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kand tax alone, in consequence of a series of stupendous natural calamities. But this was not all. The value of the commodity, silver, in which all our revenue is paid, and which had remained pretty steady at nearly 61 pence per ounce in the London market from 1833 to 1872, fell during the late famine years of 1876 to 1878 to an average of about 52 pence per ounce. While, therefore, there have been enormous charges for recurring famines, and more recently for wars, with regard to each of which sources of expenditure the Finance Minister of India was equally powerless, he found himself at the same moment denuded of many millions of revenue, and the value of the metal in which the remaining revenue was paid had lost 14 per cent. of its value in the market of the world. I cannot recall to memory such an overwhelming combination of adverse circumstances, in the financial history of any other country. Yet the Finance Minister of India has dealt with these unparalleled difficulties in such a manner that the Indian public debt stands as high as ever in the public confidence in England; and the Indian currency notes have not fallen a hundredth per cent. below par in the native bazaars of India. Mistakes may have been made in the details of this memorable campaign against famine and deficit, as we are told they have been made in the details of our operations in Afghanistan. But when I look at the net results, and consider how the public credit of India has emerged from the strain which has been placed upon it, I think that the Finance Minister, Sir John Strachey, merits, equally with our generals in the other campaign, the gratitude of the British nation.

The main difficulty in understanding Indian accounts arises from the efforts which have been made to present those accounts in the form most easily intelligible to the English people. The East India Company was a great merchant and manufacturer, and did its bookkeeping on a mercantile model. After India passed in 1858 to the Crown, rapid changes were introduced into the Indian accounts, with a view to exhibiting them on the same method as our English public accounts. A principal feature in these changes was the adoption of a system which England had copied, in some measure, from Francea system which is associated with the Parliamentary labours of Sir John Bowring, and with his previous services as a Special Commissioner. Under the old Indian system, the cost of collecting any branch of the revenue was more or less rigidly deducted from the proceeds, and only the net result was shown in the account. In the same way, any receipts under a certain heading of expenditure were deducted from the total expenditure under that heading, and only the Det outlay was shown. Under the new system, the whole gross collections of revenue, and the whole gross expenditure, of whatever sort, are shown in the account. Thus, if the gross outlay on beer for the British troops in India amounted to 300,000l., and if the soldiers paid at the canteens 250,000l. for the beer which they drank; the

50,000l. per annum. Under the present system it would appear as 300,oool. per annum, while the sum of 250,000l. would appear in the revenue account as a military receipt. This change was carried out principally between 1859 and 1864.

The effect of this change is constantly lost sight of by English speakers and writers on Indian finance. One of its first results was to vitiate any comparison of the returns of revenue and expenditure, subsequent to the change, with similar returns for periods before the change. Distinguished English statesmen are thus led, from the form of our Indian accounts, into serious errors. An ex-Minister of the Crown, whose name will go down honoured to posterity as the introducer of our system of national education in England, is reported to have said the other day that Indian taxation had been run up in less than forty years from 20 millions to 62 millions sterling. If this statement, which Mr. Forster quite fairly derived from the Parliamentary Indian Abstract, represented the real facts, I would join with the Leeds audience who raised a generous cry of “Shame' at the idea of such burdens being imposed upon the Indian people. But, fortunately, that statement does not represent the facts, as I shall now show.

Without pretending to any rigid accuracy of definition, we may say that the object of national accounts is to show the amount expended upon all charges connected with the government of a country, together with the headings under which that amount is raised, and the balance. But in India the Government is the only capitalist, and, indeed, the only corporate body possessing sufficient credit to enable it to undertake industrial works on a large scale. It thus results that, in addition to its proper business of governing the country, it has also to conduct several vast mercantile concerns. The Indian Government is the largest landed proprietor in the world, and last year it derived 20 millions sterling from this source.

