. The accounts which we received in March of the present year showed that the actual gross expenditure for 1878–9 (no longer estimated, but, as we were told, realized) had turned out to be £676,000, showing a singular approximation to the anticipation of the previous year. This remarkable result appeared to be, so far as it went, a strong confirmation of the accuracy of the Indian authorities. With regard to the financial year 1879–80 the case was as follows:—The Financial Statement for that year, which was made, as the House may recollect, two months before the conclusion of the Treaty of Gandamak, estimated the cost of the War during that year at £2,000,000. Then we heard of a great loss of baggage animals, and of other possible causes of expenditure. But in the Financial Statement for 1880–1 we find this remarkable statement made by the Finance Minister in the presence of the Legislative Council—

"The original Estimates for 1879–80 provided for an additional military expenditure of £2,000,000 for the War with Afghanistan. If the War had ended with the Treaty of Gandamak, I believe that this Estimate would not have been exceeded."

If the House has followed me so far, it will, I have no doubt, be of opinion that our previous experience did, therefore, furnish considerable confirmation of the Estimates before us. They were indorsed by all our information of a private character. They were Estimates for which the Viceroy and his Council were collectively responsible, which were prepared and, as it might have been supposed, checked in every detail by competent authority, in order to be incorporated into the annual Budget Statement, the most important and solemn act of the financial year. Everything about them seemed to indicate the complete and honest belief of the Government of India in their correctness, which, no doubt, that Government entertained. So satisfied did they appear to be of their sufficiency that they remitted certain export duties; they definitely abandoned the scheme which they had proposed, and which my noble Friend (Viscount Cranbrook) had heartily accepted, of extending the licence tax to the official and professional classes; they utterly refused, at any rate for the time, to borrow anything at all, and they expressed a confident belief that there would be no need to do so even for the prosecution of their Public Works. So little did they appear to anticipate any financial embarrassment that they pressed forward all payments that were becoming due; and they pushed on, at enormous cost out of their ordinary resources, an extended system of Frontier railways. And, last of all, it was an Estimate made with full knowledge of the military programme of the War to be pursued in the coming year. And the House will find in a telegram of June 7 an admission that, except as to the extent of the local failure of crops, all the causes which were at first put forward to account for the grave mistake in the Estimates were known and ought to have been considered in framing them.

But then it has been said—"Why were you not warned by the specific statements of the present Prime Minister upon the subject?" Well, let us see what they were. It is absolutely necessary to examine them very briefly, although I can assure the House that I am not going to allude to them in any controversial spirit. The allegations to which the right hon. Gentleman gave circulation in Mid Lothian were two—the second being, in fact, brought forward in proof of the first. It alluded to the depletion of stores in the arsenals, and was sufficiently dealt with in the debate of March last. But the first was a general charge against the authorities in India, of having deliberately cooked the military accounts, in order to conceal the real cost of the Afghan War. It cannot be denied that this was a charge of the most definite, and of the most serious, nature. It was one which, for the character of our Indian officials, absolutely required an answer, if it could be given. And when some of us are said to have expressed ourselves with some warmth on the subject, I confess that I should have been ashamed of myself, as representing the Government of India in this House, and as bound in honour to defend, where we honestly felt we could defend, the credit of our public servants in India, if I had not repelled the charge as one which every scrap of our information, and our estimate of the character of the men with whom we had to deal, compelled us to disbelieve. That allegation was made at the end of last November. It referred not to prospective Estimates, but to past Expenditure. It was one easily capable of examination and refutation in India, but not here. It reached India before Christmas, and all I have to say upon the subject is that every statement, indeed every particle of information, which reached us, officially or privately, during the last Parliament —although the Estimates had twice undergone, we were told, a careful revision—was in direct contradiction of it. And the speech of the Viceroy himself, the telegraphic summary of which reached us before the debate in this House on the 12th of March, dealt at some length with the subject, and indignantly repelled any such idea. And, therefore, in speaking on that day, knowing that the allegation was being—I do not for a moment say unfairly—used for Party purposes all over the country, I took the opportunity which naturally arose of again denying it on the authority of the Government of India.

But it is said, further, that our eyes ought to have been opened by the telegrams which we received in March about the reduction of our drawings upon India. This is somewhat a technical subject, and in endeavouring to make it clear I run the risk of exhausting the patience of the House; but it has been much misrepresented, and is essential to a clear understanding of the position. The whole amount required for the service of the Home Government is drawn by bills upon India sold weekly, but varying in amount at different periods of the year. The India Office endeavours so to adjust that amount as that it may be largest at the time of year when the export trade of India is at its height, and when, therefore, there is most demand for means of remittance to India, and the bills themselves can be sold at a better price; and smallest in the autumn, when, as experience has shown, the demand falls off altogether. But that course is not always equally convenient to the Government of India. Sometimes they press more money upon the India Office at unsuitable seasons, and sometimes they are unable to meet the drawings at suitable seasons. The result is that there is often a conflict of view as to their increase or reduction. In the present year, it originated in the belief which the Government of India, not unreasonably at the time, entertained that the total amount of drawings estimated by the Home Government to be required for the service of the year 1880–1 was in excess of their actual necessities; and they urged upon the Secretary of State that if he could see his way to reduce his drawings, they, on their part, would certainly not have to incur any Debt in India during the year. For reasons which it is not now necessary to mention, this was refused; and it being the height of the export season, drawings were continued at the rate of 45 lakhs weekly. But when a third drawing at this rate was announced for the month of March the Government of India resisted, and represented, truly enough, that this was done without any previous notice to them. Then arose the old controversy. On the one hand, the Government of India urged that some of the drawings of the Home Government should be postponed until the autumn, when their cash balances would be better able to meet them. On the other, the Secretary of State pointed out that, from past experience, he could not reckon on recouping himself in November for deficient drawings in March; and that, rather than diminish them, he would urge their borrowing in India, either temporarily or permanently, to replenish their cash balances. That was the whole object and effect of these telegrams. They were not of a very unusual character; they had a definite object, and there was nothing in the world to connect them in any way with any miscalculation of the cost of the Afghan War. In this respect they caused no special anxiety at the India Office. Up to the time of the Dissolution of Parliament I constantly attended the meetings of the Finance Committee at the India Office. I conferred daily with the experienced permanent officials there, and from none of these sources did I ever hear the suggestion that these telegrams in March were connected with any excess of expenditure such as has now been ascertained. The reason why these telegrams conveyed no alarm to us in this respect was that they were not intended to convey any. The Government of India itself at that time felt no alarm. Whether they investigated the matter with sufficient promptitude or not may be a matter of opinion; but the fact is that they believed that the increased outgoings for the War were of a temporary character, and only important as occasioning inconvenience in meeting the drawings from England.

And now I would make an appeal to the noble Lord. He has, with great fairness, included among the Papers a Minute written by me just before I left Office. But I am not the only person responsible. And I would, therefore, ask him whether he could not, in the next batch of Papers, in justice to the Financial Department of the India Office, furnish any Minute or Report which may have been made, setting out the view which they took of these telegrams at the time that they were received.

I come now to the effect which the cost of the War has produced upon the finances of India. Let us for the moment put aside altogether the question of assistance from England to India, and consider how the cost has been met by India alone. The War has extended over three years, and I understand that its total net cost has been now placed at £14,000,000 during those years, besides £4,000,000, atleast, expended upon Frontier railways, making a total of over £18,000,000 that has had to be provided over and above ordinary expenditure. Now, on the other side, I find that, including the loan that would be necessitated in England by the reduction of the drawings which the noble Lord announced some time ago, the total borrowing during the three years would have been £18,000,000 also. But of that amount, no less than £12,000,000 have been expended upon productive Public Works, or in loans to Municipalities or Native States; or, in other words, were not incurred for war purposes. So that we arrive at this remarkable result—that the total net increase of debt occasioned by the war expenditure of the three years has only been £6,000,000, and the whole of the rest of the amount required has been paid out of ordinary income. Even then I am hardly stating the case fairly, because no one could have complained if the sum expended upon Frontier railways, which were necessary whether the War had occurred or not, had been excluded from this calculation. Now, supposing that England, in a great war, costing £18,000,000 sterling, had found it necessary only to borrow one-third of that amount, and had paid the rest out of ordinary Revenue, would anyone have said that any very alarming state of things had been disclosed? And when we come to India, I do not see why the same conclusion should not be drawn. But, in addition to that, we are told that England is to come to the assistance of India, and is to contribute a solid and substantial share of these expenses. The position of the late Government with regard to this question was very simple. We had to deal with a state of things when the whole amount estimated for the War was less than £6,000,000, and even that amount was to be spread over a period of three years. Looking, therefore, to the financial condition of India, and to the great interest which, in our opinion, India had in this War, we felt that we ought to hesitate long before we departed from the sound principles which have hitherto governed the relations between England and India; and all the more, because the Government of India had unanimously come to the decision that no assistance was needed. We believed it to be essential that, except in very special circumstances, we ought to prevent India from becoming a financial burden to this country, and that the moment India was felt by the people of this country to have become a burden, the relations between the two countries must necessarily undergo serious modification. We believed, further, that the only real guarantee for economical administration was the knowledge on the part of those charged with the Government of India, and the direction of its policy, that, after all, they would have themselves to bear the cost of it. But the noble Lord (the Marquess of Hartington) has given us to-day some very strong reasons for an opinion that this War is entirely Imperial in its character, and that it was undertaken, not for Indian, but for Imperial objects; and then he comes, after all, to the somewhat lame and impotent conclusion that England is to pay some part of its cost. The logical conclusion from his argument is that England ought to bear the whole of it; and all the more, because I recollect that when, two years ago, the total cost of the War was estimated at £1,000,000 only, the noble Lord and his Friends spoke and voted in favour of the proposition that India should bear no part of it. But now the noble Lord says that we are to wait before we can be told what proportion of the cost is to be borne by the Imperial Exchequer. I do not complain of that course, because it would, no doubt, be desirable that the Government should have full information on the subject, and especially the opinion of the Government of Lord Ripon, as to the mode in which any contribution is to be made. At the same time, delay is not without danger. It is like giving a blank cheque to the Government of India, because, of course, the proportion of contribution by England will depend upon the amount expended.

I spoke just now of the amount of surplus income, independently of the War; and I am heartily glad to hear the opinion of the noble Lord with reference to the licence tax, that if it is determined to retain it, it ought in justice to be extended to the official and professional classes. That will make a small addition to income; but, besides that, the fact is that a steady increment of Revenue is going on from year to year. Not only was this to be expected from the large increase of our territory during the last 30 years; but it would have been very disappointing indeed if, after all the additional security we have given to the country, the gradual expansion of its trade, and the network of public works which have been constructed, there had been no increase in its Revenue. Well, what is that increase? I exclude opium and the new taxation, as being so variable in amount as to disturb the calculation. But, with these exceptions, if anyone will examine the figures of the last ten years, he will find a regular annual increment of Revenue to the extent of £400,000 a-year.

On the other hand, of course, there has been an increase of Expenditure, but not to an equal extent; and when we talk of the fluctuations or the uncertain character of Indian Expenditure, we really mean only two items—famine and loss by exchange. With these exceptions, and also that of war, the Expenditure has been pretty steady; and no better proof can be given than the figures quoted in the Return distributed to hon. Members this morning, from which it appears that the net ordinary Expenditure of the four years of Lord Northbrook's Viceroyalty and the first four years of Lord Lytton's was almost the same. The hon. Member for Rochester (Mr. Otway) gave us some instances, as he called them, of extravagance. I am only concerned to refer to one of them, the conversion of the Five per cent loan effected in March last. I am sorry we had not then the advice of the hon. Member as to the means of doing so on more favourable terms; but we did consult some very high authorities at the Stock Exchange on the subject. It was, especially considering the large amount involved—£17,000,000—a very delicate operation; but I believe that since it was successfully effected the India Office has received nothing but congratulations upon the subject. The hon. Member went on to refer to the policy of reduction of Expenditure. I think he would have been doing better service if he had, at first, given us some practical suggestions as to saving £1,000,000 or £2,000,000; instead of talking in a vague way about saving £8,000,000 or £9,000,000, and I was also a good deal disappointed at the manner in which the noble Lord the Secretary of State referred to this subject. He seemed to speak in discouraging terms of the prospect of any reduction. And he went on to say that he hardly thought that the undertaking made by me on behalf of the late Government, as to reduction of Expenditure, had been made good, and he rather left it to me to explain what had happened.

