The Press.
London, England, 1857-11-28 00:00:00

THE PRESS, NOVEMBER 28, 1857.

occasional deficits in time of peace, it had been
wholly unequal to provide for the expenditure
whenever war broke out. Solicitation by high
officials to the wealthier natives was, there-
fore, freely resorted to at such periods ; and
mingled solicitation and pressure were
brought to bear upon our native allies. In
this manner were obtained the large subscrip-
tions to the Company's loans at various times
by successive Kings of Oude. At last, with
the spread of commerce, more extended inter-
course with England, and the establishment
at the several Presidencies of banks of issue,
a new class of purchasers of the Indian Go-
vernment securities sprang up. These were
the wealthy native capitalists, who pur-
chased them, not as a permanent investment,
but as a more convenient, portable, and profit-
able form of keeping their capital than specie ;
while at the same time they could always
either realise or raise money on them at times
of temporary pressure, in the shape of loans
on the security of them at the several banks.
As long as the public funds of India were
subject to no greater variation than is inherent
in the nature of such security, the object of
these capitalists in making the investment
was attained. They answered the same pur-
pose that Consols do here, being largely held
and made use of for temporary purposes by
the moneyed class. But Lord DAutoustE's con-
version of five per cents. into fours, followed
as it was almost immediately by a five-per. I
cent. loan, at once deprived these securities of
the only value that in the eyes of this class
they had possessed. They found that havin g
purchased four per cents. they were unable to
sell again except at the sacrifice of a fifth of
their capital so employed; for the measure
sent down the whole public funds of India
from 97, at which they stood at the time, to
SO at a stroke. Every existing fundholder
was, therefore, irretrievably compromised ;
and no one was thereafter able to realise
except at a sacrifice of from seventeen to
twenty per cent. It was not, be it observed,
the conversion of the five per cents. into fours
that the fundholders complained of ; for that,
by raising the value of the four per cents. to
par, was a benefit to the old holders, while
those who accepted the conversion had no
reason to complain, as they might, if they liked,
have taken cash. To the moneyed class in
particular the conversion itself was a thing
almost immaterial ; for as mere temporary
holders they cared comparatively little about
the rate of interest except in so far as it
affected the market price of their stock. It
was because the conversion—followed almost
immediately by the opening of a new five•per-
cent. loan at par—made this stock absolutely
unsaleable, that they with cause complained.
It made it unsaleable, at least, except at
a rate of discount that was ruin to them ; and
the consequence has been to close the pocket
of the Indian capitalist to the Government
ever since.

The remedy which the Indian Government
has endeavoured to apply—namely, that of
raising the amount of interest without pro-
viding for the redemption of the stock that is
thus depreciated—only aggravates the evil
which it. is meant to cure. Because, although
the rate now offered be sufficient in itself, it
but the more assures the lender of the fact
that his capital, if so invested, will be in-
vested beyond recall ; for if the Company can
see no way to relief but by constantly raising
its interest, a five-per-cent. loan must very
soon be followed by a six-per-cent., and a six-
per-cent. by a seven-per cent., as its wants in-
crease. And with each rise in the rate of in-
terest the stock of the old holders will fall in
market value, and be utterly unsaleable except
at a price far below the sum which the owner
lent. No rate of interest will compensate a
capitalist for such drawbacks as an investment
of this kind presents ; and no rate of interest,
we may be sure, will tempt any but the small
annuitant class to be lenders to the Company
as long as the system lasts. This class, how-
ever, is soon used up; and their funds are
pretty well absorbed as it is by the Indian
and English joint-stock banks.
The proper basis for high colonial credit is a
stock so well secured as to induee men to lend
money on it at a fair and moderate rate—so
readily negotiable as to make it as easily got

rid of as it was bought ; and which at the same
time held out such prospect of eventual
redemption as to insure its never falling in
value to any great extent. This would afford
all the advantages to the capitalist, the trustee,
and the annuitant that Consols possess, with
the additional security against protracted
depreciation which Exchequer Bills confer
A stock of this kind would be the very thing
to restore the credit of the Indian Treasury,
and a stock of this kind they have it in their
power to create. they have, indeed, long
been urged to do so, as must be known to the
habitual readers of THE PRESS. This stock is
a stock secured as a primary charge on the
lands of India, and rendered perfectly nego-
tiable and incapable of considerable deprecia-
tion by being made repayable, at the option of
the lender, out of the first proceeds of the
redemption of the land tax, or, what is the same
thing, receivable by the India Government
everywhere at par in redemption of it when
tendered by the tenant holding directly from
the Company in liquidation of all future claims.
Such redemption would not only be an enor-
mous gain to the Government, but it would
be an enormous gain to the Indian landholderas
well, by enabling him to convert his holding,
when tenant-in-chief under the Company, into
an estate in fee. It would further give a vast
impetus to industry and improvement, and
consequently increase the productiveness of
other kinds of taxes, such as Customs, Excise,
&c., to an immense extent.

