The Sun.
London, England, 1859-04-05 00:00:00

EAST INDIA FINANCE.

Lord STANLEY then rose to make a statement in refer-
ence to the finances of India. He said that he was bound to
admit that the statement which he was about to place be-
fore the house was not as satisfactory as that which he had
brought before their notice in February last. He believed
that all measures relating to India would be considered by
the house upon their own merits ; and here he Would ob-
serve that it might be necessary for Government to ask for
larger borrowing powers than two months ago they could
have thought at all necessary. Was this owing to any
error in the calculations, to any excess of expenditure over
income, or to any deficiency of the revenue of India ? He
believed he would be able to show that this increased de-
mand of India upon the money market of the country was
not due to any one of these three causes,"but was exceptional
and temporary in its character. It might be remembered
that, in February last, he stated that he had not before him
the Indian estimates for 1858 and 1859, and that, therefore,
his information was necessarily imperfect ; but still he had
no option but to come forward with a specific demand.
Even now he had not sufficient data for his calculations to
place them beyond conjecture. He thought that looking
at the fact that while the mutiny was 'aging—while great
destruction of property was going on—while great expense
new levies—and while the was being incurred in raising
con-
fidence of the people in the stability of the British Govern-
ment there was shaken, and that India had been able to sup-
ply sufficient revenue for the government of the country—for
with the exception of £1,000,000 of bullion sent out in 1857
no money went to it from this country—it was not unnatural
that we should leave considered that the resources of India
were equal to the demand Made upon them. He believed
that the present failure was owing to remarkable circum-
stances in India. He would not say that the credit of
the' Indian Gevernment in India was impaired, but that
its borrowing powers were diminished. Such a state of
things could only arise from want of capital, from want of
confidence in the stability of the security offered, or from
the capitalists hanging back for higher terms. He did not
apprehend that any one :would allege that it arose from any
want of capital, for from all sides they heard that those
who required money for private undertakings experi-
enced no difficulty in obtaining it on favourable terms.
The capitalists of England were inclined to hold back, in
the hope of obtaining better terms than were now offered.
Without going into detail, he would take a general view of
the terms offered on the last three limns. In August, 1856,
they were 41 per cent. ; in January, 1857, 5 per cent. ; and
now they were 51 per cent. On the other hand, the native
capitalist thought that as the wants of the Government in-
creased, the rate of interest would increase in a similar pro-
portion ; and it invariably happened that when a higher
rate of interest had to be offered there was a constant depre-
ciation of the existing stocks. The difficulty in which the
Government newfound itself didnot resolve itself into a ques-
tion of larger expenditure or smaller revenue. It was simply
a question of having to borrow a larger sum in England, in
consequence of the power to borrow ut India being reduced.
What were the present requirements of the Government of
India.? The calculation of the Government was that they
would want in round numbers £11,500,000. That amount
itin vdoidlvendot in
a deficiencyvo corresponding deficiencyyosadnidmeans
tothatinexrteenvet,nbnuot.
involve vr
The calculations included payments to be made on account
of railways, amounting in the whole to 14,500,000; and after
making all deductions and allowances, the actual defi-
ciency of 1859.60 would be £9,000,000. In 1857 it was
the same; in 1858 it was estimated at £12,500,000, but in
reality had turned out to be £13,000,000. Referring to the
question of ways and means, the house had to consider in
what manner the requirements of the Indian Government
were to be made up. The amount was £11,500,000. The
Government proposed to borrow in India £5,000,000. The
produce of the new taxes was estimated, at £1,000,000, and
the difference would have to be made up in England. It
was ' proposed to take the cash balances , required at
£11,500,000; but there would still remain claims for com-
pensation and prize money, and these added to the ordinary
expenses of the Home Government would require £4,500,000.
By this bill it was proposed to raise £7,000,000, which, ac-
cording to present calculations, would give a margin to the
Government of about £1,600,000. The railway receipts
had increased in amount froze. 11,600,000 to £2,300,000, so
that, after sending £1,000,000 of bullion to India, there
would still remain a surplus of 11,300,000. The payment
for railways in progress in India would, he was told, amount
to £4,000,000. If that were so, the sum taken in the bill,
with a slight addition, would be sufficient to carry them
through the year. But he must admit that as to those
payments on account of the railways there was complete
uncertainty. There was also much uncertainty as to the
„revenue which opi would yield. There was a confident
hope that the loan would not amount to d,O 0,000, but it
very closely approximated. He did
could not be accurately stated, neither cOuld the amount of
military expenditure be
not propose to recommit the bill, nor to ask the house at
present for any 'larger amourit. He apprehended that
£3,000,000 would be more than sufficient to meet every .
want;. but the house must see, from his imperfect state-
ment, that it was impossible to make any precise and definite
statement, and that much must ba left to conjecture. An
namely, that Parliament would have an °piper-
obvious advantage would result from the course which he
ek re-discussing and re-considering this question,
,and giving to it that close attention 'that it so eminently
ptunropity.osed
deserved. He felt satisfied. that the mere fact -of the
bill now under consideration receiving the sanction of
Parliament would re-assure the people of India, and show
to them that Parliament • was ready to meet the de-
mands of the Indian Government, but it would in a great
degree restore confidence to the capitalbt iu India; and

perhaps go far towards superseding the necessity for the
loan. He was of opinion that, upon the whole, the finances
of India were in a less unsatisfactory condition than they
appeared to be ; for •the revenue of last year showed a larger
growth than had es-or previously been the case in India.
The claims for compensation would be dealt with at once,.
whilst forfeitures would fall in and swell the revenue. Large
reductions could, he,hoped, be made in the army in India,
and ten regiments were at present coming home. He did
not doubt but that after the hot weather there would be a.