The Indian Government is the greatest manufacturer in the world, and last year it derived over 9 millions sterling from the sale of its opium. The Indian Government is the greatest water-company in the world, and last year it derived close on a million sterling from its irrigation and ordinary public works.' The Indian Government is the greatest railway owner and railway manager in the world, and last year it derived from this source over 6} millions sterling. In these and the following statements I give the gross amounts as shown in the Finance and Revenue Accounts, printed by order of Parliament.

The above are a few of the great mercantile occupations of the Indian Government in addition to its regular business of governing. But the Indian Government is also a great banker, and received last year half a million of interest; a great life insurance and annuity company, in which capacity its receipts last year exceeded half a million sterling; a great exchange broker, under which head over half a million sterling is entered in its revenue returns as gains (its

the peace among foreign or feudatory States, who pay it three-quarters of a million in tribute ; and a great retailer of beer to the British soldier and a salesman of military stores, which items contribute nearly a million to its revenue accounts.

The list is not exhausted, but I am afraid that your patience must be, and I shall not weary you with a further enumeration. The result is that the Parliamentary accounts of the Indian Government show the revenue and expenditure not only as regards its business of governing, but also of a great many other businesses which the Indian Government conducts. Every rupee paid for a railway ticket is entered as public revenue ; every rupee paid for canal water is thus entered; every rupee paid for the purchase of a Government annuity or pension is thus entered; so also is every rupee paid for canal transit, or for a parcel by bullock-train, or for an ounce of cinchona alkaloids, or for a smoke of Patna opium by a Chinaman in Shanghai, or for a quart of beer at the canteen at Aden. In like manner, the public expenditure of India is saddled with a vast number of charges which have nothing to do with the cost of governing. Every railway sleeper that requires to be renewed, every engine boiler that has to be mended, every leakage in a river embankment or a canal lock that needs to be stopped, together with the whole outlay at our opium factories, and a hundred other charges which are equally unconnected with the cost of governing the country, are entered in the Indian Expenditure Accounts.

It thus results that anyone who takes the total revenue for any year obtains no accurate idea of the amount of taxation levied from the people ; and no one who takes the total expenditure for any year obtains any correct idea of the actual charge of governing the country. We have not yet received the actual accounts for the present year, but the actual accounts, printed by order of Parliament, for last year, 1878, show that the whole taxation taken from the people of India, including the land revenue and all other receipts of the nature of taxation, amounted in reality to only 35 millions sterling. The balance between this sum and the gross nominal revenue, which stood at nearly 59 millions in 1878, is made up of items connected with the vast mercantile undertakings of the Indian Government, and of other sums, not one rupee of which was taken as taxation. Of the 59 millions of gross nominal revenue last year, 35 millions were of the nature of taxation levied from the Indian people, and 24 millions were not of the nature of taxation levied from the Indian people. A comparison such as Mr. Forster's at Leeds, therefore, should have been not as between 20 millions of taxation in 1840, and the gross 59 millions of revenuē in 1878, but as between about 18 or 20 millions of taxation in 1840, and 35 millions of taxation in 1878.

Even this, however, does not fairly state the case. For, owing to the changes in keeping the accounts, the net revenues are shown in the earlier year, while the gross revenues are shown in the later one. I

50,000l. per annum. Under the present system it would appear as 300,oool. per annum, while the sum of 250,000l. would appear in the revenue account as a military receipt. This change was carried out principally between 1859 and 1864.

The effect of this change is constantly lost sight of by English speakers and writers on Indian finance. One of its first results was to vitiate any comparison of the returns of revenue and expenditure, subsequent to the change, with similar returns for periods before the change. Distinguished English statesmen are thus led, from the form of our Indian accounts, into serious errors. An ex-Minister of the Crown, whose name will go down honoured to posterity as the introducer of our system of national education in England, is reported to have said the other day that Indian taxation had been run up in less than forty years from 20 millions to 62 millions sterling. If this statement, which Mr. Forster quite fairly derived from the Parliamentary Indian Abstract, represented the real facts, I would join with the Leeds audience who raised a generous cry of • Shame' at the idea of such burdens being imposed upon the Indian people. But, fortunately, that statement does not represent the facts, as I shall now show.