Well, the pledges which I gave last year were that the arrangements with the Provincial Governments should be revised, with a view to economy, that the Public Works Expenditure should be reduced, and that a careful examination of the Army charges and the Home charges should at once be made. Let me explain to the House how those pledges have been redeemed. An extensive investigation into all expenditure, both in England and in India, has been made. At home a small Committee at the India Office has carefully considered every means of reducing expenses, and the result has been that many small economies have been effected and others set on foot. The assignments to the Provincial Governments out of the general Exchequer have been cut down by £670,000.

With regard to the Army, the noble Lord has told us that a Commission appointed by Lord Lytton has considered the whole subject; and, in spite of the War, has presented its Re-port. That Report contains recommendations which, it is believed, will add to the efficiency and fighting strength of the British and Native portions of the Army, and also save £1,250,000 a-year. It is, of course, most reasonable that full time should be taken for the consideration of this important Report. The noble Lord has spoken in a somewhat discouraging way as to the possibility of reducing this expenditure also; but I am not without hope that the detailed knowledge of our English military system which he brings to bear upon the subject will enable him to effect important economies. I venture to make one suggestion to him, and that is, that he should publish some part of the Report in England. I am well aware that there are portions of it which are not suited for publication, although summaries have appeared in India; but there are other parts to which that objection does not apply; and I believe that when the noble Lord comes to deal with the question, he would find his hands much strengthened by the support of an intelligent public opinion, created and informed by the publication of this Report.

The next reduction is in Public Works. The productive Public Works Expenditure is reduced by £1,000,000, and the Expenditure on ordinary works is also largely diminished. Special attention has been paid to the Public Works Establishment, which is considerably in excess of the requirements of the Department, even if no diminution had taken place in the Expenditure. The number of engineers employed has been reduced from 1,200 to 900, and is ultimately to be 800, of whom a considerable and an increasing proportion are to be Natives. And the principle is established that if a sudden demand for any particular work, or even the fluctuation of public opinion on the subject of this Expenditure should hereafter necessitate an increase in it, the staff will be temporarily supplemented by additions for the particular purpose, and having no claim to pensions; and the effect of this reform alone has been estimated by the noble Lord (the Marquess of Hartington) at no less than £250,000 annually after the present year. On the present occasion, the noble Lord has not expressed any definite opinion as to the amount annually to Be expended upon productive Public Works. But from the glowing panegyric which he has passed on their success a strong inference can be drawn. And on a previous occasion, in the course of his Election Address, the noble Lord has indicated a very strong opinion that this class of expenditure has recently been unduly restricted. It is, therefore, worth while to remind the House that that policy received the approval of Parliament and of a Committee specially ap- pointed to consider the subject, and also to point out what that restriction upon what are technically called productive Public Works really amounts to. It does not in any way prevent the construction of ordinary Public Works out of the Revenue of the year to the extent that the financial condition of the country can afford. It deals only with such works as may be constructed out of borrowed money. For these works the restriction is that £2,500,000 and no more may be expended every year. But that is not all. It does not include the capital required to be raised for the East Indian Railway, nor by the guaranteed Railway Companies. Nor does it include the outlay upon works calculated to guard against a probable future outlay upon Famine relief. So that during the current year, in spite of this much-abused restriction, the amount estimated to be expended upon Public Works of all kinds, including maintenance, but excluding working expenses, amounts to more than £9,000,000. It can hardly be said, looking to the present financial condition of India, that this is an inadequate sum; and I earnestly trust that the Government will not, without much more consideration than they can yet have been able to give to this matter, introduce any change. In saying this I do not suggest any doubt as to the policy of pushing on Public Works in India. On the contrary, I showed conclusively last year that the effect of these Public Works has been that, while the Debt of India has increased, the annual charge for that Debt has steadily and largely decreased. But not only is it eminently desirable to maintain a settled policy—certainly much more important than the precise limit which may be fixed upon—and to disregard, as far as possible, the incessant fluctuations of opinion which occur on this subject; but it is also absolutely and vitally necessary, in my opinion, to take any reasonable step which will prevent any increase of the Home charges. There can be no doubt that the effect of the large Expenditure on productive Public Works in recent years has been that at least two-thirds of the amount has been borrowed in gold in England. The Home Government and the Government of India has, it is true, vied with each other in deprecating this course. Both, I am sure, have honestly tried to avoid it. But every year something has happened—either a famine or a fall in the price of silver—and the result, at any rate, has been that the Gold Debt of India has gone on increasing, although in passing I may take some credit to the India Office for the fact that during the past year, when we were supposed to have exceptional difficulties to contend with, and when they had to pay the expense of a great war, no addition has been made to the Gold Debt. But I am speaking of the rule, not of the exception. Now, there are many difficulties connected with Indian Finance; but I do not think that anyone who has seen the actual working of our system in recent years will hesitate to say that the greatest and most dangerous of all is the increase in the necessary remittances from India to England. Last year I ventured to point out to the House that the full extent of this increase, though steadily going on, was not, from various causes, felt until after 1871. Since that time the increase has continued. It has had a considerable effect in forcing down the price of silver, and the total amount of remittances has now reached a point which for some years to come cannot safely be exceeded, if it can be sustained. It may be doubted whether it is possible—nay, I would say that it is impossible—over a series of years to make sure of remitting £16,000,000 annually, even without making any provision for the repayment of existing Debt. It must always depend on many contingencies, of which the most uncertain are the state of trade and the condition of the silver market. This is a question the full gravity of which is scarcely, to my mind, appreciated. It is one which we ought never to lose sight of—least of all before we plunge into any more extended system of Public Works than is at present contemplated. It is sometimes urged that it is much better to borrow in England than in India, because you can borrow at a lower rate of interest. That seems to me, at any rate in the present condition of the silver market, to be a thoroughly short-sighted view. The primary necessity is to keep down the Home charges, and the only way to do this is not to borrow in England. And I might add that this policy has recently received much encouragement from the success of the last Rupee Loan upon which I heartily congratulate the Government, suggesting, as it does, the hope that a new and excellent market has been developed for these securities.

And now, before I sit down, I wish to add a few words on a subject which has attracted much attention in the Recess. I mean the form in which the Indian Accounts are presented. The first objection, commonly taken, is that they represent the gross and not the net amounts. The reason for that has been, no doubt, the desire to assimilate them, as far as possible, to our English Accounts. And when we are told that it is absurd to have an account which shows the gross Revenue at more than £60,000,000, when, in reality, it is only about £42,000,000, why is it that nobody says that it is absurd to state our Imperial Revenue in the gross, when the net amount is many millions less? The real objection to the system of stating them in the gross appears to be its great inconvenience for the purposes of comparison from year to year. In the second place, it is said that, in presenting accounts based on the conventional system of taking 10 rupees to the pound sterling—which is, undoubtedly, convenient in itself—the Government of India falls into the error of adhering to the system in one part of their accounts and not in others. This was the point recently urged by Dr. Hunter at Birmingham, with reference to the Indian Debt—

"We represent our Debt, in 1878, at a total of £135,000,000. In reality, our Debt consists of two portions—one item of £60,000,000 in England, and another item of 750,000,000 of rupees in India, now equal to about £63,000,000, making a total of £123,000,000, instead of £135,000,000 sterling…The result is that we present a total which is inaccurate to the extent of nearly £12,000,000 sterling."

That is to say, he suggested that the rupee portion of the Debt should be converted into sterling, at the rate of exchange for the year, instead of at the fixed rate of 2s. But Dr. Hunter forgot that the effect of his suggestion would be to make the total amount of the debt vary from year to year according to the price of silver, and apparently to be lowest when the rate of exchange is most unfavourable, which would give a more inaccurate representation of the facts than is done at present. Why, if you could only get the rate of exchange down to 1s. you would appear to have diminished your Rupee Debt by one-half. It would be a much nearer ap- proach to accuracy to state the whole of the Accounts in rupees, and not in pounds sterling at all. It would, to some extent, get rid of the inconvenient item of loss by exchange, and has a good deal to recommend it. But, from an English point of view, I think it would be most unfortunate. Partly from an increased interest in our great Dependency, and partly from apprehension as to the effect upon English finance—of any great financial difficulty, largely increased attention had of late years been paid to the finances of India. That is a feeling which deserves the greatest encouragement; but which can only be promoted by presenting the Accounts in a currency to which Englishmen are accustomed. It seems to me, therefore, essential to continue the system of presenting the Accounts in pounds sterling, converted at a rate which makes calculation easy, and in such a form as to make it possible properly to compare the total amounts and the separate items from year to year. That was the object aimed at in the net Statement of Income and Expenditure during the last 10 years, which was prepared under our direction at the India Office. I hope that the noble Lord may be disposed to carry the attempt further, and by reference to India obtain, as soon as possible, a real net statement carried back as far as the Government of India can carry it, and which will enable a proper comparison of different years to be made, without being hindered by those changes in the form of the Accounts which have proved so very embarrassing.

In conclusion, I have only to thank the House for the patience with which it has listened to my observations. I hope it will be acknowledged that those observations have not been couched in any Party spirit. We, on this of the House, have always acknowledged the assistance which we received when in Office upon many financial questions from the right hon. Gentleman the present Under Secretary of State for the Colonies (Mr. Grant Duff). It is in that spirit that I have endeavoured to approach these questions to-day, and I trust that when the feelings engendered by recent controversies have passed away we may all be able to deal with Indian Finance independently of Party considerations, and with a sole regard to the best interests of that great Dependency and to the solemn duties which we owe to its people.

