The Sun.
London, England, 1859-02-19 00:00:00

THE SUN, LONDON, SATIT_RDAY EVENING, FEBRUARY 19, 1859.

difference is £3,600,537. After this explanation, I hope the
house will free me from any charge of inaccuracy. (Cheers.)
There is another matter, though a small one, to which I
may allude. When I calculated the number of European
forces in India I used the last returns received from India,
dated October. But nearly 20,000 men went out between
June and December, and a large proportion of these would
probably not have reached India in time to be included in
the return for October. My statement was accurate as far
as it went, but there is a larger charge for troops than would
be accounted for in the statement I made. With regard to
the public works in India, I have seen some doubt expressed
whether the returns from these works were accurately given.
I have since gone through the figures and verified them from
official documents, and I find they are strictly accurate.
These figures were not founded upon the calculations of en-
gineers, but upon the statements of the Board of Revenue,
whose calculations appear in despatches and minutes, in
which it is the object of the Board to show where the esti-
mates of the engineers may be too sanguine, and to reduce
the total to the true amount. With regard to the question
put to me by an hon. member as to the authority given to
Lord Canning to raise a loan at 6 per cent., I thought it de-
sirable not to answer it when it was first put, as it seemed to
require some explanation. The state of the case was this:—.
Last July the Government of India thought they had cause
to apprehend a more serious embarrassment than they had
hitherto experienced, or than has, in fact, resulted, and
underthese circumstances they addressed to the Government
here a despatch which, with the reply, I shall be prepared
to lay upon the table. They enumerated the various alter-
natives by whichthat embarrassment might be relieved, one
being that large remittances should be made from this coun-
try, and others referring to the various ways in which
money might be raised in India at a higher rate of interest
than had hitherto been given. That was not a case of op-
tion, but of necessity. There were no means at the time of
making remittances from this country to the amount that
was necessary, and on the Bth of September the Indian
Department authorised the issue of Treasury notes at 6 per
cent., if it should be found necessary. No intimation has,
up to this time, been received that this authority has been
acted upon, and it is obvious that this is a resource to which
the Government of India will not willingly have recourse,
unless under circumstances that leave it no option. The
rate of interest hitherto paid by the Government of India
has not been nominally above 5 per cent. I say has not
been nominally above 5 per cent., because in point of fact it
has been a good deal more. The 6 per cent. loan is about
92. Of course no one will subscribe to that loan at par when
he can buy it at 92 ; and the operation is that 4 per cent.
paper, which can be bought at 82, is allowed to be paid in
with an equivalent amount of cash into the 5 per cent.
loan. The natural working is that any person is allowed to
pay £l,OOO in 4 per cent. paper, and he gets 5 per cent.,
provided he also pays in £l,OOO cash. The effect is
that, ix consideration of getting £l,OOO cash at 5 per cent.,
the Government is paying 1 per cent. more upon an equal
amount of paper; so that the Government of India is
borrowing practically. at a little less than 6 per cent.,
and the power of issuing Treasury notes at 6 per
cent. is a greater increase in appearance than in
reality. It was expected that there might be a necessity for
issuing the 6 per cent. Treasury notes, but the last returns
received on Monday show a considerable increase in the
open 5 per cent. loan, and not the least gratifying circum-
stance is that the increased subscription is principally from
native sources. (Hear.) With regard to the authority to
raise money by Treasury notes at 6 per cent., I have stated
that I hope the occasion will not arise for its being used,
but it is not contemplated that the authority shouldbe with-
drawn. As to the closing of the 5 per cent., it does not ap-
pear to be desirable at present. It is the general feeling in
this country that India ought, as far as possible, to supply
the capital that maybe required for works in India. (Hear.)
It is not easy to explain why there should be this difference
between the price paid in India and that in England. Some
hon. members may be able to explain the reason, but I can-
not, although it is a fact that a difference in the rate of in-
terest upon the same security has existed for a considerable
time. Last year the average price paid for the £8,000,000
loan you sanctioned was -If per cent. here, while the rate at
Calcutta was between 5 and 6. There is one other question
upon the amount of Indian debt as estimated by me. I have
seen, since Monday, various comments and remarks upon
that debt which indicate some confusion as to its actual
amount. I have been asked why I did not include the
£40,000,000 of railway guarantees. My answer is, that the
£40,000,000 of railway capital, on which interest is guaran-
teed, has not been in any sense a burden upon the Indian
revenue. The railway guarantees are no charge; they are
an investment, and when the lines are opened we shall pro-
bably see the railways a source of profit. Again, I am asked
why East India Stock was not included. East India Stock
is never included, because it is not a permanent but a ter-
minable charge, which will cease in 1784, and, therefore,
cannot have a place in any general calculation of the per-
manent resources and burdens of Indian revenue. I thought,
also, that I could not safely include the £7,000,000 of de-
posits. It is hardly possible to say how much of that
£7,000,000 constitutes a real liability upon the Government
of India. These deposits are composed of various items.
They are a possible liability, but there is always a balance
of them. Above 4000,000 is bullion in the Treasury. A
part of these deposits is not likely to be required, and
upon the whole no interest is paid. Therefore I did not
include them in my statement of the debt. When these
deductions are made, it will be found that my statement of
the amount of the debt is strictly accurate. Up to April,
1857, the debt of India was, by the Parliamentary account,
£52,074,986. There had been borrowed in India up to
November, 1858, £7,468,181. The debenture loan of last
year was £8,000,000. The home bond debt is £7,000,000.
and the aggregate debt bearing interest is thus £74,513,167.
I do not know the exact amount, but it is comparatively
small, which has been borrowed in India since the Bth of
November, 1858, when the return was made up. I thought
' it better to offer these explanations at the present time.
(Cheers.) I now move, sir, that you leave the chair.

The h.ouza ihcn vrentint; cviniLittoo, and Mr. Frrsuoy,
the Chairman, read the resolution, to the effect that it was
expedient that the Secretary of State for India should have
power to raise money in England for the use of the Govern-
ment in India.

