^* : The limited audience to whom the Secretary of State has annually to expound the Indian Budget in this House makes the absence of any past well-known and regular attendant a noticeable incident. Since the last discussion of Indian finance there has passed away from amongst us one who took deep interest in all questions relating to India. The death of Mr. Caine has deprived this Assembly of a notable personality, of one in whom sincerity of purpose and geniality of manner were combined to a remarkable degree, and who, as a critic and opponent of the Indian Government and its policy, contrived to perform what he considered to be his duty without exciting either dislike or anger amongst those whom he criticized. Though to me he was a constant opponent, I deeply regret his loss, both on personal and political grounds. He was one with whom I was ever ready to co-operate, and his devotion to India and the task which he had imposed upon himself were as sincere as they were successful.

The three financial years with which I have to deal run from 1st April, 1901, to April, 1904; and the general tenor of the financial results of those years is very satisfactory. In reviewing them, I will abstain, as far as practicable, from recourse to a multiplicity of figures, using only such as are necessary to indicate the general tendency and trend of the revenue and expenditure with which I have to deal. We budgeted in the financial year ended April, 1902, for a surplus of £690,000. That surplus steadily grew, until it attained the dimensions of £4,950,000, or an increase of £4,260,000 over the original estimate. This satisfactory result was due to a considerable increase in income and a very large reduction of expenditure. The two causes which mainly contributed to the reduction of expenditure were the large contributions from the Imperial Exchequer for the use of troops in South Africa and China and the very satisfactory returns from the railways, which gave a net result of £1,000,000 in excess of the original forecast. For the year ended April, 1903, we estimated a surplus of £936,000. The revised Budget three months back showed a surplus of £2,740,000; and the closed accounts now put it at £3,190,000. Therefore it is satisfactory to note that in each of these two years there has been a steady and continuous improvement in the realization of surpluses. For the first time this year the revenue and expenditure of the districts known as the Bears are included in the accounts of the Indian Government, and I shall subsequently give an explanation for the inclusion of figures connected with those territories. There was also a payment of £480,000 from Imperial funds for military purposes connected with China. On the other hand, this Budget made a special provision of £1,400,000 to the provincial Governments in reduction of land revenue and in increasing grants for the maintenance and enlargement of provincial establishments.

The most satisfactory feature, both in this, as well as in the finance of the preceding year, is the steady growth of every branch of revenue— Customs, Excise, Assessed taxes, and salt—which is connected with the consuming capacity of the people. The growth is small if the vast population affected is taken into account, but it has been continuous, showing that, though the movement may be slight, it is an advance both in material prosperity and spending power. In considering the Estimates for the next year, we had behind us large realized surpluses for three years in succession, and with such an experience we felt justified in taking a somewhat more sanguine estimate of our revenue for the forthcoming year. The Chancellor of the Exchequer in India is not in as happy circumstances as his financial brother in this country. It would puzzle the ingenuity, I think, of any financier to devise any fresh taxes which would bring in any very considerable increase of revenue. Although the taxation is very light per head if you take the enormous population of India, still the existing system practically includes all sources of revenue. The remission, still more the abolition, of taxation, however small in amount, becomes, therefore, to the Indian Finance Minister a question of immeasurably grayer import than it is to the more happily circumstanced Chancellor of the Exchequer in this country. If a mistake or miscalculation is made it cannot easily be remedied, and there is, in addition, always the danger hanging over India of a shortage of rain, which, if it occurs over any considerable area of that continent, not only curtails the revenue, but at once imposes heavy charges for the establishment and maintenance of a provisional system of poor relief, the cost of which is defrayed, not as here out of local rates, but out of Treasury funds.

Notwithstanding these unquestionable drawbacks to the reduction of taxation, we considered it necessary to give to the taxpayers considerable remission this year. Assuming that the sources of revenue remained unchanged, we found that we might safely forecast a surplus of £2,250,000 after balancing that income against all sanctioned expenditure. It did not seem to us to be fair to the taxpayers in India that we should budget for such a sum, and if any reduction of taxation was contemplated it was clear that the first tax to be reduced was the salt tax. We propose to reduce the salt tax by 20 per cent. Though there is little direct taxation in India, such as does exist comes down very low into the scale of material comfort and the means of subsistence. In this country all incomes below £160 a year are fully exempt from the income tax; in India all incomes above Rs.500, or £33 a year, are subject to its operation. We determined, therefore, to raise this exemption to Rs. 1,000, or £66 per annum. The result of these two remissions was to reduce our surplus by £1,320,000. Deducting this from the surplus we could otherwise count upon, we were left with an estimated surplus for the year of £948,000. I am glad to say that later Returns which have reached me, show that we may anticipate a considerable addition to this sum, because the reports of the fall of rain are satisfactory. Therefore I think we can dismiss from our minds any idea of there being any scarcity of food or deficiency in the harvest in India this year.

In accordance with practice we spend a large sum this year upon remunerative public works, and we propose to devote to that purpose £8,834,000. Of this sum only £4,686,000 will be raised by loan or through the railway companies, the remainder being found from revenue and cash balances. The practice which for many years past has prevailed of devoting, either out of surpluses or from expenditure charged to revenue, large sums annually to the prosecution of remunerative works is now bearing good fruit. The unproductive debt under this process is steadily diminishing, and the returns of railway and irrigation works with equal certainty are becoming a larger and larger source of revenue. A two-fold sinking fund is thus established, which enables the Indian Government to meet various calls upon them for the promotion of the efficiency of both civil and military establishments, to a considerable extent, without imposing additional taxation.

That part of India known as the Bears is now included in the Imperial accounts, and I will give the reasons for this incorporation. Every student of Indian history is aware that during the latter days of Lord Dalhousie's administration he was compelled to resort to summary action in order to make the Nizam of Haidarabad comply with his financial and military obligations towards the supreme Government. Into the merits of that protracted controversy I do not now propose to go; but the financial arrangement agreed upon by treaty, was one under which the Nizam transferred to the British Government, as security for the fulfillment of his military obligations and for the support of the Haidarabad Contingent, that fertile piece of territory known as the Bears, the Indian Government undertaking, after paying off the cost of administration, to defray the expenditure of the contingent and then to hand over any surplus that might accrue to the Nizam. This arrangement has not worked altogether satisfactorily. The Nizam and his Government complained that the administration was unnecessarily expensive, and that they did not get the surplus they ought to have. Those in authority in Bear contended that the anomalous and uncertain conditions surrounding their administration prevented the establishment of that confidence and continuity in changes and reforms which is undoubtedly associated with the administration of other territory which is permanently under British rule. This transfer of administration took place some fifty years ago, and from that time to now the inhabitants have had the advantage of a system of land revenue, of Law Courts and education, and of public works, far superior to that prevailing in the contiguous territories of Haidarabad. It would have been impossible, in the interests of those who for two generations had become habituated to such methods of administration, to transfer them back to a lower and inferior form of government. Successive Viceroys had endeavored to solve this contro- versy; but the inherent difficulties of coming to an arrangement fair alike to the Nizam, the British Government, and the inhabitants of the Bears were such that none of them had been able to suggest a plan preferable to that devised by Lord Dalhousie. The subject was recently broached to the Nizam, and Lord Curzon took the opportunity of a visit to him during last autumn to propose fresh arrangements. The Nizam responded with such promptitude and even mindedness that, in the course of a few interviews, they came to a new agreement in every sense more satisfactory. This arrangement reaffirms the Nizam's sovereignty over the assigned districts, and he gives a perpetual lease of the administration to the British Government. The Nizam receives, Instead of fluctuating revenue, an annual fixed rent of 25 lakhs, and in addition he has received an immediate credit of 41 lakhs in respect of the amount held by the Administration of the Bears as a working cash balance. This arrangement enables us to combine the civil administration of Bear with that of the Central Provinces, and to promote economy and efficiency in administration. As regards the military charges, we have already been able to effect certain improvements and economies. The Haidarabad Contingent is incorporated in the Indian Army, and it has been at once possible to reduce the actual number of regiments without any sacrifice of military strength. The whole negotiation was conducted by the Viceroy with characteristic energy and skill, and its confirmation has. I am glad to say, been eminently satisfactory to the Nizam, who, as the first of the great Indian princes, headed the deputation of that body at the Delhi Durbar to render homage to the King-Emperor of India.

Turning to the finances, this is the first time that any great reduction of taxation has been made in India for twenty years. That period has, to the Indian Government, been one of anxiety and suspense. They have had to deal with cycles of bad harvests and unprecedented droughts, with currency perplexities, with military reforms and administrative advancement entailing increased and progressing expenditure; and yet at the end of this period Indian finance emerges stronger in its credit, its stability, and its recuperative power than it was at the commencement of that period. My critics, both in this House and outside, have found fault with my Estimates on previous occasions on the ground that they have been too sanguine; but when each successive year has shown that, if I erred at all as regards the figures I used, it was in under-estimating my revenue, another form of criticism has been devised; and it was insinuated that, even if my figures were correct, they were paper figures and incapable of realization, and that only when a large remission of taxation had been made could they believe in the substance and reality of my surpluses. Now that this year I have been able to make these large reductions I hope that my critics will discuss Indian finance from a rational point of view, and will not dispute that which is absolutely undeniable, but will impartially examine what are the strong and the weak points in the system and structure of Indian taxation and expenditure. The surpluses of the last three years have amounted to £1,670,000, £4,950,000, and £3,050,000, and the first of these years was one of exceptional drought, and consequently of very large famine expenditure. Indian revenue, therefore, has shown, both in good years and bad years, a remarkable stability. At first sight it may seem curious that in a country which derives its revenue almost entirely from agriculture the income should show so well. India, as we all know, is subject to an insufficient or very fluctuating rainfall. But the fact is that the climate of India compensates one part for the drought of another. India is so vast, and its climate so variable, that there has never been known a year, not even of the most exceptional drought, when its food supply was insufficient for the support of its whole population. If one large portion of the country suffers from lack of food, others benefit by the high prices thus promoted, and the law of compensation has so distributed over this vast country loss and gain that even in the blackest of famines in the West large profits are made by the agriculturists in the East.

Those who are conversant with Indian finance talk a good deal of the external trade of India and of the development of certain great industries. The external trade of India is good. The manufactures of cotton and jute and the mining of gold and of coal have developed considerably during the past few years. But it is not until we take the numbers of those engaged in these industries, and compare them numerically with those engaged in agriculture, that we realize how puny is the aggregate employment given by all non-agricultural industries contrasted with the enormous agricultural population. Cotton employs and maintains 430,000, jute 144,000, coal 100,000, other mines. 60,000. But the agricultural population in British India alone numbers 192,000,000; and although subsidiary industrial employments will be the valves and conduits by which we can diminish the pressure of this gigantic population on the soil, the prosperity of India almost entirely depends upon the condition of agriculture and those engaged in it. The agricultural methods of India are in many parts deplorably backward, and have remained unchanged and unimproved for centuries. This has engaged the attention of the Government. Active steps are being taken by the Government of India for its improvement, and under the superintendence of an inspector-general and his staff, substantial progress has been made in the development of agricultural inquiries and experiments. A body of experts and chemists have been associated with the various agricultural departments. A wealthy American, Mr. Phipps, gave a magnificent donation to the Viceroy of £20,000, to be devoted to what Indian purpose he chose; and Lord Curzon has decided to devote it to an agricultural research laboratory. It is further proposed by the Government to establish in connection with the laboratory an agricultural college and a large experimental farm, so that the theory and science and practice of agriculture can be progressively taught. If this scheme succeeds it will be easy to multiply such institutions in other parts of India, and not only do much towards improving the condition of agriculture, but to offer a field of employment to a section of the community of higher intelligence and ability than are ordinarily associated with agricultural pursuits.

There is another experiment which we made some time back in connection with the agricultural classes which is very interesting in its results. As the House is aware, one of the great evils of the agricultural population of India is its indebtedness to the moneyed classes. The founders and promoters of the various systems of land settlement now in operation throughout India were desirous to so limit the demands of the Government upon the cultivator or owner, as to leave him a considerable annual margin of profit, which might form security for advances should he be desirous of borrowing for the improvement of his holding. A low land assessment, full proprietary rights, were the security and inducement for capital to be lent, whilst the Civil Courts gave to the money lender exceptional facilities for recovery. Capital and land improvement were thus harnessed together for the reciprocal benefit of each interest. These ideas, though in strict accordance with the accepted economic theories of Western Europe, have worked disastrously in India, and the indebtedness of the cultivator to the moneyed classes, and the steady alienation of land from the agricultural to the non-agricultural classes, have over large portions of India become a social and political danger. In the Punjab the evil assumed such dimensions that there arose a strong request for legislative remedies. But no remedy could be effected which did not curtail existing proprietary rights by prohibiting alienation, and if this was done the selling value of land would diminish, the security for loans would be lessened, and the rate of interest increased. The question then arose, Would these drastic measures, if adopted, give offence to the owners of the land and the cultivators of the soil? A Bill was prepared and brought into the Legislative Council of the Governor-General to be applied to the Punjab. A series of lively and interesting debates took place; there was a marked difference of opinion on the subject, and the opponents and supporters of the Bill were composed indiscriminately both of Europeans and natives. The Government decided that it was necessary to interfere. The Bill was sent home for the sanction of the Secretary of State, who has unrivalled expert advisers on these questions, and they unanimously came to the conclusion that the Bill should become law. A full report of its working during the first year of its operation in the Punjab has been received. It has justified the predictions of both its friends and supporters. It has stopped alienation, succeeded in checking and diminishing sales of land, and its restraining influence on mortgaging and other forms of indebtedness has been marked. On the other hand, the selling value of land has fallen, the rate of interest has risen, and the credit of landholders has been curtailed. I am glad to say that so far from the Act becoming unpopular in consequence, the Financial Commissioner of the Punjab reports—

In a densely-populated and long settled agricultural country like India no rapid growth of public revenue is to be expected, and if I claim stability as one characteristic of Indian income, I must admit that it is neither elastic nor expansive. Its annual growth is estimated at about 2½ per cent., and from the experience of the last fourteen years I do not think that it can be safely put higher. When we turn to the expenditure side, its most satisfactory feature is the small amount of the dead weight charges in connection with the debt. There is no great Government whose un remunerative expenditure is, in proportion to income, so small as that of India. But, small as it is, I am glad to say it is yearly decreasing. This is due to the practice of devoting every year not only surpluses of revenue over expenditure, but even portions of the annual current expenditure itself to the construction of such reproductive works as railways and canals. In the railway account there are charged against railway revenue the terminable annuities, by which in fifty years the Indian Government obtains possession of a magnificent property in the guaranteed railways. Sir Edward Law made an interesting calculation on a commercial basis of the assets and liabilities of India, and the result is very satisfactory. The public debt and liabilities of India in April last were £224,000,000. This included temporary and unfunded debt, liabilities for Post Office Savings Banks, and provident funds. The capitalized amount of liabilities on account of railways was £94,800,000, and there were various minor obligations of £5,500,000, making a total commercial indebtedness of £322,800,000. Against this has to be put the commercial value of railways and canals created and in working order. Sir Edward Law took the net annual income of the last three years of these enterprises, and capitalized it at twenty five years' purchase. This gave a sum of 264,000,000 sterling, and, adding to this the cash balances and reserves, loans and advances to Native States and corporations, which amount to £37,000,000, we have total assets of £301,000,000. Deducting this from the total liabilities, we get a net result of liabilities over assets of £21,000,000. Small as this amount is now it will steadily decrease, and I am confident there is no Government in the world which can show so satisfactory a balance-sheet of its assets and liabilities.

Now let me say a word in connection with currency. The finance of no Government can be satisfactory if it is associated with a discredited and depreciated currency. I claim for the Indian Government that the success of the currency policy recently adopted has enormously increased their whole financial system. Let me shortly recapitulate what it has done. The foundation of the change was the attempt to give to the rupee an external exchange value in gold of 1s. 4d. That scheme has now been four years in full operation. Taking the annual average external value of the rupee for purposes of exchange for the last four years, it only shows a variation of ½ per cent., while the exchange during the past year —that is, the year 1902–03—varied only 1·4 per cent. During the same period the fluctuation in the price of silver— which had previously governed the price of the rupee—was 14·7 per cent. The benefit thus conferred upon Indian merchants, exporters from and importers into India, is incalculable. It has given, in place of the slippery shifting value of the old silver rupee, the stable foundation of a gold standard upon which to frame their enterprises and calculations. Whilst the exchange value externally of the rupee has risen, and without difficulty been maintained practically at the rate of 1s. 4d., internally prices have not been adversely affected. In fact, the prices of commodities of general consumption have risen rather than fallen. By reducing the number of rupees to be remitted to this country to meet gold obligations, surplus after surplus has been secured during the past four years, and the present remission of taxation is mainly due to the success of our currency policy. Neither has any difficulty occurred of obtaining and retaining in our treasuries the gold necessary for exchange of notes or rupees coined in silver. Sir Edward Law reports that gold coins, though demanded by bankers chiefly for remittance purposes, are little used in local circulation We have in the currency reserve about £9,000,000, and in the gold reserve in this country about £4,000,000 invested in gold securities. I saw that in the debate in the Legislative Council of the Viceroy it was said by some native gentleman that the rise in the external value of the rupee had increased taxation internally by the amount of the difference between the external value of the rupee when the Mints were closed and its present quotation. I think only a moment's consideration is necessary to upset that contention. If a rise in the exchange value of the rupee means an increase in internal taxation, then a fall in that exchange value would mean a lightening of internal taxation. The exchange value of the rupee during the last twenty-five years has steadily fallen from twenty-four pence to twelve pence. Was taxation during that time diminished 50 per cent.? Taxation was not so affected, and, if a fall does not diminish taxation, then a rise in the exchange value does not raise it.