supported the Amendment of the hon. Member for Rochester (Mr. Otway). He had himself presented Petitions from Calcutta, Bombay, and other places very far removed from each other, and very different in circumstances; but the prayer was the same in every case. The arguments with which they supported their Petitions were various; but the Petitions themselves were identical, and the general subjects as to which they craved for inquiry were the same. They proposed that the Government should send out to India an independent Commission of Inquiry into the administration of the country during the period since the country passed from the hands of the East India Company to that of the Crown; and they stated that since that great change took place no comprehensive inquiry had been held in India into a variety of very important matters. So long as the East India Company had a Charter which required renewal every 20 years, it was customary to have a thorough investigation by a Committee of the House of Commons previous to the renewal of the Charter; and upon those Committees there were men most distinguished who sat in that House, and their inquiries were exhaustive, and the information they obtained was of the highest value; but what was wanted now by the people of India was not any inquiry by the House of Commons, although they would rather have that than none at all. The people of India prayed that a Commission might be sent out to India, in order that they might obtain on the spot the opinions and the information of the Natives themselves. They suggested also special inquiries into various matters. The first of these matters was that in the Legislative Council there was no adequate control over expenditure and taxation; that the nominated Members were not sufficiently independent, and were too few to carry out such a control efficiently; and the people prayed that inquiry should be made as to how far it was possible to give popular representation in the Legislative Councils of India. They asked also that there should be an inquiry into finance and taxation. That also was a hard subject. They main- tained that the views and the opinions and requirements of the people of India were a most important factor in arriving at conclusions on this matter. They complained that, with regard to the administration of justice, important changes had been made of late years prejudicial to the interests of the Native community. The ancient Arbitration Courts, which used to furnish a cheap and rapid administration of justice in the immediate locality, had ceased to operate under our Government, and our Government had refused to recognize them. Petitions had been presented on this subject from various parts of India, but more particularly from the Deccan, where these Courts were eminently successful under the Native Paishwas. Then, with regard to landed tenures, they wished that there should be a thorough inquiry into the respective advantages of a permanent and of a temporary settlement. Employment of Natives was another important matter into which the Natives prayed that inquiry should be made. This had been alluded to during the discussion, and to the great saving and economy which would result from the more general employment of Natives. They also complained of certain Acts passed within the last year or two, and as to whose repeal they were exceedingly desirous. He would not further allude to these points, because they would be beside the question they were discussing; but he mentioned them because they were those on which great stress was laid by the Petitioners; and although it might not be possible to obtain information as to all the matters, still a great deal of information could be obtained, which would afford general satisfaction. As regarded the Civil Courts now established throughout the whole of British India, the expense was very great. In a suit for 100 rupees, where, on an average, only one-tenth of the amount sued for was recovered, fees to the amount of 25 rupees had to be paid. Into the circumstances of these Courts inquiry should be made, and the inquiry should result in economy. Then there was a rigid centralization system of revenue throughout the country altogether independent of the district. There was the same system prevailing in the Southern Mahratta country, where there was a rich soil and an independent Yeomanry proprietary, (as it might be styled), as prevailed in arid Scinde and the stony ridges of the Deccan, and in the forest portion of the Western coast. It was precisely into these details that inquiry needed to be made on the spot; and he knew he expressed the opinion of those who had taken the greatest interest in the subject when he said that upon a thorough investigation of the revenue settlement of survey the most vital interest of the country depended. The question of public works had, of course, been alluded to. As regarded irrigation, he held that we had suffered greatly from not sufficiently inquiring into Native modes of working and engineering. It was, he believed, a fact that there was no great irrigation work a recorded success in India except such as had been originally Native works, and constructed by Native engineering. The great canals which our civil engineers had constructed had, he believed, been altogether constructed on a mistaken principle. It had been thought that navigation should be kept in view in constructing these canals, and locks had been constructed which had interfered with the proper irrigating purposes of the canal. It was also found that these canals had produced fever, and had caused barrenness of the soil. There were, he believed, in some parts, canals constructed by the Natives, and still worked successfully, and under the control of what would be local or County Boards in this country; and in Ceylon, which might serve as a model, they had recently engaged the local authorities in works of irrigation, and the system had proved eminently successful. Ceylon was an Island from which valuable information might be obtained. They had in that Island a Legislative Council where representative Members sat. They had their village communities, which still maintained a great deal of local independence and self-government, and the Native officials were employed much more largely in positions of honour and trust than they were in India. Then the Civil Service, which was an eminently valuable and efficient one, was paid on a much smaller scale, and it had not suffered on that account. In that respect a very valuable example might be found in Ceylon. That was a matter on which inquiry might certainly be made, because it was perplexing to those who might be supposed to understand the matter, and who found a difficulty in explaining it. It was the fact that from our own Provinces, even the most fertile and productive, there was a constant emigration going on to adjoining Native States. In Gujerat there was a special district of a rich character, where the rent was assessed at something like 9 or 10 rupees, in our territory; and it was a fact that in years past persons emigrated across the Border, where land was only to be obtained of similar character at 25 or 26 rupees. Then, in the Nizam's territory, it was found that the population was increasing in prosperity, and cultivation extending. That was the case more especially with the prosperous and well-to-do population known as occupancy tenants, who were not mere tenants at will. In one district of the Nizam's territory the area of cultivable land had increased 200 per cent, and the number of cultivators in the territory had doubled, most of them being occupancy tenants; and he would call attention to the fact that while the cultivation had doubled the assessment had only been raised moderately; and in that, he imagined, might be found, to a great extent, the solution of the matter. In the adjoining British territory great distress had prevailed in recent years, although the land was similar. In conclusion, he would say that, however alarming the financial condition of India might be, that condition was, he believed, by no means desperate. He was satisfied that if the noble Lord who was now the Secretary of State for India was able, for some years, to devote his attention to the financial government of India, he would soon be able to show favourable balances. His great difficulty would be to carry out the retrenchments which he considered necessary and desirable. It was always, of course, difficult to give effect to schemes of retrenchment where those who paid the taxes had no voice in their disposal, and those who disposed of them were all-powerful; but if the authorities at home exerted their power, they would be able to save something, though he doubted whether they would save so much as the hon. Member who moved the Amendment suggested. What was feared by the people of India was not by any means the good intentions of the present Government, but that, with the best intentions, the Secretary of State and the Viceroy would find it very difficult to deal with, those persons on the spot who had been reared and trained in a different school of finance. What they apprehended was that many of those reforms which were practically promised by the present Government before they came into power would be slow of being carried into effect. The Viceroy would still be surrounded by the same people; but he trusted the Home authorities would see their way to fulfil their pledges to the people of India. No thorough inquiry into the administration of that Empire had taken place since its government came into the hands of the Crown. It was quite true that a Committee of the House of Commons sat and collected a great deal of information on the subject of Indian Finance; but that Committee was interrupted in its career by a Dissolution of Parliament; and it never reported; and he must say its investigations could not be said to be complete, more particularly as there was the objection that the evidence given was principally by European officials, very few Natives giving evidence before the Committee, from the fact that the inquiry was held in Westminster. He therefore ventured to move, as an addition to the Amendment—

"And that a Royal Commission should be appointed to inquire, in India, into the administration of that Country since the transfer of the Government from the East India Company to the Crown."

said, the hon. Baronet could not now propose his Amendment, as there was one before the House which must be first disposed of.

said, that when the proper time came he hoped to be able to submit his Amendment.

moved the adjournment of the debate.

assented, on the understanding that it should be resumed at the Evening Sitting.

, who had the following Notice upon the Paper:—To call attention to the relations of Great Britain and of Russia with Afghanistan and Central Asia; and to move—

"That, in view of the unsatisfactory condition of Indian finance, and of the great expenditure and labour already incurred on several occasions in occupying Afghanistan, and of the great advance made by the Russians since 1862 towards India, it is desirable for the safety of the British Empire in India, and for the security of the 250,000,000 of people inhabiting that country, and for the highest interests of civilisation, that the British occupation of Afghanistan shall be maintained, but more especially that the great fortress of Kandahar shall be permanently garrisoned by British troops,"

said: Sir, the question of Afghanistan is the most difficult and most troublesome of all the questions connected with Indian Finance. I know I shall receive little sympathy from hon. Gentlemen opposite, and, perhaps, not much support from the Party to which I belong; but my Amendment offers a solution of the difficulty which is commending itself more and more to the solid judgment of the country. The belief in some such solution as that which I am about to advocate is growing day by day, and the course of events, which is stronger than the wishes of statesmen, is leading inexorably towards the same conclusion. There are two, if not three, points connected with this method of dealing with the Afghan Question and its relations to Indian Finance which, I think, however divergent may he the opinion of hon. Gentlemen, will be generally agreed upon. The first is the importance of Afghanistan in a military and political point of view to those who hold the Empire of Hindostan. Afghanistan is admitted by all the great military authorities to be, in a military sense, the key to British India. If you look at it from a geographical point of view, you will find that Nature has formed the great chain of mountains of the Hindoo Koosh as a natural boundary for the Power who holds sway in India; and if you look at it from an historical point of view, you find that every invader from the time of Alexander the Great to that of Nadir Shah, who has conquered India, has had to pass through the avenues of Afghanistan. The mountains of that country would afford excellent shelter for great armies, which could at any moment, and it might be again, as has often been the case before, with fatal effect, descend upon the plains of India. It is impossible for the Power that holds India to allow Afghanistan to fall under the sway of Russia. That time is drawing near which has been foreseen by all the leading statesmen of England, when the struggle between the two great Powers which are at present dividing Asia must come. The result will largely depend upon who is first in possession of Afghanistan. The commercial value of Afghanistan as commanding all the great trade routes which connect Persia, the Caspian, Central Asia, and Hindostan is very considerable, and its connection with India opens fresh and valuable markets to our stagnatory manufactures. The annual Revenue of the late Ameer was estimated at nearly £2,000,000. There is still another consideration, which I think will be generally admitted—that the great expenditure and trouble which has already been incurred in conquering that country on two or three different occasions should render those who have incurred this expenditure very chary of allowing it to be incurred in vain. If you choose to sink £25,000,000 or £30,000,000, spent in invading that country without any return, you are guilty of wilful waste; but if you permanently occupy it, you not only secure the safety of India, you not only prevent costly and dangerous wars in the future, but you will own a country which will pay, at all events, the interest upon the money spent. If trade, however, were to develop, as it has done at Candahar, there is the best reason to believe that in a few years time the Revenue of Afghanistan will amount to no less than £3,000,000. There are special reasons why the abandonment of the country is extremely dangerous and hazardous at the present moment. I do not propose to criticize in detail the events which have taken place recently in Afghanistan, as the noble Marquess (the Marquess of Hartington) has deprecated discussion on these points; but I think it is worthy the consideration of Her Majesty's Government that they are abandoning that country, to occupy which has cost so much trouble and money, at a moment which is probably the most inopportune they could have chosen in the history of the last 40 years. They are abandoning it at a moment when an Afghan Chief, whom it is not wrong to describe as a pensioner of Russia and an emissary of the Russian Government, has been raised, with a haste which, without exaggeration, may be described as indecent to the Throne of Cabul, and when a near relation, and, possibly, a co-conspirator of his, has inflicted a severe reverse upon us in the Candahar portion of that country. I think it is ominous that we should abandon Afghanistan at a time when the elevation of Abdurrahman to the Throne of Cabul has been received with rejoicing throughout the Russian Empire and throughout the Russian part of Asia, and at a time when it is feared—and not without some reason—that the Ameer is in league with Ayoob Khan, who is, according to many different authorities, accompanied by Russian officers. There is also another and a still more serious consideration for the future authority of England in Afghanistan, and for the safety of Hindostan itself. It was that consideration which I regret to say was derided by the noble Marquess the other day; but I am very much afraid that, before many months are over, the noble Marquess may have cause to change his opinion. I refer to the march of General Skobeleff towards Afghanistan. That General has a very considerable army under his command, an army of about 30,000 bayonets, and his road to India, if he once overcomes the resistance of the Turcomans, will be without obstacle. It will be through a country which the best authorities on this portion of the world describe as well-watered and easy of approach. General Skobeleff is now, or rather was a month ago, only 400 miles from Herat, the outer gate of India. The greatest mistake which I think Her Majesty's Government is committing is in allowing these Turcoman tribes, who are placed by Nature as a buffer between England and Russia, to be subdued, if not annihilated, by Russia. You have in these Turcoman tribes a race of singular courage and military quality; you have a race passionately attached to their independence, which they have defended for hundreds of years against attacks from all quarters. It would only require a little moral encouragement from England, and, at most, the assistance of a few thousand rifles, to make these Turcoman horsemen a match for the Russian armies. They look for nothing more than to be allowed to maintain their independence, which they are practically unable to maintain with their miserable weapons in the face of the deadly breech-loaders and discipline of the Russian invaders.

rose to Order. I wish to ask you, Sir, whether this has any reference to the Question before us?

I am bound to say that the observations of the hon. Gentleman seem to be wide of the Question before us. We are now considering the Indian Revenue Accounts.

I very much regret, Sir, that you should have regarded my observations in that light; for I should, in a very short time, have shown how essential the policy I am advocating in regard to Afghanistan is for future economy in Indian Finance, and for the accomplishment of those internal reforms which we, in common with Her Majesty's Government, wished to see carried out. I will not, however, distress the hon. Member (Sir George Campbell) by any further reference to the Turcoman tribes. I will only repeat what I have already said—that those tribes are placed as a natural buffer between England and Russia, and that to allow them to be destroyed would be an act of short-sightedness. Another most important boundary to the advance of Russia is the great desert between the Caspian, the Oxus, and Persia, which is the boundary evidently placed by Nature, as a limit to the further progress of the Russians southwards. ["Order, order !"] I think it would very much conduce to the progress of Business if hon. Gentlemen would refrain from interruption. I was saying that if Russia is allowed to cross that desert, she would be placed in such a position that you would find it most difficult to resist her in the future. ["Order!"]

I must point out to the hon. Gentleman that the question of the relations between Afghanistan and Russia is beyond the scope of the Question before the House.

Well, Sir, I may be told that I am raising what hon. Members are pleased to call the "Russian bogey." I have no doubt the arguments I have advanced will be met by some general phrases, such as—"We don't believe in this constant fear of Russia," and "We think that a little more manly confidence would be better." I can only say that these statements are mere phrases, and have no value in face of the irrefutable facts of the Russian advance. [Cries of "Order, order!"] Do I understand, Sir, that you rule that I am not in Order in dwelling upon the question of the Russian advance towards India.

I have just now stated that I consider the question of the relations between Afghanistan and Russia beyond the scope of the Question before the House.

My Amendment has been allowed to remain on the Paper, and it contains references to this effect. I was certainly under the impression that I should be allowed to dwell upon that Amendment.

I am bound to say that the hon. Gentleman would not be in Order in moving that Amendment in the terms in which it now stands.

I shall, of course, after your ruling, not pursue the subject now; but shall take the opportunity of raising the question in the shape in which I wish to raise it on going into Committee of Supply on the Appropriation Bill. That, no doubt, will satisfy hon. Gentlemen opposite. Well, Sir, what are the arguments against the permanent occupa- tion of Afghanistan? We are told that it is too costly. I have already ventured to point out what the Revenue of the country might become if the country were added to the present possessions of Her Majesty in India; and, in advocating this course, I do not, of course, venture to recommend to Her Majesty's Government any particular shape it should take. It might be by means of a tributary Prince; it might be with more or less occupation of that country on the part of British troops. Such an addition would, I believe, not only settle this question, not only give permanent security to India, which otherwise will be kept in a state of perpetual alarm, not only very greatly develop trade, not only open fresh markets for English productions and the trade of Hindostan, not only bring into connection with the Indian markets the markets of Central Asia and Northern Persia; but the Revenue of Afghanistan itself would more than pay the cost to which we have been put. And if you occupy such places as Herat, Mseinene, and Fyzabad, which are the real outworks of British India, you would then, indeed, be in a position to treat with the utmost disregard and contempt what I have referred to as the "Russian bogey." Until you do that you will be subjected to perpetual alarms, which will increase day by day, till at last you will find yourselves unprepared, after abandoning every coign of vantage to your inveterate foe, in face of the struggle which all statesmen in Europe regard as inevitable. But it is said the Afghans are opposed to annexation on the part of Great Britain—and, no doubt, the opposition offered by a part of the Afghans to the British Army seems to give some proof to this—but you have no evidence that the opposition comes from the great majority of the people. It must not be forgotten that Afghanistan is governed by a small portion of the Afghan races. There is no such thing as a homogeneous Afghan race. Not more than 30 years ago a section of the Afghan tribes—those about Cabul—conquered the remainder.