Sir C. WOOD was afraid that further discrepancies might
be found than those which had been pointed out by the
noble lord in the explanations which he had just given to the
house. He entirely concurred in most of the remarks of the
noble lord on a previous night relative to the difficulties which
had arisen from the war expenditure, but thought that his
statements with regard to public works were not sufficiently
full and satisfactory. With respect to the loan for war ex-
penses, he of course did not intend to offer any opposition to
the-motion of the noble lord. As he understood, the noble
lord proposed to defray the war expenses for the ensuing
year out of the loan of £7,000,000, but he hid not pointed
out the operations which the Government expected to be
undertaken, or whether they imagined they would be able
to bring those operations to a close without a further loan.
The noble lord at present proposed to raise a loan of seven
millions, and he did not know that he could take a wiser
course. He now came to the most important matter—the
financial state of India. The financial state of any country
was of importance, but looking to the present state of India,
it was one of great importance, not only to India, but to this
country. In this country, when there was an increased ex-
penditure, there was no great difficulty in putting on some
fresh tax. (Hear, hear, and laughter.) If there Were an
increase in the navy estimates, the Chancellor of the Ex-
chequer would, by increasing the income tax, or by some
other mode, find a means of defraying the expenditure. But
when the revenue of a country was in the state which he
was sorry to say that of India was at this moment, they
could not find fresh sources in India. And he thought it
was incumbent on the noble lord, and it was incumbent on
the house, when the Indian finances were brought before
them for the first time since India had been brought under
the government of the Queen, that they should carefully
look to the state of those finances. The ordinary state of
Indian finance for some years past had been that of an an-
nual deficit. If the Secretary for India and the council,
supported by that house, did not pay the most earnest atten-
tion to that question, depend upon it, they would bring
great liabilities upon this country. The noble lord intimated
to them the other night something like a moral responsibility
on this country. Now, he protested against any liability
being imposed on this country on account of India. (Cheers.)
He was sure it would be detrimental to the government of
India if they supposed that they could fall back en the
finances of this country. If they were to undertake liabilities
in India, they might be called upon to do so for the colo-
nies. If they were to admit the intimation made by others
last year, and by the noble lord this year, they would
be drifting into a responsibility which he was sure
the house was not prepared to undertake. He would say
one word more on this subject, not in reference to the
noble lord, but to warn the house against this possible
danger. That house had shown itself not indisposed. to
meddle with this subject in two ways. The house was
disposed not long since to take a course which would put
in great jeopardy the revenue from salt, and the other night
an hon. member gave notice of a motion to take away the
revenue from opium. If they took away Indian revenue
by imperial legislation then they would incur not a moral
but a legal responsibility. (Hear, hear.) They must be
cautious in dealing with Indian revenue and Indian deficit,
and they must oppose directly or indirectly any liability
which this country ought not to undertake. (Hear,
hear.) The ordinary revenue of India at the present
moment was not so satisfactory as he should be glad to see
it.. He was speaking of the ordinary, independent of the
war expenditure. The accounts which were laid on the
table last July contained the accounts for India up to
April, 1857, just before the mutiny broke out. • In 1850-51
there was a surplus of upwards of £400,000; in 1851-52,
a surplus of £531,000 ; in 1852-53, a surplus of £424,000.
Those were the accounts which were received in this
country when he had the honour of being President of
the Board of Control, and the revenues of India had not
been in so satisfactory a state for some time. They availed
themselves of that opportunity of reducing the charge on
the Indian debt. Objections were made to that course in this
country, but he thought that on financial grounds it was
perfectly right. The interest of the debt was reduced to
the extent of half a million. Well, next year a change of cir-
cumstances took place, and instead of there being a surplus
of nearly half a million there was a deficiency of two mil-
lions ; in the subsequent year of £1,700,000 ; in the follow-
ing year, of £972,000. The deficit of the three years ex-
ceeded very considerably the surplus of the three preceding
years, the surplus amounting to £1,300,000, and the defi-
ciency to £4,700,000. In the subsequent year there was a
surplus of £143,000. He said he would refer to the in-
crease of expenditure as well as the increase of revenue. He
found that the charge had increased more than the reve-
nue, and whatever had been the increase of revenue the
charge had increased more. In 1851 there was a surplus of
£400,000; in 1856-7 a deficit of £150,000. That was the
state of things up to the last period before the commence-
ment of the war. And now let them see how they would stand
after all the war expenditure had been incurred. Supposing
that by the Ist of May, 1860, the war establishment was
put down and the troops disbanded. He had shown that
in the last ten years the charge had increased more
than the revenue, and it would not be unfair to assume that
the charge and expenditure would be the same then. But
then they would have borrowed £26,000,000 for the 0
on the pur-
poses of the war, and he hoped that would be the whole that
they would have to borrow. He could not say that he
thought it would, but he wished to understate the case and
thendodt e
dto
wholetot overstate
hec
amount.ha
ritg Thee Ile wouldinnedr
eiaasstns
ourfme
revenue,
thatnautew, £oau
would
OthOpaOkv,
jfiOeogOt wastheb e
a
interest at 4f per cent. it would be £1,170,000 a year, and
adding that to the existing deficit there would be a deficit of
from a million and a quarter to a million and a half. How
was that to be met ? He was bound to say, after his tribute
to the lucid statement of the noble lord, that it was exceed-
ingly deficient in holding out to them any houe-or prospect
IA prlACticg WAY 14917ta5 Was to be met, The Aoki 194