Now let me pass on and examine what is undoubtedly the weak part of our financial system. It has no practical taxable reserves; and I cannot better illustrate this weakness than by examining the two taxes, portions of which we remitted this year. The income tax in this country is a vast financial reserve. It can be raised and lowered without commercial or financial inconvenience, and its yield per penny in the pound is steadily increasing. The income tax in India differs in one material sense from the similar impost in England, inasmuch as agricultural incomes are exempt from its operation; and as agriculture is the main source of wealth in India, the income tax there only falls upon official and industrial incomes and those derived from investments other than land. In England all incomes below £160 are exempted from this impost; in India all incomes above £33 were till this year subject to it. A sixpenny Indian income tax upon its present assessment brings in about £1,290,000; in England a penny income tax gives £2,475,000, or almost exactly double the full yield of a sixpenny income tax in India—that is to say, a halfpenny income tax here brings in the equivalent of a sixpenny income tax in India. An extra 1d. or even 2d. in the pound has not been an infrequent method by which Chancellors of the Exchequer balance their revenue against a sudden rise of expenditure; but to bring in an amount equal to 1d. in the pound here an Indian Finance Minister would have to impose an extra shilling in the pound income tax. This will give some idea of the scanty resources behind the Indian Treasury; so far as direct taxation is concerned, compared with those available here. Estate and succession duties here are another great source of annual taxation, but the laws of inheritance in India preclude the possibility of applying this method of increasing public revenues so as to bring in any large amount.

The other tax we have reduced is the salt tax; but this, again, illustrates the tenuity of our indirect taxation. This is the most prolific of our indirect taxes, but it is very high upon the ad valorem value of the commodity itself. Salt in India is supplied from three sources —partly from salt mines and lakes in the North, partly from manufacture by evaporation in the South, and partly by imports from Europe; but it is all subject to a uniform tax. The tax was Rs.2½ per 821b. This represents a 1,000 per cent. tax upon the salt from the mines and lakes, and 214 per cent. upon the retail price of imported salt. I have always been in favor of a large reduction of this tax. We have reduced the tax 20 per cent., and I am watching with great interest the result. Unless all my experience and knowledge of taxation is at fault, I believe the consumption will so increase in the course of a few years—already in the three months of this year there is a very considerable increase—as to make good the whole of the present remission. And if my forecast be correct, in this way we may create a financial reserve by encouraging the consumption of a necessity of life liable to taxation, and in an emergency realizing upon the improved consumption we have thus created a higher revenue than on the rate remitted. But this is the only reliable financial reserve that can at present be named, and this reserve is not yet in existence.

On the other hand, expenditure is increasing, and under pressure of influences which no Government can permanently resist; for we have established a system of administration which has for its ideal and aim a standard not of Asiatic conventionality, but of European conception. The Viceroy, with indomitable energy, has reviewed, inspected, and inquired into the various branches of administration with a view to raising their efficiency. (Hear, hear.) Education, police, land revenue, railways, irrigation, famine administration— each has in its turn been overhauled, and in each case recommendations have been made resulting in a larger outlay. And though there is reason to believe that this increased expenditure will be a good reproductive investment, still at the outset of each reform, or step in advance, it entails unavoidable expenditure. Sanitary improvement, supplies of pure water, increased facilities of communication and progressive municipal life are each in their turn making increased demands upon local resources. The local cesses which defray all these demands are un-distinguishable in their incidence from the land revenue, and in consequence an addition to it. I fear that, quite independent of any other call upon the revenues of India, the objects which I have enumerated, praiseworthy and necessary of attainment though they may be, will in the course of the next few years absorb the greater part of the present surplus and the annual increment of increased yield from existing taxes. Therefore it behoves us, flourishing though our finance may apparently be, to carefully scrutinise and overhaul all demands for increased expenditure.

That naturally brings me to those disbursements which are heaviest, and at the same time most necessary of all the expenditure incurred by the Indian Government—namely, the military establishments of India. I am old-fashioned and economical; and during the eight years that I have been Secretary of State I have endeavoured, and not without success, to fight against that expansion of military establishments which has characterised the policy of all the great Governments of the world. The white army in India, when I came into office, was 74,000 men; it is now 75,300. The native army was 145,000; it is now 148,000. When we take into consideration the number of the population amongst whom this army is stationed, the size of the country in which order has to be maintained, and the extent of the frontier to be defended, the number of officers and men upon the Indian establishment is surprisingly small. It cannot with safety be reduced; and, in the opinion of many competent authorities, it ought to be increased. But though the numbers give little signs of expansion, the expenditure during this eight years has risen from £15,200,000 to £17,700,000; and this increase is mainly due to the necessity of re-armament, so that the equipment of the whole of the establishments, both European and native, should be brought up to the latest standard of military efficiency.

The position of the Indian Government in the control of the military expenditure is somewhat anomalous. Over the native army it has full and complete control, but over the European army that control is much more limited. After the Mutiny, the white army of the old East India Company was abolished and incorporated in the Imperial British Army, and from that time till now the War Office stands to India in the position of a contractor who has a monopoly of the article required. I believe the arrangement to be, from an Indian point of view, the cheapest that can be devised. But it is open at times to self-evident drawbacks. The foundation of the arrangements then made, and still in force, is that while the War Office will give India, within limits, the white soldiers she wants, the Indian Government are under an obligation to give to all transferred to the Indian establishment, a daily rate of pay not less than that which is received in other parts of the Empire. This rate of pay is governed by the condition of the labour market where the men are recruited, and that happens to be within the richest country in Europe and the highest rate of wages. The wages fluctuate according to the prospects of the community within which they circulate. If higher pay is given here to the soldier, it is associated with a rise of wealth in the community to whom the Government offer the higher rate of pay. But India has no corresponding advantage; she has to pay, not according to the standard other wealth or her labour market, but according to the standard of wealth here, and she has no option if the soldiers she wants cannot be otherwise obtained. The correspondence which was recently published relating to the increase of pay sanctioned to the British soldier in India illustrates this anomaly. But to anybody who is not conversant with Cabinet practice and procedure, a perusal of these Papers may lead to a misunderstanding, as the impression might be created on those who read them that the War Office, suddenly and without any consultation, informed the India Office of its determination, and that in consequence the Indian objections to this increase of pay were not in the purview of the Cabinet when they decided upon this rise. It may, therefore, be as well to state somewhat more fully what was the origin of the increase of pay. Towards the close of the preparation of the Army Estimates for the year 1902–3 the Secretary of State for War informed the Government that, in the unanimous opinion of his military advisers, they could not undertake to maintain the establishments at the necessary strength during the ensuing year unless there was a considerable rise in the inducement to join the Army. It must be recollected that at that time we were engaged in a serious war. A Cabinet Committee was at once appointed, of which I was a member; and it very carefully investigated the matter, as it was clear that any rise in the pay here would have to be given to the British soldiers who were quartered in India. The Government subsequently considered the question, and every objection taken in the correspondence, urged either by the India Office or the Government of India, was present to the mind of the Cabinet when they arrived at their decision.

I was not able to adopt the ordinary and recognised procedure of officially consulting the Government of India on the matter. If it had become known that the Government had under contemplation the idea of largely increasing the pay of the British soldier, all recruiting for the time being would have been stopped; and it therefore became necessary to adopt measures of extreme precaution to ensure secrecy in this matter. The Government of India is double-headed, and consists of two considerable Councils, and it would have been almost impossible to have followed the procedure laid down by Act of Parliament, and have addressed them officially on the matter, without a risk of the proposition becoming known. I therefore adopted the course of placing myself in semiofficial communication both with the Viceroy and my military advisers; and there is no objection contained in these Papers which the Government of India subsequently urged against the proposal that was not known both to the Committee of the Cabinet and the Cabinet itself when they decided upon the increase. There was no difference of opinion between the Council of the Secretary of State and the Council of the Viceroy as regards this increase of pay. We agreed to pay the extra 2d.; we objected to paying the whole 6d. I did not adopt the suggested argument of the Viceroy of India, because it was one which, if recourse was had to arbitration, would not have stood the test of argument. But I stated with absolute accuracy in my correspondence with the War Office what the position of the Indian Government was, and the only ground upon which they could claim exemption from the full burden of the charge then imposed upon them. I may as well read these two paragraphs, written on 22nd April—

It therefore behoves us to subject to more rigorous examination, with the view of keeping within the most economical limits, any proposals to meet other military difficulties. And this brings me to a proposition which excited a good deal of interest—namely, the proposal that a reserve for India should be located in South Africa, and that, towards the extra expense which the quartering of this reserve would entail, a certain contribution should be made from Indian revenues. Now, Sir, this proposal has met with great opposition, and on the ground that it is asking India to bear a charge which legitimately falls upon Imperial revenues alone. But such allegations show a complete misunderstanding both of the origin and of the nature of the proposal. The proposal arose as follows:—The steady and continuous advance of Russia, and the consolidation of her power in the immediate neighbourhood of our frontier or of territory in which we have an exclusive political influence, is a fact which cannot be ignored. I have always shared the views expressed by the late Lord Beaconsfield that Asia is big enough for the aspirations both of the Russian and British Empires. I view the advance of Russia with no jealousy or special apprehension; but it is a fact that cannot be ignored that, year by year, the completing of her railways and other facilities of communication does give her an increasing power of military mobilisation on our frontiers, and of feeding and maintaining those so mobilised. The invasion of India is so serious a matter, and would entail such gigantic expenditure, that no country or Empire, however strong, would lightly undertake such a task. But it is an eventuality that cannot be summarily brushed on one side as outside the sphere of all practical politics, and it has been looked into by successive Governments. Every military and civil authority who has looked into the question, is of opinion that, in certain contingencies, a large reinforcement of our existing garrison in India would at once be necessary. The Admiralty would have to be consulted as to the transport of these reinforcements; and every Board of Admiralty with which I have any acquaintance, has been unanimous in stating that naval difficulties or combinations might occur which would preclude them from giving any guarantee that the troops could with safety be so transported to India.

This subject has been most exhaustively investigated during the past few months by a special branch of the Defence Committee. I was present at all these discussions, and I had with me three Anglo-Indian generals, all men of exceptional experience and knowledge. The War Office was represented by Lord Roberts and Sir William Nicholson; so that every military authority present was an Anglo-Indian general, and every one of them had a personal knowledge, from past campaigns, of the question which we were endeavouring to solve. I doubt if it would be possible ever again to get so unique a combination of personal expert experience. The investigation was conducted exclusively from an Indian point of view, and with a desire to save, as far as was practicable, Indian finance. There is an obvious method of meeting the difficulty, and that is by largely increasing the existing garrison in India. That is a measure which has been pressed upon me from various quarters, but it is one which I have declined to sanction, as it must entail a large and growing increase to our present military expenditure. Was there, then, any other place within the British Empire nearer to India where this reserve force could be located, and from which in time of emergency it might with certainty be transported to India? The Admiralty were unanimously of opinion that they could guarantee the transport of such reinforcements to India if they were located in South Africa. South Africa is a healthy country, and it lends itself to the physical development of soldiers who are training. The question then arose—and it was put entirely in the interests of India—Would it be possible for the War Office to make any arrangements by which this additional force should be maintained in South Africa to be at the call of India in any emergency which might arise? And the Secretary of State, after consultation with his military advisers, came to the conclusion that it would be possible to so add permanently to the troops located in South Africa as to establish for India's special benefit this Reserve. But the cost of maintaining this extra force would be very heavy; and it seemed only reasonable that, if it was located there for the benefit of India, India should in some degree contribute towards the increased charge thus created. If this scheme could be carried out it would give to India a great moral and material Reserve, and thus give a guarantee against that increase to her garrison that otherwise might become unavoidable. After carefully considering the matter, I came to the conclusion with my military advisers that it was the most economical and most convenient proposal that could be made to meet this special difficulty. I have forwarded the proposal to the Indian Government, and they have taken an opposite view. They are opposed to it; and in consequence the Secretary of State for War has said that India will not now incur the expenditure which otherwise she would have incurred. I regret, there ore, that a favourable opportunity of obtaining at so slight a cost to India that which we required has been allowed to go by, and I am afraid that in the course of a very short time those who were its most ardent opponents will regret their action when they have to face the almost certain consequences of their successful agitation. I am waiting a despatch from the Government of India; but I certainly say, that if Lord Curzon and Lord Kitchener both combine in their objections to the scheme, I could not press on the War Office an increase of expenditure which they were ready to incur for the purpose of placing this reserve at the disposal of India.

It is frequently assumed by native opinion in India, that India, in consequence of being an integral portion of the British Empire, is subject both to extra risk and taxation from which she would be free if she were a separate and self-supporting political entity. But this theory will not stand a moment's examination, and it is an entire delusion. From time immemorial, as far as history goes back, India has been invaded from the central plains of Asia until British rule, founded upon a sea base and upon naval supremacy at sea, established itself in the South of India and gradually rolled back what, up to that time, had been the ever-recurring tide of northern aggression. For a century or more India has been immune from the old terror of invasion and spoliation. She has had that protection because she is part of the British Empire. But the protection so afforded her has vitally affected our whole military system, for it has brought us, who are primarily a naval Power, to the boundaries and territories of the greatest military empire in the world. It is this contiguity which affects our military establishments and expenditure. And though I believe that the present relations and ties between Great Britain and India are beneficial to both, and have enabled each to contribute largely to the other's prosperity, the burden thrown upon this country of fulfilling its military obligations to India is a problem of ever-increasing difficulty. Those who have to solve that problem are not the Government of India, but the Imperial Government here. It is not from Indian, but from British resources that the reserves, reinforcements, and forces required in certain eventualities will have to be furnished.

Sir, it is the fashion in certain quarters to assume that India is constantly outwitted, and most inadequately protected by the India Office, in the transactions which occur between her and the Imperial Departments relating to payments for services rendered. This view is widely prevalent in India and in the Press, and is entertained by many Members of Parliament. But all the Departments with whom I have to transact business of this character hold diametrically opposite opinions. It is their ingrained belief that they lose rather than gain by the duties they have to perform, even though India pays for them. It is quite a delusion to suppose that these Departments have any wish whatever to make a profit out of the transaction, or to force on India an unfair or unjust bargain. They contend that it puts upon them certain charges for which the money payment by India does not compensate them. And there is a good deal to be said for their point of view. It is quite true that India pays the full cost of what she has; but it is equally true that her requirements put upon our military system a strain which I believe no financial payments can counterbalance. An establishment on a war footing of 75,000 men, fully trained and in the prime of life, has to be located and replenished in a tropical climate at the other end of the world. This, with the increased mortality inseparable from the climate and surroundings of India, is a very heavy tax upon a short service system of voluntary recruitment in the richest industrial community in the world; and, heavy as it is, it is only the vanguard of what in time of emergency might be required. It is a very difficult problem; and although I am often attacked for not adequately defending the revenues of India, no one who has been behind the scenes and had a long experience of official administration, can come to any other conclusion than that, on the whole, the arrangement made is not an unfair one, and that the home Departments do not make a profit out of it. The views I am now expressing are the result of a long and almost unique experience of the working arrangements between the War Office and the India Office. Originally I believed, when I first went to that Department nearly thirty years ago, that India did, and was intended to, get the worst of the bargains made, and I was instrumental in moving for a Select Committee that sat chirty years ago to inquire into that question. But the greater my knowledge and experience became, the more have I been compelled to modify my original opinion. Though it is my duty, as Secretary of State, to protect to the best of my ability India in the multifarious pecuniary transactions in which we are involved with other Departments, and although I am constantly in controversy, and sometimes in collision with those Departments, I find no wish on their side to make a profit out of any of the services rendered to India; nor do I find any evidence of any fixed intention on their part to force upon us unfair bargains on terms. The principle that should govern these inter-Departmental controversies is well and succinctly summarised in the language of the celebrated Select Committee of 1874, before which Lord Salisbury, the Duke of Cambridge, and Mr. Cardwell all gave evidence—

The widespread interest felt in the term of Lord Curzon's tenure of his present office has shown itself in various Questions addressed to me upon the subject, and I will, therefore, explain more fully than is possible in a Parliamentary answer the reason for the arrangement we have made. The past five years have been years of exceptional activity in India. Questions of the utmost importance relating to railways, irrigation, police, education, land settlements, and famine administration have been exhaustively investigated, and in each case Commissions of high authority have made recommendations of a far-reaching character. The Viceroy himself has inspected and reviewed many branches of Government action. There is, therefore, a mass of questions waiting to be dealt with, and the evidence is ready on which conclusions could be based. It seemed to us that it would be greatly to India's disadvantage if the Viceroy, who by his personal vigour had himself initiated all these inquiries, left office before he had time to put into shape and to ensure the acceptance and establishment of the reforms and improvements proposed. There is no legal limit to the tenure of office of the Governor-General of India, though usage has confined it to five years, but that is on the ground that five years hard work in a tropical climate is as much as most strong men can stand. But if a Viceroy leaves India for Europe, he ipso facto vacates his office. Lord Curzon's five years would terminate in January next. His Majesty's Government sounded him as to his willingness to remain for a further period. He accepted the proposition provided his health and strength would allow him to stay on, but the strain of his extraordinary labours during the past five years rendered it more than probable that, before a further prolongation of office, he would require a holiday of three or four months in Europe. Lord Curzon will, therefore, anyhow remain in India till the end of April next. If his health will then enable him to take up a fresh term of office we propose to extend it for a period of two years. But if he requires a holiday and comes to Europe he will vacate his office, but be re-appointed, on his return, for a period of not more than two years in addition to his original term. I sincerely hope that he may be able to undergo these fresh labours, for he would re-enter upon the office under singularly favourable auspices. The gigantic organism of India, inert though it may be in normal times, has, by the the events of the last five years, been stimulated to unwonted activity. The terrible calamity in the West of India originated for the relief of the afflicted measures of extraordinary magnitude and efficacy, and there has been produced in the minds of the sufferers not only gratitude for the succour so given, but a new sense of hope and trust in the power and goodwill of the British Government to protect them from calamities hitherto uncontrollable. At the Delhi Durbar—that great assemblage which met to do homage to the King-Emperor—the representatives of the races, creeds, and nationalities of one-sixth of the whole world's population were congregated together, and all present at that ceremony felt instilled Into them a higher appreciation of the immensity of the organisation to which they individually belonged, and a quickened sense of national unity and power. Let us, then, hope that these newly-awakened influences may, under the firm and prescient guidance of Lord Curzon and the superlative services of which he is for the time being the head, be able to give their undivided attention to the development of those agricultural, industrial and educational projects without which India can never hope to attain among the nations of the world a place commensurate to her population and her resources.