The relations between Afghanistan and India do appear to me to come within the scope of this discussion.

resumed: These persistent interruptions are more readily made than, but are not so readily met as, arguments. I was remarking that there was no such thing as a homogeneous nationality in Afghanistan. The ruling portion is, perhaps, not more than one-third or one-fourth of the nation, and their rule is very unpopular among the other portion. Candahar has welcomed the appearance of the British troops, and the order and sense of security which accompanies that presence, with the greatest pleasure. The trade of Candahar since our occupation of that district has more than doubled. Even in Cabul itself the British have been welcomed by a large portion of the population; and all the trading classes throughout Afghanistan are delighted with the order, good government, and prosperity which the occupation by British troops afforded. There is reason to believe that the Heratees, who are of a semi-Persian origin, would welcome a definite rule by England, as they did years ago, when Lieutenant Pottinger was the practical autocrat of that city. They would welcome our rule with the same pleasure at the present moment. The great difficulty in the relations of the Indian Government with Afghanistan has hitherto been that the English have never avowed any intention of permanently remaining there. That fact has rendered it impossible for the British authorities to gather around them that support and following which would immediately result from an avowed intention of this kind. It is a well-known fact that influential Chiefs have told us that they were ready to come forward and lend us political, and even military, aid, if only they were sure we would remain, and that they would not be abandoned to the fanaticism of the ruling class as soon as we had left. It is believed by many who were concerned in the occupation of 1842, or have watched the course of events since, that if we had held the country in 1842, it would now have been quite as civilized as the rest of India. That opinion is expressed by distinguished officers like Sir G. Lawrence, brother of the late Lord Lawrence, who lived for many years in Afghanistan. He holds that if we had then continued the occupation the coun- try would have been now quite as peaceful as the Punjaub. In fact, very much the same predictions were made with regard to the occupation of the Punjaub in 1847 and 1848, as are now made with reference to Afghanistan. As a matter of fact, we have never experienced any difficulty at all in conquering Afghanistan. The military portion of the proceeding has been very simple; and had we announced our intention to occupy the country, we should have gathered a large following, and the North-West Frontier Question, the Central Asian Question, nay, the Indian Question, would have been settled at once and for ever. For, once in possession of the strong places of Afghanistan, you could disregard with safety the menacing advance of Russia. But if none of these facts existed, if it were impossible to point to the obvious advantages which would result to the Afghans themselves from the permanent occupation and civilization of their country, I could defend the course on the maxim,"Salus populi suprema lex." There are in India 250,000,000 of people absolutely dependent upon our Government for protection. You have done that which has entailed a great responsibility on the English Government. You have deprived them of their reliance on their own government and organization, and, what is not an unmixed evil, you have deprived them of their military institutions and experience. You thereby leave them by themselves almost defenceless in the face of an attack, and you are bound to take those precautions, in view of a probable invasion from Russia, which any other military Power in the world would have taken long ago. You are bound to consider the future of that vast population, whose power of self-defence you have largely taken away, and to guard their security against the cruel and destructive despotism to which they would be subject if conquered by the Russian Government. On this account, as well as from the benefit which no one can deny would result to the Afghans themselves from a British occupation, I advocate the permanent occupation of Afghanistan as the wisest and most economical course. It is the perpetual putting off dealing with the question which renders it so troublesome and so expensive. It is with nations as with individuals—the adage is true, "a stitch in time" saves considerable trouble in the future. You do not avoid war by the policy of retreat you adopt; you invite aggression; you do but prepare the way for more dangerous, more expensive struggles in the future; you are repeating the same policy which involved you in all the troubles and expenses that preceded 1874; the same policy of pusillanimous retreat that rendered the Wars and Expenditure, which followed 1852, necessary; which caused you the Crimean War, with its great bloodshed and expense; which led you to encourage Denmark to resist her assailants, and then to abandon her; which led you to neglect the annihilation of France—["Order, order!"]

reminded the hon. Member that he was wandering from the question, which had reference to Indian finance.

I shall not dispute your ruling, Sir, and I admit that my last statements were not directly connected with the question; but I have, during my short experience of the House, known hon. Members comment on the policy of the past, as the only way to illustrate the policy of the present and the future. I shall not proceed, however, and I only mention this in my own defence. I apprehend that, after the spirit which has been displayed by hon. Members opposite, it will be impossible to go into the question in the particular way I could have wished, with regard to the Amendment put on the Paper, and which I was under the impression I could support. I regret a remark which fell from the noble Marquess this afternoon, when he stigmatized the policy of the late Government as "Imperial," and seemed to think that it should therefore meet with the reprobation of the House; and I am bound to say that, in the view of the many, an "Imperial" policy is necessary for the interests of a great, and widespreading Power. It is a charge against the present, as it was against the late, Liberal Government, that they do not follow this Imperial policy in dealing with the affairs of a great Empire; but follow a narrow, insular, parochial policy. [Cries of "Order!"] Surely I am in Order in referring to the observation of the noble Marquess.

What is the observation referred to?

It was, so far as I recollect, that England ought to bear a certain portion of the expenses of the Afghan War, because that War was dictated by an Imperial policy. Therefore, my remarks are apposite to the question.

I beg to say I did not stigmatize the policy.

I allude to the tone of the noble Marquess's speech; and when the speech is read, I think it will fairly corroborate what I have said. I shall endeavour, before long, to bring this question before the House at a time when I hope I shall not be subjected to a persistent interruption, with which it is not easy to cope.

said, the late Under Secretary of State for India had made several statements which were not in accordance with his notions of finance. For instance, he said there was always great difficulty in getting the actual cash balances in India, which appeared to be an extraordinary confession after his Party had been six or seven years in power. The first thing a Government ought to do would be to bring the whole of the financial arrangements into the best possible order; and he hoped if the noble Lord the present Secretary of State for India found it difficult to ascertain what the cash balances were, he would not wait two or three years until he sent someone out to India to put the finances into order. The late Under Secretary said that there had been a loss on the exchange of £24,000,000 in eight years. That seemed an extraordinary statement.

said, what he intended to state was that there had been a loss of £3,000,000 a-year for three years.

accepted the explanation of the hon. Gentleman; but he believed that in the last four years the actual loss on exchange did not amount to more than £6,385,000. It was the greatest possible bugbear to Indian finance to be constantly referring to the loss on the exchange. It should also be considered that there were some compensatory advantages. If silver went down in price, opium went up; and, no doubt, the Government had recouped themselves more than half the loss sustained in exchange by the in- creased price which they received for opium. He could not help thinking that if the Government had paid proper attention to the telegrams received from India during the early part of this year, they ought to have known the serious state of the Indian finances. The first announcement of the prosperity of the Government did not come from India, but was made by the Under Secretary of State (Mr. E. Stanhope) at Hackney on the 19th of January last, who, after describing Mr. Gladstone as the boomerang of the Liberal Party, went on to state that the Government would approach the Budget of 1880–81 without any apprehension; and as regarded the current year, they would be able to meet not only the expenses for the War, but the charges for the Frontier railways, out of surplus Revenue. It was very singular that that statement was made so long in advance of the Indian Budget, and on the day when the Military Estimates were framed. That statement was confirned by Sir John Strachey on the 24th of February, who estimated the total expense of the Afghan War at £9,000,000; but, at the same time, the Government received a statement from India warning them that the finances of the year had been made up in a very risky fashion. The Indian Government stated that they had arrived at the decision to carry on the Public Service of 1880–81 even at the inconvenience of a considerable diminution of their balances, in order that they might announce a sound state of their finances. This was an extraordinary statement to make. He should have thought the proper course would have been to contract a loan rather than deplete their balances. The first note of warning which came from India was on the 13th of March. On that date a telegram was received stating that they would not be able to meet the usual drawings of 45 lacs, or even 40 lacs, without borrowing, which they were extremely anxious to avoid. That came the day after the prosperity Budget was presented to the House of Commons. To most people it would have been a warning that the finances of India were not quite satisfactory. On the 17th of March came another telegram—"We have to meet a constant military drain, the ultimate aggregate amount of which is quite uncertain." Even that did not seem to have any effect on the Home Government. They did not seem to have thought that any change could have taken place between the 24th of February and the 17th of March, for they replied—"Apparently nothing new in the situation since the Budget proposals." The Government still adhered to its prosperity Budget. The late Government must surely have seen that there was something wrong in the Estimates. Her Majesty's late Advisers were mistaken in not accepting the telegrams which they received as warnings that the state of Indian finance was alarming; and the House was entitled to know who was really answerable for the failure of the Estimates which had been put forward by the Indian Government. Sir John Strachey, having every means at hand for checking the accounts, and being aware that £1,800,000 more had been paid over to the Military Department than had been accounted for by it, preferred to take the Estimates of that Department rather than consider the actual facts; while he still did not seem to think that the Estimates erred on the side of being too low. In short, with those facts before him, Sir John Strachey had framed his "prosperity Budget." The system of finance which had been carried on in India appeared to have been the most extraordinary conceivable; and the House would agree with him that if Sir John Strachey was not to blame, someone was. There were several very remarkable features of Sir John Strachey's last Budget Statement. Last year, when these Accounts were under consideration, he (Mr. Gross) ventured to point out that instead of a surplus of £2,200,000, there was really a deficit of £6,000,000. During the last 10 years there had been, on an average, a deficit of £2,100,000 each year. In Sir John Strachey's Statement it was announced that the hugely overgrown Public Works Establishments had been got rid of; that the cost which they imposed upon the Revenue was at least £500,000 more than was necessary, and that the reduction had been carried out effectually. Yet it appeared, from the same Statement, that the reductions which had been made only amounted to £250,000 a-year; and that to carry them into effect it had been necessary to impose a charge of £280,000 for gratuities and pensions in the present year. He (Mr. Cross) did not hesitate to say that the establish- ment cost of the Public Works Department would be about 35 per cent on the work done—an outrageous charge as compared with the ordinary percentage of engineering charges upon Public Works. But that was not all; for Sir John Strachey stated that while he had found it necessary to pension off engineers already in the Service, there was a constant influx of young engineers into the Service from Cooper's Hill, who, in their turn, would doubtless also require to be pensioned. It behoved the noble Lord the Secretary of State for India to take this matter into his consideration and prevent its going on any longer. Various reforms in the organization of the Army had been promised by Sir John Strachey, and he should be glad to hear that these were being carried into effect. In regard to the question of borrowing in India, it appeared to him doubtful finance to pay very much more for their money than they would pay for it if borrowed in England. On the two recent loans of 700 lacs of rupees there was an annual charge of 440,000 rupees laid on the Revenues of India more than would have been involved had the money been borrowed in this country. There was one other point to which he desired to refer before he sat down. Some little time ago he received an answer to a Question of his from the noble Lord the Secretary of State for India, to the effect that Her Majesty's Government would be willing to recommend that a substantial sum should be contributed by this country in aid of India in the liquidation of the Afghan War. Many demands had been made upon the late Government from below the Gangway on the other side of the House for the adoption of that policy; but he was afraid a considerable change of opinion had since taken place on the subject. The Radical ranks had been decimated by promotion; and, although he readily admitted that the promotion had been on the merits, he did not think that India would be benefited by the change. He should like to know what his right hon. Friend the Postmaster General thought as to the amount that should be given by this country in aid of India in that matter. Was the War undertaken for the sake of India, or for our purposes? The Government seem to have come to the conclusion that it was undertaken for Imperial purposes; and, if, so, he did not see why India should be charged with one farthing of the cost. But it was said that the late Government had come to a different determination, and that, therefore, India should bear her proportion of the War expenses. Well, if her proportion were that of her Revenue to ours—and he did not say that that would be just to India—then, assuming the cost of the War to be £18,000,000, England should pay £12,000,000, and India £6,000,000 only. He hoped that before long the noble Lord would be in a position to make a Statement to the House as to the cost of the War, and as to the sum which the Government intended to propose this country should contribute towards the payment of the entire amount.

