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SOME ASPECTS OF INDIAN FINANCE.1

I

BELIEVE that reforms must before long take place in the ad

ministration of India. The Government of that country now finds itself in the presence of two new forces of tremendous power. British Rule in the East is confronted for the first time by a genuine public opinion in India, and at the same moment its acts are more and more closely scrutinised by public opinion in England. Two new sets of influences have thus been brought to bear upon the Indian Government -influences which, down to the time when India passed to the Crown, were scarcely felt, but which are every day more powerfully asserting themselves in the management of that country.

As regards the first of these new forces, native public opinion, we are but reaping what we have sown. We have planted schools and colleges over all the land. We must now be content to reckon with the educated critical intelligence which we ourselves have developed. We have nurtured the youth of India upon text-books filled with noble passages from Milton and Burke. We have now to deal with the aspirations which that free-born eloquence has inspired. We have held up as examples to the rising generation of Hindus, our Pyms and Hampdens and the heroes of British liberty. We have formed their ideal of public duty upon the model of the great constitutional statesmen whom Macaulay loved to paint. We have perpetually placed before their eyes our own free England as the pattern of a self-governed people, and we have inflamed their imaginations by the stirring words of the great political orators of our day.

The children whom we have trained in these ideas are now the grown men with whom the Indian Administration has to deal. I do not believe that a people, numbering one-sixth of the whole inbabitants of this globe, and whose aspirations have been nourished from their earliest youth on the strong food of English liberty, can be permanently denied a voice in the government of their country. I do not believe that races among whom we raise a gross revenue of 60 millions sterling, and ivto whom we have instilled the maxim of no taxation without representation as the fundamental right of a people, can be permanently excluded from a share in the management of their finances. I do not believe it practicable to curtail, for long, the right of the freest criticism on their rulers, to 200 millions of British subjects who have the speeches of Mr. Gladstone and Mr. Bright at this moment ringing in their ears. During seven centuries the Indian

1 An address delivered at Birmingham on the invitation of the Chamber of Commerce, December 12, 1879. The views set forth are the writer's own personal

races bore the yoke of successive invaders. They suffered in silence. Our State education in India, and the great examples of English history in time past, and of English public men in our own day, have taught the dumb to speak, and we can no longer ask them to remain dumb. It is as if you planted a palm-tree in a glass house, and watered and tended it till it grew to the roof, and then banded it over with iron girders to keep it from growing any higher. We have planted such a tree, the tree of political aspirations in India. We have watered it from the rivers of Western knowledge, we have thrown open the windows of its glass house, and let in the fresh breezes of English liberty to give vigour and nutriment to its sap. We have watched with pride its growth as the latest and fairest product of our national genius for Colonial rule. That tree has very nearly reached the roof. You may for a time keep it down with bands of iron, and so stunt it, and bring decay upon the tips of its leaves and distort the straightness of its stem. But unless you give free play to its growth, the day will come when either its top will burst through the roof, or you will have to cut down with sharp steel the fair tree which your own hands have planted. While there is still time, take off the roof.

The question of the representation of the Indian people must before long occupy the serious thoughts of the English nation. I find that a basis for such a system of representation is growing up silently, naturally, and unperceived, in our Indian Municipalities, Rural Unions, and District Boards. But if, as is sometimes loudly stated, our rule in India has been a series of crimes and blunders, little profitable to ourselves and disastrous to the Indian races, then I do not see how we can ever dare to grant a system of representation to India. My own inquiries into the results of our rule-inquiries conducted, I trust, with impartiality, and certainly under a very serious sense of responsibility—throughout the twelve provinces of India, have led me to a different conclusion. I, on the contrary, believe that the true history of British Rule in India has been such, that, when the timecomes, we can fearlessly render an account of it to the representatives of the Indian people. Therefore it is that elsewhere I have stated what the English have done for India, in order that I may, both now and hereafter, urge upon my countrymen what England has yet to do for the Indian people.