stated various sources from which an increased income would
arise. He stated that 60 per cent, of the receipts was de-
rived from the land revenue, and he showed clearly enough
that there was no prospect of that being increased.
,He stated that it had been increased by annexation and
by the cultivation of waste lands. Annexation he
stated had ceased, and he was exceedingly glad to hear
the noble lord say it was undesirable to annex
native states. When he was at the Board of Con-
trol he never suffered annexation to take place when a heir,
even by adoption, could be found ; but there were certain
annexations made where there were no heirs. The house
would find that the increase of the land tax was almost
entirely by annexation. It had increased from £17,355,000
in 1861 to £19,863,000 in 1856-7; but the land revenue of
Nagpore and Oude was £1,500,000, and the increase was
almost entirely due to the annexation of those provinces. But
now annexation had ceased. And he did not think there was
possibility of its being increased in our own districts. He
thought, indeed, that in some cases it ought to be reduced,
and in the presidency of Madras Lord Harris did reduce it in
one province, but he chose one that was in circumstances
favourable to the experiment, and the revenue recovered
itself in two years. But that was an exceptional case. He
believed that on the whole there was as much prospect of a
decrease as of an increase in the land revenue. Then there
was the revenue from opium. Like the noble lord, he saw
no more objection to raising a tax en opium than to raise a
tax on spirits. He did not think that the use of opium was
more injurious than the excessive use of spirits or wine, and
the mode in which the tax was raised was not open to the
objections that there existed to an excise duty. In 1850-1
the revenue from opium was £3,500,000, in 1846 it had in-
creased to £4,697,000, in 1857-8 it was £6,443,000, and the
estimate for this year was £5,195,000. It rose £1,800,000
one year, and another year it fell £1,300,000. It was ob-
vious therefore that the revenue from opium was very pre-
carious. But there was another consideration. He was
afraid—at least he did not say he was afraid—but as far
as the Indian revenue went he was afraid, as far as the
Indian revenue was concerned, that the Chinese Govern-
ment, which had sanctioned the admission of opium, would
legalise its cultivation in that country, and if the export of
opium from India should cease the revenue from opium
would cease. Dr. Bowrmg, when in this country, told him
that if opium were cultivated in China we should still be
able to supply them on account of the superior quality of
the Indian opium, but at a much reduced cost. But in
that case there would not be the profit there was now, and
there would not therefore be exports to the same extent.
The next largest source of revenue was salt, and, in point
of fact, that was the only article of consumption on which
any duty was levied. But they could not expect any in-
crease on the duty on that article. The duty rose and fell
without any apparent reason, and it was more likely to,
fall off than to increase. He how came to the expenditure.
The noble lord said truly that there was no likelihoed
of any increase in the revenue, and that what they had
to look to was a decrease in the expenditure. He was
disappointed in the noble lord's statement in that respect,
and expected that he would have given them some clearer
notions of the mode by which he would decrease expendi-
ture than those which fell from him on Monday night. The
noble lord proposed to reduce the civil expenditure, and he
said he would do it by two measure ; first, by reducing the
salaries of the European agents, and next by the employ-
ment, in greater numbers, of native agents. With regard
to the reduction of the salaries of European servants, the
words had scarcely escaped the noble lord's lips when he
said he could scarcely find more candidates by competition
even than there were situations to fill, and that on one oc-
casion there were not so many candidates as places. Again,
they knew that even private merchants found it necessary
to give to the persons they employed in India much higher
salaries than they paid in this country, and higher than
the company's servants received. The noble lord had ex-
pressed a hope that there would be a reduction in the mili-
tary expenditure. Hd (the right hon. baronet) hoped and
trusted that there would ; but he also hoped that the noble
lord would have said something more than he had done
as to the mode in which that reduction might be
brought about. It might be true that there were now no
great native powers like Runjeet Singh, or Scindiah ; but
many years ago when he (Sir C. Wood) pressed thenecessity
of reduction upon Lord Dalhousie, the noble lord gave him
the very same reasons which the noble lord opposite now
adduced why the military expenditure should be diminished
as reasons why it should be increased. He consulted Lord
Hardinge on the point, and by his advice he assented to the
creation of three new European regiments for India. At
that time he was in correspondence with Lord Hardinge
as to the substitution of irregular horse for regular
cavalry, which was a much more expensive, but not
more useful corps. And here he (the right honourable
baronet) could not help paying a tribute to the great ser-
vices of a very able officer who had recently died : he
meant General Jacob. (Hear, hear.) The noble lord
had given them no intimation as to how he thought the re-
duction of the army might be effected; but he (Sir C.
Wood) thought we should be utterly without justification if
we did not maintain a large European force in India than
we had yet done. (Hear, hear.) Let us have none but Eu-
ropean artillery ; let it be armed with the most efficient
possible weapons ; and let it be stationed in barracks in the
healthiest situations in the country. In that manner we
might perhaps be able to reduce the native army ; but a na-
tive army there always must be for purposes of police ; and
in order to do the ordinary work of the army. Anyhow, we
must-have the expenditure within the income for India.
(Hear, hear.) The only other financial feature in the noble
lord's speech struck him as being most objectionable. He
referred to the guarantee proposed to be given to the Madras
Irrigation Company to the extent of a million, and to the
contemplated guarantees of some minor railways. Thewhole
system of guarantees was in truth most objectionable. It
might perhaps in the first instance have been necessary to
guarantee the great trunk lines ; but for the Government to
aid companies to compete with.their own loan was about as
unwise a step as could be adopted. The policy of raising
funds for India in this country was at least questionable.
It should be our task to encourage native capitalists to invest
their money to as great an extent as possible; forthe moment
they lent their money to the Government their loyaltymight
be implicitly depended upon. Accordingly, in the late crisis
the moneyed classes had proved themselves the mostfaithful
supporters of British rule. (Hear, hoar.) The noble lord
told them that the return that might be expected from works
of irrigation was certain and large. But surely, if that was
the case, there could be no necessity for offering a guarantee
on enterprises which were certain to yield a return of 26,
40, 100, and even more than cent. per cent. (Hear, hear.)
He strongly objected to this sort of partnership between the
Government and private individuals ; it was a connexion
from which the public might reap loss, but from which it
was impossible for it to enjoy any advantage. He trusted,
therefore, that the house would express its opinion in a
manner that would operate as a check upon the practice.
(Hear.) The liabilities of India according to the last returns
were 82 millions sterling, to which must be added the sum
borrowed in India, £8,700,000; makin" thus a total of
£90,700,000—an amount of liability which ought to make
the house-unwilling to add to it another million. (Hear.)
Unless the expenditure of the Indian Government could be
brought within its income, there was danger not only of its
becoming a charge upon the imperial exchequer, but of
serious complications arising in our Eastern territories
themselves. We had a great mission to perform in India;
but the basis of all good administration lay in a wise and
economical system of finance. (Cheers.)
Sir E. PERRY said the right hon. baronet had just
stated what was the real question the house had to consider,
namely, how they were to restore the balance between the
revenue and the expenditure of India ? The right hon.
gentleman had drawn a most gloomy picture of Indian
finance ; and he had shown that many of the existing sources
of income could not be depended upon. Three years ago
he (Sir E. Perry) had himself pointed out that principles of
finance were being acted upon that must lead to national
insolvency, and principles of government that must bring
about national disaffection. He was then called a croaker;
but now a Cabinet Minister and an ex-Cabinet Minister
were agreed upon the precarious state of the revenue. What
was the amount of the debt at the present moment? The
noble lord had stated it at £74,500,000; and the right hon.
baronet at £90,000,000. He (Sir E. Perry) would now give
his estimate of it. From the published parliamentary
papers he took the debt at £82,000,000, but to that must be
added £10,000,000 of debt which did not bear interest, but
which the Government might at any moment be called on
to repay. Then, £12,000,000 must be added to represent
the £630,000 payable annually to the proprietors of the East
India stock. A sum had been set apart to accumulate at
compound interest, in order to defray that charge ; but till
1874 there would be a charge equal to the interest of 12
millions. These Reins together made a total of £103,776,565
to which must be added the new loan of seven millions,
making thus a total dedt of £110,776,565. They had been
told that the debt of India did not much exceed two years'
revenue ; but in making a comparison of that kind he main-
tained that they ought to take not the gross, but the net
income, which was £23,000,000 a year. Thus- the total
amount of the debt was equivalentto more than four years'
revenue. (Hear.) That might not seem to be a very
heavy burden when compared with some European debts ;
but when the inelastic character of Indian finances was taken
into consideration it would be seen that it was in reality very
onerous. The interest paid yearly was made up of the fol-
lowing sums :—payable in India, £3,500,000 ; in London,
£1,230,000; temporary loans, £48,000; civil service an-
nuities, &c., £1,439,003 ; total, £6,217,000. He need not
dwell on these figures, for it was admitted that the finances
of India were alarming. (Hear.) Though it was said that
no imperial guarantee would be given for the new debt, the
house must not be deluded by such an announcement. The
holders of East India paper had in reality a better security
than was enjoyed by any public creditor in Europe. The
holders of bonds could not sue the government; but the
holders of India paper might sue the secretary and council,
and might sell the India-house, or the new India-office,
which he hoped Mr. Scott was not going to build in the
Gothic style. (Hear, hear.) If ever matters came to that
pass, this country would either have to pay the money or to
give up India. If he agreed with the right hon. baronet
(Sir C. Wood) he should say that in a pecuniary sense it
would be better to take the latter course. He was not of
course speaking of the moral claims which a country pos-.
sessed upon us after we had deposed every native ruler and
made self-government impossible ; but on other grounds
he could not coincide with the right hon. gentleman. He
thought that they ought to lay down a strict rule that the
expenditure should be kept within the income; and if an
emergency like that through which we had just passed
occurred, this country ought to take the extra charge upon
herself. Much as it might shock the moneyed circles to
propose an addition of £30,000,000 to the burdens of this
country, he ventured to think that if they contrasted the
wars for which we had expended hundreds of millions with
what India might be made worth to us, the balance would
be found vastly in favour of a war for the maintenance of
our Eastern possessions. The borrowing system ought,
howevey to be put an end to. To give an example of the
i
improvdent manner in which loans had been resorted to, it
was estimated that there would be a deficit upon the year
1856-7 of two millions sterling ; but it turned out that the
real deficiency was only £143,000. Nevertheless, there was
a loan of a million and a half. (Hear, hear.)dHe should have
been glad if the noble lord had explained where the interest
of the new loan was to come from. Ho agreed with the
noble lord rather than with the right hon. gentleman as to
the feasibility of reducing the civil expenditure ; for he was
convinced that the Government of India could not be satis -
factorily carried on unless the natives were allowed to take
a large share in it. (Hear, hear.) Much had been said
in the last 20 months of the increased strength gained by
the successes of our arms. It was said we might disregard
the prejudices of the natives, employ more Europeans in
office, introduce our Bible into our schools, and even disre-
gard caste. That seemed to be the opinion of the right
hon. baronet, who said that a greater number of English
officials would now be introduced. Such was not the advice
of the committee who sat on the affairs of India. Tho first
thing to be done to increase the revenue was to rely on
native co-operation, and call forth the abilities of native
statesmen, many of whom- had rendered us good service in
the late rebellion. Another mode of developing the re-
sources of India was to facilitate titles to land, and so
induce European or native capitalists to become holders of
land. In every country the land was the source of the
wealth of the country, wherever land was at all improved.
He knew that the process of dealing with land in India was
extremely slow ; let it be improved. Hitherto he had viewed
with admiration the steps taken by the noble lord, especially
in the matter of the royal proclamation. This was now
Priuteci MIT ficll99l- *k ; but the uativers Imo apt to

