The Sun.
London, England, 1859-02-14 00:00:00

INDIAN FINANCE.

The - City articles of the Times carry much
weight, and generally are based on good intelli-
gence, and display correct views. But the note of
alarm sounded by its correspondent on Wednesday
on the subject of Indian finance, and which appeared
in the Times of Thursday, is not characterised by
these qualities. We quite agree in the writer's obser-
vations as to the necessity of setting a limit to the
grant of guarantees of five per cent., or any other
rate of interest, to the projectors of works pretend-
ing to be of urgent public benefit, and of certain
reproductive profit. The market of London, rich
as it is in capital, cannot bear straining beyond a
certain limit; and that limit has been reached, if
it has not been exceeded, by the guarantees al-
ready given to railways that will cost more than
fifty millions to compete. The portion of the East
Indian line that has been constructed, though
the most expensive, from proximity to Calcutta,
yields, nevertheless, seven per cent. in the work-
ing; and we have little doubt that the traffic up to
Delhi on this great line will prove remunerative.
Still at each successive call for fresh capital the
price of the stock falls, showing evidently that the
market will not take off more than has already been
sent into it. There cannot be a clearer indication
of the folly of forcing on new schemes when this,
the very best of these afloat, shows such weakness;
and we quite go along with the Times in warning
the public and the authorities against putting out
fresh schemes, and attempting to throw their
guaranteed stock into the market while in such a
condition.

But the Times' correspondent has discussed the
finance of India also, of which he evidently knows
nothing. Of the fifty crore of rupees of registered
Indian debt, two-fifths are held by natives, and
three-fifths by Europeans. It is only those stock-
holders of the latter class who are resident in Eng-
land that will think of having their promissory
notes enfaced for the receipt of interest in London
by bills drawn there on the treasuries of India.
It is a convenience to them to receive interest in
that manner, and no doubt the enfaced notes will
be saleable in the market here, which may give
them additional value to the holders. But this
will not affect the selling price in India so long as
the existing loan is open, to which subscriptions
are invited at a rate equal to six per cent. Native
holders will not sell to Europeans for enfacement,
but English capitalists who wish to embark their
capital in this kind of investment because of the
enfacemcnt benefits will subscribe to do so, and
thus give the Indian Government the additional
means it wants. There is no doubt that the pros-
pects of Indian finance are not very flourishing
just at present ; but how can they be so while the
Government is maintaining a force of 100,000
British troops there, and most of them in the field,
and on field allowances, instead of the 25,000 or
30,000 that used to be paid out of ordinrry revenues
when the income of India was barely sufficient to
meet the current expenditure ? Let this drain
cease, and we doubt not the ability of India again
to support her own expenditure. To meet it while
war lasts will require a recourse to the loan market,
both there and here. We shall learn from Lord
Stanley on Monday what demand he means to
make for the year on this market. Of course if
there should be a fresh issue of debentures on the
same terms as last year their selling price will fall,
but we doubt if that price will be at all affected by
the enfacing privileges of the Indian Registered
Stocks, for the debentures are held by quite la
different• class of capitalists, and not for purposes pf
fixedinvestment, as is the case with the promissm
notes of the Indian Government, whether enfaced
or not—Allen's Indian ItTail,