Motion made, and Question proposed, "That Mr. Speaker do now leave the Chair (for Committee on East India Revenue Accounts)."

expressed his regret that the arrangements of the Government were such that they never permitted a discussion upon the Indian Estimates before this period of the session, and the noble Lord the Secretary for State, he thought, should endeavour to remedy this state of things. As the Vote for the salary of the noble Lord did not come before the House for criticism, some opportunity should be given for discussing the important questions raised by this matter before the last day but one of the session. Once more it was necessary to complain that the Indian Budget was not brought on earlier in the session, when more than a handful of Members were present. The statement which the noble Lord had made of the increasing revenues of India was a justification for the Motion which he now brought forward for the abolition of India's import duties on manufactured goods. Twenty years ago the settled policy of abandoning these duties was adopted, but the fall of the rupee in 1894 brought about their re-establishment. To-day the exchange was steady and favourable, and in 1895 the Secretary of State had admitted that the re-consideration of the duties would be desirable as soon as financial equilibrium was established in India. Troublesome times and famine came; Lancashire not only waited, but did something to assist India in her troubles. Employers and operatives joined hands and raised a fairly large sum of money to help them. They did that because they knew that India needed help, and that anything which assisted India would in the long run be to the benefit of Lancashire. Their only object was to relieve distress and ultimately to do good to their trade. These duties were not defended on their merits, it was admitted that they were put on only for revenue purposes to meet certain financial difficulties. That being so, the only point he had to make clear was that the time had come for the abolition of the duties, and that there was a demand for their abolition. During the past five years the Indian Budget had shown large surpluses, estimated to amount to £14,774,000, or an average of nearly £3,000,000 per annum, and this year there was to be a reduction of the salt tax by 25 per cent., while the limit on incomes for assessment for income tax had been raised from £33 to £66. Even with these remissions there was an estimated surplus of £1,000,000, which the right hon. Gentleman hoped would be exceeded. That was more than sufficient to cover the loss caused by the removal of the import and Excise duties on cotton yarns and piece goods. That being so, surely the time had come when the right hon. Gentleman should keep the promise made some eight years ago. The cotton trade were not adopting a selfish attitude. They desired that India should be relieved of the Excise duties, that they should compete on fair terms, that the tax on the industry there should be removed at the same time as it was removed from the industry here, and that the other trades in this country which exported goods to India should be relieved of this burden. The financial difficulty, to meet which the duties were imposed, had disappeared; therefore the duties ought also to disappear. The cotton trade was at present in such a condition that the relief afforded by the removal of the duties would be greatly welcomed by everybody concerned. A large and representative deputation had waited on the Secretary of State, but the reply, though courteous, was not satisfactory. Resolutions had been passed by employers and operatives pressing for the removal of the duties, and he hoped the right hon. Gentleman would now take up an attitude more consistent with the promises made by him eight years ago. He begged to move.

^* : In seconding this Motion I must congratulate the hon. Member on his able exposition of a difficult subject, and I am sure that the House has been pleased to listen to such an interesting and exhaustive statement from one who speaks with so much authority, as representing one of our greatest industries which gives employment to such large numbers of our countrymen. I am sure that everyone, both in the House and outside, will congratulate the Secretary of State for India on the continued improvement in the financial posi- tion of that part of the Empire, and that notwithstanding the expenses of famine and the constantly recurring incidents of petty warfare, a succession of surpluses fall to her lot must be a source of satisfaction to the Government of India and of envy to that of this country. At the same time, our satisfaction at this continuing surplus must be somewhat tempered by the reflection that it is obtained, in a measure, at the expense of the manufacturers and workpeople of this country. I am afraid that I am one who has importuned the Secretary of State during successive sessions by Questions with reference to the import duties imposed for the first time at the ports of India by right hon. Gentlemen opposite, the last time they sat on this side of the House. The effect of the answers to those Questions by the Secretary of State was that although he had now a surplus he could hold out no hope of a remission of the duties having regard to the possible requirements of India, the implication being that the surplus was in a measure the direct result of those duties. Another cause of this continuing surplus is doubtless that, by extraordinary manipulations of the currency, by methods hitherto unknown, the annual loss to India by the fall of silver in terms of gold, has been checked, and as it was largely the loss on this account which gave rise to the need for raising revenue by means of duties, it seems reasonable, now that that loss has disappeared, the duties should also disappear, if they are injurious to trade, and especially to the trade of the United Kingdom. That those duties are injurious to the trade of the United Kingdom is, I submit, beyond argument; this was clearly shown at the time of their imposition, as the cotton industry was represented in this House in sufficient numbers and force as to finally obtain from the Government, not indeed the exclusion of Lancashire from the operation of the duties as first proposed, but a countervailing duty in India on all cottons above a certain count, which was calculated to remove the protective character of the duty proposed, but other industries, smaller doubtless in extent, remaining subject to the duty which was thus removed from Lancashire. My requests of the Secretary of State were, in effect, now that the Indian Exchequer was in funds and the primary cause of the necessity for the imposition of the duties removed, to remove the duties altogether, but that if he could not now remit them, or if the necessities of India required them permanently, if he will not give other trades also the benefit of the countervailing duty, and thus remove the protective character of the duty from those other trades which has been removed from the trade of Lancashire? I think that that is a reasonable request, and in accordance with the principles of commercial equity. It may be that other trades exporting from the United Kingdom to India are not so large in amount as that of Lancashire, but some of them are growing, and I submit that it should be the policy of this country to encourage that growth. Reading a special article in The Times last year on India, I see that the American Consul at Bombay has pointed out that India is likely to be a fertile field for the extension of the boot and shoe trade, and recommends American manufacturers to sedulously cultivate it. Now, I represent a constituency which is said to be the capital town of the boot and shoe trade, and in and around it some 50,000 people are said to be employed in that industry.

Besides this, many towns and large villages distributed over the Midland counties live almost entirely by this trade, with which India now very largely competes. There are large boot and shoe factories at Cawnpore and elsewhere in India, paying wages to their workmen of a few pence per day, men who, I am told, work the American machinery as well as Europeans. These factories not only compete in general trade in which they are protected by the duty, but large quantities of boots are purchased annually in India by the Government for the use of the Army. Boots for the manufacture of which plant was largely prepared in this country, and the orders having been placed in India instead, has caused much disappointment amongst the manufacturers of the Midland counties. Under these circumstances it will be seen that the duty—the protective duty—imposed on boots and shoes imported from the United Kingdom into India inflicts a hardship on that trade, and I think I am not unreasonable in asking that the injury which the House thought should be removed from the trade of Lancashire, should also be removed from one of the chief trades of the Midland counties—a trade to which the Australasian market, at one time a good market, has been closed by tariffs, and a trade which, in the face of severe and intense competition, needs new markets and the removal of all disabilities which it is in the power of the Government to effect. In a speech at Cambridge, in March, 1895, the right hon. Member for East Fife well defined the position and asked what possible justification there could be for singling out a particular industry for exemption? That question has never been answered.

I must here anticipate a question which might be asked in India, which is this: "Why do you object to our getting duties on boots or shoes and other articles from Americans and Germans and other foreigners?" The answer to the plain and simple mind is obvious, and it is: "Get as much as you like from the foreigner, as long as you, inhabitants of our own Empire, do not get it out of us. Get them out of Germany or America if you like, but not out of Lancashire, Leicestershire or Northamptonshire." But that might lead to a controversy upon which it might not suit the convenience of the House to enter at this period. But it is the simple mind which will answer and settle these questions. The men who will settle them will never have heard of Adam Smith; they will be settled in the factories and workshops of this country—in the marts of commerce, rather than the lecture-rooms of schools. If not in this Budget, at least in future Budgets, I hope that this injustice to trades in this country will be removed and the duties abolished. We have heard a good deal about duties lately, and we are promised a great deal more; but I do hope—and I speak with great respect—I do hope that right hon. Gentlemen opposite may find it convenient to explain why they were so ready to put on duties all along the line for the purpose of filling the Exchequer of India, while they object so strongly to any duty imposed for the purpose of helping to fill our own. I think that we have a claim on hon. Members opposite for their support to this Motion, inasmuch as they were primarily responsible for these duties of which complaint is made. It is true that they were brought to read the old story of the silver debtor and the gold creditor in a very acute form, as the finances of India were thereby approaching collapse; but by their action in closing the mints they commenced the legislation which has eventually restored the equilibrium of exchange, and therefore we might suppose that they would agree now to the abolition of the duties imposed. Here the mere mention, the merest suggestion, of fiscal change appears to agitate the country from end to end, and it is indeed remarkable that those in this country who pride themselves on being professors of economic orthodoxy should have passed over in silence, and without comment, the establishment, within a period of seven years, of both protection and bimetallism in free trade and monometallic India.

India has indeed of late years been the country of economic experiments; the corpus of India seems like the living animal in the hands of the vivisector, who tries what effect the removal of some important organ or the shock of some violent operation has upon the system as a whole; the experiment of duties has been apparently successful; the consumers of India having stood the shock very well, and the revenues having been much benefited. I refer, of course, to the consumers of British India; the consumers of the native States do not like them so well as they do not share in the revenue, at least, directly. The experiment of bimetallism, or the circulation of both silver and gold as legal tender money, at a legally fixed ratio, seems also to have been in a measure successful as the fluctuations and uncertainties of exchange between India and England seem to have disappeared, although they are as acute as ever between both England and India and the Far East. The remedy is a purely local remedy, but still satisfactory as far as it goes. But whether India, although seemingly unaffected at present, suffering probably from the numbness which succeeds a violent operation, whether India can maintain a condition of permanent health and prosperity after the removal of her time-honoured institution of the free coinage of silver, still remains to be shown. This is indeed a great experiment, and an experiment which every economist of repute has pronunced as certain to be attended with grave danger to any State that makes it. I feel, however, Sir, that I cannot pursue that subject further to-day. I can only say that while India is satisfied with the results of these scientific experiments we here can only regard them with interest and attention, but should it so be that she should some day wake up to discover that by her abandonment of free coinage she has sacrificed 50 per cent. of the value of her hoards of silver bullion, for centuries past the potential money of her people, for the smaller advantage of making the payment of her gold debt to England easier; then, in that case, I hope, that she will find a sympathetic ear in the Parliament of the paramount Power. But even if India remains satisfied with these experiments I must still protest that they should not be made at the expense of the constituencies of the United Kingdom, and the substance of this Motion is that in the first instance these duties were unjustifiable; but that now that the first cause for their imposition has disappeared, their maintenance is doubly so; and, further, I appeal to the House generally not to continue to sanction legislation which must show that parts of the country can squeeze privileges from it, which other parts, though equally entitled, are unable to obtain.

It is mere pedantry to contend that what is known as the Government of India is responsible. The Government of India is the Government of this country, and for the actions of the Governor-General and the Indian Council the Parliament of the United Kingdom is responsible. And in any inquiry into fiscal matters into which the Government are entering, or which they are contemplating, I hope that the system of India, both as regards tariffs and its tinkered currency, may occupy an important place: and further that that question of stupendous importance, exchange with the Far East, may also meet with consideration and attention. My excuse for taking part in this debate must be that I have seen India, and have been a landowner there: and the glimpses that I had in this way have induced me to follow with keen interest the lines of its economy and administration, and I must say that, although I think that mistakes have been made, yet I am not one of those who believe, nor do I share in any degree in the sentiment which is frequently unfortunately expressed in this country, that the Government of India, though parental in form, is step-fatherly in spirit, preferring the interests of the children of its own body to those of its step-children in India. On the contrary I believe that through all the turbulent scenes of their history, nothing more fortunate could have happened to that collection of States, geographically known as India, nothing could have occurred more likely to settle them in a condition of permanent peace and prosperity, than the establishment amongst them, of the Government, the absolute Government, of the British Crown. I believe that that Government is actuated by feelings of the utmost sympathy and goodwill for the welfare and the interests of its many millions of subjects without regard to colour, caste, or creed. It is, therefore, with reluctance that I even venture to criticise, and I certainly do not wish, by anything that might be said or done in this House, to increase in any way the difficulties of the administration of an Empire which is a duty already of stupendous responsibility, requiring a supreme degree of ability to efficiently discharge it. At the same time I cannot agree that the suppression of and the withdrawal of Indian affairs from the notice of this House is in the interests of either the Government or the people of India. That the interests of this House, one of the Chambers of the paramount Parliament, should be aroused in Indian affairs is, in my opinion, desirable. That the actions of the Secretary of State and the Government of India should be discussed in this House is, I submit, as constitutional as that those of the Prime Minister and the Government of this country should be, and I hope that in the course of seconding the Motion proposed by the hon. Member for Clitheroe I have not transgressed in any way the privileges which the freedom of debate habitually accords to Members of this House. I beg to second.

Amendment proposed—

"To leave out from the word 'that,' to the end of the Question, in order to add the words 'this House is of opinion that, in view of the satisfactory Indian Budgets in the current and recent years, the duties imposed in 1894–5 on manufactured goods imported into India should be abolished.'"—( (Mr. Shackleton. )

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

^* said that as many Members desired to speak on other subjects, it would perhaps be convenient that he should state the reasons why the Government could not possibly accept the Motion. He felt both surprise and regret at this Motion being proposed. He was surprised because he thought the view put forward by the hon. Gentleman opposite had been very fully met and satisfied by the reply his noble friend gave to the deputation that waited on him from Lancashire. With regard to the pledges the noble Lord was said to have given, all that he said was that as soon as the finances of India were in a satisfactory condition these duties would have to be dealt with. He had fully redeemed those pledges by the changes which he introduced into the tariff, by the abolition of the duty on imported yarn, and the assimilation of the lower duty of 3½ instead of 5 on the imported manufactured article to the Excise duty imposed on the manufactured article produced in India itself. Motions of the kind now under discussion were liable to give rise to misunderstanding, to increase suspicion, and to considerably diminish the respect and confidence the Indian people might otherwise feel in the House of Commons. Last year they discussed a Motion to put the salary of the Secretary of State on the Estimates, the object being to give this House more detailed control over the finances of India. They were finances to which the taxpayers of this country contributed nothing, and no Member of this House was representative of, or responsible to, a single Indian constituency. A Motion of that kind could only be justified on the assumption that in dealing with a purely Indian question this House was capable of looking at the matter from a somewhat broad standpoint, and capable of putting aside all prejudice and partiality.

^* said it was not merely an Indian question.

^* said it was primarily an Indian question, and it seemed to him that the Motion now before them proved that some hon. Members, at any rate, of this House approached Indian questions rather more from the point of view of the British manufacturer than from the point of view of the Indian taxpayer. So far as it was an Indian question the hon. Member had admitted that the natives were not injured by the duty materially. They could not find in the whole of India anybody of native opinion in favour of doing away with these import duties. The only opinion expressed at all by the native members of the Viceroy's Council was not in favour of doing away with import duties but of retaining them, and abolishing the Excise duties. His hon. friend took the opposite view, for he suggested that if the Government could not assent to the abolition of the import duties they should extend the system of Excise, and impose that Excise on all manufactured goods which competed with British imports. That proposal was certainly not made in the interests of either the Indian producer or consumer.