compare acts with words; and one unfortunate step had been
taken in the despatch issued on the Ist September—almost
the last act of the East India Company. It was doubtless
essential to check fraud in the collection of the revenue ; but
the commission appointed to inquire into enams would create
great dissatisfaction. This had been the case in the province
of Bombay, where a commission had been appointed to call
on the landlords to prove a title of 90 years. The nicest ques-
tions arose, which were entrusted not to lawyers, but to mili-
tary men, whose decisionshad givenunmixed dissatisfaction.
It was in evidence before the committee of last year that the
enam commission had decided on 8,000 titles, and that
100,000 were still pending before them.- He was surprised to
learn that a similar commissionhad been issued for Madras.
The object, no doubt, was to inorease the revenue, but it
would not have that affect. In Bengal a similar commission
had been found so oppressive that it had beenput an endto.
.k HON. MEMBER—No, no; its operations were finished.
Sir E. PERRY hoped that the Madras commission
would not only be suspended but put an end to at once, and
that Sir C. Trevelyan would retract the advice he had
given the other day in favour of the commission. He would
not encourage fraud, but deal with it as in this country. If
a man's great grandfather had committed a fraud was he to
be put out of possession of his land ? (Hear.) Let them
fix a period, 30 or 40 years, beyond whichthe inquiryshould
not extend, and then let fraud be treated in the ordinary
course. If the steps he suggested were taken he had no
fear for the future of India. Recollecting that our trade
with India exceeded that with any other country, except
the United States and Australia, we might form an idea of
its value. The amount of that trade was 30 millions a year.
Besides that, India paid three or four millions to this coun-
try as dividends and salaries. Let us treat the natives of
India so as to give them an interest in its institutions, and
they would not be found unwilling to aid with their purses
the expenses of the State. Reference had been made to the
Government irrigation worki effected in Bombay, but in
reality they had been done by the municipality of Bombay,
where the natives were most liberally treated. The same re-
sults would follow all over India if the same course were
adopted. From the high rank and great popularity of the
noble lord he was in a position to carry out greater reforms
than any one on that side the house could do—(hear, hear)
—because they would be opposed to a great body of the
Conservatives. (Hear.) At the same time he hoped the
noble lord would not entangle himself too much with " Old
Indians," for it was impossible not to see that the new board
was the old East India Company over again. Many of the
projected reforms would militate most strongly with their
views ; but if the noble lord would depend on his own sound.
judgment, India, instead of becoming a burden.to this coun-
try, would be a powerful auxiliary to its prosperity. (Hear.)
Mr. LI DDELL said the noble lord had been charged
with omitting to propose any means of improving the In-
dian revenue. This was not correct. On Monday night
the noble lord had suggested those means ; and any mea-
sure relating to taxes must emanate from the Indian go-
vernment in the first instance. The noble lord had truly
said that the revenue of India was elastic ; but he had not,
as some supposed, named any amount to which it might be
expected to rise. With the prospect of a good and benefi-
cent government in that country he believed that the peo -
ple would have the fullest confidence in the improvement of
India. The noble lord looked forward to the restoration of
the balance between expenditure and income, and, as one
means, referred to the reduction of military expenditure.
It must be recollected that India was a conquered country,.
and had been held for a century by the force of our arms ;
and so long as we had to deal with Mahommedan fanati-
cism on the one hand and Hincloo ignorance on the other,
without any prospect of mitigation, he feared there was
little hope of reducing our military expenditure. Besides,
our Indian commerce was yearly becoming more an object
of attention to European governments on all sides ; and if
our army were largely reduced, might not this excite their
ambition ? Though a more complete system of police
throughout Bengal might lessen the chances of insurrection,
it would still be our duty to guard our stations that protection
might be afforded on any emergency to our stores and bar-
racks. Mr. Macpherson, in his annals, pointed to many that
were still unimproved—several barracks were overcrowded,
and extremely unhealthy. This would prevent any exten-
sive reduction of the military forces in India. At all events
if they were reduced, we must secure greater power of con-
centrating a large force in any given place. Colonel Ken-
nedy had well said that two-thirds of an army might thus
be rendered more effective in a few days than the whole num-
ber would be in as many months. In reference to the rail-
way system, he must, with all submission to the noble lord,
challenge his statement, that the progress of the railway
system, rested mainly on the Indian government. Having
guaranteed no less than two millions of this expenditure, it
was requisite that the Home Government should in some
way superintend the work. This led to the jealousy of the
companies—military engineers being generally employed
by the Government. Confidence had been felt that every
unnecessary obstruction would be removed, but he feared
that the railway officials and the Government engineers
were still keeping up their internal struggles.
Mr. V. SMITH said that he might have trespassed on
the house at greater length than he should do if they had
had any results before them. But there was the same ab-
sence of result as on a former occasion. It was perfectly
true that the novelty of the noble lord's position, as the
first responsible minister for India, as well as the high posi-
tion which he had attained at so early an age, from what
he had already done, and the promise which he held out for
the future, had combined to impart to this debate greater
interest than any former debate on. India had possessed.
But what had the noble lord done ? He had entered into a
general explanation of the state of the finances of India, but
he had held out nothing on which they could positively
give an opinion. The speeches had been merely deliberate
essays on Indian affairs, which could _lead to nothing.
(Hear, hear.) The accounts annually submitted to Parlia-
ment required some examination, and he would recommend
to the noble lord that on a future occasion those accounts
should be laid before a committee of the house. With re-
gard to the elasticity of the revenue, he differed both from
the noble lord and from his right hon. friend the member
for Halifax (Sir C. Wood), who both seemed to think that
there was no prospect of an increase. He thought the land
revenue displayed some elasticity, as it had largely increased
during the half century, and would be further improved by
the reduction of the assessment. There was another ques-
tion to which he would direct the attention of the noble
lord—the diminution of outlay. The noble lord had given
two examples to show the impossibility of reducing the ex-
pense of the civil service, but both were rather inapplicable.
The noble lord had spoken of the difficulty of procuring assis-
tant-surgeons, and said that even the competitive examination
did not bring forward candidates,but the pay of the assistant-
surgeons was not as high as the civil service, and the com-
petitive examination rather kept men from offering them-
selves, as, if rejected, they were prevented from obtaining
other situations. Again, the noble lord said that the rail-
ways paid as high salaries as the Company.
Lord STANLEY—Relatively as high.
Mr. V. SMITH—But the railway employment was not
permanent, and there was no promotion. He believed that
in no part of the world was there a service so highly paid
as the civil service, where a man entered at £3OO or £4OO,
with a prospect of rising to £4,000 or £lO,OOO. He admitted
the service was highly competent, but other services equally
so were not so highly paid. With regard to the military
expenditure, he had been surprised to hear from the noble
lord that he expected shortly to be able. to reduce the Euro-
pean force to the number before the mutiny.
Lord STANLEY stated that he had not said so. He
did not think it would be possible to reduce the European
force. (Hear, hear.) He only stated that he hoped to re-
duce the total of the military force of every description to
'about the same as it was before the mutiny.
Mr. V. SMlTH—However desirous they might be to
reduce the force, it was absolutely necessary to keep Euro-
peans, wherever there was a large detachment of natives.
It would be long before the confidence in the natives could
be restored. But although they retained a large Euro-
pean force he did not see why the expenditure might not be
reduced. If they were to keep 80,000 men in India, they
would not long be able to pay them double what was paid
to the troops serving in the West Indies and other colonies.
He had been surprised and sorry to hear that the number of
native troops was now as great as it had been before the
mutiny. He would not question the necessity of these
levies •, but he hoped they would soon be reduced. He
thought the noble lord in proposing the establishment of
freehold tenures was perfectly right. (Hear.) He also agreed
with him as to the railway guarantee. He believed that the
system was erroneous in the first instance, and he had wished
that some scheme had been started without a guarantee, but
as the system had once been established, he thought the noble
lord had done right in following it up, and if railway com-
panies got guarantees there was no reason why the Madras
Irrigation Company should not get it also. He thought,
however, the present rate of 5 per cent. was rather high.
With regard to railways, he would suggest to the noble lord
whether a system ;:iffiheap 'railways could not be established.
He thought that% Country where the present rate of
travelling was so slow, a cheap line, capable of working 10
miles an hour, would in many districts answer every re-
quirement. The noble lord had alluded to the question of
an imperial guarantee. (Hear.) If raised at all, that
question should be settled at once. If there was to be such
a guarantee, let them have the benefit of it now ; the noble
lord ought to have stated his opinion on this point. The
noble lord had also neglected to furnish the grounds on
which he came to the conclusion that no further loan would
be required to be raised here. He however saw no objec-
tion to the mode in which it was proposed to raise the pre-
sent loan, and he should therefore vote for the proposal.
Mr. VANSITTART, who spoke from his own know-
ledge, having been a civil officer and magistrate in India,
stated that a very large proportion of the land in many of
the districts was alienated from the Government by fraudu-
lent titles, by which the revenue was considerably impaired,
and recommended a commission to inquire into all titles since
1801, and a proclamation confirming the validity of all titles
'previous to that date. He suggested that a cheaper rate of
agency should be introduced, by the more extensive employ-
ment of natives in civil capacities, and expressed an opinion
that under a wise and conciliatory system of government,
the revenues of India would more than pay off the debt in
20 years, and that as tranquillity was re-established, and
European capital was introduced, the Asiatic population
would see that their best interests would be served by se-
conding the policy of a powerful and beneficent government.
Mr.' CRAWFORD, in reference to the remark of the right
hon. member for Northamptonshire about cheap railways in
India, observed that in such lines as that from Calcutta to-
wards the north cheapness was impossible, owing to the
nature of the works, there being many very wide rivers to
cross and very heavy engineering operations. Again, with
regard to witholding the Government guarantee, he was
aware that a negotiation had been opened for constructing a
railway without the guarantee, but it was not accepted by
the market. Until it was proved that the traffic would be re-
munerative it was not to be expected that the funds for
railways in India would be forthcomingin this country. The
East India Railway Company, to which he had alluded, had
now 280 miles at work, and from the traffic over 243 of those
miles it was earning £4,000 a week, or at the rate of 7s 2d.
per train per mile, which was about the earnings of the
great railways in this country. He mentioned this to show
that the railways in India were already beginning to prove
that they would in the end be highly remunerative. It was
understood that last year the security fund was drawn upon
for the payment of the dividends on the East India stock.
He should be glad to know from the noble lord the extent to
which that fund had been so made available, and whether
the provisions of the act had been followed, of devoting the
first subsequent receipts from India to the extinction of the
debt due to .the security fund. He thought it desirable that
some change should be made in the principle on which the
exchanges were now regulated, and that instead of an arbi-
trary and 'varying rate there should be a fixed basis. The
present proposition fool raising funds must be looked upon as
a necessity. All he wished was that it might not have to be
repeated, and that the noble lord would direct his attention
to the attainment of the funq necessary for the government
of India from Indian resources.
Mr. CARDWELL thought it was premature to call upon
the Government for an exposition of their mode of adapting
the expenditure of India to its income. They had just
quelled an extraordinary rebellion, and had not arrived at
the time when they could commence those retrenchments by
which alone the expenditure could be brought within the in-
come; and they were departing from those usual maxims
of prudence which ordinarily regulated their conduct,if they
did not at present make a very rigid examination of the dif-
ference between the income and the expenditure. If the
time had come for such an examination, the prospect, it
TAO' kt admitted, Would not ) YVY good—fQX they w"9

