The Sun.
London, England, 1858-02-23 00:00:00

the clause which involved an entirely new principle and
would raise an important discussion.
The house then went into committee.
On the question that the preamble be postponed,
The CHANCELLOR of the EXCHEQUER said,—
I I shall be able to satisfy the oommittee that
there is a real reason of convenience for proceeding
with the bill at this moment. The course which her
Majesty's present advisers—l will not say her Ma-
jesty's Government—are taking in asking the house
to consider the measure is quite disinterested on their
part, inasmuch as it does not in any way concern
them at present that the bill should make progress.
In quitting office, however, they are desirous not to
leave such a deficiency of revenue as would create an in-
convenience to their successors, or render necessary a
supplemental vote and an encroachment on the balances
in the Exchequer, which might have to be resorted to if
the East India Company are net empowered by raising
money on loan to repay the advances which have been
ands to them by the Exchequer during the course of the
present year. The proposal is to authorise the Company,
for the service of the Home Government, to raise money,
either by debentures or Londe. Such a proposition in-
no new principle. From a very early period the East
India Company have from time to time been empowered
to raise money by bonds in this country, and the raising
it by debentures constitutes merely a formal alteration,
which makes no difference in point of principle. When
they were a trading as well as a governing corporation
they raised money on bonds for the purposes of their
trade. At that time Parliament thought fit, as it limits
the amount borrowed by other trading companies, such
as railway companies, to limit the amount which this
corporation could raise by their bonds. As soon as the
Company ceased to be a trading company, and remained
merely a governing body—a subordinate part of the
Rome Government of India—their position was entirely
altered. Nevertheless, the old maxim was thought to
apply—namely, that they had not as unlimited power
of borrowing in this country for the service of the Indian
Government. It was stated by the hon, member for
Guildford (Mr. Mangles), and from communications
with the India-house I know it to be the fact, that the
opinion of counsel has been taken on the point whether
now that they have ceased to be a trading body, there is
anything to restrain them from borrowing money in Eng-
land for the service of the Home Government ; and the
opinion of counsel is that there is nothing so to prevent
them, so that in fact, if thatopinion be just, there would
be no necessity for passing this bill. But the Go
vernment thought, and so advised the Company
that inasmuch as it bad been the invariable practice
for Parliament to authorise them to borrow on bonds
in this country, it would not be expedient to act on the
opinion expres•ed by counsel, and that it would be
more respectful to Parliament to ask for their express
authority. For that reason the bill has been introduced.
As I said before the measure involves no new principle
whatever. In point of fact the company have now a power
to borrow on bonds which is net wholly, though it is
nearly exhausted. Therefore, when it is argued that this
is a dangerous principle, and that it would involve the
British Exchequer, my answer is, that the principle is
neither new nor dangerous, and that it is per:ectly un
derstood with respect to loans contracted by the Com-
pany in the money-market. If the committee wish I will
go through the items of account which has been framed
by the Company, containing an estimate of the probable
charges upon the home Government of India until the
end of their next financial year, April 30, 1359, and the
means they estimate for meeting these charges. Perhaps
it is unnecessary that I should do more than mention the
result, which is, that there would be a deficit of about
7,500,0001. The charges have, I think, been taken on
rather a liberal scale, and the probability is, as far as we
can judge at present, that the deficiency will be a sum
considerably less than 7,500,0001. However, in the pre-
sent state of India it is difficult to form anything like a
close approximation to the truth in framing an estimate,
and we will therefore assume that at the end of the Com-
pany's financial year, cm April 30, 1859, there will pro-
bably be a deficiency exceeding 7,000,0001. Now, the
question arises how that deficiency is to be met. The hon.
baronet opposite contends that there is danger in autho-
rising the East India Company to borrow this money,
inasmuch as the consequence of such a step may be the
creation of a prospective charge upon the Imperial
Exchequer.
Sir H. WILLOUGHBY—I simply wished to have
an assurance from the Government that there was no
danger involved in the measure.
The CHANCELLOR of the EXCHEQUER—My
answer to the hen. baronet is, that there is a charge to
a certain amount to be met, and that we must endeavour
to meet it in one way or another. It is the duty of Par-
liament to see that adequate means be provided ror that
purpose, and we, with that view, propose to enable the
East India Company to borrow in the English market,
the unlimited power of raising loans in the native market
which they possess being now exhausted. The hon.
baronet wishes further to know what is the exact
amount of the present debt of the Government of India ?
In reply to that qeestion I may state that the gross in-
come derivable from our Indian possessions is about
29,000,0001. per annum, and that the stock of the Com•
parry—which is a portion of their debt guaranteed by
Parliament, but not guaranteed upon the credit of the
British Exchequer, the fund out of which the dividends
are to be paid not being designated by the Legislature—
amounts to 6,000,0001.
Mr. WALPOLE—There is a virtual guarantee upon
our part in reference to that stock.