He proposed first of all to deal with the demand for the abolition of the whole of the Indian tariff. He did not stop to notice the suggestion made in the Motion of the hon. Gentleman opposite that they might abolish the Customs duties on manufactured articles while retaining the import duties on other goods. The duties on manufactured articles constituted by far the larger portion of the yield of the tariff, and if they were to take off the duty on manufactured goods the tariff would not be worth maintaining at all. Cotton alone represented 38 to 40 per cent. of the whole of the imports, and the revenue derived from duties on cotton represented one-sixth or one-seventh of the whole of the Customs revenue The suggestion of the hon. Member had been tried more than once in the past, and it had invariably failed. It was tried by Lord Lytton in 1878, when he abolished the duties on cotton, and in a very few years that was necessarily followed by the abolition of the whole of the Customs tariff. It was tried again in 1894, when the general import duties were re-imposed on articles other than cotton, and within a few months it was found impossible to maintain the exemption. Therefore, to propose the abolition of the duties on manufactured articles was practically to propose to abolish the whole import tariff. It meant asking India to sacrifice no less than £3,500,000 of revenue. India was unlike this country. We in England raised five-sixths of our total revenue from taxation. India only raised a quarter of her revenue in this way, and of that quarter the Customs revenue produced at least one-sixth. Anybody who made the suggestion that India should sacrifice a revenue of £3,500,000 was bound to show one of two things—either that India could dispense with that revenue altogether, or be able to suggest some other source of revenue which would provide a similar amount without imposing a greater burden on the Indian people. The hon. Gentlemen, who moved and seconded the Motion, had both selected the first alternative. They pointed to the prosperous Budgets of the last few years, and proceeded to draw the inference that, in view of this prosperity, India could dispense with that source of revenue. The satisfaction with which we regarded these prosperity Budgets must be qualified by several considerations which he would refer to shortly. But even if that were not so, it seemed to him that the inference the hon. Gentlemen drew was manifestly absurd. The fact that there had been for the last four years Budgets which showed a net surplus of £11,000,000 was clearly no argument for a further abandonment of revenue of £3,500,000 when all these Budget surpluses had been already allocated to the reduction of taxation, or to increased expenditure, and were, therefore, no longer available for a further reduction. Of course it might be said that a succession of surpluses of this kind for a number of years was an argument that there would be a similar succession of surpluses in future. He hoped that might be so, but it was clearly not an hypothesis which they were justified in reckoning upon. It was rather an extraordinary hypothesis for hon. Members to put forward seeing that only a few years ago they were pressing this House to make a large grant in aid of the Indian revenue.

His noble friend had reminded the House that the revenue of India was subject to great variations and fluctuations, and that the calls on that revenue were very great. He might add that they could hardly make the assumption that these surpluses would continue, without casting somewhat of a reflection on the capacity of the Finance Minister in India implying that he was budgeting for a smaller surplus than he was likely to get, and that we were maintaining the taxation of the Indian people at a higher level than was justified by the exigencies and necessities of Indian finance. He did not deny that these Budgets constituted a very satisfactory feature. They proved the recuperative power of the country, they were evidence of the soundness of the basis of our financial system and they proved the elasticity of the revenue. The inference which he should draw from these facts was that we ought to be careful how we disturbed the basis of a system which had only recently been settled, and which had yielded such very surprising and satisfactory results, that we ought to think twice before we rashly surrendered any source of revenue which showed a capacity for expansion, and that in determining reductions of that taxation we ought to select those which would give the maximum of relief to the taxpayers and involve the minimum of loss to the revenue. That was the principle the Government had followed in the last Budget. They had not abandoned any single head of revenue. They had given relief where they believed it would be most felt—namely, in respect of the salt tax, income tax, and land tax, and by the remission of the interest on their debt to the small and impoverished States. He did not know that anybody in the House would contend that anything like the same relief would have been given by the abolition of the Customs duties. To abolish the Customs duties would have been to surrender a large and expanding source of revenue, but the modification of the salt duty only meant the temporary surrender of a revenue which was already stationary, and would, we hoped, expand in consequence of an increase of consumption. The reduction of the salt duty and the remission of land revenue were forms of relief which touched practically the whole of the very poorest classes in India. A relief of the Customs duty would do nothing of the kind. He observed that Sir Edward Law, the Finance Minister, in his speech in the course of the Indian Budget, estimated that the proportion of Customs duty which was paid by the very poor only amounted to 20 per cent. Even if that were not so, the surpluses at their disposal had not been sufficient to permit of an entire surrender of the Customs revenue. Out of the whole £11,000,000 of surpluses which they had had during the last four years they had only been able to give towards the relief of taxation a sum of a little over £2,000,000. That was to say, it was more than £1,000,000 less than they would have to surrender if they did away with the Customs tariff. The reason why they had been able to devote so small a share of the surpluses to the relief of taxation was partly that the surpluses were, in themselves, to a certain extent, artificial. These surpluses had been due to the proceeds of the countervailing duty on sugar—a new form of taxation which had only recently been tried, and which had been brilliantly successful—and to the large savings which India had derived from the employment of a great portion of her military forces in South Africa and China. These were temporary in character, and neither of them would have justified a large and permanent remission of revenue.

The second reason why they had devoted so small a portion to the relief of taxation was the same cause with which they were all familiar in this country—namely, that the growth of revenue had been more than counterbalanced by the increase in expenditure. A great many hon. Gentlemen argued that much of this expenditure was unnecessary and ought to be dispensed with. He did not agree with that. He thought, however, that it was a logical point of view that if they were going to surrender a large portion of revenue they ought to begin by cutting down their expenditure. The increase in net expenditure could not fairly be attributed to the Army Vote. It had been pointed out that during the last eleven years the revenue had increased by £17,000,000, and that the expenditure on the Army had only increased by £1,500,000; and taking the last two decades, the proportion of military expenditure to the total revenue had fallen from 26 to 24 per cent. The real reasons why the expenditure had increased were the very large outlay on public works, especially on irrigation, much of which was, of course, of a reproductive character, but much, and, if the recommendations of the Irrigation Committee were carried out, an increasing proportion of which would bring in no direct return. In addition to that, they would have to meet in the future very large charges for sanitation, police reforms, and education, which in all its branches was in a seriously back ward condition. Hon. Members would see that, in view of these growing liabilities and the uncertainty of a revenue which depended mainly on agriculture, it would be folly to throw away a source of revenue which yielded a considerable sum, which imposed no serious burden on the people, and which violated no canon of the most orthodox political economy. He did not propose to labour the point whether these duties were protective. They were not imposed with that object; and he did not think that they had that effect. He did not suppose that his hon. friend could produce a single authority on political economy who would say that a general all-round 5 per cent. ad valorem duty involved an infringement of free trade principles. He had read the debate in the House of Lords on the fiscal question, and every ex-Viceroy of India who took part in it went on the assumption, which no one thought of disputing, that the fiscal system of India was a free trade system. Hon. Gentlemen on this side of the House voted last year for a shilling duty on corn without a corresponding Excise duty, and hon. Members opposite were equally debarred from contending that the Indian tariff was protective because they had lately challenged very strongly the statement made by the right hon. the Colonial Secretary that the citizens of the British Empire took £10 per head of our manufactures, on the ground that he had included the imports into India, which was a free trade market.

^* : The Colonial Secretary said the self-governing colonies. The question was not whether India was a free trade market.

^* said that the question of self-government was irrelevant. He admitted, however, as a matter of pure theory—or pedantry as he preferred to call it—that if you put a tax upon an article which could be manufactured in the country which taxed it, without imposing an equivalent excise, that tax might be described as protective.

That was not the Colonial Secretary's statement.

^* said that that was his own statement. So far as abstract devotion to free trade was concerned, they had already done homage to it in the case of the cotton duties. They had retained the tax on manufactured goods but had also levied an equivalent Excise duty on the native product. Nobody, except Lancashire, alleged that this import duty was protective. The total imports of cotton goods had steadily risen. He thought that Lancashire had been very much in error in attributing so much effect to the protective character of the old duty on yarns. That duty had been abolished, and yet the statistics showed that the Lancashire imports had steadily fallen off. The reason was the competition of the Indian mills, with their advantage of cheap labour, and the changes of native fashions. The case of Lancashire had always been treated as exceptional. Lancashire had had a very large and a very long established trade with India —a trade which depended to a great extent for its prosperity on exports to the Indian market, and also to a very large extent on the Far Eastern market in which India itself was a serious competitor. The margin of profit on the Far Eastern market was so small that it was feared that a very small advantage given to the Indian producer might turn the balance in his favour. The Indian mills were very numerous and very largely capitalised, employing more than 200,000 men, and enjoying the further advantage that the Indian manufacturers drew their raw material from the country itself and consequently escaped the duty. Now, none of those conditions applied to the other trades. There was not one of them which had more than a comparatively small trade with India itself. He was not aware that any single one of them competed with India in the Par Eastern markets. Take the boot and shoe industry, to which the hon. Member had referred, and in which he was especially interested. The bulk of that industry in India was carried on by the small village traders, to whose products, like the products of the hand-loom weavers, it was not possible to apply the Excise duty, and who did not make the kind of goods which were imported from abroad. The only people who might be considered to compete with the British manufacturers were the large shops in the Presidency towns and the owners of three or four large factories. The prosperity of the factories almost entirely depended on Government orders, in respect of which they enjoyed no advantage whatever from the duty, for the simple reason that Government stores could be imported into India free of duty. The large shops again made their goods from English leather which had already paid duty, so that if a further Excise duty were imposed on the manufactured articles they would be put to a very serious disadvantage as compared with the small village producers. He supposed that his hon. friend was afraid that some of these home trades were being seriously injured by the existing duties. He had no evidence of that at all. He had had the averages taken out for the four-year periods from 1885–6 onwards. The total imports between 1885–6 and 1888–9 amounted to £37,400,000. In the next four years they had risen to £44,128,000. In 1893–4 and 1894–5 the imports were abnormally swollen by shipments in anticipation of the duty. From 1895–6 to 1898–9, they amounted to £46,000,000; and in the succeeding four years they had risen to £51,000,000. In regard to boots and shoes, the imports into India were in 1894–5, £84,000; and in 1902–3 they had risen to £122,000; while as to other leather goods they had risen from £114,000 to £118,000. Of course, it might be said that, even if these duties were not protective in their character, they indirectly affected the producer by limiting the capacity of the consumer. That, however, was not an argument for extending the range of Excise duties, and, as a matter of fact, he did not think the main contention could be sustained. In the debate in the Viceroy's Council it was stated that, owing to the fall in price amounting to 12½ per cent. the Indian consumer had not paid the duty, but had been able to shift it very largely, if not entirely, upon the foreign producer. In any other country we should say that that was an ideal state of things, and the only reason why it was not ideal in the case of India was that the larger proportion of these imported goods belonged to this country. In other words, India was being asked to sacrifice herself, not on the altar of outraged fiscal purity, but on the altar of Imperial sentiment.

He recognised the large part which sentiment played in Imperial relations. On occasion sentiment might be allowed to overrule even purely business considerations. He could not help seeing that the great obstacle at present to Imperial consolidation was the fiscal barriers which our own colonies had raised against the mother country, and that even in the case of India the existence of a tariff which was not protective at all, which did not exclude British products, but was imposed simply for revenue purposes, was a constant source of friction, bitterness, and misunderstanding between the two countries. But the suggestion that India should cease to levy revenue from the produce of the mother country was only legitimate on two conditions The first was that, if India was to consider the mother country in its fiscal relations, the mother country should also consider India in her fiscal relations. At the present moment we did nothing of the kind. For example, we taxed tea, of which India, with Ceylon, had practically a monopoly, having driven Chinese tea almost out of the market, to the extent of 80 per cent. of its value. And the second condition was that, if India was to sacrifice a large revenue, those who asked for that sacrifice should be prepared to suggest some alternative source from which she could derive a revenue as large, and one which inflicted as little burden on the population. No such suggestion had been made in the debate, and he was not prepared to make any. It was very remarkable that when in 1893 Lord Herschell's Commission went thoroughly into the question, they came to the conclusion that they could recommend no other method of raising the necessary revenue except the re-imposition of the Customs tariff. The only mode of raising revenue which India had since discovered was the addition to the tariff of countervailing duties on sugar. Without a tariff he did not see how she could meet her large and growing expenditure. Of course, it was possible that a modification of the tariff in one direction might be compensated for by modification in another. It was possible that by selecting those articles which foreign nations imported into India and increasing the duties upon them, and exempting or lowering the duties on goods from this country, India might derive a revenue equal to that which she abandoned and without any greater cost to her consumers. That did not necessarily entail any departure from the fiscal system which she had hitherto maintained. If the articles taxed were not articles which we exported, or which India produced, it was obvious that such a tariff would not involve any more departure from free trade principles than was involved by the imposition of the general duties in 1894 and the special exemption of the cotton imports of which Great Britain was almost the sole exporter. It was possible, also, that India might raise the revenue she required by export duties on raw products of which she possessed a virtual monopoly. The answer to this and the like questions could only be given after minute and careful inquiry into the circumstances and conditions of Indian trade, and should not be answered in the affirmative unless it could be shown to be to the interests, not only of Great Britain or of the Empire, but of India itself. The main hope for India in the future, as everybody knew who had studied the question, lay not only in the extension of her agriculture, but in the development of her mineral and industrial resources. They had had some very serious illustrations, during the last few famine years, of the value of cheap food to a population which had no money wherewith to buy it, and the only remedy for that state of things was to increase the diversity of openings for employment. He hoped we should not allow any selfish motives on our part to stand in the way of such development. Any fiscal change which was adopted must be dictated by Indian as much as by British interests, must be the outcome of very careful consideration of the whole circumstances and conditions of the case, and a change which carried with it some guarantee of stability and permanence.

^* said he desired to support the Motion of the hon. Member for Clitheroe in the interests of the people of India, as well as in the interests of the people of Lancashire. The question of import duties carried with it, as a matter of course, the question of the imposition of Excise duties, which were imposed solely to balance them. He believed it would stimulate the manufacturing industry of India, as well as that of Great Britain, if those two duties which now balanced each other were abolished. They were told by the hon. Member for South Kensington that they ought to be satisfied, because the import duty had been reduced to the amount of the Excise duty, But it was not so, and the people of Lancashire and the people of India both demanded the abolition of those duties. It was surely worth the Government's while to notice that nearly all the imports of cotton into India came from Great Britain. The import duties on cotton manufactures were a tax on the very poorest of the people. That was, of course, emphatically true of the salt tax also, and he must congratulate the Government on having been able to reduce it. That was an odious tax indeed, and he, for one, was not going to urge that duties on cotton demanded reduction more than the duty on salt. He thought they ought to go together, because they were unquestionably taxes on the very poorest. The cotton trade in India had progressed. Government Returns showed that in number of spindles, looms, and capital invested the Indian cotton manufacture in the last ten years had increased 50 per cent. But of late the cotton trade of India had been rather depressed, and, of course, the cotton trade of Lancashire was fearfully depressed. He believed the cotton trade of Lancashire was suffering at the present time more intensely than it had done since the American war. Everybody was hoping that the spindles would soon be busily going again; but surely this was a peculiarly opportune moment to abolish these duties. He was one of those who believed in having very few articles on the Customs list. He thought the present was too large a list for the amount of revenue raised. The Indian people, as well as those of Lancashire, believed that if these duties were abolished the Government of India would recoup the amount they realised by the increased prosperity of the country. The Secretary of State for India, in 1895, promised that when the finances of India had reached equilibrium these duties should be abolished.