said, that with a good deal the hon. Member who had just sat down said he perfectly agreed; but as to what he had urged in reference to England bearing a certain proportion of the cost of the War he could not agree. At the same time, he could not but think that those who had read the Papers on the Table of the House must have been appalled by the financial errors which had been committed. Knowing what care and labour had been bestowed of late years in order to insure accuracy of account in every branch of Expenditure, it appeared to him almost incredible that such mistakes could possibly have occurred. He (Mr. Onslow) had some experience of the cash balances of India, and he knew that there had always been the greatest difficulty in ascertaining within a short period how much money the Government had in its different Treasuries, scattered broadcast over that vast Continent. It was not as in England, where it was known at once what money there was in the Bank to the Government's credit, and where it was so easy to centralize everything. With regard to the telegrams received by the late Government from India asking them not to draw so much upon India, it was to be observed that nothing was more common than for the Government of India to telegraph to the Secretary of State in England to hold his hand and to moderate his drawals; and he did not himself think the first telegrams to that effect were at all alarming, or that the late Government should be under a suspicion of endea- vouring to conceal from the country the real state of Indian finance from any knowledge or even idea that things were going wrong. He trusted the country would be satisfied there was no such intention on the part of the late Government. He was aware that the present Secretary of State had a difficult task before him. He would have to exercise much care, and take much trouble, to bring Indian finance into good order, so as to prevent a recurrence of such gross errors which had caused such a scandal. It had been said, "Your system of keeping accounts must be bad." He did not believe, however good a system of accounts could possibly be, that it could stand the strain of careless estimating. In his belief, men were to blame and not the system. He (Mr. Onslow) was in India when two gentlemen, one from the Treasury, the other from the War Office, were sent out to look into the financial system of India, and they thought, doubtless, they had done their work very properly, and that the system inaugurated by them was everything that could be desired. Sir Charles Trevelyan declared that the last finish had been put on the financial machinery of the country when these two gentlemen had finished their work. But if there was anything wrong in the system, which had yet to be proved, he (Mr. Onslow) thought that, from the lowest official up to the Viceroy himself, all had been to blame. It was obvious that in time of war especially the utmost care ought to have been taken in framing the Estimates, and he could not but think that a series of Councils should have been held to consider them. He was rather startled to read what Sir John Strachey wrote on the subject. Sir John Strachey expressed his complete confidence in the machinery which had been provided for dealing with Finance and Estimates, and his belief that the grave error which had been committed was in no way to be attributed to that machinery. Neither he, nor Sir Edward Johnson, nor the Government of India had any right to trust to that machinery; they ought to have gone carefully into the whole Estimate, and the Government, as a body, should have satisfied themselves that the War Estimates which were sent home could be thoroughly relied upon. He did not blame poor Major Newmarch, of whom it had been attempted to make a scapegoat. The whole Government of India was seriously to blame for the grave error which had been committed. Sir John Strachey said it was the duty of the Government to make an intelligent use of the Estimates and the Finance Accounts, and to correct them by fresh information if it drew different inferences; and he added that the Government of India alone was responsible, although it took no part in the detailed preparation of the Estimates. If this were the case, it was very different from what it used to be. [General Sir GEORGE BALFOUR: Hear, hear !] He had known Finance Ministers who had gone into the details of Estimates. It was the duty of Sir John Strachey to have gone into them for himself, with the assistance of the Financial Department; and it was equally his duty to have demanded at a Cabinet Council—as we should call it in England—the most careful consideration of the conclusions at which he, as Financial Minister, had arrived. But nothing of the kind appeared to have been done; and though, of course, technically, the Viceroy was ultimately responsible, yet it seemed to him that he had been placed quite in the dark by Members of his Council, whose primary duty it was to scrutinize most accurately the Estimate for Charges which must of necessity have been very heavy. Sir John Strachey said that, to sum up the whole matter, the error was mainly due, not to any misapprehension of the extent and character of the military operations, but to the fact that they were ignorant of the actual cost of the War. But there was great misapprehension as to the character of the military operations; for there was a telegram from the Government of India, dated the 28th of April, 1880, which stated that, owing to the increasing cost of carriage and of supplies, it was probable there would be a large addition to the War Expenditure. The whole of this should have been foreseen by the Military Secretariat, by Sir John Strachey, and by Lord Lytton. It was obvious that the longer the War was prolonged the more expensive would operations become, from the exhaustion of near supplies, and the greater distance they would have to be carried. It was the duty even of the Finance Committee at the India Office to have foreseen this inevitable increase in the cost of the operations, and not to have swallowed the Estimates which were forwarded from India. He was appalled with the disclosures made. He hoped the noble Marquess would not fail to punish all who had been remiss in this serious business; as it was the duty of the Government to show the people of India that they expected something more from their highly-paid officials than the commission of errors, amounting to many millions, which ought not to have been committed at all. He desired to notice a speech made by the right hon. Gentleman the Chief Secretary for Ireland, at Leeds, in which he said that the taxation in India per head had more than doubled since 1840. This was a misleading statement, considering the territory they had acquired since that date and the expenditure on Public Works. As an individual Member, he would assist the noble Marquess in carrying any measures for the benefit of India, irrespective of any Party consideration; for if they let Party feeling influence their administration of India, they would soon lose it altogether. He concluded by advising the noble Marquess not to part with any of the Revenue which India at present yielded. He hoped he would not listen to the Lancashire people, who might urge him to abolish the Cotton Duties, or to those who wanted the Duty on rice abolished. If India was to be governed well, he implored him not to lend his hand to the remission of taxation, for, depend upon it, India could not for many years to come sacrifice one atom of her Revenue, even though though there might be great reductions in her Military and other Expenditure.

said, that, as he found he could not relinquish any interest he felt in India during the many years he had sat below the Gangway, he trusted the House would not think he was intruding if he ventured to make a few remarks. The state of things disclosed in the admirable speech of the noble Marquess, which had received just praise from both sides of the House, was so grave, that he would not run the risk of letting the House drift away from the great issues they had to consider by using any expression which could lead them into a Party or a personal controversy. The more unreservedly they accepted the assurance of the hon. Member the Under Secretary of State in the late Government (Mr. E. Stanhope), that that Government had not a gleam of suspicion that the Estimates for the Afghan War had been exceeded until a fortnight before they went out of Office, the more painfully was the conclusion forced upon them that there was something radically wrong in the present system of government in India; and that all those elaborate checks and safeguards which they were taught to believe were associated with this double system of government and divided responsibility proved to be no security whatever for due and efficient financial control. Let him recall two of the most serious and grave statements disclosed by the noble Lord. The Afghan War was commenced in the autumn of 1878. From the moment that that War broke out the actual Expenditure exceeded the Estimates by something like 180 per cent. The first Estimate was £5,000,000; and now the Estimate exceeded £14,000,000. Yet what was the state of things disclosed by the confession of the Government both in India and in England? The Finance Minister, a year and a-half after the War began, had so little idea that the Estimates had been exceeded that he brought forward a "prosperity Budget," sanctioned the removal of Duties, surrendered Revenue, and confidently said he could go on without a loan. According to the statement of the late Under Secretary of State for India, the War began in October, 1878; it continued till April, 1880; once concluded, it again broke out. The cost of that War exceeded the Estimates 190 per cent; but, after all the labours of the Secretary of State, the Under Secretary of State, the Council, and the permanent Secretary—after all the letters which had been written about the state of affairs during a year and a-half—not a glimmer of suspicion crossed their minds to cause the slightest alarm as to their Estimates being exceeded. He would not say whether Colonel This, or Sir So-and-So, was most to blame; but what was infinitely more important was this—when such a state of things had happened in the past, what security could they have, unless the system of government was fundamentally changed, that it would not occur again? The late Under Secretary of State for India said, again and again, it was not the Secretary of State, it was the Secretary of State in Council, that was responsible. In making that admission, he pointed to one of the greatest defects in the government of India; and that was, that when anything wrong occurred, the responsibility was so divided and so frittered away that they never could fasten on anyone. When a charge was made, a game of battledore and shuttlecock took place among the officials concerned, and the responsibility was tossed from one to the other in such a way that the Government might try for years to put their finger on the guilty person, and only find at last that they were engaged in a perfectly hopeless task. Not holding any official position connected with India, and still speaking, as far as he could, as an independent Member, nothing could be further from his mind than to presume for a moment to sketch out what should be the changes that ought to be introduced into the government of India; but what he was prepared to maintain was this—that the disclosures which had been made, with so much force and clearness by the noble Lord, must bring home to every man who took a thoughtful interest in the welfare of the Indian Empire the conviction that some radical changes must be introduced into that system of government; and that the time had come when the Act of 1858, by which the government of that country was transferred from the Company to the Crown, required to be thoroughly overhauled. To give only one instance showing the extreme urgency and importance of having that Act examined, the late Under Secretary of State for India had said it was not the Secretary of State that was responsible with regard to the finances of India, it was the Secretary of State in Council—the Council of the Secretary of State. Now, so obscurely was the Act of 1858 worded, that no two authorities up to the present time agreed as to the legal powers and functions which were properly exercised by the Council of the Secretary of State. In a remarkable debate in the House of Lords in 1869, he found there was a singular conflict of opinion on this subject. Lord Cairns, as ex-Lord Chancellor, supported by Lord Chelmsford and Lord Salisbury, maintained that the Council of the Secretary of State was ab-absolutely supreme in all questions of finance, and that a war could not be un- dertaken without consulting them, because every war, sooner or later, involved expenditure. Exactly the opposite opinion was held by the present Lord Chancellor, supported by the Duke of Argyll, who maintained that the functions of the Council were simply consultative. He did not presume to decide who was correct—Lord Cairns or Lord Selborne—but the Act in this respect had remained absolutely unaltered to the present time; and he said it was not right—it could not be right—that an Act which governed 250,000,000 of people should be so obscurely worded, and left in such a state of ambiguity, that no two persons could agree as to the functions and powers of a Body to whom was entrusted the supreme control of the Financial Expenditure of India. He once suggested that, following precedents, the most influential Committee possible should be appointed to inquire into the Government of India Act of 1858. In the past these inquiries used to be held at stated periods of 20 years. The Charter of the Company was renewed only for 20 years, with the specific object that at the end of 20 years Parliament should have a direct control over the affairs of India. In fact, Parliament always recognized the great responsibility it owed to India, and it never hesitated to let all its most important Members serve on Committees relating to the government of that country. There was a Committee of that House on which Lord Castlereagh sat, and the Duke of Wellington, in the brief respite from his military duties, during 1809, 1810, 1811, and 1812—some of the most stirring financial years in our history. Even in 1832 the House was not so absorbed by Parliamentary Reform as to prevent no less than 50 of its most important Members constituting one of the most weighty Committees to inquire into the affairs of the East India Company. Another Committee sat in 1853, presided over by Mr. Baring, and there was scarcely a distinguished name in Parliament that was not on that Committee. The present Prime Minister was among its Members; so were Lord Beaconsfield, Lord Russell, Lord Pal-merston, Sir William Molesworth, and almost every name of influence in the House. Now, since 1858, 22 years had elapsed; the transfer of the government of India from the East India Company to the Crown had been effected; great events had happened since then; public works had been extended; the military system had been entirely changed; a different race of men had grown up; and he believed the time had come when nothing but good would result if a careful and thorough and impartial inquiry were now made into the whole administration of the finances of India. Of course, it was not for him to dictate to the noble Lord that this Committee should be appointed. The noble Lord could not think he was doing that; but feeling strongly on the subject two or three years ago he spoke upon it, and the events which had happened since only confirmed him in the opinions he then expressed; and he should be wanting in fairness and candour if he did not say so. But if the noble Lord found that he had materials at his hand at the India Office which would enable him to reform the system of government of India, and to provide better safeguards for financial control, no one would more cordially rejoice that he should be able to solve this difficult problem without the delay a Committee might cause. And now, as to the speech of the late Under Secretary of State for India. That hon. Gentleman was not less emphatic than the present Secretary of State as to the importance of doing everything in our power to prevent Home Charges increasing at the same rate as of late years. Some startling figures had been given on that subject. It appeared that in 10 years these Charges had increased from £9,000,000 to £17,000,000. He could conceive no country engaging in a rasher enterprize than to receive her Revenue in one metal, and constantly to increase the amount of payments she had to make in some other metal. With regard to the suggestion of the hon. Member (Mr. Cross) that it would be better, because cheaper, to raise a loan in England than in India at present, the experience of the recent Indian Loan led him to the conclusion that it did not seem to be very important whether the loan was raised in England or in India. Whatever loan was raised it should be a silver loan, paid out of a silver Revenue. If silver were down, they would gain; if it went up, they would be losers. The risk was one which might be run by a private individual with great resources, but it was not a risk which, a poor country like India should incur; because no one could resist the conclusion that of all evils which could be brought upon the country, none was greater than to be obliged to harass the people with increased taxation, and this would have to be done if they found their gold Payment in proportion to their silver Revenue steadily increasing. What were the Home Charges and the proportion the}' bore to the net Revenue of India? The net Revenue of India at present was not more than £40,000,000. He meant that was the available amount India had to spend. That £40,000,000 represented 400,000,000 rupees. India had to make a payment of £17,000,000. At present it took 12 rupees to purchase a sovereign, and apayment of £17,000,000 was equivalent to 204,000,000 rupees. But the whole net Revenue of India was only 400,000,000 rupees; therefore, the payment of £17,000,000 absorbed more than half the net Revenue of the country. That one fact showed that the Secretary of State had acted most prudently in resolving, if possible, not to increase the Home Charges of India. Again, there was another aspect of the matter. The House would probably remember that the noble Lord had referred to the exports and imports of India at the present time. The latter were computed to amount to £52,000,000, and the former to £69,000,000; and the difference between them showed that as much as £17,000,000 had annually to to be shipped from India. That, also, was a circumstance that would be duly considered by the House. He desired to refer to one remark of the late Under Secretary of State, because he had served with him on the Committee that had sat to inquire into the Public Works of India. As the hon. Gentleman had said, the Committee had recommended that no more than £2,500,000 should be annually borrowed in India for the construction of public works. Of course, that recommendation placed no restriction on the amount that might be spent if India obtained a surplus. In that case,£8,000,000 or £10,000,000 might be expended; but the conclusion of the Committee was that it was not safe, considering the uncertain returns yielded by many of the later public works, to borrow more than the annual sum of £2,500,000. The hon. Gentleman said that on that point he had not changed his mind, and he might add that neither had he seen any reason for altering his opinion. Now, there was probably no part of the noble Lord's speech that day which would be received with more satisfaction than that part of it which stated that England would make a solid and substantial contribution towards the expenses of the Afghan War; and that statement would give not less satisfaction in England than in India. Whatever might be the faults of the English people, they were not mean or ungenerous; and, knowing that the War was undertaken for Imperial purposes, they would assuredly not think it fair to throw the whole burden of the expense on the poor and heavily-taxed people of India. Everywhere it would be felt that the noble Lord had had the courage to do a just act that might even at first have the semblance of unpopularity. He was particularly glad that the contribution would be made on the ground not of charity, but of justice. Anxious as he had always been to reduce the taxation and the expenses of the country, no one on either side would more resolutely oppose the gift of a single shilling in the way of charity to India. Bad and serious as would be the consequences of increased taxation in India, he had rather incur responsibility on that score than let loose all the manifold evils that were associated with aid in the form of a subvention. Alike by law and by justice they were bound to pay part of the expense whenever the troops of India were employed beyond the Frontier on Imperial enterprises; and it could not, of course, be contended that the War was local rather than Imperial in its character. With reference to another point in the speech of the late Under Secretary of State, he had noticed the remark of the hon. Gentleman that it mattered little whether the Revenue of India was taken as a gross or a net Revenue. But, according to the latest information, while the gross Revenue exceeded £64,000,000, the net amount came to only £13,000,000; and the difference between the two, which in England was only about 12 per cent, was of far greater importance to the English than to the Indian financier. He would explain how this great difference arose. Let hon. Members go through the Revenue of each country, and they would see item after item which represented real Revenue in England, but did not represent Revenue in India, being simply items of loss. Take, for example, the Department over which he now presided. The actual Revenue from the Post Office and Telegraph Service in England was nearly £3,000,000 a-year. That amount was handed over without a deduction to the Exchequer. In India, however, there was a loss on the Post Office and Telegraph Service; and, consequently, it was absolutely misleading to speak of Post Office and Telegraph Revenue in India. The reason why he desired to keep before the House and the country the net Revenue of India as distinguished from the gross Revenue, was this. If they thought a man had been spending too much, and if they wanted to insist on his reducing his expenditure, one of the first things to do was to make him clearly understand what his real income was. It was of no use to let him go about as if he were a man with £20,000 a-year, when his estate was so heavily mortgaged that he had only an available income of £12,000 a-year. That was the case with regard to India, and he would give the House a practical illustration of the way in which that operated. No one who had given attention to Indian finance, could come to any other conclusion than this—that there was not much hope of effecting a great saving in Expenditure except by reducing the enormous Military Expenditure of India. Sir John Strachey, before the Afghan War broke out, said that the Military Expenditure of India was £17,000,000. That was a sufficiently serious deduction if taken from a Revenue of £69,000,000; but it was infinitely more serious when it represented nearly one-half of a Revenue of £38,000,000 or £39,000,000. Therefore, this was no pedantic argument about the keeping of accounts. The great thing in order to make the English people insist on a policy of economy being pursued was to make them feel, in the first instance, what was the real amount that India had to expend. He entreated the House not to forget these three cardinal facts, which might be remembered by a child. Here was a country, with scarcely any available means of increased taxation—a country with a Revenue of only about£40,000,000 at the utmost. Out of that £40,000,000, no less than £17,000,000 had to go in Military Expenditure, and £17,000,000 had to be sent out of the country itself for payment of those Charges. These were facts which must bring home to everyone the importance of something effectual being done to reduce the Military Expenditure. He felt convinced that something serious must be done with regard to the Military Expenditure, and that it would be not be sufficient to abolish this particular office or to reduce the pay of that particular person. He believed it would be found necessary fundamentally to change our system of military organization. At the present time India was made a compulsory partner in our system of military organization. What England could afford to spend with regard to military organization it might possibly well happen that India could not afford, and what might be suited to England might not be suited to India. Not being a military authority, he would not presume to express an opinion on the advantages or disadvantages of short service in India; but he knew enough of military matters and of Indian finance to know that a more costly system for India could not be devised by the ingenuity of man. It enormously increased the cost of transport, and soldiers were sent to India when young and taken away from the country when just beginning to be effective. He had endeavoured to speak without any Party bias; and he felt he should be doing no good service to the Government if he did not speak on the present occasion much in the same way as he had done in days gone by. He could only assure the Secretary of State for India that there were few things his noble Friend could do which would give him more sincere pleasure than to aid him, in however small an extent and in however humble a manner, in the great task he had undertaken to perform. He believed that the interests of India—and he thought this was the opinion of both sides of the House—were safe in his noble Friend's hands. India and England, he hoped, would alike profit by his noble Friend's sound judgement and straightforwardness; and he believed that if his noble Friend should succeed in introducing better government, and a more careful and more thrifty administration of the finances of that country, he would not only earn the thanks of England, but would be always remembered as one of the greatest benefactors of the people of India.