Without pretending to any rigid accuracy of definition, we may say that the object of national accounts is to show the amount expended upon all charges connected with the government of a country, together with the headings under which that amount is raised, and the balance. But in India the Government is the only capitalist, and, indeed, the only corporate body possessing sufficient credit to enable it to undertake industrial works on a large scale. It thus results that, in addition to its proper business of governing the country, it has also to conduct several vast mercantile concerns. The Indian Government is the largest landed proprietor in the world, and last year it derived 20 millions sterling from this source. The Indian Government is the greatest manufacturer in the world, and last year it derived over 9 millions sterling from the sale of its opium. The Indian Government is the greatest water-company in the world, and last year it derived close on a million sterling from its irrigation and

ordinary public works.' The Indian Government is the greatest railway owner and railway manager in the world, and last year it derived from this source over 64 millions sterling. In these and the following statements I give the gross amounts as shown in the Finance and Revenue Accounts, printed by order of Parliament.

The above are a few of the great mercantile occupations of the Indian Government in addition to its regular business of governing. But the Indian Government is also a great banker, and received last year half a million of interest; a great life insurance and annuity company, in which capacity its receipts last year exceeded half a million sterling; a great exchange broker, under which head over half a million sterling is entered in its revenue returns as gains (its the peace among foreign or feudatory States, who pay it three-quarters of a million in tribute ; and a great retailer of beer to the British soldier and a salesman of military stores, which items contribute Dearly a million to its revenue accounts.

The list is not exhausted, but I am afraid that your patience must be, and I shall not weary you with a further enumeration. The result is that the Parliamentary accounts of the Indian Government show the revenue and expenditure not only as regards its business of governing, but also of a great many other businesses which the Indian Government conducts. Every rupee paid for a railway ticket iš entered as public revenue; every rupee paid for canal water is thus entered; every rupee paid for the purchase of a Government annuity or pension is thus entered; so also is every rupee paid for canal transit, or for a parcel by bullock-train, or for an ounce of cinchona alkaloids, or for a smoke of Patna opium by a Chinaman in Shanghai, or for a quart of beer at the canteen at Aden. In like manner, the public expenditure of India is saddled with a vast number of charges which have nothing to do with the cost of governing. Every railway sleeper that requires to be renewed, every engine boiler that has to be mended, every leakage in a river embankment or a canal lock that needs to be stopped, together with the whole outlay at our opium factories, and a hundred other charges which are equally unconnected with the cost of governing the country, are entered in the Indian Expenditure Accounts.

It thus results that anyone who takes the total revenue for any year obtains no accurate idea of the amount of taxation levied from the people; and no one who takes the total expenditure for any year obtains any correct idea of the actual charge of governing the country. We have not yet received the actual accounts for the present year, but the actual accounts, printed by order of Parliament, for last year, 1878, show that the whole taxation taken from the people of India, including the land revenue and all other receipts of the nature of taxation, amounted in reality to only 35 millions sterling. The balance between this sum and the gross nominal revenue, which stood at nearly 59 millions in 1878, is made up of items connected with the vast mercantile undertakings of the Indian Government, and of other sums, not one rupee of which was taken as taxation. Of the 59 millions of gross nominal revenue last year, 35 millions were of the nature of taxation levied from the Indian people, and 24 millions were not of the nature of taxation levied from the Indian people. A comparison such as Mr. Forster's at Leeds, therefore, should have been not as between 20 millions of taxation in 1840, and the gross 59 millions of revenue in 1878, but as between about 18 or 20 millions of taxation in 1840, and 35 millions of taxation in 1878.

Even this, however, does not fairly state the case. For, owing to the changes in keeping the accounts, the net revenues are shown in the earlier year, while the gross revenues are shown in the later one. I

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