If then the Government will only adopt the
principle of allowing the land tax or head rent
of India to be thus redeemed, the finances of
India may be at once restored to a condition
the most flourishing, and that country made
in a short time independent of pecuniary aid
from home. For as the Company's net rental
or land revenue touches upon sixteen millions
sterling annually, there could not be the
slightest difficitlty in raising any amount of
money on stock secured as a primary charge
upon it, which was receivable in India always
by the Government in redemption of the land
tax or rental at par, and of which the interest
in the interim was made payable either at
Calcutta or in England as the holder might
desire. Such stock would readily be pur-
chased for investment, whether temporary or
otherwise ; and its security against deprecia-
tion guaranteed by its eventual acceptance at
par in the redemption of the Indian land tax,
would soon send any amount of it into native
hands that might be taken up in the first
instance by people here. Perhaps not in the
very height of the present crisis, but certainly
as soon as order had begun to be restored.
The precise rate of interest at which such
stock should he issued at the present moment
could be better determined by the great City
capitalists than by ourselves ; but it certainly
need not exceed five, and might perhaps not
he more than four and a half per cent. The
allowing half the subscription to be made in
the present four-per-cent. paper to this and all
succeeding loans would be a proper mode of
remedying a past act of gross injustice and
bad faith, and place the whole public funds of
India on that footing cf stability and general
confidence which is the most essential element
of prosperity in every State.

1149

was contrary to the rights of the Sublime Porte, in
so many words it absolutely acknowledges the prin-
ciple. Let all those who oppose the union on the
ground of supporting the sovereignty of the Sultan,
read attentively this article.
It is astonishing what trouble some of your
journals take to prove that they are badly informed
as to what really passes in Paris. I do not for a
moment believe that the writers are actuated from
malicious motives, but the great desire for early
and exclusive information causes them to accept
mere on ditg as facts, and the rumours of ante-
chambers as official news. It was thus with one of your
Journals, in giving to M. Fould a diplomatic mission.
Another of your papers, the editor of which is a
pious man, delights in any little piece of scandal
telling against the French authorities. Some few
days since this journal gravely published, in order
to show the disaffection of the people, that several
persons had been arrested on the Place de la Bastile
for having sung the Marseillaise. Now, all this is
pure invention—from the singing of the patriotic song
to the arrest! This Place de la Bastile has
for the last sixty years always been put forward as
the spot for political arbitrary arrests. It is, in fact,
to the Government, the ghost of Banquo. Another
London journal, which wishes to be considered as an
authority on all foreign matters, informs its readers
that the Minister of the Interior had sent a confi-
dential note to all the Prefets, requesting a detailed
account of the state of commerce in each depart-
ment. All this is "fudge," and for this simple reason,
that such reports are monthly made by each Prefet ;
and I am enabled to state that no confidential note
has been sent on the present occasion. But
mark the effect of this communication. The
pious man above, in order to prove that he is
better informed than his colleagues, adds to the
information that this circular was sent in conse-
quence of the misery and disaffection which existed
throughout the departments ! So much for early
and authentic information.
The financial crisis is nearly over. The cellars
of the Bank are well stocked with gold, and the
directors have lowered the discount on bills of thirty
days to seven per cent. Trade throughout the
country is gradually improving, and provisions abun-
dant and unusually cheap. lam induced to think
that republican principles are at a discount in some
parts of France, for I find that at the election for
La Sarthe, just finished, the Government candidate
polled 18,000 votes, whilst that enfant cheri of the
demagogues, Jules Fevre, was only honoured with
about 4,000.
The stringent measures which Government deter-
mined to take against all those convicted with
traflicing in the coins of the realm has already
produced an excellent effect, and both gold and silver
can now be easily obtained, and that without paying
a premium to the money-changers.
The Plenipotentiaries to the Paris Congress met
this morning, in the cabinet of Count Walewskl,
to exchange the ratifications of the treaty relative
to the limitation of the Bessarabian frontiers.
It appears to be certain that Ferouk-Khan, the
Persian Ambassador, will leave Europe in the month
of January next.
The Emperor has taken up his winter residence at
the Tuilieries. The season is expected to be very
gay, several of the vieux noblesse whose salons
have been closed since 1830, having determined now
to throw them open.
The winter at Nice has every appearance of being
most brilliant. A great number of families have
already arrived. The Duchess of Hamilton, who is
expected from Italy, has taken apartments in the
Hotel Vittoria. The Duchess of Baden and the
Duchess of Sagari have already opened their salons.
The long-pending question as to the reduction of
the Austrian army seems now decided. All the in-
fantry, engineer, and artillery companies are to be
reduced by twenty-five men, the heavy cavalry by
thirty men, and the light cavalry by forty men. It
is expected that a saving by this reduction will be
made to the extent of 10,000 florins.
The Austrian Regiment Minsky have quitted Bo-
logna, and have recrossed the Po. It has been re-
placed by the Regiment Giulay (33rd). The garri-
I son of Bologna is now composed of 4,300 men. The
garrison of Ancona has 3,000 Austrian troops.
The railroad from Bologna to Ancona is far ad-
vanced; it will be opened about the 20th of Jul,
next. _ _

M. Ferdinand de Lesseps, the projector of the SneK
Canal, left Ancona on the 18th, for, it is said, Egypt.