said, that anyone who had heard the speech of the Secretary of State for India must have been impressed alike by the masterly facility with which he handled the figures, and by the impartiality and candour with which he dealt with many questions. The Postmaster General expressed the general feeling of the House in saying that there was something radically wrong in a financial system which would allow a blunder of £9,000,000 to take place undetected. The right hon. Gentleman seemed to indicate that some process of overhauling the Act of 1858 was necessary to prevent the recurrence of the mistake. He (Lord George Hamilton) believed that this blunder pointed to what had been the great blot of the Indian financial system. The officers of the Indian Financial Department performed their work, on the whole, with marvellous accuracy, considering the great disadvantages under which they laboured. But there was one point on which they were always liable to error, and that was the estimated cash balances in hand on a given day. The Indian Government themselves, in a despatch dated May 4 last, admitted that, owing to the existence of a multitude of transactions connected with innumerable treasuries and sub-treasuries, it was impossible, no matter what skill or care was employed, that the Estimate of cash balances could be, within a considerable margin, any better than a guess; and during the time he was at the India Office constant mistakes in that matter were made by the Financial Department of the Government of India. In order to appreciate the purport of the telegrams which had passed between Lord Cranbrook and the Viceroy early in the year, the House must understand that telegrams of the same nature passed between the Government of India and the Secretary of State almost every financial year. The meaning of those telegrams would be easily comprehended when the House understood the method in which the Government of India had to meet its financial obligations. Every year the Government of India had to provide Ways and Means for the Expenditure over and above the Ordinary Exdenditure. The Ordinary Revenue of the year was more than sufficient to meet the Ordinary Expenditure; but this surplus was not sufficient to meet the Extra Expenditure connected with Famine, Remunerative Public Works, and similar disbursements. The question, therefore, arose every year—Shall the sum necessary to establish an equilibrium between Receipts and Disbursements be borrowed in England or in India? If borrowed in England the interest payable upon it swelled the amount of the Home Charges, increasing in subsequent years the exchange difficulty. The Indian Government, however, generally were in favour of borrowing in England, as the result of such borrowing was to reduce the loss upon exchange for the year in a two-fold manner—first, by diminishing the amount to be remitted from India; and, secondly, by such diminution, obtaining a higher price for each rupee remitted. The telegrams of this year were merely a repetition of those of previous years, and indicated, not that the Budget Estimates were erroneous, but merely the inability of the Government to meet in India the wants of the Home Treasury in London. The latest telegrams on this subject which had been laid upon the Table of the House constituted an appalling confession as to the want of control exercised by the Indian Government over their cash balances. That was, no doubt, a strong expression to use; but it seemed to him to be perfectly justified. He had no doubt it was owing to that defect in the financial system of India that the recent great blunder had occurred. It seemed really impossible for the Indian Government to take account of the issues from the Exchequer so as to be able to tell within millions their cash balances on a given day. Now, he did not wish to censure the officers of the Financo Department in India, who, as he had already remarked, performed their duties, on the whole, with singular accuracy; but, seeing that the evil referred to manifested itself under successive Viceroys and successive Secretaries of State, he could not help think that there was something radically wrong in the manner in which the cash balances in India were calculated. What he would venture, in the circumstances, to suggest was that a small Commission, composed of the best men whose services could be obtained, should be sent out to India to investigate the mistake which had been made, and to lay down such rules and regulations as would be likely to prevent the recurrence of a similar mistake in future years. If that suggestion were adopted by the noble Lord, the Commission, he thought, might inquire into something more than merely the best method of arranging the cash balances. A small Commission, appointed by the Secretary of State, well paid, and with a limited Reference, and confining itself to financial matters only, would, in his opinion, in all probability, be productive of much good. The Viceroy ought, he thought, to be consulted previous to the appointment of such a Commission, both as to its constitution and the exact scope of its powers. Then let the Commission proceed at once to India, investigate each branch of Expenditure, not merely in connection with the Imperial, but the local Governments, and make a Report to the Viceroy, whose duty it should be to communicate their suggestions and recommendations to the Secretary of State. By that means, such substantial results as regarded economy might be effected as were produced by the labours of the Military Commission, which was presided over by Sir Ashley Eden, and which sat last year. As to the Indian Civil Service, it was almost impossible to expect that it could undertake the hopeless and thankless task of initiating economy. He understood the Postmaster General to advocate the appointment of a Committee somewhat similar to that which was presided over by Sir James Mackintosh in 1833. But those inquiries were held previous to the renewal of the Charters of the East India Company; while at present there was not the smallest Charge connected with the whole administration of that country which could not be called in question by any Member' of that House, and no powers were conferred upon the Viceroy except by Act of Parliament. And if, he might add, any great Inquiry were set on foot, such as had been suggested in the course of the discussion, many years must, he was afraid, elapse before any Report could be received upon which Parliament could act; while nobody would, in all probability, wade through the Blue Books in which the results of such Inquiry were contained. The Viceroy and his Council were, he might add, too much overburdened with work to initiate the necessary reforms; and, besides, the tenure of Office of the Viceroy was very short. While any attempt to enforce economy would be sure to be very unpopular. He might also observe that there was so much jealousy between the local Governments, that it was extremely difficult to institute the necessary Inquiry without the greatest opposition. But he could not help thinking that the lapse of time, increased facilities of communication, and an improved system of administration might suggest many useful economies. The second suggestion he would make to the noble Lord related to that part of the Expenditure on which the Postmaster General had laid so much stress; and he would point out to him that if the Charges, amounting as they did to £17,000,000 per annum, were to be reduced, he must set to work by having recourse to economy in India. India wanted certain articles for which she was compelled to pay; England was the only European country which could supply her; India raised loans in this country because she could get them cheaper here than elsewhere. If it was not possible largely to reduce the annual amounts required by India for this purpose, great improvements might, at all events, be made in the method of selling bills upon India. The present method was that once a-week a certain fixed sum represented by bills payable in silver was sold by the Secretary of State. The Indian Government in this way annually sold £15,000,000 worth of silver, and the sales were conducted in a manner which would bring ruin on any private trader. The demand for silver was uncertain and fluctuating; but the sale by the Secretary of State was constant and certain. No matter how great the demand might be, the Secretary of State never sold more than sufficient to meet his requirements; and, on the other hand, no matter how small the demand, he never considered it necessary to abstain from forcing as many as possible of his bills on the market. The results were ruinous to trade, and he had been informed by many merchants and bankers that a continuous rise or fall in the value of gold or silver was not necessarily injurious to trade; but zigzag fluctuations were various, as the basis of calculation upon which profits depended was shifty and uncertain. He would, therefore, venture to suggest to the Secretary of State that lie should endeavour to adjust the sale of his bills to the demand for silver, and that the India Office should select some broker who should have power to sell on any day of the week any number of bills, provided the market was at a certain price. He quite admitted that this course was open to dangers and risks; but there was such a combination of financial ability at the India Office as to make it an easy matter to suggest some means by which the risk could be minimized. He would suggest, further, to the noble Lord that if he were not prepared at once to adopt this step, he should consider during the Recess the propriety of appointing next Session a small Commission to consider the matter. The fact was, that the Indian Office was more or less the victim of a "ring." It was desirable that these bills should be obtained at the lowest possible rate; but the existing arrangements made that impossible. He thanked the House for the attention which they had paid to his dry and practical remarks. This country had conferred inestimable benefits upon India, and that by the agency of only about 3,000 Europeans; and, indeed, the affairs of India were managed at a cheaper rate than our own. We should, therefore, aim at making India self-supporting. Since the present Government came into Office suggestions had been made that a part of the expenses of the Afghan War should be borne by the Imperial Exchequer. He objected to the use which was constantly being made of the words "Imperial" and "local;" the former word being applied to the Central Government, and the latter to local bodies. But the fact was, that England would be little interested in Eastern questions were it not for India. The Afghan War was not an English war, and the Crimean War was in great measure undertaken by us in consequence of our position in India. However, as the Government had made up their minds to pay a large contribution, he hoped they would accompany it with a declaration which would make it quite clear that the Indian Treasury could not rely again upon a similar subvention. He believed the Government of India could best be made self-supporting by introducing more economical methods of administration. The noble Lord had a grand opportunity of carrying out such a programme; and if he acted with the same vigour and power as he had displayed in his speech, he would deserve all the confidence which was at present reposed in him by his Party.