For the second of the two new forces with which the Indian Government has now to reckon, is public opinion at home. A vast power has insensibly passed into the hands of English constituencies, the power of minutely controlling a distant Asiatic Empire-an Empire with a population greater than that of all Europe, Russia excepted, and exactly double in number all the races which, according to Gibbon's famous estimate, obeyed Imperial Rome. Until 1858, the power of control was practically vested in two close corporations -the governing body in India, and the Court of Directors in London ; during

the last twenty years, it has passed more and more completely

Britain. Down to our own time, the British Government in India was the great trustee for the voiceless Indian races. Now it is the English nation itself which is the trustee for the Indian races. Unrepresented themselves, they have to trust to you to represent them, to defend their rights, and to guard them from wrong. It is, I think, the most solemn responsibility which ever descended on a nation. The purpose of this paper is to ask you to aid in more seriously discharging that responsibility than it has hitherto been discharged. England cannot do its duty by India, so long as the great body of Englishmen remains in contented ignorance regarding India. England cannot do its duty by India, if English public men allow themselves to deal with Indian questions from an English party point of view. In 1863, a great popular orator of our time, in an address to the Birmingham Chamber of Commerce, warned it, with reference to certain statements about India, not to accept the utterances of men who speak with the authority of a lofty position in this country, instead of with a knowledge of the Indian facts. The seasonable warning which Mr. Bright thus sounded, at the time when the responsibility for the government of India had lately passed into the hands of the British people, has to be repeated to-day. You cannot do well for India, you cannot deal justly with India, unless you yourselves will take some pains to understand India.

One of the Indian questions least understood in this country is the great question of Indian Finance. It forms at present the subject which, of all others, is of the most pressing and vital importance to India, the pivot on which the whole situation turns. I must, however, confine my remarks to only one or two of its many aspects. I propose to select the two for which I believe that England is in a special manner responsible, and in which she has at present a special pecuniary interest. I mean our Indian public accounts, and our Indian import duties.

But before entering on the discussion of systems, in respect to which

my

views will be found to be at variance with those now in vogue, permit me to premise one word. I hold that anyone who complicates this already most difficult subject by considerations connected with English party politics, does a most serious wrong to India. Before I conclude, you will find that I am no optimist regarding the existing system of Indian finance. But it is the system to which my strictures apply, not to the men who are labouring to make the best they can of it. When I read, the other day, the gazetted tbanks of the Lords and Commons to our brave army and their skilful commanders in Afghanistan, I thought of another and equally arduous campaign which has been going on in Indiaa campaign against deficit and famine. Since 1874, an entirely new charge has appeared in our Indian accounts, a charge which amounted to fourteen millions sterling between that year and 1878, for feeding a starving people. During the same years, the revenues were diminished, land 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 bad 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 net 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

Britain. Down to our own time, the British Government in India was the great trustee for the voiceless Indian races. Now it is the English nation itself which is the trustee for the Indian races. Unrepresented themselves, they have to trust to you to represent them, to defend their rights, and to guard them from wrong. It is, I think, the most solemn responsibility which ever descended on a nation. The purpose of this paper is to ask you to aid in more seriously discharging that responsibility than it has hitherto been discharged. England cannot do its duty by India, so long as the great body of Englishmen remains in contented ignorance regarding India. England cannot do its duty by India, if English public men allow themselves to deal with Indian questions from an English party point of view. In 1863, a great popular orator of our time, in an address to the Birmingham Chamber of Commerce, warned it, with reference to certain statements about India, not to accept the utterances of men who speak with the authority of a lofty position in this country, instead of with a knowledge of the Indian facts. The seasonable warning which Mr. Bright thus sounded, at the time when the responsibility for the government of India had lately passed into the hands of the British people, has to be repeated to-day. You cannot do well for India, you cannot deal justly with India, unless you yourselves will take some pains to understand India.

One of the Indian questions least understood in this country is the great question of Indian Finance. It forms at present the subject which, of all others, is of the most pressing and vital importance to India, the pivot on which the whole situation turns. I must, however, confine my remarks to only one or two of its many aspects. I propose to select the two for which I believe that England is in a special manner responsible, and in which she has at present a special pecuniary interest. I mean our Indian public accounts, and our Indian import duties.

But before entering on the discussion of systems, in respect to which my views will be found to be at variance with those now in vogue, permit me to premise one word. I hold that anyone who complicates this already most difficult subject by considerations connected with English party politics, does a most serious wrong to India. Before I conclude, you will find that I am no optimist regarding the existing system of Indian finance. But it is the system to which my strictures apply, not to the men who are labouring to make the best they can of it. When I read, the other day, the gazetted thanks of the Lords and Commons to our brave army and their skilful commanders in Afghanistan, I thought of another and equally arduous campaign which has been going on in Indiaa campaign against deficit and famine. Since 1874, an entirely new charge has appeared in our Indian accounts, a charge which amounted to fourteen millions sterling between that year and 1878, for feeding a starving people. During the same years, the revenues were diminished,

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