considerable reduction. As to the new taxes, the subject
was considered in the Indian Council. He was prepared to,
recommend an increase of the Customs duties, as it was
thought the most unobjectionable and the wisest mode of
increasing the revenue. The emergency had come suddenly
upon the Indian Government, and they were prepared to
deal with it, and to take the matter into their own hands.
Only two taxes were mentioned to be imposed at once : an
increase in the Customs duties and the stamp duties. How-
ever, all the papers which he had received, and which could
with propriety be laid 'before Parlionent,' would be pro-
duced. He now proposed to take this stage of the bill.
Mr. V. SMITIL observed that the statement of the noble

lord differed materially from that of the noble lord at the
head of the Government in another place. As regarded the
loan, it was most likely that the natives before they sub-
scribed were waiting to see if they could get better terms.
He must say, the whole accounts and finance of India ap-
peared to be in a most unsatisfactory state. The noble lord
stated that he was not about to ask for more than £5,000,000 ;
if he had he should have agreed to it.
Mr. VANSITTART said that he was not aware that this

debate was coming on, and had not his notes with him.
From the information he had received he thought it would
be quite necessary to raise another £5,000,000 in addition
to the £7,000,000. As to an Imperial guarantee, it was
impossible to borrow from the natives at 5} per cent.
They would never be able to do without a considerable force
of European troops in India, but a. great, reduction in the
native force might then be made. He would also remodel
the Legislative Council, and would encourage the construc-
tion of railways,-and also the settlement of Europeans.
As to the expenses of the establishment, he would sell the .
old place in Leadenhall-street. He was told that it would
fetch £350,000. He would also reduce the council from 15
to, nine. He understood ell the business was divided be- •
tween three different committtees of five each. He thought
three would do the work quite as well. He would not turn
out any of the present members—the dear old creatures—
(laughter)—but would allow them to die out. He would
also do away with one of the Supreme Courts. He could
not see the use of two such courts. These alterations would
effect a large saving to India, and he believed would make
the Government popular.
Mr. R. CRAWFORD wished to call the attention of the
house fora short time to the subject of Indian finance.
The present practice was to maintain an open loan, and for
the officers of the Government in the different presidencies
to receive money directly on behalf of the Government. On
the Ist of May, 1834, when a new state of things began in
India, the public registered debt in India was £30,195,000.
On the Ist May, 1856, it was £44,028,000, being an in-
crease of £14,000,000. The interest had not increased in
the same ratio. In 1853 the interest was reduced from sto
4 per cent., and a feeling of distrust had thereby been
created in the minds of the people of India. In 1854 the
deficiency in the revenue, of India was £690,000, and the
prospective deficiency for`the year following was estimated
at £672,000; making a deficiency of £1,560,000. •Notwith-
standing that deficiency orders had been sent out by the
right hon. baronet the member for Halifax for a reduction _
of the guaranteed interest from 5 to 4 per cent. Soon
afterwards a notice was issued for a loan, under the name
of loan for public works, but it soon appeared that it was
intended to cover the deficiency of £1,560,000 to which
he had referred, and to provide for a like sum required
to pay off the dissentients who would not accept 4
per cent.' instead of 5 per cent. The result had been a feel-
mg of intense distrust in the minds of the people of India
from that time to this with respect to the financial opera-
tions of the Government. Last year, at the very time the
Government ought to have upheld the value of Indian
securities in the market, they took measures which had
brought about quite an opposite result. The ont. creditable
part of these transactions was the notification issued to the
public by the Government of India, which had been pub-
lished in this country a few days ago. So long as different
schemes remained floating in the market, scarcely above
par, it would be difficult for the noble lord to procure the
means to carry on the public works contemplated in India.
Sir C. WOOD thought it was of the utmost importance'
that steps should be taken at once to equalise the expendi-
ture and income of• India. The expenditure was estimated
at £53,435,000, and the income at £46,692,500, leaving a
deficit, of £6,742,500. Unless there was a reduction of ex-
penditure, not by tens of thousands or hundreds of thou-
sands, it was impossible to bring income and expenditure to
van equality: It was incumbent on the house to press on
the Indian Government the necessity of such measures of
retrenchment. He did not think the mode suggested by
the hon. member for Northampton, by means of a com-
mittee, was the proper course; for if the Indian Govern-
ment, consisting of men who had a knowledge of the affairs
of India, could not accomplish the purpose, it was not likely
that this house could do it.. It must be done by the Indian
Government in India, or by the Indian Council at home.
Unless the house was prepared to insist on t4e Government
in India doing it, he despaired of seeing it done at all. He
was aware of the difficulties which the Indian. Government
had in reducing the salaries, &c. ; but when they looked at
the magnitude of the deficit, he hoped some means would
be-taken to meet the difficulty. '
Mr. T. BARING said that the reduction of interest,
though it was said to have been successful, and it might
have been temporarily so, was permanently unfortunate.
He viewed with anxiety the disposition, to guarantee public
. works. Economy was to be establish ed by letting India
pay only for Indian wants, and not making her aid m pay-
ing for our own national wants. He hid some apprehen-
sions that hereafter a time might come when, if the Minis-
ter was not sufficiently firm to resist, India might be made
to contribute towards the expense of the army of England.
The revenue might be increased, but only very gradually,
and taxes could not be put on without c( insulting the feel-
ings of the people. There must be retrei ichment, and that
enin the
army. There
said
w
idtehaei nveeoettnedow thateraaserdtouefblbe Gnifoer-
mvearnminiy
againnt pressure. The pressure now ea me directly on a
Cabinet Minister.