said, that he wished to go into some of the details of the Indian Accounts; but, in doing so, there was no occasion whatever to criticize, in a hostile spirit, the clear and able Statement of the noble Marquess the Secretary of State for India. On the contrary, he agreed with almost every word he had said. There were some points, however, to which he should like to draw the attention of the noble Marquess and the House. In the first place, he thought they all felt grateful to the noble Marquess for the clear Statement of the net Revenue and Expenditure of India he had put before them, in which some of the mist in which those Accounts were enveloped had been cleared away; because the ordinary Indian Accounts erred on the side of complication to a degree that was very delusive indeed. The hon. Gentleman the late Under Secretary of State for India (Mr. E. Stanhope) had given them some reasons why the Accounts should be given in gross. The system might be carried too far; it had, in fact, been carried on in India in a most pedantic manner. And, in the constant changes that took place, they made it almost impossible to understand the matter. When they were told that this and that distinguished Statesman were mistaken in their views of the Indian Revenue and Expenditure, he would say that the blame was for having a system that was utterly unintelligible except to experts. Under those circumstances, the noble Marquess had done good service in making a step towards reducing that system to simplicity, in comparing a series of years. Besides confusing the Accounts, the old system had a bad effect in spreading throughout the country the idea of the great elasticity of the Indian Revenue. An increase was seen continually arising in the big figures, and it was concluded that that Revenue was of the most elastic nature. In reality, the Revenue was to a certain extent elastic; but the increase was very slow indeed. One change in the Accounts was entirely contrary to what every good accountant would do. That was the way in which, for the last two years, what was called provincial rates were mixed up with the ordinary finances of India. Those provincial rates answered to the local rates of this country. Every rate for roads had been included; and, not only so, but the figures had been so mixed up together that it was impossible to dissever them. It might be possible to deduct the local revenues. But, in Expenditure also, local and Imperial items had been mixed up, so as to make it impossible to distinguish them. The result was an absolutely confused Expenditure. If they took one item, such as Public Works, the noble Marquess told them truly that, in consequence of the strain upon the finances caused by the War, the ordinary expenditure for Public Works had been reduced to an excessive degree—that was, that the Public Works had been starved to what he (Sir George Campbell) might almost call a shocking degree. But that did not appear in these Accounts at all. On the contrary, if they looked over them, it would appear that, instead of a diminution in the expenditure, there was an increase. That was due to the change in the system of Accounts, because every local expenditure, such as roads and bridges, was, in that Account, added to the Imperial Expenditure for Public Works. With regard to the Extraordinary Reproductive Works, they had heard a good deal about the changes that had been made, and they rendered the Accounts most misleading to the House. Some years ago, the whole of the works under that head were included in the ordinary Revenue and Expenditure of the year. Then, for a time, the Extraordinary Expenditure was thrown under a separate head. That was so until a comparatively recent period; until, in fact, a year or two ago. The Expenditure and Revenue showed—first, the Ordinary Heads, and then that Extraordinary Expenditure was shown; so that they were able to take their choice of an Estimate with these items included or excluded. But since a year or two ago, that Extraordinary Expenditure on so-called Reproductive Works was excluded altogether. It was quite true, that the Revenue and Expenditure were included; but the capital expended was wholly excluded, formerly, for railways, except borrowed money under a guarantee system, and it was quite right to show that in the Capital Account. It had been admitted, however, by the Government of India, that there were many items now included under the head of Reproductive Works which were not so at all. It was wholly misleading to exclude that expenditure from the Accounts of the year, when, in reality, the surplus was subject to that reduction. Those items should not be put under the head of Reproductive Works, which ought to be charged to Income. As regarded the income and expenditure of those works, although the Account was so arranged as to be misleading to a considerable degree, the Grand Trunk Railways, designed by Lord Dalhousie, paid very well; but the others did not. After having carefully gone into the matter of the guaranteed railways and other things, he must say that he was under the impression that many of those so-called reproductive works were, in reality, not at all so, from a financial point of view. With reference to irrigation, no doubt, the most favourable sites had been already taken up. They contributed more than many other works; and his right hon. Friend the Postmaster General (Mr. Fawcett) had said that he thought that was due to the superior engineering on the part of the Natives. He could not agree with the right hon. Gentleman in that matter; for he did not believe that they possessed superior skill in that way. The most favourable sites, as he had said, were first taken up, and they, therefore, had then to content themselves with less favourable ones. Those works were not always carried out in the best manner possible; and he must say he was inclined to agree with the Committee which sat two years ago and reported that the irrigation works were not always a financial success. He was strongly under the impression that that was so. If carried on, it should be with a view of saving life, rather than of gaining money by the transaction. Whether they had the effect of saving life seemed to be a matter that required serious consideration, when they remembered that, in some districts, where irrigation had been carried on, the mortality was very great. Another point to which he wished to draw attention was, that the balance from year to year, and the receipt and expenditure, did not correspond. He had taken the Statistical Abstract, and found that the Debt had increased by £51,000,000, whereas the Reproductive Works' Expenditure amounted to something like £35,000,000. The difference of £15,000,000 was wholly unaccounted for. He believed that many works, such as that of Madras Harbour, had not been included. That, he believed, would go a considerable way to explain the missing £15,000,000. He thought that there should be a balance shown, by which the increase in the Debt should be made to tally with the apparent balance for the year. As regarded the question of the War Expenditure, and the mode in which it was shown, it appeared to him absolutely necessary that a radical change should be made. He believed he was one of the first Members in that House who had drawn attention to the extraordinarily small expenditure estimated for the War in Afghanistan. He would confine himself for the present to the Estimate of 1878–9. They had been told that the War for six months could be carried on for the small expenditure of something over £600,000, and he had ventured to express his extreme incredulity as to that. They knew that, some months after, his hon. Friend the late Under Secretary of State for India had shown that he (Sir George Campbell) was wrong, and that the Estimate of the Government of India was the right one, and that the cost of the War had only been £600,000. What had been the result? Two or three months ago, it was brought to light that another £600,000 had not been brought to account; and it was said that, in reality, the expenditure had been £1,200,000. But what was the statement of the noble Marquess that day? £2,250,000 beyond the original Estimate was found to be the expenditure in that year, 1878–9, and of that the Government of India appeared at the time to have no knowledge whatever. So that that War, which was represented by the hon. Gentleman the late Under Secretary of State for India to have cost only £600,000, in reality, had cost nearly £3,000,000. That was the most extraordinary thing possible. The hon. Gentleman the Member for Mid Lincolnshire had remarked upon the statement of the present Prime Minister as to the impossibility of the War being carried on for the amount stated. The statement of the hon. Gentleman the late Under Secretary of State for India was, no doubt, calculated to excuse the Home Government; but it was damnatory of the Government of India. He was unwilling to charge dishonesty upon the Government of India in that matter; but he must say that it was difficult to believe that they might not have known that the expenditure appearing in the Accounts was not the real one. Was it possible, when the Government of India had stated clearly and distinctly that so much only had been spent, that they might not have ascertained that a much larger expenditure was going on to meet the cost of the War? The expression used by Sir John Strachey, in bringing forward the Budget, was, he (Sir George Campbell) thought, peculiar. He said—"The cost of the Warhasbeen£670,381 forl878–9. That, we observe, nearly tallies with the Estimates of last year." Then he went on to say—"That the total cost recorded in our Accounts for that War is what we have stated." The first statement was entirely a mistake. In point of fact, the amount recorded bore no resemblance at all to that actually spent; and if that might have been surmised at the time the statement was made, he must say he did not think that the Government of this great country, or the country itself, had been treated fairly in regard to that matter. Those were the remarks he had to make with regard to the question of Accounts. With reference to what he had before mentioned—namely, the elasticity of the Indian Revenue, the Papers which he had before him showed a very slow increase indeed. He would not compare the present Revenue with those from 1856–7, because many important changes had taken place since that. But he would read those since 1867–8. They were as follows:—£37,000,000, £37,000,000, £38,000,000, £39,000,000, £39,000,000, £39,000,000, £38,000,000, £38,000,000, £39,000,000. In the bad year of 1876–7, it dropped to £37,000,000. During those 10 years the increase had been slow indeed, and the apparent jump that was shown in the last two years in great part was due to the provincial rates which had been brought in. About £3,000,000 was due to those changes in Account, and about £3,000,000 to the salt and opium revenue. There could be no doubt that, during the past two years, the increase had been almost entirely confined to those items. But what did an increase in the salt revenue mean? There was no reason to suppose that the people of India consumed much more salt. That salt revenue was, in fact, a poll-tax; and that not only on a part of the people, but on every man, woman, and child in the country. That sudden increase meant, either an increase in the rate of the poll-tax, or in the area over which it was collected. He thought the House were scarcely aware of what some of the changes meant. In the case of the abolition of the Customs which had been spoken of, the real change that had taken place was not shown. They had exchanged a system of Customs revenue on salt, for one of Excise, and the result had been to bring under the system at least 20,000,000 of people who had hitherto been exempt. They had obtained the consent of their Rulers, the Native Princes, in those parts of the country; but they had obtained it at the people's expense; and, having done so, it became a misleading element in the Accounts; because, while they had taken credit for the whole Revenue, they had attributed to political allowances the sums paid as compensation to the Native Chiefs whom they had induced to come into their arrangements. Then, with regard to the opium trade, for the last two or three years it had been the mainstay of their Revenue; but there could be no doubt that such revenue was precarious, and that it became year by year less possible to rely upon it. Amongst the various reasons in support of that view was the present high price of the drug, which was very likely to create competition in the market, and the fact that our reserve stock of opium had been considerably decreased. Therefore, he urged that we should cease more and more to rely upon that source of Revenue. He agreed with the suggestion that a fixed sum should be taken, beneath the waves of fluctuation, and that all above that sum should be treated as a god-send, and applied to the reduction of Debt. But, as matters now stood, whether they had a surplus or a deficit, they were always borrowing. They had no Reserve Fund. Therefore, he thought a portion of the Revenue should be systematically devoted to paying off Debt. That being his view with regard to the Revenue, he would like to examine what was their present position. He admitted, although it might be possible in some respects to take exception to the Statement submitted to the House by the noble Marquess, that our Ordinary Revenue was really in a satisfactory and prosperous condition. No doubt, in the year 1878–9, there was a considerable surplus in hand which amounted, according to his calculations, to about £2,000,000. But they had had a prosperous year, with an increase of taxation, and a prosperous opium trade; and, that being so, it seemed to him that they had no great reason to pride themselves upon that surplus. In 1879–80, there had been an enormous jump in the opium revenue, which brought the surplus of the year of Ordinary Revenue up to something like £4,000,000. Although he had fully recognized the importance of the suggestion of the noble Marquess, that they should provide for bad years out of surpluses of good years, he held that they should maintain, if possible, as a normal surplus, that amount of £4,000,000, and then there would be no cause for anxiety with regard to the Indian Revenues. There were two very important branches of Revenue—namely, the Customs and the direct taxes, in a doubtful and difficult position. The Finance Minister, Sir John Strachey, had put these on such footing that, with regard to them, they must either go backward or go forward; they could not remain in their present position; and if the present system was maintained, the Customs revenue must be sacrificed. Sir John Strachey had said, with regard to the remission of the Cotton Duties, that the results had followed more rapidly than had been expected; and he expressed his opinion that the Customs Duties were virtually dead. He believed that the course in which they had embarked would lead to the sacrifice of almost the whole of their Customs revenue; and it became necessary, in his opinion, to consider how that hiatus in the Indian Revenue was to be supplied. The noble Marquess had told the House, that his wish and expectation was, that the Licence Duties should be continued and extended to the professional and official classes; but, if that were done, he (Sir George Campbell) must express his belief that the people of India would have a just cause of complaint on that account; because, when it was resolved by that House, in 1877, that the Cotton Duties should be abolished, Her Majesty's Government over and over again declared that it was not their intention to reduce or abolish them at the cost of additional taxation in another form. But if they took off one tax and put on another, it was impossible not to conclude that the latter had been put on in place of the tax put off; and, therefore, He said that the people of India would have serious ground of complaint if the declaration of Her Majesty's late Government were not acted upon. His view was, therefore, that in order to maintain the Revenue the present level of taxation must be maintained. Another view of the subject was contained in the Amendment of the hon. Member for Rochester (Mr. Otway)—namely, that the difficulty might be got over by largely reducing Expenditure. That view was also held by the Postmaster General; but, upon that subject, he (Sir George Campbell) confessed he was much more inclined to take the view which the noble Marquess the Secretary of State for India had expressed, than those of his hon. Friends to whom he had alluded. It seemed to him that, although a reduction might here and there be made, to effect a saving of £6,000,000 or £8,000,000 in Indian Finance, was by no means as easy as seemed to be supposed. Something might, no doubt, be done by judicious changes in the Army; but he felt that the present Force of 180,000 men could not be reduced with due regard to the safety of India; and, looking at the increase of Charges, he was not at all sanguine that a very great reduction of Expenditure could be effected. In other directions changes might be made; but his impression remained that no large reduction could be effected without changes of a radical nature, which, owing to the existing influences, he did not believe could be made. With regard to Public Works, he had been a Member of the Select Committee which had inquired into that subject, and he had always doubted the propriety of limiting the annual expenditure to the sum of £2,500,000; and, therefore, he would be glad if the noble Marquess could see his way to a considerable extension of these works by an enlargement of the sum devoted to that purpose. At the same time, care should be taken to confine the money to works of a reproductive character. With regard to the Estimate for the Afghan War, it seemed to him absolutely impossible to understand how the great miscalculation which had been discovered should have been made, and he was completely at a loss how to account for it. It seemed to him that not only had the money been lost, but that it had been expended absolutely without control. Another thing almost more serious was, that the late Government had been shaping and continuing their policy with regard to the War in Afghanistan, in entire ignorance of what that policey would cost, and without taking the most ordinary and easy measures to ascertain how much money was being expended. No one had been more unwilling to see the country embark in that War than he had been; but, up to a certain point, he had felt that, at any rate, it had been conducted at an extremely small expense. But his fears had been afterwards aroused, and he now learned that there had been an enormous expenditure in men and money, a drain on the Exchequer, and, moreover, the destruction of the morale of their Army. For those reasons, he thought the Government were doing what was right in getting the troops out of Afghanistan as soon as they possibly could. It appeared to him that the hon. Member for Eye (Mr. Ashmead-Bartlett) was completely in error when he argued that that country would yield a Revenue sufficient to defray the cost of the War. Anyone who knew anything of the resources of Afghanistan would see that the thing was impossible. For his own part, he regarded the statement of the hon. Member as one of the most preposterous that had ever been made in the House of Commons. Now, with regard to the blunders which had been made in the Estimates of the cost of the Afghan War, Sir Edwin Johnson, whose health had not been for some months past such as to allow him to do justice to the appointment held by him, had resigned, and, in so doing, had acted rightly; but he ought not, in his (Sir George Campbell's) opinion, to be made the scapegoat for the whole of the blunders made—for the major officials of the Government of India were, after all, responsible in this matter. With regard to Sir John Strachey, although he was a very old friend of his, he (Sir George Campbell) did not see his way altogether to defend him. But it did seem to him extremely unfair that Lord Lytton, who, after all, was chiefly responsible in that matter, should be allowed to escape blame, while Sir John Strachey had to bear it all. The hon. Member for Bolton (Mr. J. K. Cross) had quoted, with great effect, telegrams of the 13th, 17th, and 23rd March, which, as he had said, to any man of ordinary sense showed that there was something wrong in the Estimates, and that, in fact, the Indian Government were very much pressed for money. The hon. Gentleman the Member for Mid Lincolnshire (Mr. E. Stanhope) said that his surprise was not excited by those telegrams; but it appeared to him (Sir George Campbell) that there was every reason why he should have been. It was evident that, reading between the lines of those telegrams, the suspicions of the Government in India were excited, and it seemed to him extraordinary that for 16 days after they had been sent there was entire and absolute silence on the part of the Government of India till the 6th April. In that time a General Election had taken place, and Lord Lytton had resigned, and been made an Earl. He certainly thought some explanation was necessary with regard to that extraordinary silence.