^* : I think the right hon. Gentleman said dealt with.

said at all events Lancashire thought he meant to abolish the duties. If there had been surpluses totalling £12,000,000 during the last four years, and the finances of India had not reached equilibrium, he wondered when they would do so. It had been asked what was to be taxed instead. But to pay that was not the duty of the Opposition. It was the duty of the Opposition to oppose what they thought undesirable, and the duty of the Government to propose what they believed to be desirable. He felt the Secretary of State for India had the interests of the country at heart; but he would serve those interests and the interests of Lancashire best by abolishing these duties.

said he had listened with discouragement to the speech of the noble Earl. He had hoped that they would receive better treatment in view of the definite promise given to Lancashire in 1895, that when a satisfactory equilibrium was reached as regarded the finances of India, this matter should be dealt with. Now that the finances of India had reached this satisfactory condition — and they were all hoping that it would be permanent—and seeing that in spite of the large remissions in regard to both the salt duty and the tax on incomes there was still a surplus of over £1,000,000, they thought that some of it might be devoted to taking off these duties, and he trusted that they had not heard the final word on the subject. He did not think that they in Lancashire wished to be unreasonable. The duties were put on because they were told that they were in the interests of India. The interests of India were the interests of Lancashire, and vice versâ, and they accepted the duties without a murmur. But the time had now arrived for reconsideration of the matter.

thought that the speech of the noble Earl had let the cat out of the bag, and he thanked him for making it, because they in Lancashire had evidently been under the delusion all these years in thinking that the cotton duties were in a category by themselves. Now they found there was a change in the policy of the noble Lord at the India Office. Unless they mistook the noble Lord's words, his policy was that these duties were in a category by themselves, firstly, because the cotton trade was there long before the duties were thought of, and had grown up under a free trade system; secondly, because it was peculiarly and almost exclusively a British trade; and, thirdly, because in competing with India it was competing with a country where the raw material was at the doors of the mills which were its rivals. There was no doubt that the universal impression amongst those who had taken part in this matter was that these duties might be dealt with by themselves. The words used in 1895 were that when a satisfactory equilibrium had been established between income and expenditure the cotton duties should be the first to receive consideration. Now the noble Earl told them that they could not be dealt with except the whole Customs were dealt with. Undoubtedly, when the duties were put on, the whole storm raged round those pertaining to cotton. It had been so ever since. The noble Lord had given Lancashire to understand that the cotton duties could be dealt with separately, and now they were to understand that it was useless to hope that they would be done away with unless the whole of the Customs were done away with. Was that a reasonable position to take up? The noble Lord had stated that the cotton duties were only about one-sixth of the total Customs duties. Was not the other five-sixths worth preserving? It was a most absurd contention, and one not in the least warranted by the facts. This duty had always been promised special treatment, and now it was said that it could only be dealt with when all the Customs duties were abolished. He objected to the sneer that those who were pressing for the removal of these duties were actuated by selfish motives. They all felt their responsibility towards the Indian Empire, and they wished to do their duty to their fellow-subjects who had no voice in that House, but he did not think when they were asking for what they considered the fulfilment of a plain bargain, that they ought to be considered selfish. They were bound to defend their trade, which paid a great deal towards the maintenance of the Army and Navy and the general expenses of the Empire They must not kill the goose that laid the golden egg. It was said—he did not know how far it was correct—that Lancashire and Yorkshire paid about one-fifth of the cost of carrying on the Empire, and, speaking for themselves, he thought they had a right to ask the noble Lord to deal very gently with the source of income which enabled them to bear this enormous taxation. The noble Lord spoke of 20 per cent. of the population not being benefited by this duty. But five-sixths of the population of India were clothed almost exclusively in cotton, and 3£ per cent. on all clothing represented a considerable sum. About 400,000 people were employed in the cotton industry in India; they were interested in buying goods cheaply, and every duty taken off Indian products enlarged their market. He had risen to emphasise the effect of the speech of the noble Lord. Lancashire had agitated and would continue to agitate this question, and it was well that they should understand what they were agitating about. It was necessary that the country should understand that this duty would not be further touched until the whole Customs duties of India were abolished, and he contended that the decision was contrary to the understanding which had prevailed from the first, to the promises which had been given from time to time, and to the welfare of both Lancashire and India.

said that what he and, he believed, the majority of people in Lancashire understood on the occasion of the deputation to which reference had been made, was that the noble Lord would do away with the inequality by which the Lancashire producer of cotton goods was at a disadvantage as compared with the Indian producer. That promise had been kept, and he was unable to find any undertaking to abolish the duties altogether. At the same time, in view of the noble Lord's statement that India was greatly prospering, he was very disappointed that no prospect was held out of the removal of the duties. They who represented Lancashire constituencies felt that it was most important that regard should be paid to the cotton industry. They did not urge their case in any selfish spirit, but when they had been told that, as soon as Indian finances could bear it, the question would be further dealt with, they had a right to ask that something should be done.

^* in supporting the Motion, said the question which had been brought into special prominence in the debate was that of the noble Lord's promise and its fulfilment. His right hon. friend did not deny the statement that the cotton duties should be the first to be dealt with, so that those duties had had assigned to them a place different from that occupied by other duties, and were to be regarded in a special light. The noble Lord now declared that they were not to be so regarded, and that they could not be dealt with unless the whole of the Customs tariff was re-arranged. That provided a legitimate ground of complaint, and he found in it sufficient reason for supporting the Amendment before the House. The right hon. Gentleman had given them to understand that the question would be considered when Indian circumstances permitted. Since then India had become more prosperous, and unfortunately there was at the same time a transient, but very real and serious, depression in the cotton trade. That depression might be ascribed to various causes, and, though arising out of shortage of raw material and speculation in the United States, it would be utilised to turn people's minds in the direction of other and larger proposals not yet before the country. Lancashire, however, in this case, as he hoped they would in all others, asked simply for free trade in the commodity they principally exported. There was no trade in which cheapness of production counted for so much as in the cotton trade. The consumers of cotton goods were very poor people, and in the Indian climate they could easily reduce their demand if the goods were expensive. The removal of the restriction on the importation of cotton would stimulate the purchasing power of the great home market in India, and that ought to be the first concern of statesmen. What a little thing this duty was to cause so much disturbance, irritation, and inconvenience to the trade. The whole yield of the duty to the Indian Exchequer was only £667,000 a year, or considerably less than the sum being thrown on the Indian revenues for the pay of soldiers for purely English purposes. These instances of protection were very instructive. The Indian tariff was extremely complicated, and extended to an enormous number of articles, but the return was contemptibly small compared with the irritation and friction it engendered, and of all the items in that tariff there was none which more urgently called for revision than the cotton duties. The noble Lord had undoubtedly excited hopes which had not been justified, and they made this protest because they did not altogether despair that, in the near future, the improvement of the finances of India would render possible that which ought to have been done before.

said that although the noble Earl had advanced the argument that it was incumbent on the Member who moved this Motion to suggest an alternative source of revenue, he seemed to indicate a consciousness of the fact that there was another alternative, because he referred to the probability of a reduction in the excessive expenditure on the military establishment in India. It was not absolutely necessary, if the cotton duties were to be abandoned, that the revenue should be made up in another way, as a corresponding reduction of expenditure might easily be effected in the enormously inflated military expenditure of India.

Question put.

The House divided:—Ayes, 98; Noes, 30. (Division List No. 263.)

Main Question again proposed.

Debate arising.

^* : After the strange protestations of sympathy with the people of India to which we have been treated by the various hon. Members for Lancashire who have spoken in support of the Motion so deservedly defeated a few moments ago, it is refreshing to revert to the consideration of those subjects which legitimately pertain to the true interests of that country, and which are suggested by the statement of the noble Lord. There is every reason to congratulate him and the Government of India on the favourable aspect of India's financial condition, which the noble Lord so lucidly delineated this afternoon, and more especially on the very judicious use made of the surplus which they found at their disposal for the reduction of the salt tax and the income tax. These are the taxes that press most heavily on the poorer classes of India, and although I should like to see a further reduction made in the near future in the former, and the scale of taxable incomes raised to earnings of 1,200 rupees a year, I confess that what has been done so far is deserving of grateful recognition. The benefit of any such surpluses rightfully belongs to the people of India, and not to Lancashire or any other constituency here, as was claimed by those who supported the Motion against which we have just voted. Another matter which calls for congratulations to India is the announcement of my noble friend that the services of Lord Curzon will be secured to her beyond the present term of his office. As one who begged for it on the Budget debate last year, I rejoice that this arrangement has been made, and Lord Curzon deserves our thanks for putting aside considerations of personal convenience in consenting to continue his work there and carry to completion the many undertakings which he has begun and formulated. All of them are useful, but to my mind that for the development of the industrial resources and technical instruction of India is of paramount importance to assure her future prosperity. The reference made to the need of it both by the noble Lord and the Under-Secretary to-night fills me with the hope that a great effort will ere long be made to supply that great national want. Still I must deplore the fact that so little has been done as yet, and I should like to know at what stage the inquiry instituted by Lord Curzon on that subject has arrived. So far back as in April last, I was informed by the Secretary of State that the Report of the Committee would be published soon, but now after four months from that date we know nothing further. The noble Lord referred in his speech to the gift of an American citizen of £20,000 for some object of public benefit to India, and stated that Lord Curzon had devoted that sum to the establishment of an institute of agricultural science and research. That was no doubt wise, and we are thankful to the donor But the fact that so essentially agricultural a country as India should have had to wait for a gift from a strange visitor before the first institute of that kind could be started there, suggests the significant reflection that some more energy and enterprise should be put into the work of India's industrial development than has been the case hitherto. When I inform the House that the trifling sum of less than £30,000 is all that is devoted to the purpose of technical and industrial education in all India, it will not be surprised that I should once again refer to this matter here, after having done so at some length in previous years, and plead for more zeal and solicitude towards it.

I must allude also to another matter of grave concern to the interests and even the honour of India, namely the treatment of our fellow-subjects of that country in British colonies, especially in Africa. In view of the more important subject of war charges awaiting consideration to-night, I am unwilling to devote as much time as I should like to do to this question. That British-Indian subjects are treated in our colonies with a harshness which they have done nothing to provoke or deserve is now an admitted fact. The Secretary of State for the Colonies, with all his authority and influence, and in spite of all his sympathetic assurances, has failed to obtain any appreciable relief or redress. I am thankful to him for the consideration he has paid to my representations to numerous cases of hardship, and I shall continue to engage his attention to the subject in future. But it is apparent now that the real remedy lies with India herself when all other help is failing. It must be gratefully owned that the Secretary of State for India has pressed for redress, and I rejoice that the Government of Lord Curzon has insisted on asking for better treatment before they respond to the demand from those colonies for Indian labour. That demand is becoming more pressing every day, and, feeling that Africa's need will be India's opportunity, I was pleased to see this telegram from Johannesburg in yesterday's Times —

There are many other matters relating to India which might well engage the attention of hon. Members for a considerably longer time than is usually allotted for the discussion of the Budget, and I therefore regret the decision of the Prime Minister to restrict us again to one evening, and that on the eve of the prorogation. Last autumn the Government were compelled at the eleventh hour to allow the debate to go over a second day because a few Members persisted in discussing a small question with reference to Lord Curzon's treatment of a regiment, and one would have thought that so recent an experience would have induced the Government to make a like concession this session, when the far more important question of the imposition of a large burden on the finances of India for Army charges, complicated as it is by the dissent of her own Government, demands the fullest consideration and arbitrament of this House. The people of India regard the imposition of these new Army charges as a flagrant act of injustice, an opinion which is largely endorsed here by men of every shade of politics who are at all conversant with the conditions of that country; and I have only given expression to the universal feeling entertained, both here and there, in placing on the Paper the Motion—"That, in the opinion of this House, the imposition of an additional burden on the Indian Exchequer of £786,000 per annum, on account of the increased pay of the British soldier, and of a further annual charge of £400,000 to defray a portion of the cost of maintaining 25,000 troops in South Africa, is unjustifiable by reason of its being entirely uncalled for by the actual military requirements of India, and is sure to react disastrously on her financial position." With regard to the first named charge of £786,000, the most remarkable thing is that until well nigh its public announcement, here the Government of India were not given any opportunity of stating their views thereupon. This strange omission was explained away by the Secretary of State for War on the ground that—"Circumstances rendered the premature disclosure of the intentions of Government inadvisable." And in reply to a Question, the right hon. Gentleman was good enough to explain to me further that—"Any question of an increase of pay to the Army is necessarily kept strictly confidential, as such proposals, if not carried through after they have been entertained, would lead to discontent." I hardly think this excuse can be deemed satisfactory by hon. Members, assuming as it does that they were bound to accept the proposals as soon as the Secretary of State for War submitted them to the House, for otherwise there would have been discontent in the Army. Its second assumption is that the Government in India could not be trusted to maintain secrecy even if the home authorities enjoined such secrecy. Is it to be seriously maintained that the Cabinet were so distrustful of His Majesty's Viceroy in India, or at least of his ability to keep a secret, that for that reason they bad to forego the advantage of having his and his Council's views on a question of this magnitude? Sir, such a contention could only result in weakening the hold of the Government of India on the people there, and I trust in the course of this debate the excuse given by the Secretary for War will be disavowed on the part of His Majesty's Ministers. The more intelligible explanation of this episode would appear to be that, knowing full well that the universal voice of India, official and non-official, would be raised in condemnation of this new burden, they came to their decision without consulting the Indian Administration, counting on the futility of any subsequent protest. That decision took no note of any considerations connected with her military needs and of the ability of India to meet the new charge. These were the two essential and fundamental points to be borne in mind before arriving at the decision, and the only competent opinion thereon could be that of the Government of India, and no other. That opinion is now given, and it has behind it the emphatic endorsement of every organ of public opinion in India, without one solitary exception, in condemnation of the proposal of the War Office.

The only return to India for the additional bill of upwards of £750,000 sterling per year which she is called upon to pay is that, in the words of the War Office, "she gains a better quality of soldier," that is to say, her military strength will be augmented. If so, it is only a further argument for reducing the number of British troops there. Her military needs to-day are the same as they have been, say, in the last twenty years. There is nothing to convince us to the contrary. So that if you replace every soldier there with another of a better quality, you make her pay for an unnecessary increase in the strength of her army, unless by reducing the number you allow her to counter-balance the additional cost of the more efficient soldier. This disposes of the solitary plea on which the War Office has sought to justify its demand. It is true that the decision of the Lord Chief Justice, to whose arbitration the difference between the Indian and home Governments was referred, has been given in favour of the demand against India. No one can question the legality of that finding on the issue placed before that high authority. But I contend that if the Indian Administration was of opinion, as it was, that India's military requirements and her finances alike made it undesirable for her to incur any additional expenditure, the matter ought not to have been carried further. They were and could be the only competent judges of these primary issues, and they decided them in favour of India. In coming to that conclusion the Viceroy's whole Council, which comprised the Commander-in-Chief and the military member, were unanimous. In their later despatch of the 30th October last they adhered to their original views, emphatically declaring that they did "not require either re-inforcement or repetition." Immediately after that date Lord Kitchener succeeded to the command of the Indian Army, and in the absence of anything known to the contrary, it is but fair to assume that he has not differed from that conclusion, a fact which ought to lend overwhelming weight to the position taken up by the Government of India. In fact, the reasons adduced by them in support of their protest are convincing and remain unrefuted. They are reasons dictated by bare justice to the people of India for whose welfare they are responsible, and in speaking out against the demand of the War Office, they merely voiced the cry of a helpless population, standing generally on the brink of poverty and famine, to be saved from a merciless exaction. If this charge cannot even yet be withdrawn, I trust that its burden will be lessened by a reduction in the number of troops maintained on the Indian establishment.

The welcome announcement of the noble Lord that the Cabinet had decided to abandon that part of their scheme of the South African garrison which threw half its cost on the Indian Exchequer, relieves me from the necessity of arguing in support of the reference to that head in my Motion. I congratulate the noble Lord on being able to make this announcement, and feel that Lord Curzon and Lord Kitchener, whose protest has brought it about, are entitled to the gratitude of all India, where this announcement will be hailed with delight. There was almost a consensus of opinion on both sides in this House against this proposal, but the tension caused by it has been relieved since the declaration to abandon it was made. Sir, India has paid all along every penny of the huge cost of maintaining a large military establishment, twice as large in respect of British troops as her own requirements warranted. In the last twenty-five years, and more, she has lent thousands of her troops, both British and native, for purely Imperial necessities, and when occasionally you have reimbursed her the cost of the men for the time they were actually employed on expeditions abroad, you have taken endless credit for being just to her. But even then you have not repaid your full debt to her, for you give not a penny piece to the credit of the enormous outlay she makes, year in and year out, for the training and maintenance of those troops. And yet you were coolly proposing to saddle her with the cost of half the garrison you have to plant in South Africa, on the plea that India might have, some day in the future, need of the services of half that force. Some vague apprehension of an emergency was hinted at as the basis of the proposal, but we were not told of any solid reasons for entertaining that apprehension. It may not be possible to define an emergency, but surely some experience of the past, some knowledge of the present must be invoked to justify the hypothesis of an emergency in the future. The experience we have of the past only serves to show that the Army maintained by India has been amply sufficient for her own purposes; the knowledge we have of the present is that India is as quiet and devoted to the British Crown as any other portion of the Empire, and as regards any prospect of foreign aggression, it is less than it ever was. Besides, if any such emergency arose, why should not India be then allowed to draw upon the Army in other quarters of the British dominions, just as her Army has been drawn upon so often for Imperial service abroad?

To have made India pay for a portion of the garrison in South Africa, which really was provided for African purposes, would have resulted in not only imposing on her a cruel burden, but inflicting on her an indignity, by forcing her into relations for mutual help with a country which has treated her shamefully. The colonists there have torn into tatters every pledge and promise made on behalf of the British Crown to the people of India for equal justice and fair treatment within the possessions of that Crown. They have done everything they could to shake the very foundation of Imperial unity, about which we have been talking here so much. And it would be simply absurd to think of training 25,000 British soldiers for the defence of India in a time of emergency among a people so blind in their enmity to and prejudice of the people of India. As I have already stated, I need not further argue this part of my Motion as the proposal is relinquished. I thank you for receding even at this late hour from an untenable position, and rejoice at it not only because India will be relieved of the threatened burden, but because the grotesque necessity of contributing £400,000 of the money earned by the hard toil of her children, to be spent within the inhospitable shores of Africa, is averted.

That the weight of these charges would react disastrously on the financial position of India, as alleged in my Motion, is self-evident. She is not rich, and is subject to recurring famines. Millions of her agricultural, that is, the main bulk of her population, live from hand to mouth even in normal times, and in deep ignorance for want of means of education. In a speech of remarkable cogency in the course of the Budget debate in the Viceroy's Council last March, one of its most distinguished members, the Aga Khan, drew attention to "the general ignorance of the masses," and made suggestions for reducing the military expenditure without impairing the efficiency of the Army, so that the saving effected might be devoted to purposes of elementary education. These suggestions, I trust, will command the attention of the Government of India. There are numerous other subjects of national welfare demanding treatment at the hands of the Indian Administration. But if charges such as we have been criticising to-night are sprung upon that Government without their consent, and even in direct opposition to their views, their resources are crippled, and they are disabled from giving effect, to use their own words, "to their desire to alleviate the burdens of the Indian people." I trust, Sir, the debate to-night will have the salutary effect of preventing in future any such interference with the work entrusted to the Viceroy and his Council of promoting the welfare of the people committed to their charge in a sympathetic spirit, and with sole regard to the paramount interests of India. It is work of that description which will strengthen your hold upon her and earn for you the gratitude of her people, the value of which to the cause of Imperial unity, and even for the purpose of repelling a foreign foe, it might be impossible to overrate.