The CHANCELLOR of the EXCHEQUER—In the
event of the failure of the Indian revenue, the faith of
Parliament is no doubt pledged to provide for the pay-
ment of the dividends out of the English Exchequer—
(hear, bear)—but there exists no necessity for making a
demand upon it until that revenue becomes exhausted. I
think, therefore, I am right in saying that there is no
direct and prirxary charge upon the Exchequer of Erg.
land in connexion with this stock. That stock, as I have
just stated, amounts to 6,000,0091., and is guaranteed at
12,000,00 e—that is to say, 2001. are to be paid for
every 100/., so that the whole sum may therefore be
considered as equivalent to a debt of 12,000,0001. Now
the guarantee fund which is to be set off against that
debt amounts to about 4,500,0001., and we reckon that
it will in the course et a few years be as high as
7,000,0001. Well, the India debt is 50,433,0003., and
the bond debt about 6,000,000/. ; those various coins in
conjunction constituting a total charge of 68,433,000/.
That is the whole of the present charge upon the reve-
nues of India, and against that is to be set oil the gin-
mantes fund. The committee will therefore see that,
comparing the gross debt of India with its annual reve-
nue—which is 29,000,000/.—the amount is not so con-
siderable as might have been supposed. There is,
however, another way of looking at the Indian debt.
Sir H. WILLOUGHBY—Are the railway guarantees
included in the statement you have just made 1
The CHANCELLOR of the EXCHEQUER—No.
I am referring to that which is, strictly speaking, the
amount of the debt, and I tray add that what seems to
me to be most material with respect to it is not the
nominal amount of the capital of the debt, but the annual
charge which it imposes. The total annual charge for
the Indian debt, according to the last accounts presented
to Parliament, which relate to the year ending the 3d
of April, 1858, was as follows :
Interest on the India debt £2,044 318
Interest on the home bonded debt
Dividends to proprietors of stock

Total £2,829,024
Now the gross revenue, as I before said, is 29,000,0001.,
and the net income may be taken at 23,000,0001., so
that the annual charge f,r the public debt of India, as
it stood in 1356, amounts to about one-eighth of the net
revenue, whereas the annual charge for the debt of the
United Kingdom is about 23,500,000/., or nearly one-
half its ordinary revenue. The committee, therefore,
cannot fail to perceive that the debt of Tudiais compare.
tively light when taken in connection with the revenue
which she yields. The statement which I have just
made will, I trust, lead the committee to arrive at the
conclusion that when the existing revolt in India has
been quelled, and the country restored to its ordinary
condition, the credit of the Indian Government will be
in a position to sustain the loan which I now propose.
Let us just see what is the present state of the credit of
that Government. On eth Oct., 1853, the Company's
Four per Cents. were worth in the Indian market 1031
or 1031. That was before the public works loan was
negotiated. Upon 29;h Jan., 1857, just previous to the
mutiny, the 5 per Cents, were 99, and the 4 per Cents.
80, at which price the Indian Government could borrow
at the rate of 5 per cent. If, however, yuu outupuis its
credit with that of most of the continental nations,
7ott will find the comparison to be not very disadvanta-
ge"s to the Government of India. The French Three
tr. Cents., for instance, were lately as low as 69, and
.-.7 many
continental governments find themselves
unable to borro4 2-7ths per °e w
at.
upon more advantageous terms than
India is 10eanenet. The ordinary interest of money in
can borrow
12 per cent., and if the Indian Go-
vernmentsible to contend hat at 5 per cent., it is, I think, impos-
of the soundness of ttetir credit is bad. No better test
than the value of its bonds in
e can,
per cent.,l think, be taken
the London market. Those
bonds are at 4
Exchequer-bills aVeldatare now at about 253.
premium.
per cent.,). rate of interest which
is equivalent to 31. 16a,
eed are at about V.
that
the
two scales
premium. If the committee will compare
Go superiority
of credit, they cannot fail to perceive
, bear.) of
of the Imperial credit over that of the
s.being
India is nothing very remarkable. (Rear
therefore entertain no reasonable doubt as tori, I can
able to negotiate its bonds upon fair terms,nor, in my
opinion, is there any goodground for calling upon the 1
Enitliale Exchequer
the
oegive a guarantee for those bonds.
It hashitherto been reatenbaobasl boast of
meat, that they have beeng the Indian Govern.
to def defray t all
it tcha
ex-
penses connected with their administration; ennotwith justice be denied that they have
advantage of being backed up b the resources
enjoyed the
country. The number of troop: sent roeustoutroTadoita this
been much larger than usual, but the pay and pro./ 'has scrn.
in
ing of those troops is provided for from the Indian
exchequer. It has been usual for raany years for alla
military expenses, and to some extent the naval _ Expeeee,
for the defence of India, to be paid out of the revenues
0
f India. In the time of Lord North the question was
mooted whether the British Government had not a claim
to the territorial
revenues of India. The East India
ta ind their right to them, while, on the
other hand,
C°ll3l""maintained
thein Imperial Government contended, and
maintained, that whatever
has always com
acquired by British subjects, it was
territory might he
to the Crown. A compromise,
acquired only as tenants
d by the imposition of what was
however, was effected
East India Company,
series of years and fora
called a tribute upon the B:itish Ex.
the
that tribute was paid into the
arrangement was
chequer. Snle,equently, however,
•
altered and the Company was required to pay over the
surplus revenues, but no surplus ever came, and at last
held
the bargain was abandoned. But it has always been
that if the East India Company contributed nothing to