told that the balance was considerably on the wrong side,
even excluding thQ extraordinary expenditure of the war.
And even when the rebellion was over the charge would
not, for some time, be brought down to the point at which
it stood ere the outbreak commenced. We did not in India
possess two modes of obtaining revenue, which we had at
home—the excise and the customs. We could not make
the excise severe, owing to the probability of the exactions
and cruelty which might arise from its collection, and in
our desire to encourage trade with India we were unwil-
ling to saddle it with import duties. There were reasons
why, even in expenditure on public works, wo should use
prudence and-circumspection. Allusion had been made by
his right hon. friend the member for Northampton to the
system of railways in India, but he could not agree with
his right hon. friend that you should make the great lines
which traversed the country, and on which you mainly de-
pended for the conveyance of troops in a cheap, and there-
fore in an inefficient _manner. (Hear, hear.) When on a
line of railway great political and social interests depended,
the amount of expenditure upon it should not be a conside-
ration of much moment, and when it was said that railways
in India could be constructed at the rate of £12,000 a mile
he did not think we could charge ourselves with much ex-
travagance. He wished to suggest to the noble lord that
the day was nearly come when there must be an alteration
of the system of guarantees out of Government capital, and
he hoped that the system of guarantees was nearly at an
end. He knew of no case of guarantee to a company in
which you could not have as good an argument for the con-
structing of works with Government men and money. He
looked at the question of guarantees with some anxiety,
because such guarantees ought not to creep into the
exchequer at home, any more than into that of India.
He hoped that the construction of the branch lines
of railway communicating with the main lines in
India would be created out of the wealth of
that country, and so have a tendency to create a native in-
terest in such works. But the most interesting point in
this discussion had been raised by an " obiter dictum" of
the noble lord the other night, which should not be passed