^* said that every speaker in the debate looked upon the condition of Indian finance as satisfactory, and all had taken the same optimistic view as the noble Lord the Secretary of State for India. There never was, however, an occasion when the condition of India more required to be brought before the House of Commons in general debate than the present. It was an unfortunate fact that the debate had hitherto been nearly confined to a single topic. Every speaker had declared that the condition of India was satisfactory; but it was his opinion that the state of India was not as satisfactory as it was represented as being that afternoon. He would advance reasons for that opinion. The admissions of the Government with reference to the cruel nature of the salt tax were in themselves a proof that the condition of India was not as satisfactory as had been stated. "The Moral and Material Progress of India," which was issued to Parliament annually, showed that India was not in as satisfactory a condition as they could wish. This year the volume extended over a period of ten years, and was less detailed than the annual volumes. He believed that at this moment there was a native State in India which was actually bankrupt, the reason alleged for the bankruptcy being the plague and the costs incurred in connection with representation at the Coronation and at the Durbar. The fact that the inhabitants of India were reduced to a condition of plague and famine should in itself prevent them being optimistic about the state of that country. Even now the salt tax pressed more heavily than it did when he first entered the House in 1868, when Professor Fawcett was showing how much more cruel it was than any other tax in the world. He was prepared to show that this was a horrible tax on a necessary of life, which was peculiarly necessary in India. If taxation in India were to be reduced, the salt tax had the highest possible claim to be regarded as the first tax that should be chosen for reduction.

In the Indian Financial Statement for 1903–4 and Proceedings of the Legislative Council the Government of India state on page 9—

On page 146, His Highness the Agha Khan, first speaker in the debate, is reported to have said—

The noble Lord said that the Army in India, although small, ought to be efficient; but that often meant that in India, a poor country, military establishments were kept up on a scale which would not be applied in England, rich though it was. Four great military factories were being built in India; and, whereas, in this country they would be paid out of a military loan, they were in India paid out of revenue. Further, he had never been able to think that the expenditure on the ecclesiastical establishment in India for the small white minority could be defended. That expenditure, as far as it went beyond chaplains and a Chaplain-General, was indefensible. He doubted, also, whether there was any reason for keeping up the Governments of Madras and Bombay with all their palaces, in contrast to the Governments of other provinces. On the other hand, the Government of India admitted that the police system was very inefficient, and needed money. There was the demand which had in the past been made for additional expenditure on police, which would continue to be an enlarged demand. Then, there was an additional reason for economy in the fact that further military charges of various kinds were inevitable, even if the Indian Army were not to be increased. Moreover, that increase would certainly come on the Indian Government, they were told, a fact which must prevent this country from ever dreaming that the financial condition of India would be satisfactory in the time to come. Those Members who had opposed the proposed charge on India for 12,500 men stationed in South Africa had been jubilant at the unlamented death—unlamented except by the noble Lord the Secretary of State—of that scheme; but they could not shut their eyes to the fact that the noble Lord had pointed plainly to an increase in the number of the white troops in India. Before we, or the Government of India, or the people of India, were committed to this increase of the white forces which was evidently comtemplated, there ought to be some statement in Parliament. The reasons for this increase had only been glanced at by the noble Lord in as vague and sketchy manner as they had been dealt with in the statement of the Prime Minister, when he dealt with them for a different purpose. What we were asked to do was to prepare for immediate use in India a vastly greater force than was thought necessary a few years ago. It was not a question of reinforcing our Indian dominions slowly in the event of war, but of meeting a sudden necessity. That was the argument. Before such a proposition could be assented to, it must be shown that there was some probability that from the existing frontier of Russia there would be such a sudden attack as could necessitate these immediate reinforcements. The plan of increasing the white forces in India would shift and alter the difficulties with which the Secretary for War had to cope, but it would not get rid of them. With regard to the proposal for the increase of pay; the Government of India had already used some strong language on that point in a Paper before Parliament in which they said—

As to the position of British-Indian subjects in South Africa, he did not think any blame could justly be attached to the Secretary of State for the treatment of the Indian people in South Africa. If he could have improved it he would have done so, and they desired to strengthen his hands in this matter. The state of things in South Africa was undoubtedly deplorable; it was almost horrible to all who had at heart the interests of the Empire in all its parts. At the South African Custom Union Conference a resolution was moved by a Government official to the effect that "South Africa is essentially a white man's country," but although it was "a white man's country," it was in the position of wanting black or Indian labour, and the conference proceeded to lay down principles to be applied to Asiatic immigration. Another resolution, also moved by a Government official, declared the conference to be of opinion,

said the law was alleged to be a cause of the war.

^* said that was so. Minister after Minister put forward the harshness of the laws and the actual treatment of the Indians as being a cause of the war, although it was notorious that by our pressure we had prevented the enforcement of the laws. Lord Milner had declared that the policy of the Government was not directed against colour, but the House should look at the action of the Government, and support the Secretary of State for India in his protests against the treatment of Indians which was not merely mob action, but was backed by responsible officials of the Government. In the South African Republic, under a law which was not enforced, as the Asiatic Department did not share the prejudice which had forced the law upon them, there were locations, and when notice was given to the British-Indians to go into these locations, the British agent was instructed to protest. Our Vice-Consul supported the resistance to the order, and the State Secretary of the Transvaal gave an assurance that it was not intended to enforce the law. That was one of the very laws which Lord Milner now said he had no alternative but to enforce. The few Indians already licensed were not allowed to transfer their licences, so that they were unable to sell their business, even if they wished to leave the Transvaal. In the Orange Free State the law was different. There a special poll-tax was levied on Indians, and they could only reside there by permission. Many of the laws of that State had been altered since British rule was established, while this law had not only not been altered, but was being enforced far more harshly than before. The House could strengthen the hands of the Secretary of State in acting on the principle, so powerfully declared by the Government themselves at the commencement of the war, and they could unite in deploring the miserable want of tact by which it was proposed specially to tax the people of India for the maintenance of a white force in the very country in which they received the treatment which had been so powerfully described.

The right hon. Gentleman has made so vehement an attack upon the proposal in regard to the reinforcement of the Indian Army, that I would crave the indulgence of the House for a few moments in order to make perfectly clear what is the reason why that proposal was made, and how little ground there is for the indignation the right hon. Gentleman has expressed. My noble friend said at the commencement of this debate that for ten years past it had been an admitted fact, that in certain contingencies the Indian Army would require substantial reinforcement. In that speech my noble friend was well within the mark. He might have gone further back, and said the same with justice. But it was impossible that any Government, urged by this House, as the present Government has been, to survey the whole of the needs of the Empire by means of the Defence Committee, and to see how, in case of attack, the different portions of the Empire should be defended—it was impossible for any Government, after reading Report after Report of Committees of Indian statesmen and strategists, to come to the conclusion that they could entirely ignore the demands pressed upon them. The right hon. Gentleman made a somewhat slight attempt to establish a divergence of opinion between the First Lord of the Treasury and my noble friend with regard to the question of stationing troops in South Africa. The First Lord of the Treasury urged, earlier in the session, that the maintenance of a large Army for foreign service must specially be considered in relation to the Indian frontier. The right hon. Gentleman and others urged that in case of war there would be a difficulty of conveying such troops to India. It is obvious that a state of things might arise on the frontier when troops might be sent from these shores and no European force which could possibly interfere with their convoy would be arrayed against us. On the other hand, it is equally possible that at the moment when we required to send troops to India we might, unfortunately, have against us another European Power who would be in a position to prevent such convoy, and it is with regard to that contingency, on which the whole maritime arrangements are based, that the House, without a dissentient voice, has, time after time, voted large sums for the increase of the Fleet. It is on that contingency that we have considered, and, I think, rightly considered, how we can reinforce India with the men—not whom the War Office desired to send, but whom the Indian experts themselves demand. It has been decided that in case of an emergency in India, it would be highly desirable to have troops that would only require to be conveyed from South Africa instead of from this country. The proposal was not made for the needs of the War Office, but entirely for the convenience of the Indian Government. If the recommendations of these Committees were to be considered at all, there are only two ways by which effect can be given to them—either a considerable increase must be made to the permanent garrison of India, which means a still greater strain on this country, a still larger number of men kept in a tropical climate, and a very heavy charge, which it is impossible to place on the taxyayers of India, or we must discover some means by which a rapid reinforcement of India can be effected at less charge. That reinforcement could have been obtained from South Africa had the Indian Government been willing to entertain our proposals. These proposals are made in good faith, not for the benefit of the War Office, but solely for the benefit, and in the interests, of the Indian Government.

Many hard words have been used in regard to those proposals in the Indian Press, and in regard to myself personally. Now, these decisions, if they were War Office decisions, would have been made—by whom? By officers, from Lord Roberts downwards, nearly all of whom have spent the major portion of their lives in India! That in itself was a guarantee that Indian interests would be considered. One word with regard to the relations of the War Office and the Indian Army. Statements have been made as if the War Office kept a shop of soldiers and pressed them upon an unwilling customer, India, at a high figure. That is absolutely the reverse of the position, I believe that the closer our dependencies and the mother country are knit together, in regard to their defensive forces, the better. If I spoke, not as a member of the British Cabinet and of this Parliament, but simply as the representative of the War Office, I can honestly say that it would be more to our advantage that India should have a separate army. That would ease many of our difficulties, it would immensely cheapen our Estimates, and it would at once, and for all, relieve us from those fluctuating demands which we cannot control, but which the Indian Government make upon us. I go further. If the Indian Army is to be increased, and if you could, draw a distinction between British policy and Indian policy, the increase is not due to trouble forced upon India by our Imperial position, but is due to the actual needs of India itself, and the policy pursued in her behalf by her rulers. I am not criticising or complaining of that policy; but, nevertheless, the fact remains that it is not our difficulties in Europe which cause the increase of Indian armaments. It is the need of her own protection which make it necessary for India to make further demands on the War Office.

I hope I have not gone beyond what I should have said in giving this explanation. The hon. Member opposite took exception not merely to the measure by which we recently proposed to give India 12,500 men upon an emergency at one-third of the cost for which they could otherwise be obtained, but also to the increase of pay to the Army made a short time ago, of which India had to pay her share. As regards the increase of pay, I would say that it was made mainly in order that the Indian Army should be maintained at full strength. If we could have continued to obtain our necessary drafts for foreign service without an increase of pay, I do not think this House would ever have voted the money. We should have had no difficulty whatever in raising the number of men required to serve in this country, and for the moderate amount of service abroad in our colonies. I have been frequently attacked in this House and criticised because a regiment we had at Aldershot a few years ago had been ravaged in order to supply the Indian drafts so that the Indian Army should be kept up to its proper strength. It is for India that we keep up a Reserve which will shortly number 100,000 men, and to which India has not been asked to contribute a single farthing. While, therefore, I fully appreciate the arguments of those who desire to save the Indian taxpayer from undue exactions, it should not be represented that the present demands are due to any desire on the part of any member of this Government to increase those exactions. They have been the deliberate requirements of the Indian experts on the one hand, and the efforts of the British Government to supply those demands on the other. I respectfully ask attention to these considerations, fully realising what the effect of such debates must be on our Indian fellow-subjects, and desiring, at all events, that a fair and unvarnished account, of what has been to us a distasteful demand, should go forth from this country to the people of India.

said he desired to thank the Secretary of State for India for the references he made to the late Mr. W. S. Caine and for the generous tribute be paid to the character of his work in this House. That tribute was all the more valuable because the deceased gentleman was opposed to the noble Lord in politics.

And it being half-past Seven of the clock, the Debate stood adjourned till this Evening's Sitting.

continuing his speech, said many people, having regard to the taxation of India, believed that a point had been reached, beyond which it was difficult to go without doing great injury. He submitted that before any addition was made to the expenditure of India, it should be on a scheme which had the unanimous support of the Cabinet which suggested it. Was there any proof that there was a unanimous opinion on the part of the Government that the £786,000, which was now proposed to be added, should be added to the expenditure of India? There had been an almost continual growth of military expenditure during the last twenty-five or thirty years. In 1860, the military expenditure was under £10,000,000, in 1872 it was £12,000,000, in 1892 it was £15,000,000, and in 1903 £17,784,000, and the situation became all the more serious when it was tested in relation to the net revenue of the country. £17,784,000 was rather more than 40 per cent. of the net revenue, which was a very high expenditure, having regard to all the circumstances of the country, yet it was now proposed to add to that £786,000 per annum. The noble Lord had stated that we could not expect the net revenue of India in the future to increase beyond 2½ per cent., which would amount to £1,000,000, so that it might be said that the revenue of the country was already mortgaged for the burden placed on the revenue of India by the increased pay of the soldiers. But it was important to remember in discussing the question of taxation the extreme poverty of the people. A million of people in India only yielded one-sixtieth of what the people of this country yielded in regard to income tax, and when they considered the small incomes enjoyed by 250,000,000 of people in India, the small margin they had to spare for any increase of taxation must be of vital consequence to them. The Indian Government had protested against this increase. Whose project was it to have these troops in South Africa, and what reason could be advanced in favour of such a scheme being of advantage to India? The Secretary of State had more than once stated that India demanded it. India, on the other hand, had protested against it.

With regard to the financial statement of the Government of India, he could not help noticing with regret the steady increase under the head of land revenue. Under the present conditions of India he could not believe that that was paid without great injury to the country, and he would like to ask whether the Government of India had made any inquiry into the land assessment of India, and whether it was intended to take any steps for the adequate assessment of the land. The noble Lord had emphasised the fact that in future we must look to the yield from the land, and pointed out that the bulk of the population was engaged in agriculture. He believed that although the bulk of the people were so engaged, it was hopeless to suppose the Government would get much revenue from the land. He was glad to hear that the Excise revenue was less than it had been, and he would be glad to know whether the Government had inquired into the complaint which had been made as to the scandals which had occurred with regard to the Excise. The revenue from the railways could not be regarded as satisfactory when compared with the revenue of similar undertakings in other countries, and he was glad to know that the Report which had been made with regard to this subject had recommended drastic changes in the railway system. The Report was most useful, not only for the information it contained, but also because it showed the necessity of reviewing and revising, from time to time, this branch of our administration in India. In conclusion, he had only to say that he believed that everything in regard to the future of India depended on the attitude of the House of Commons. They were always deploring the listlessness that was shown in this country on the question of India, and until they could infuse a new sense of their responsibility into the people of this country, he did not believe they would ever fully discharge their duties to the people of India.

^* said he desired in the first place to congratulate the Secretary of State for India on the very interesting and able speech he had delivered that day. The statement was eminently satisfactory in more senses than one. It was peculiarly agreeable to all Members of the House to hear the announcement that was made with respect to the reduction of the salt tax and the raising of the minimum taxable limit of incomes subject to income tax. In both these directions the Government had correctly interpreted popular feeling. There were many points in his noble friend's speech to which he had intended to refer, but having regard to the lateness of the hour and to the fact that many other Members wished to address the House, he (Sir William) would confine his remarks on this occasion to the particular Motion of which he had given notice. He desired to call attention to the constitution of the Supreme Courts of Judicature in two of the most important provinces of India, namely, the Punjab and Burmah. Although, in point of jurisdiction and in regard to the functions they exercised, the Judges of these Courts were in the same position as Judges holding similar positions in other provinces, they were, with respect to status, salaries and pensions, in a vastly inferior position. For instance, in the High Courts the Chief Justice drew a salary of 5,000 rupees per month, but the presiding Judges in the Chief Courts of the Punjab and Burmah were only entitled to receive a maximum of 4,000 rupees and they had to serve fourteen years before they were entitled to a pension. The Judges of the High Court were entitled to a pension at the end of twelve years. It was surely anomalous that the Judges of one class of superior Courts should be treated as occupying an inferior position as compared with those of the High Courts. He asked the noble Lord whether the honour, dignity, and prestige of the Courts in the Punjab and Burmah were likely to be maintained if these differences were allowed to exist. He had no hesitation in saying that the state of things was not only anomalous, but that it was a scandal. He asked the Secretary of State to see if he could not put these Courts on the same constitutional level as the High Courts. He believed that the extra cost would not be more than 3,000 rupees per month for each of these Courts. That surely was a trifle, when they considered the satisfaction which would be given to the people of the provinces by the elevation of their Courts to the position they were entitled to have. At present there was the feeling that these Courts were badly treated, and that was not calculated to enhance the respect that was due to them. There could be no real reason for refusing to improve their position, and he strongly appealed to his noble friend to do so.

said he welcomed the statement of the noble Lord the Secretary for India that the proposal that India should pay part of the charge of the maintenance of British troops in South Africa, had been abandoned. He should like to ascertain from the noble Lord what was now the exact position of the Government with regard to the maintenance of the British force in South Africa. So far as he could gather at Question time to-day, it appeared that the establishment of 25,000 troops in South Africa was dependent upon the consent of the Indian Government to defray part of the charge. They had now learned that the Indian Government was not to defray part of that charge. What he wanted to know was whether in future there were to be 25,000 men in South Africa as a permanent establishment. He should like to know also what was to be the expenditure on that force, because, within the past fortnight, the House, in the Military Works Bill, had sanctioned an initial expense of £2,300,000 for barracks in South Africa, the calculation being that they had to provide accommodation for 25,000 men. Surely the House ought to be informed what was to be the limit of expenditure, and whether steps would be taken at the earliest possible moment to put some restriction on the spending of this money. He not only welcomed the statement of the noble Lord, but he welcomed also the grounds on which the statement was made. He gathered from it that the proposal that India should defray part of the charge for the British force in South Africa was abandoned because of the strong representations of the Government of India. He had always been of opinion that it was the duty of this House to support the Government of India fully in its independence with regard to politics, administration, and finance. It was because he was strongly in favour of supporting the Government of India as the responsible authority for finance and administration that he was unable to support the Motion, made earlier in the evening by the hon. Member for the Clitheroe Division, with regard to the repeal of the cotton duties. He was equally strongly of opinion that it was their duty to support the Government of India in resisting Departmental pressure, and he gathered from the statement of the noble Lord, that that was practically what had occurred—that the Government of India had taken a firm line in resisting the expenditure proposed to be placed upon India.