Sir G. C. LEWIS should like to hear from the Govern-
ment some statement as to the prospects o: F diminishing the
number of the European forces in India. ('hear, hear-3 He
could not understand it to be the interest. of the War De.
partment to maintain a larger force in India than that
country absolutely required, and he believed. the Horse
ttoo
dihesapre
nths
ea it
witwh as
somei n theof perthoew
ro gio.f
tGh u ae
Indrcl iwa
u 1G
d over b en
gml ea nd t
ments at present in India. Looking at the present state of
the Continent, it was not desirable that 90,000 of our army
should be maintained in that empire. He hoped the Go-
vernment would be prepared to announce the probable re-
duction of the number of European- troops now serving in
that country. (Hear.)
Mr. IL BAILLIE believed that if India were governed
in the spirit of the Queen's proclamation., and without in-
terference with.the religion of the natives-,(hear, hear)
our troops, with the assistance of the native army, could be
reduced to 50,000 men. (Hear.)
Colonel SYKES said that there was a large deficiency in.
Indian finance, and it was likely to continue. He believed -
that philanthropists on this side of the iv ater had much to
answer for in diminishing the tax derivable from opium.
Neither an import tax nor an export tax would meet the
deficiency. • Some people thought that an. increase in the
excise duties' would- suffice ; but this source would be quite
inadequate. Works of irrigation, by improving the soil and '•
increasing its value, would very much increase the revenue.
200 per cent. upon the outlay of capital might be obtained
in this direction, but such a plan could only be the result
of time. Retrenchment was dwelt upon. Of course any
curtailment of expenditure in this direction would tend to •
equalise revenue and expenditure ; but it did not look much
like retrenchment to send twelve battalions of artillery out
to India when their presence was not required. The bug-
bear which had been raised was that England might be
made responsible for Indian loans. Those loans were for
Imperial purposes, and it was only reasonable that the
mother country should bear the burden of responsibility in
case of any sudden emergency. By the last mail ha had
received a letter from Sir James Outram in which he said
that he did not anticipate much result from the issue of
Treasury bonds, and that the natives Of India laboured
under the conviction that unless an Imperial loan were
raised in England Indian securities would become• depre-
ciated. Without such loan the Indian population would
not believe in the identity of the home and Indian Govern-
ments. His own belief was, that if India was restored to
the normal condition she presented before the mutiny, ex.,
penditure and income would be made to balance themselves.
Lord STANLEY said that all these questions of taxation
were being considered in the Indian Council, although their
deliberations had been somewhat interfered with by the fact -
that the Indian executive had themselves undertaken the
subject.
The bill was read a third time and passod.
SUPERANNUATION BILL.
This bill went through committee.
POOR LAW AND MEDICAL CHARITIES (TRE-

LAND) ACT AMENDMENT BILL.
This bill was read a second time.
LAW OF PROPERTY AND TRUSTEES' RELIEF
AMENDMENT BILL.
This bill was passed through committee.
DEBTOR AND CREDITOR BILL.
This bill was read a second time. -
SAVINGS BANK (IRELAND) APT AMENDMENT
B. s?
This bill was read a third time. -.-
PUBLIC OFFICES EXTENSION BILL.
This bill went through committee.
In reply t 3 Sir IL WILLOUGIIItY,
Lord J. MANNERS stated that in reality ne money
would be required to be expended in order to carry out the
purposes of this Act, although power would necessarily be
taken for voting it in committee of supply in the usual way.
The amount to be contributed by the suitors' fund would-
more than Cover the expenditure contemplated by the Go-
vernment.
The bill was ordered to be read a third time tp-morrow.
INDEMNITY BILL.
The house went into committee on this bill, which was
ordered to be read a third time to-morrow.
Some other bills were brought in and forwarded a stage,
and the house adjourned at a quarter to twelve.