over. In law•there was no more frequent cause of mistakes
and confusion than the " obiter dictum" of great judges.
The dictum of the noble lord had nothing to do with the
present loan, because the noble lord did not propose to ask
for an imperial guarantee ; but the noble lord let fall an ex-
pression which had excited a considerable feeling out of
doors, and which rendered it necessary that the house
should not depart from the strong ground which had been
established in this matter. In the India Bill of the Govern-
ment of last year a clause was introduced for the purpose of
settling all controversy on this point, by declaring that the
India debt was to be a burden on the Indian Exchequer
alone. He hoped that w.e were not going to set loose a doc-
trine whieh we thought had been set fast. The hon. Mem-
ber for Devonport said that a-native might bring an action
against the noble lord the Secretary for India, but in all
actions the right depended on the contract which was en-
tered into, and here the contract was that the payment of
the debt should be made out of the Indian, and not out of
the imperial exchequer. What, too, was the rate of interest
in India? It varied from 4i to 6 per cent., and were we
going-to give this interest with an imperia guarantee in
the back ground ? He could conceive arguments in favour
of the policy of the hon. member for Devonport, and that
which was shadowed forth in the speech of his right hon.
friend the member for Northampton, that is, that we should
take the benefit of the debt at once, and do something to-
wards balancing the revenue and expenditure of India ;
and more valid arguments might be adduced for allow-
ing India to borrow money on her own security, but
for one thing there could be brought forward no argu-
ment, and that was borrowing money in England at the
rate of Indian interest. The Government of India was not
subject to the control of that house, as regarded loans raised.
in India. Were they going to allow India to bor-
row without the sanction of Parliament, and then let the
taxpayer at home bear the burden? He appealed to the
statute of last year, in which the doctrine was laid down
that Indian revenues alone should guarantee loans, and he
hoped that that doctrine would never be departed from.
He thought that we ought not- to take a gloomy view of
the finances of India. Looking to what had been done in
that country, and how great had been the development of
its resources and its trade with'this country, he could not
but expect a still greater development of its wealth and
industry. When they were debating a proposition in the
second year for providing finances to meet the expenses of
a great rebellion, when last year they only raised a loan of
ten millions, and this year the noble lord asked for a loan
of only seven millions, and said that he did not anticipate
his coming to the house for such a purpose on another oc-
casion, when they considered the crisis through which India
had passed, and that the whole amount of the financial
appeal to this country had been under 18 millions, he could
not but think that it was a matter of thankfulness. The
moral spectacle we had exhibited, and the prowess we had
shown in India, had had a great effect in Europe in raising
our character, and he believed that a very salutary effect
would be produced when it was found that so great were our
pecuniary resources, that all that had been done had been
effected out of the revenues of India itself, with a resort to
the English money market only for so small an amount.
Sir H. WILLOUGHBY said . it was proposed to raise a
loan of seven millions for India in this country. When a
loan was raised for home purposes, it was guarded by cer-
tain precautions and checks—why should not the same pre-
cautions be taken in the present instance? It was a
dangerous system of finance to raise a large sum to be spent
in a distant dependency with no control exercised over it.
He would suggest to the noble lord whether in the bill
which we were about to pass he ought not to introduce a
special clause of appropriation, declaring the special pur-
pose to which the loan was to be applied.
Mr. LOWE regretted that the statement of the noble
lord did not enable the house to gather any notion of the
mode in which he proposed to extricate himself from
the difficulties in which he was placed. The noble lord said
that he did not see his way to any increase of revenue, or
any decrease of expenditure, and the consequence was that
there must be a perpetual deficit, which was to be measured
by the interest of the loans. They had a right to expect
from the noble lord some measure which showed a tendency
to remove the existing difficulty. The noble lord said that
the land revenue was elastic, and he spoke of the salt tax,
but he suggested no actual means of adding to the revenue.
This was the state of things which the noble lord admitted,
and by that he bound himself to propose a remedy. He was
sorry to see that the only measure which the noble lord had
taken was to call on the Government in India to do that
which he (Mr. Lowe) said ought to be done by the Govern-
ment of India in England—for he had called on Lord
Canning to devise a tax which would balance income and
revenue. It was hard on Lord Canning, engaged as he was
in quelling a rebellion ; and of what use were the gentlemen
in Leadenhall-street when it was necessary to call on Lord
Canning to go into so large a question, and in fact to take
that course was to postpone the matter sine die. The noble
lord expected a trifling decrease in the civil expenditure.
His right hon. friend the member for Halifax had disposed
of that, showing that as the improvement of the country
increased, the standard of wants and comforts would en-
large, and you must look for a gradual increase in the civil
expenditure of India, as was the case in this country when
the standard of human wants was raised. He had only
one other thing to say, and that was that when the com-
mittee of 1853 bad finished its sittings, it was its opinion
that the suddar and supreme courts should be anialga-
'mated. A commission was appointed to see what could
be done, and they received instructions from the Board of
Control to take all the necessary preliminary measures for
amalgamation. The commission laboured for three years
according to these instructions, and, as they believed, com-
pleted an efficient code. They expected it would be adopted,
but it was sent to India, and referred to that anomalous
body the Legislative Connell. The council persisted in pre-
serving many of the defects of -the old system, and in par-
ticular left the suddar and supreme courts untouched, con-
fining their alterations wholly to the mofussil courts. If
this were not remedied, the natives would believe that the
Queen intended one sort of justice for the English and
another for the native subjects of India. He trusted that
the noble lord would not allow this system to go on, but
would rather, suspend all change until he had more fully
examined the subject. It might be said that all this was
foreign to the financial question, but the fact was that the
great cause of all our troubles in India was the imperfection
of the judicial system: (Hear, hear.) There was now a
great opportunity of reform, and he earnestly entreated the
noble lord to take the matter into his consideration.
Lord STANLEY said that a great variety of subjects had