^* dissented.

said that, in any case, he welcomed the announcement because Lord Curzon and Lord Kitchener had taken a firm and independent line upon this proposal of the Home Government. They were the people after all who were in every way responsible for the Government of India and for the administration of its finances. The noble Lord had told them, practically, that he was unable formally to consult the Government of India on this subject in its initial stages lest the matter should become public. Surely the moral to be drawn from this was, that when proposals of this sort were going to be made which involved a considerable charge upon the finances of India the Government should ascertain in advance, before the public was informed of them, what were the reasoned and settled views, not only of the Secretary of State here, but also of the Government of India.

^* : I made that observation in connection with the increase of pay.

said his memory might be at fault, but he was not complaining of the conduct of the noble Lord with regard to the question. He thought the conclusion which the House would draw from the incidents coming under their notice was that it was all important in future, when there was a probability of charges of this sort being put on the revenues of India, that the views of the Government of India should be ascertained beforehand in order that they might not have what they had seen this afternoon, namely, the statement that owing to strong representations made by the Government of India to the Government at home, proposals which had been put before the House and the country had been abandoned. That was a matter for regret. He said so not merely because of any Party consideration, but because it was a matter to be deprecated that proposals of this sort should become public property in India and excite the feelings that had been expressed there. That was disastrous not only for the Government here but for the stability of our system of government in India. This question of India being asked to pay a portion of the charge for British troops in South Africa was part of a wider subject that had often come before this House for consideration, the apportionment of the charge between India and the United Kingdom for services in which both were interested. He served on the Commission on Indian Expenditure under the chairmanship of Lord Welby. That Commission thoroughly examined this question for a considerable period of years.

The noble Lord, in referring not to the South African question but to the question of pay, had deprecated the view the Government of India had put forward that it might fairly be proposed that this increase might be halved between the Home Government and the Indian Government. He understood the noble Lord to say that the Government of India must accept the conditions under which the solidarity of the Indian and the Home Armies at present existed. To that he would make a demurrer. On equitable considerations he thought he might fairly bring in the noble Lord himself as a witness, because, although he declined to support the Government of India in that, he proposed a division of the capitation charges. Surely if it was a right principle to apply in one set of charges it must also apply to the other set of charges. Although they must accept the decision come to nearly thirty years ago in regard to the amalgamation of the British force in India with the British Army as a whole, when changes in the conditions of service were made, and new charges of such a substantial character as those involved in the increase of pay were introduced, equitable considerations should come into play. He thought that considerations o equity ought to come into play. No one could say that India did not discharge fully, and more than fully, all her duties in connection with Imperial defence. She paid the whole cost of the Indian Navy; she paid the whole cost of the 75,000 white troops; she housed them and maintained all the barracks. We spent millions of money in building barracks, not merely at home but in every other part of the British Empire, but India paid for all the barracks in that country. And when any alteration was made in our armaments—in artillery or small arms—India was bound to pay all the charges. He found from the Indian Statement that one of the chief increases last year was on armaments. Then she paid millions for coast defence. He was not complaining of that; he thought it was perfectly justifiable that India should pay the full charges for every soldier within her bounds. India, had to pay her quota, amounting to something like £2,000,000 for the increased soldiers' pay; she had to deal with the War Office as a contractor possessing a monopoly. The Indian Government had to pay £7 10s. per head for every recruit who went to India. That had been a subject of contention between the Indian Government and the War Office.

said that nobody would be more glad than he if India provided her own Army.

said he was glad that the right hon. Gentleman had made that statement which was practically the same as he had made the previous day at Pepper Harro Park. He was surprised that that statement came from a War Office official It had been urged, on the grounds of economy, that there should be a separate Army for India, because it was said that India could recruit her Army much more cheaply in this country than the War Office did at the present moment. But the right hon. Gentleman should not put forward a statement like that either in this House or in the country when he must know that it was outside the bounds of possibility that the proposals of the Indian Government would be accepted by the home authorities. Then India was called upon to pay an extra charge which was practically a grant-in-aid of the troops in South Africa. He was glad that that demand had been abandoned, he hoped never to be repeated. For his part he thought that India had more than amply discharged, to the very fullest extent, any claim that could be put upon her on the grounds of Imperial Defence. He had been surprised to see that the First Lord of the Admiralty had described the contribution of India towards the Navy as exiguous. India policed her own seas, she policed the Persian Gulf, she paid for her coast defence, she built dockyards at Bombay, and made an allowance for coaling. It was, therefore, unworthy for a responsible Minister of the Crown to say that India was exiguous when she made a contribution of £100,000 per annum. On the Report of the Welby Commission, the Government had agreed to a remission of £250,000 of the charges on India on equitable grounds, but they had imposed an addition of something like £1,250,000. That was, he considered, most unfair. He strongly urged on the noble Lord, as representing the interest of this Govern- ment and of India, that an attempt should be made to reconsider anew the whole question of the charges between India and Great Britain.

^* said that nothing could be more satisfactory than that the Secretary of State for War and the Secretary of State for India were determined to make the condition of the Army in India as efficient as possible. Whatever view might be taken it was impossible to deny that a great change had come over the state of affairs in Central Asia in the last ten or fifteen years. The Russian forces in Central Asia were becoming stronger and more numerous every day, and the most ordinary prudence demanded that nothing should be omitted to render the Indian forces fit for war if occasion arose. There was one matter in which India should excel, and that was the matter of mounted men. The cavalry of the Indian Army was one of the most efficient arms of that Army. It was very cheap. The cost was only about £25 a year for every man. Every man found his own horse, his equipment, food, forage, and transport, and he believed that in the extension of the Indian cavalry a very great addition to the military forces of India might be obtained. That was the view shared by some of the most experienced officers connected with the Indian Army, and by none more strongly than by General Sir Bindon Blood. There was another matter of importance in regard to the Indian cavalry. The fighting force of India was a mounted force. The price of horses in India had lately increased very much indeed. There was a great demand for horses, and the market, which had formerly been well stocked, was now assailed from many quarters. He hoped the Secretary of State would give the officers of Indian cavalry the same privileges as regards their chargers as had been given to the officers of British cavalry regiments. As to the assistance given to the Volunteer force in India, considering the very small numbers, comparatively speaking, of the European population in India, every adult male between eighteen and fifty should certainly; be required—as the Netherlands Government required in Netherlands India—to serve in the Volunteer force. That was done now as regards many of the principal railways in India. The assistance given to the Volunteer force had been described by many members of the Indian Government, and by none more strongly than Sir Edwin Collen, as exceedingly inadequate. Sir Edwin Collen, who was the Government's representative on the Viceroy's Council, had written only the other day expressing a very strong opinion as to the absolute necessity of rendering more assistance to the Volunteer force in India. The Volunteer force was now 30,000 strong, but many of the regiments were exceedingly under-officered. The Secretary of State had not referred to the frontier policy inaugurated by Lord Curzon. The frontier Militia, officered by British officers, had been very successful.

The House would have read with interest the statement that Lord Kitchener was going to visit every part of the frontier. It had been said that Lord Kitchener was thrown away in India, and that he ought to be at home, but it was perfectly certain that he had a very great work to do in modernising and improving the efficiency of the British and native armies in India. In this connection he asked why British Infantry battalions were only 850 strong instead of 1,000, and native infantry regiments only 750 instead of 1,000. Everybody knew that the casualties in tropical countries were very numerous, and so a regiment was often able only to turn out 500 or 600 men on parade. The consequence of this reduced strength was that brigades consisted of only 1,300 or 1,400 instead of 2,500 or 3,000, as in Germany. As regards the railways, he thought it most important that a uniform gauge should be established on the railway between Bombay and the North-West Frontier. It would not be wise that troops on their way from the port of debarkation to the scene of action should have to be taken out of one train and put into another because of the difference in the gauge. Uniformity of gauge was one of the chief essentials in the preparation for mobilisation, and there should be such uniformity throughout the whole of India.

A very able Report recently presented to the Secretary of State by Mr. Francis Drake showed that there was a very marked decline in the proportion of British trade with India during the last ten years. In those years the trade of Germany and the United States with India had more than doubled. We were going back instead of going forward. With regard to the industries of Sheffield, it was stated in the official Report, to which he referred, that there was a marked decline in that portion belonging to the United Kingdom, and that a large quantity of iron and steel came from Belgium, which supplied them with inferior quality and at a cheaper rate than the goods imported from Great Britain. This was a serious state of affairs. The imports of steel into India from England had gone back some 20 per cent. in the last ten years, while imports of steel from Belgium had increased in almost like ratio, and the imports of iron and steel from Germany had increased to equal extent. This was also the case with regard to hardware and cutlery. The very cheap goods made on the Continent found a ready and easy market in the bazaars of India. He would not complain of this if they were sold as German or Belgian goods, but in the bazaars of India—as he had himself seen—they were constantly marked with indications professing that they were of British origin. He had no doubt the Customs authorities did their best to enforce the provisions of the Merchandise Marks Act, passed in India in 1889; and there were numerous detentions for false marking—more particularly false marking of origin—and he urged the Secretary of State to do what he possibly could to induce the authorities to exercise the utmost vigilance in this matter, because it was unquestionable that an enormous amount of goods were at present palmed off on the people of India as British, whereas they were of very inferior Continental origin. That was a fraud on the people of India, and it was a still worse fraud on the manufacturers and operatives of this country, because the goods obtained a bad reputation, and the man who bought an inferior knife with a Sheffield mark upon it, and who found it absolutely useless, entertained an idea of the goods of Sheffield which affected very much the sale of hardware and cutlery in one of our best markets. He would suggest that the Secretary of State for India should do everything he could to entourage the cultivation of raw materials in India for the British market. It would be an advantage to the mutual trade of Great Britain and India if the area of land under wheat in India, now 23,000,000 acres out of a cropped area of 200,000,000 acres, could be increased, and experiments could be made to improve the production of cotton, now 15,000,000 acres, and the staple of cotton, so as to make it suitable for the mills of Lancashire.

asked for information as to the continuance of the subsidy hitherto paid to the Ameer of Afghanistan.

said he had heard with pleasure that it was probable the proposed expenditure of £400,000 by India for troops in South Africa would not be incurred. The Secretary for India had stated, however, that in view of the Russian position it was necessary either that the Indian Army should be increased or that these troops should be stationed in South Africa. He (Colonel Kemp) agreed with the Motion placed on the Paper earlier in the session by Mr. Beckett, that 27,000 men should be put in South Africa for the purposes of India. It might seem, therefore, a curious position that he should go down to the House and oppose this expenditure of £400,000 for the 25,000 men who were ostensibly for India, and for whom India would have to pay. What he wished to point out to the House was, that if this plan was not absolutely given up, these men for whom India would pay would not be available for India in case of emergency. They knew from the Secretary of State for War that the men whom it was proposed to station in South Africa would not be seven years men, but three years men. Three-quarters of the recruits who enlisted in England were eighteen years of age, or under, and these men would not be allowed to go to India in time of peace, because they were under twenty. But in case of emergency they would be sent to India, although under age. But in that case India would be asked to pay for men, to be sent there in time of war, who were physically unfit, and who were not allowed to go there in time of peace. He thought it would be the gravest misfortune if this plan was adhered to, for the people of India would be deceived. As to the increased expenditure which India would incur for the extra pay of the soldiers, were they to understand that India was to acquiesce in every call which might be made for Imperial purposes without any direct benefit to herself, and that by whatever number we might increase the Imperial Army, and to whatever extent the market price of the soldiers might go up, India would always be obliged to pay that extra price for her soldiers? We ought to exercise a little imagination, put ourselves in the position of the people of India, and try to conceive what they thought of such an arrangement as this. They knew from the statement of the Viceroy that he was satisfied with the troops he had had, and with the existing system of pay and recruiting, and the people would say that the Viceroy and the Government were satisfied, and yet year by year the Imperial Army went on increasing, and the market price was put up, and they had to pay more and more for the same number and quality of troops as before. That would appear manifestly unjust to the people of India, It not only affected the people of India, but the people of England. Keen supervision should be taken that India should pay only a just amount towards the expenditure of her Army. They ought to ask, with regard to India, that the amount paid should not be only according to the letter of the law, but that some regard should be had to equity. They knew the Viceroy had distinctly stated that not only in his opinion was the proportion of expenditure increased for India, as against England, but that the result would be that the efficiency of the Indian Army would be curtailed. That was a very serious matter.

^* : What Lord Curzon said was that it would curtail the income for other purposes.

thought if the noble Lord would look at the Paper presented to the House he would find Lord Curzon also said it would re-act on the efficiency of the Indian Army. They ought to be just to India now. They were asking her to pay more than she ought to pay, but he had a broader and graver reason for feeling that this expenditure ought not to be sanctioned. If they asked India to pay what she felt to be unjust and had not the chance of giving her voice upon—if India was to pay for those large Army schemes of this country—he feared seeds of discontent would be sown which would spring up afterwards and be in the future a grave element of danger to the very existence of the Empire itself.

observed that within the last two or three years there had been a marked and almost alarming increase in the cases of plague in India, not only in their number but also in their severity. He was aware that certain persons attributed that increase to the misdirected recommendations of the Plague Committee, but on that point he offered no opinion. The great increase was not only of grave importance to India; it constituted a danger to the whole world, and he urged the noble Lord to seriously consider what measures could be taken to lessen the number of cases. India was essentially a pathological country. Cholera had its home there; smallpox was supposed to have originated there; and in any case the problems of disease were more complicated, and required investigation in a greater degree even than in the mother country. It was of the utmost importance not only to the white population, but also to the whole population, that the medical service of India should be of the highest character, and that the brightest intellects of Europe should be attracted to that wonderful field of medical inquiry. But there was considerable dissatisfaction in the medical service both military and civil. He had inquired among his young friends—one learned a great deal from his young friends—and when he spoke to them of the great future before them in India they said in their familiar language, "It is not good enough." The noble Lord had received a report, sanctioned by no less a body than the British Medical Association, detailing certain wants in the Indian Medical Service, both military and civil. One of the complaints was that whereas in the Royal Army Medical Corps the pay had been increased because of the increase of medical education and the cost thereof, there had been no corresponding increase in the pay of the Indian Medical Service, either military or civil. He felt some difficulty about pressing this case because it involved an increased expenditure, but he ventured to think that the increased expenditure would be simply money better invested.

He had no such hesitation with regard to other grievances which were prominent in the service, none of which would involve an increased expenditure. One of them was with regard to the private practice of members of the Civil Medical Service. Very wisely members of that service were permitted to engage in private practice; that was very good for them and for the service because a great deal of their work as Civil officers was of a routine character. Prior to some ten years ago there were no restraints upon that practice, but certain regulations were then put in force which he could only describe as galling to the medical profession, for when a member of the Civil Medical Service was invited to apply his European skill and last results of science to a native nobleman, not only was there a tariff of the fees to be charged, but the tariff in each particular case was laid before a lay officer of the civil or political service who was often of inferior rank to the medical officer. In many cases the medical officer, who was known as a Doctor-Colonel, had to apply to a lieutenant or a captain for power to charge such-and-such a fee for treating the native gentlemen or babus, and he had to lay his charges for a difficult kind of investigation or a special remedy before an officer who knew nothing about such matters. He was aware that the noble Lord would say that this was necessary in order to protect the native, but surely if it were thought that an European was going to charge an exorbitant fee it would be quite possible for the Government to step in and say that he should not. The profession did not like this proceedure at all, and he believed it was preventing bright young men from joining the service. Gentlemen with medical status had no seat on the Viceroy's Council. How were they to carry out proper sanitary measures unless the head of sanitary science had a seat on the Council. Other Departments were there represented—why was not the medical department? To remedy these three things, the most important being the latter, would not lead to any increase of expenditure, but it would remove a very notable bar to the recruiting of the bright intellects for service in India, for the benefit of the population of that great Empire. He earnestly hoped the noble Lord would take these matters into his consideration.