suggested the necessity of adjourning the debate.

thought there were very good grounds for adjourning the present discussion; but, in consideration of the lateness of the Session, he could not take upon himself the responsibility of proposing a Motion to that effect, but would proceed with what observations he had to make upon the general question. After the official and ex-official speeches to which the House had listened, it was only fair that some independent Members should be heard; and he could promise that, though he had much to say, he would compress his remarks within the smallest possible compass. He had listened with great attention to the able, simple, and clear speech in which the noble Marquess the Secretary of State for India had made the Financial Statement, and would wish to make a few remarks on the general questions involved, omitting reference to the cost of the Afghan War, which had been very thoroughly discussed, in all its aspects, by the House. While he admitted the clearness and ability of the statement, he must com- plain that it contained no sketch of a programme of Indian policy in the future, and held out no large promise of future performance in the direction of Departmental administration. It was, perhaps, a little early in the history of a new Parliament and a changed Government to expect any wide and comprehensive scheme of reform to be announced as far as the affairs of India were concerned; but he could not help thinking that something more than had been vouchsafed by the noble Marquess might reasonably have been expected from him. It was, at the same time, satisfactory to hear from the noble Marquess that the Government were not unwilling to reform and curtail the costs and complications of the military system which prevailed in India, and under which three distinct armies, so to speak, were maintained for the purpose of keeping up three expensive staffs. The noble Marquess frankly confessed that there could be no hope of economy in connection with the Indian Civil Service without the introduction of a radical change; but the noble Marquess considerably dashed his (Mr. O'Donnell's) hopes when he added that he saw no immediate prospect of such radical change being practicable. He feared that the introduction of a gradual change in the administration of the Civil Service in India would be useless, inasmuch as everybody who had studied the question knew it to be highly expensive, highly inefficient, and highly unjust. This would always continue to be the case, as far as the question of expense was concerned, so long as it was thought necessary to employ large numbers of British officers in the highest positions. These officials had, from year to year, persisted in, and insisted on, introducing what was called "civilized legislation" into India, and the result had been that the laws so introduced had been made the instruments of tyranny and oppression by the official class. As at present constituted, the system was not only expensive, inefficient, and unjust, speaking in general terms; but it was, in his view, a grave violation of the terms on which Her Majesty's Government held the control of their Indian Empire. It was, in his view, simply a fallacious and deceitful performance of a solemn engagement to compel such Natives as wished to enter the Indian Civil Service to come at great cost to England; and, in the first place, to prepare for, and, in the second, to pass, the necessary examination. He shared in the opinion that, for a long time to come, it would be necessary to retain in European hands a very large number of the posts in the Indian Civil Service; but, at the same time, he thought it would be wise, and, indeed, almost obligatory, on the part of any Government seeking to do its duty to India, to see what number of posts could be left entirely open to Natives of India, who would discharge the duties at a much lower rate than had to be paid to British officials, and, at the same time, in a more efficient manner, for the reason that they would have a better knowledge of the circumstances and the people with which and whom they would have to deal. As far as the cost of the Afghan War, and the financial blunder as to its cost were concerned, he could only say, speaking entirely apart from any Party point of view, that the admissions made on both sides showed the fact that the arrangements made had broken down; that they were unworthy of the confidence of Parliament, and that it was absolutely necessary to adopt some better system of control than at present existed. He was, at the same time, convinced of the unwisdom of the House or Parliament interfering too much with the internal government of a country like India, instead of letting the necessary reforms proceed from within. He knew that there were elements of rottenness, as the right hon. Gentleman the Postmaster General (Mr. Eawcett) had said, in the official system of India, and it was the duty of Parliament to probe such a state of things to the bottom. In that view, he fully admitted the importance of occasional discussions on Indian affairs in Parliament, so as to fix the responsibility on the right shoulders. Taking, as an instance, the reports of agrarian reforms that had been received by the British Indian officials in high places, and that had been urged in answer to speeches and written arguments delivered and published in this country; on examination, it had been found that those boasted agrarian reforms were unreal; as unreal, in fact, as was the original Estimate of the cost of the Afghan War, made by Sir John Strachey. When he (Mr. O'Donnell) came into the House, one of the first speeches he made was in reference to the famine which, at the time, existed in Behar; and he had since found, as the result of careful examination and inquiry, that the arguments and statements used in reply to what he then said were most unfair and misleading. The statement of the noble Marquess had been so admirably clear, though, perhaps, it was slightly tinged with official optimism, that he looked forward, with great confidence, to the continuance of the noble Marquess in the position of Secretary of State for India. He would conclude by expressing a sincere hope that another year they might hear less about foreign competition, the unfortunate consequences of military blundering, and of Imperialist adventures; and by saying that that House would be more worthily occupied by considering how best they might raise the material and moral condition of the people of India, so that it might be seen that the race that had conquered that great Empire were not only equal to the task of conquering it under such difficult conditions, but also that Irishmen and Englishmen, into whose hands the trust had fallen, were equal to the great duty of bringing happiness among the miserable millions of India.

moved the adjournment of the debate.

said, that if the House desired an adjournment of that debate he should not oppose it; at the same time, however, it must be distinctly understood that no day could be afforded for its resumption until the close of the Session. If another opportunity were desired for the discussion, he should, of course, have no objection to allow it to take another day, if it did not interfere with the other Business before the House. No doubt a day could be given shortly before the Prorogation for that purpose.

said, he was not aware that anything would preclude his moving his Resolution on the Motion that Mr. Speaker do now leave the Chair. He did not intend to move that Resolution; but he wished merely to put on record the fact that no attempt had been made to answer the arguments which he had brought forward. He should, therefore, withdraw his Resolution.

said, he did not know that it was necessary for him to say anything then. So far as the Members of the late Government were concerned, they had no feeling on the matter, one way or the other. They were perfectly satisfied with what had passed in the course of that discussion. The speech of the noble Marquess the Secretary of State for India was one of great ability; but there were one or two remarks to which he should take exception. At the proper time, he should like to express his views, which differed in some respects from those of the noble Marquess, especially with regard to the observations he made as to the origin of the hostilities in Afghanistan. The proper time would be when the proposal was made to put a portion of the expenditure of that War on England. With regard to the general discussion that day, he was perfectly satisfied with what had been said in the course of the debate. The question was one, undoubtedly, of great interest; and if there were many hon. Members who wished for an opportunity for expressing their opinions on the subject, of course it would not be a gracious thing to stand in their way. As he understood it, the Government offered no objection to the adjournment, and he certainly should not himself offer any. He presumed, however, that it was not likely that they would have an opportunity of continuing the debate for some time to come.

said, he had no wish to press his Amendment upon the House. His only object had been to make a claim upon the Government in accordance with the desire that was widely felt by many people, both in India and at home.