been touched upon,,but he should take the liberty of con-
fining himself to the main question. He would say, how-
ever, that he quite concurred with the hon. member for
Kidderminster as to the importance of the revision of the
suddar and supreme courts, and had sent out instructions
to stay all changes until further consideration had taken
place. With respect to the civil expenditure, he feared
there would not be much reduction under that head. Some-
thing had also been said respecting railway guarantees, but
he submitted it was now rather late to discuss that question.
We had guaranteed forty millions ,and must take the con-
sequences. Guarantee, however was better than if Govern-
ment undertook the work, as in the one case they had only
to guarantee the interest, while, in the other, they would
have to supply the capital for the work. With respect to
the Indian debt he thought that nothing had been more
clearly stated by him on a former occasion than that the
change of government had not at all increased the imperial
responsibility. The debt of India was a fair charge on In-
dian revenue, and when he said that England had a contin-
gent interest in its security, he meant that if the Indian re-
venue should ever fail in paying the interest and expenses
of civil administration, the question would then arise as to
what was to be done, and in that way he contendedthat this
country had a contingent interest in the financial condition
of India. (Hear.) In conclusion, the noble lord thanked
the house for the unanimous wish which had been shown.
to assist the government in settling thisimportant question.
Mr. KINNAIRD said he was glad the government of
India had not shrunk from the responsibility of giving gua-
rantees for the railways and other useful investments of
capital, without which those undertakings would not have
been introduced ; and the advantages of parliamentary con-
trol having been secured for India, he trusted that the in-
terests of that great country would be promoted by its
future administration.