^* said the Government seemed to have had only three alternatives in their mind in regard to the increased military charges on India—either that the number of troops available should remain unchanged, or that a large number should be maintained in South Africa partly at the cost of India, or that the garrison actually in India should be increased. The first two having been rejected, they now threatened the adoption of the third. This would involve too heavy a burden. But surely there were other alternatives. The right hon. Baronet the Member for the Forest of Dean had suggested the recruitment of a special Army for service in India. Without discussing so radical a change as that, he would venture to suggest that there was a fifth course open, that a larger force should be kept in South Africa for service in India if necessary, but that the charge should not be placed on the Indian revenue. He would not be prepared to argue against the maintenance of a considerable force in South Africa for service in India, but there was absolutely no reason why India should be asked to pay any part of the maintenance of troops stationed 5,300 miles from her shores. The whole military forces of the Empire had always been regarded as a reserve at the disposal of any part of the Empire, and there was no more reason why India should be called upon to pay part of the increased charges for the maintenance of troops in South Africa than that she should be called upon to share in their maintenance at Aldershot or Salisbury Plain. The fact that South Africa was a more convenient strategic centre was no reason for requiring that India should pay the cost of maintaining troops there instead of in England. India in times of crisis had frequently been called upon to send a large force to different parts of the Empire. She sent 9,000 men who saved Ladysmith; she sent 16,000 men who helped to save the Pekin Legations; reserves from India saved the British administrators in Uganda at the time of the Soudanese Mutiny. She had helped us in Somaliland and in Egypt. Her forces had always been looked upon as a reserve for the Empire; yet it had never been suggested that England should pay the cost of maintaining troops in India. The error proposed to be committed was of a piece with that which was committed when the Indian princes were entertained at the Coronation, and it was proposed to send in the bill to India. [Lord GEORGE HAMILTON: No.] Perhaps the noble Lord would explain in his reply. The unanimity with which the latest proposal of the Government had been condemned in India was remarkable. He was delighted it had been abandoned, and was only fearful that it might be revived, and that thereby the confidence of the Indian people in British justice would be shaken.

said he rose to ask the Government to have the courage of their expenditure. It seemed to him the Government had run up a heavy bill for military expenditure and were endeavouring to palm off a considerable portion of the cost upon the poor people of India. The Government seemed to be frightened at the cost of their own military preparations. In his opinion the Government of India had been treated very scurvily by the War Office authorities in charging them with £786,000 a year without allowing them any voice in the allocation of the money, and in absolute defiance of the wishes of the Indian Government. It seemed to him not to be right for the home Government to engage in great schemes of Army reform unless they were prepared to pay for them. The Indian Government, in an admirable despatch in which they objected to this expenditure, stated that the change in the Army scheme at home was introduced, not so much to meet Indian needs as Imperial needs, and its effect upon the military and financial situation in India would be extremely serious. To his mind, despite the authority of the Lord Chief Justice, the pleas of the Indian Government were quite unanswerable. The reference of the matter to the Lord Chief Justice seemed to him to be dragging this Imperial question to the level of a divorce case. The last proposal, which he was glad to see had been dropped, was the most monstrous of all. After all, these reserves at home on which the Secretary for War had laid so much stress would not be available for India unless we had command of the sea. It seemed to him that the War Office had started its great scheme of Army organisation without any reference at all to the action of the Navy. Nothing could be more ridiculous than to overlook that point. The Secretary for India rather cavilled at the remark of one of the hon. Members for Lancashire that the Viceroy had declared that this additional charge of £786,000 would hamper his policy without securing increased efficiency for the Indian Army. Was it wise to sacrifice efficiency to the exigencies of Imperial needs? Undoubtedly this scheme for imposing so large an extra burden would have a prejudicial effect on the people of India, and the words of the Viceroy were a strong censure on the action of the home Government, which he ventured to say had nothing to do with India or with the welfare of the Empire. It seemed to be more the proposal of a gentleman desiring to increase his practice at the Old Bailey than that of a far-sighted Imperial statesman. Who was the arbitrator selected? The Lord Chief Justice. And this great change was decided in the same building and by the same people as were connected with divorce cases and other unsavory matters. That was bringing Imperialism down to a very low level. The award was given entirely in favour of the home Government, and all the contentions of the noble Lord and the Indian Government were swept aside. But the proposal, which had now been dropped, to make the Indian Government pay for the increased garrison in South Africa, was the most monstrous of all. Surely for Imperial purposes the Imperial Government could pay its own way. The proposal appeared to emanate from that extraordinary body, the Defence Committee, who always had their eyes fixed on the wrong place. That Committee should be set to work on the fiscal inquiry, and as they were generally wrong they would probably come out on the side of the Colonial Secretary. It was very hard that the necessity of an army in India should be made the pretext for further exactions from India. If England continued to throw such burdens on India, without considering whether she could bear them, the extravagance would become an Imperial menace, and he could not conceive anything more dangerous than that the people of India should get the idea that they were being exploited for the benefit of the home country. Why did not the noble Lord govern India according to the wishes of the people as expressed by the Indian Government? He protested against these constant attempts to bleed the people of India, millions of whom were on the verge of starvation, and contended that the practice was not founded on the principles of justice.

^* shared the view of the right hon. Baronet the Member for the Forest of Dean that there was not much cause for rejoicing in the present Budget. The financial position showed great stability, but that did not necessarily point to the welfare of the people of India. The satisfaction at the reduction of the salt tax was largely minimised by the statement that that, too, was a sort of financial reserve. In England, that description was applied to the income tax which fell on people able to pay it, but the salt tax fell upon the poorest of the people. The population was chiefly dependent upon agriculture, which, according to the Secretary of State, was in a deplorable condition and lacked expansion. In such a state of things, where was the evidence of the comfort of the people. Moreover, according to the Census of 1901, the population was stationary, and that was always regarded as a mark of the decay of a nation. There was no occasion for congratulation, and he failed to understand how the noble Lord could conscientiously contend that we had improved the condition of the 300,000,000 people of India, who were seven times the number of the inhabitants of the United Kingdom.

^* said it was a curious circumstance that while the Government had done a great deal to improve the condition of the Army Medical Corps, the present Secretary of State for War was a much-abused man (wrongly, he thought), as he had instituted many most valuable Army reforms, and was a hard and conscientious worker. But if he had never done anything but reform the Royal Army Medical Corps, he had succeeded where all other Secretaries of State had failed, and he deserved, and would in the end receive, the eternal gratitude of the British public, and especially of the British soldier. The Indian Government seemed bent on refusing to learn the lesson taught by the agitation to reform the Royal Army Medical Corps, and were trying to destroy the Indian medical service, which he trusted the Secretary of State for India, who had performed such great services to his country in various important offices, would surely frustrate. In recent years the rate of pension had fallen from £750 to £500, and one of the chief grievances was the limitation of private fees by the Government. The rules which had been laid down were an insult to the service of the medical profession. The result of these pin-pricks would be to destroy the popularity of the service, but he hoped that now the matter had been brought before the House by one of so high scientific attainments as the hon. Member for London University, the noble Lord would take these complaints into consideration.

drew attention to the cost of the Durbar, which had been described by Lord Curzon as a landmark in the native history of India. There was no definite announcement made in Lord Curzon's speech as to any reforms for the people of India. Vague promises of some financial relief had been made, but the Government should have gone further than they had indicated in the remission of taxation and in broadening the basis of Indian administration. The present unsympathetic Imperialism and cast-iron exclusion of the natives from all participation in the government of their own affairs, was a poor policy after the ex- pectations raised by the Durbar. He had not a word to say against Lord Curzon. His Lordship had done very well, but he had not faced the problem of Indian poverty. Let the House contrast the last quarter of a century with the two decades preceding. From 1858 to 1878, in the reign of Canning, Lawrence, and Northbrook, peace and retrenchments prevailed, frontier wars were avoided, Mysore was given back to native administration, education was promoted, and Universities were established; but from 1878 to the present time had been a period of "Imperialism," and there had been a reign of depression, wasteful wars, and no remedial legislation, two Afghan wars, large increases, of debt and taxation, and the exclusion of the natives from the higher services, and frequent and devastating famines. Was the Durbar to be the high-water mark of reform for these struggling and silent people? Was there no statesman to remove this devastating and blighting Imperialism from India, and give the people of India some voice in the management of their own affairs? Without such reforms the Durbar would be a mockery.

^* thought the statement of the noble Lord that the increase of military expenditure was justifiable, apart from Imperial considerations, could hardly have been well considered. The alarms to which we had been subjected were mainly due to our persistent determination to prevent Russia reaching the open sea. Great Britain had blocked her out of the Eastern Mediterranean; refused her access to the Persian Gulf, and driven her to extend her Siberian communications into Manchuria. The arrival of Russia at Port Arthur in the Pacific was the ultimate consequence of the closing of the Dardanelles. Did any expert believe that the conquest of India by Russia was within the range of possibility for this generation? India possessed so long a seaboard that no military Power could hold that country against a Power commanding the sea. Those best acquainted with the problem knew that the real object of Russia was quite different. Her India was to be found in a reversion to the Asiatic provinces of Turkey. Her necessity was open ports for all the year round. These were the real reasons for these fresh charges on the resources of India. In recent years there had been an increase of population which was startling in comparison with the condition of things before the British occupation. When famine and plague were not at work, there was a surplus for which provision must be found. The present population was probably in excess per acre of the number the land could properly carry. China, in a like condition, found the necessity for an outlet irresistible. Indian colonies were already scattered on the eastern seaboard of Africa. The tropical and sub-tropical portions of our African territory were well fitted to our Indian fellow-subjects, but practically impossible to white colonisation. Let the Government secure equal rights of British citizenship to the Indian colonists, and the inter-dependence of the two countries for military defence might be then fairly discussed.

^* said the question of the position of the Chief Courts of Burma and the Punjab had been frequently before the Indian Government, and only recently they came to the conclusion that under the particular conditions which existed in both those provinces it was advisable still to keep the Courts as they were. The subsidy payable to the late Ameer of Afghanistan was dependent on an agreement made between him and the Indian Government, and they were in negotiation with the present Ameer for an agreement on somewhat similar lines. There was a certain credit at the disposal of his Highness the late Ameer which the present Ameer has not exhausted; and, pending the conclusion of the new arrangement, the Viceroy is perfectly ready, if His Highness wishes, to make some pecuniary advance in connection with the subsidy that would, when the arrangement was completed, be payable to the Ameer. He thought hon. Members might fairly assume that if the Ameer had not drawn upon this credit, it was because his treasury was in such a satisfactory condition that for the time being he did not want it.

It is not correct to say, then, that he has declined the subsidy?

^* said is was not true. He would like to make one criticism upon the speeches which had been made by hon. Gentlemen opposite. He did not think hon. Gentlemen realised the mischievous effect which the language they used produced in India. His right hon. friend the Secretary of State for War and himself had been attacked in the customary recognised Parliamentary manner because they made certain proposals that did not meet with the view of hon. Gentlemen opposite. Provided that that language was confined to these islands he should be the last man to object; but when it went out to India it would have the most unfortunate effect; and those out there who read the speeches that had been made that night would be under the impression, notwithstanding the statement by the Secretary of State for War and himself, that there had been an unfair attempt made to place on the Indian Revenues charges which properly belonged to the Imperial Exchequer. That was absolutely untrue, and he ventured respectfully to protest against language and arguments of the kind that had been used. He had, during the time he had been responsible for the Government of India, tried to hold the balance between the Indian Exchequer and the Imperial Exchequer, and he had been successful in effecting an arrangement which previous Secretaries of State for India had failed to achieve. In this particular case of the increase of pay, everybody talked as though an unnecessary charge had been suddenly imposed on India. It was part and parcel of the contract which existed between the Indian Government and the Imperial Government that the Indian Government should pay to all the soldiers to be maintained by them the same emoluments that were paid to the soldiers in the Home Army. The British Government were forced by exigencies to put up the rate of pay and to charge the taxpayers of this country with that part which was due to be payable to the men in the Home Army; and surely it was a monstrous perversion of the fact to pretend that the Government had gone out of their way to put an unnecessary charge on the Indian Government. And yet that was the language that had been used from first to last. He would ask hon. Gentlemen just to consider, before they spoke again on the Indian Budget, what effect it would have in India. He could assure them that that language went out exaggerated and distorted, and that it became greatly magnified in the native Press. If they really believed that the union of the two countries was beneficial to both, they should be careful not to make use of language, the consequence of which they would be the first to deplore.

The right hon. Baronet the Member for the Forest of Dean based his objection to the proposal for keeping a reserve in South Africa almost on one word. He said they must assume that there must be immediate reinforcements of the garrison of India in certain contingencies, and contended that no reinforcement would be necessary for a considerable number of months. He went on to imply that any military man or expert who looked into the question would arrive at his opinion. That was exactly the point that had been gone into with great minuteness, and it was because in certain contingencies reinforcements must arrive in India at a given time, if they were to be of any use at all, that they had made the suggestion as to the maintenance of a reserve in South Africa. If that proposal was put on one side a future Government might be forced to come to the conclusion that they had no alternative but to increase the garrison of India. It was because he had always been in favour of economy in India in regard to the military establishment that be had given his assent reluctantly to this proposal, which he believed was the most economical solution of the question. As regarded the military question, there were two matters worthy of consideration. First of all, was the present system the best? He had always believed that from the Indian point of view it was the most economical, and he thought there were serious political objections to establishing a separate white force in India that would always be located there. A Prætorian guard always suggested ideas that were applicable in every climate and every country, and it would be regretable if a white force misbehaved and could not be removed. He admitted that it was a debatable point, and that there were men of high authority who held a different opinion. He believed that this was the best system for India, but he admitted that if the financial strain of the present system became too great it might be necessary to reconsider the question. The second question was—did the system work fairly between India and Great Britain? To the best of his belief, it had worked fairly in the sense that India paid for nothing except to compensate the War Office for the actual disbursements which they made. It might be that the system was expensive and that from time to time charges were put upon India which they would rather not have to impose, but that was not a question of mere justice.

He had listened with some regret to the remarks of one hon. Member who drew a contrast between the policy of Lord Curzon and that of some of his predecessors. The hon. Member pointed to the state of poverty in which the Indian people were said to be now as compared with what they were in previous years. He ventured, with some personal knowledge, to controvert those statements. He did not think that more attention had ever been given to every branch of Indian administration so as to ameliorate the condition of the poorer classes than was the case now. And this was carried on with a due regard to the Imperial well-being of India. There had been a large reduction of taxation; there had been an improvement in agriculture; education had been reorganised and its administration improved. Surely all these were matters that should come home to the poorest classes in India. He thought that it was very unfair to charge Lord Curzon with neglecting the poorer community because he had Imperial aspirations. On the contrary, he thought the prolongation of Lord Curzon's term of office had given universal satisfaction, and to none more than to the poorest of the population. With regard to the position of their Indian fellow-subjects in South Africa, there was a desire that every legitimate pressure should be used with regard to the local authorities, so that the natives of India should be treated more in accordance with British rule and British ideas; and he could only assure his hon. friend that he should do everything in his power to bring legitimate pressure to bear to ameliorate the position of their Indian subjects already located in South Africa.

said the noble Lord had thought it necessary to lecture those hon. Members who had ventured to differ from him in the debate upon this question. The noble Lord had also taken credit for carrying out great reforms. Surely hon. Members of this House were entitled to put forward their views without being told that they were perverting facts while the Secretary of State for India himself claimed to be the only reformer on Indian matters. He wished to ask the noble Lord one or two Questions. He wished to know in the first place what were the Imperial aspirations which he said Lord Curzon held. The noble Lord stated that a certain amount of deference was due to Lord Curzon in that matter. He ventured to think that the fact Lord Curzon held these Imperial aspirations, was all the more reason why some Members of the House should object strongly to the new Imperialism. It appeared that the Secretary of State for India had been in communication with the Colonial Office with reference to Indian subjects in the Transvaal. He understood from what he had seen in the Press that the argument in favour of coolies being allowed to be imported in South Africa, was that their labour was required. He asked the noble Lord to give a reply, "yes" or "no," to this Question. Has he given any distinct reply to the Colonial Office on the question of the importation of coolies? He must be well aware that in the Legislative Council of the Transvaal an ordinance had been passed distinctly excluding Indians from participating in the administration of the Transvaal. If the hon. Member for North-East Bethnal Green were in the Transvaal he would not be allowed to sit in the Legislative Council. He submitted therefore that this was an injustice to place upon an intelligent portion of Indian subjects. Having in view that this ordnance had been passed, the Indian Government had stated that they would refuse to allow any importation of coolies into South Africa. The noble Lord was also aware that the President of the British Indian Association in the Transvaal had addressed several protests to the Colonial Office with reference to the ill-treatment of Indian subjects there. A petition from that association stated that never in the time of President Kruger's rule were they so badly treated as they were now. Would the noble Lord say now definitely whether the indignties to British Indian subjects in the Transvaal were to be permitted to continue with the sanction and approval of the India Office?

^* : Certainly not.

Question put, and agreed to.

(Considered in Committee.)

(In the Committee.)

Resolved, That it appears from Accounts presented to Parliament that in 1901–2 the revenue of India amounted to £76,344,525, the expenditure charged against revenue to £71,394,282, and the capital expenditure not charged to revenue to £4,071,152.—( Secretary Lord George Hamilton. )

Resolution to be reported.

Military Lands Bill

Lords Amendments considered, and agreed to.

Penal Servitude Bill

Order for Second Reading read, and discharged. Bill withdrawn.

Alkali, Etc., Works Bill

Order for Second Reading read, and discharged. Bill withdrawn.

Poor Prisoners Defence Bill

Lords Amendments to be considered forthwith; considered, and agreed to.

Sittings of the House

Resolved, That this House do meet to-morrow at Ten of the clock.—( Sir A. Acland-Hood. )

Whereupon, in pursuance of the Order of the House of the 28th day of July, Mr. SPEAKER adjourned the House without Question put.

Adjourned at ten minutes after Twelve o'clock.