Col. SYKES regretted that some hon. gentlemen had
shown themselves disposed to take so gloomy a view of the
prospects of India, to refute which he reverted to a com-
parison of the revenue and expenditure of India in the year
1809 with the financial statements of recent years, showing
that, after 50 years had elapsed, the debt, relative to the
income of India, was less in proportion than it was at the
commencement of that period ; being 18 per cent. at the
former date, and only 10 per cent. in 1850-1. The increase
of prosperity was also proved by, the imports and exports,
which showed a notable augmentation.
The resolution was then passed nem. con., and the house
having reamed the chairman reported progress.
OCCASIONAL FORMS OF PRAYER.
The Occasional Forms of Prayer Bill, on the motion of
Mr. IVALPoLE, was read a third time and passed.
The Law of Property and Trustees Amendment Bill was
brought from the Rouse of Lords and read a first time.

- CIVIL SERVICE SUPERANNUATION.
, The CHANCELLOR of the EXCHEQUER moved the
second reading of this bill.
Sir H. WILLOUGHBY complained that the recommen-
dations of the committee had not been attended to in re-
spect of this bill, and urged also that the report of the Royal
Commission was entitled to more respect. He wished to
know what would be the additional cost of the system now
proposed to be adopted? The witnesses examined before the
committee repudiated the notion that when they called for the
abolition of this tax, they were intending to get an increase
of salary. He thought the form of this bill was likewise
objectionable, as to repeal some clauses of a former statute
and leave others standing, was a bit by bit sort of legisla-
tion, the effect of which was embarrassing.
Sir S. NORTHCOTE said it was the intention of the
Government to go into committee pro forma, on Monday,
with this bill, in order that it might be reprinted with some
amendments, which would render it more clear, and to some
extent meet the views of the hon. gentleman. The object
was to put all classes of the civil service upon an uniform
footing, and put an end to those anomalies which had so
long existed in the system of superannuation. With regard
to the additional expense thrown on the country, the
Government had not considered either the recommendations
of the select committee or those of the commission, but the
decision of that house, which was to. Tut an end to that
system which had hitherto prevailed, and lie thought it was
wisp decision, 'his matter WARM not be looked at AN a

pounds, shillings, and pence; the
objecte re
suupesetrannuatten system was to get good men
mere narrow of
in the civil service at a moderate price, to keep them as long
as was desirable, and pa wide for their retiring from the
service when they ohou: td cease to be efficient. It was
necessary to have a clear, efficient, and uniform system. It
was most desirable that an niform system should be adopted.
It was no less desirable ihs t some power should be given to
the Treasury to determiml whether certain classes ought or
ought not to receive allowil. 'ices. Thus country postmas-
ters, who were not wholly et. nployed by Government, were
a class, some of the individutlis of which were entitled to
superannuation and others wet e not. In many other cases
of the like nature it was :d .esirable that the hands of the
Treasury should be strengthened. He trusted that the bill
would be read a second time, and that any discussion
would be taken in committi
Mr. DEASY pointed out that the 4th clause, extending
this bill to judicial offices, was one which ought to be
amended. As it stood, it was not clear whether county
court judges in England and Ireland were included in this
clause.
Mr. WHITESIDE thought that the principle of the bill
ought to be applied to the cases mentioned by the hon. and
learned member, and ,as he Understood the bill it did apply
to them.
Mr. J. D. FITZGER AID said' that the effect of the
clause would be to put .it :in the power of the Treasury to
require any county court ft idge to resign who was sixty-
five years old. This ,was a most 'objectionable provision,
and would tend to tamfer th the purity of justice.
Sir W. CODRING ON' ished to know whether the
.
bill was retrospective or not,
Mr. GROGAN said that the
question to which the gal-
lant member alluded was a most in.'Portant one. He wished
to put a further question, which will, whether the bill ap-
plied to supernumeraries ?
Mr. DOBBS pointed out that by ,the 13th seotion the
limitation of 65 years, id not apply to those persons who
held office 4, during good behTnour." ;it therefore did not
apply to county court judges., • • •
The bill was then read a second time. • •

SALE OF POISONS BILL.
Mr. KINNAIRD asked that this bill might` be postponed.
He had not had time to hear from the north 02., the subject.
Mr. WALPOLE proposed to put the bill th rough com-
mittee on this day week; or even at a later period if hon.
members desired it. He therefore trusted that the house
would now read it a second time. (Hear, hear.)
Mr. HUNT thought the bill ought to specify the names
of all the persons to which it applied.
The bill was then read a second time, and ordered to be
committed on Monday week.

MANOR COURTS, &c. (IRELAND) BILL.
On the motion of Mr. WHITESIDE, this bill was read a
second time.
SALE OF OILAIN, Scc.. BILL.
Mr. M'CANN obtained leave to bring in a bill for the sale
of grain, meal, flour, butter, and potatoes, and other agri-
cultural produce, by the pound avoirdupois, the score of
20 lbs., the hundredweight of .1001bs., and the ton of
2,000 lbs. . .
-

MEDICAL PRACTITIONERS BILL.
'Mr. WALPOLE obtained leave to bring- in a bill to amend
the Medical Practitioners Act (21 and 22 "Vie. e. 90).

BURIAL ACTS AMENDMENT BILL.
Mr. HARDY obtained leave to bring in a bill to amend
the 23d section of the act 20 and 21 Vic., c. 81, relating tea
burials.

LUNATICS BILL.
Mr. WALPOLE obtained leave to bring in two bills for
amending the laws relating to lunatics in county and pri-
vate asylums.
These five bills were severally brought in and read a first
time.

The house adjourned at 20 minutes before one.

COUNTRY MARKETS;