which to embark their capital, and a guarantee that that territory would remain in their hands a sufficient number of years to develop its resources. The then Secretary of State, with much zeal, embraced the cause of the company, and settled that they should hold the territory assigned to them for 25 years, at the end of which the Government might purchase that joint-stock company at the price it bore in the London market. The Governor of Madras was ordered to assign them a portion of territory. The selection of the territory was made under the auspices of Sir Arthur Cotton, and everything went well until the money came to be raised. The noble Lord the present Secretary of State for India said-and that showed how ill-informed he still was-that 10 years ago everybody believed in 100 per cent profits from irrigation works. The people of London, however, at that time, did not believe in those profits, for when the money came to be raised there was a difficulty. But the Directors were equal to the emergency. The company persuaded the Secretary of State to give a guarantee for the first £1,000,000 they raised, telling him, of course, that that was the last call they would make upon him; and he gave them the guarantee, not for 25 years, but in perpetuity. The consequence was that £50,000, less income tax, had been paid by the Government of India to those adventurers ever since; and it would continue to be paid until the crack of doom. In 1866 the first £1,000,000 was expended and a portion of the canal was made, amounting to the extent of 76 miles. The directors were then called on to find the money to go on with it, and they tried to sell fresh shares in the market, but nobody would buy them. They, therefore, went to the noble Lord the then Secretary of State (the Marquess of Ripon), and asked him for a fresh guarantee on £2,000,000 more; but the noble Marquess refused to entertain the application. He desired the directors to resign the work that they had so mismanaged, and offered to take it over with all its responsibilities. The directors declined, and after a little negotiation £600,000 was advanced from the public cash to finish the first section of the work as far as Cuddapah. The understanding come to was, that if the first section did not pay in 1870, when the additional £500,000 was spent, the work should be handed over to the Government. In 1870 the section was completed as far as Cuddapah but there were no receipts; and again the Government asked the directors to deliver it over with its engagements. The directors peremptorily refused. They took high ground. They said they would not be deprived of a work of so profitable a nature, and from that day to this, though it had not yielded one shilling of revenue, they had contrived to keep possession of the work. It was true they had refunded £220,000 of debentures; but then they borrowed £360,000 and mortgaged the Government works for that amount, paying back the £220,000 with that borrowed money. Nobody doubted that the work would ultimately become the property of the Government. It had not done so now, simply because the directors expected to be paid for relinquishing it; and when the Government got it, they would obtain a work which was destructive to the country through which it went. Without reckoning compound interest, it stood the Government in £3,000,000 of money, and it had not yielded a sixpence of net revenue in the present year. So much for this Toombuddra undertaking. He would now, in a few words, expose the Orissa work, which was a greater scandal than the Madras Irrigation, though that, perhaps, seemed impossible. He had all the papers with him, substantiating what he had to say, but he would not trouble the Committee with them. It, too, was originally made by a joint-stock company, who in 1868 were in a state of impecuniosity, while the work was perfectly unproductive. In their distress the company went to the Government and offered to sell it, and in 1868 he had in that House tried to prevent that purchase; but, of course, his observations were treated with contempt. It was purchased, in the year 1867, under a Liberal Government, and £1,048,000 was paid for it; a douceur of £24,000 being paid to the secretary of the company for his services in negotiating the sale, so delighted were the directors at their escape from responsibility. £1,250,000 sterling had since been laid out on the work and its extension. The capital was now £2,283,585, and the loss in working last year was £23,000. In a few years more, with interest upon this capital account, the cost of this work would stand, at the least, at £3,000,000 sterling. It might against carrying out works of this be said that those things were now unprofitable nature. Of course, the better managed under Lord North- Correspondent and Sir John Strachey brook; but he could show that the had their own way of making the works condition of some other of those under- profitable. They contended that if the takings of very recent origin were just people would not use the works, a beneas bad as that in Orissa. On these volence in the form of a poll tax must matters they sometimes learnt more from be levied on the districts through which well-authenticated letters in newspapers they passed. That was a scheme which than even from Secretaries of State. was seriously proposed by those gentleNo paper in London had correspondents men; and, so far as he was aware, the who were better informed about what was Marquess of Salisbury leant to it a good going on in India than The Times. It deal. But, be that as it might, he (Mr. was from a communication addressed to Smollett) had spent 30 years in India, and that journal that he would now quote. he knew that the people would rejoice to In The Times of the latter end of October, have water, if it were brought to them 1874, there appeared a letter dated the in a proper manner. If irrigation was 2nd of the same month from its Special endeavoured to be forced upon the people, Correspondent in Calcutta, which was they would openly resist so scandalous written with a view to bring to the notice an imposition. He had now done. of the English public the services and He had shown how, in matters of irrigathe opinions of Sir John Strachey, an tion, the money of the inhabitants of Indian official of high position and an India had been mercilessly squandered; advocate of public works, who had re- and if the exposure only effected some cently recorded a Minute upon that sub-good, the trouble which he had taken ject in the archives of the Government. The Times Correspondent, after speaking of Sir John Strachey as one of the ablest men who had been sent out to India, proceeded as follows: "From the foregoing Minute the readers of The Times will see that Sir John Strachey, while insisting that it is the duty of the Government to push on irrigation to the utmost extent, expresses a strong opinion that the present system, if it goes on long enough, must end in financial ruin. The last published accounts in India show the force of this. The total receipts from irrigation works in 1872-73 are stated to be £3,600 on an expenditure of £2,220,000. The last example of the same kind ". he (Mr. Smollett) would beg the particular attention of the Under Secretary of State to what followed 66 was the Agra Canal," which has just been opened. "It leaves the Jumna a little below Delhi. It runs through an extremely dry country. The cost of the canal is £900,000; it is a work of the greatest possible utility, although no one will use it, and it has just been opened to the public. Although the conditions under which the work has been undertaken are most favourable, the engineers report that the estimated result of the operations of this canal for the first five years will be a loss to Government know that this is far too sanguine an estimate." to make it would not have been in vain. The hon. Gentleman concluded by moving the Amendment. Amendment proposed, At the end of the Question, to add the words "and, in the opinion of the Committee, the Statement of Indian Finance now submitted is unsatisfactory, because the policy of the Goof borrowing large sums of money in each year, vernment of India is based upon the principle without reference to the income of the Country, in order to carry on, through Government agency, undertakings of a speculative character, and classed as 'extraordinary,' many of which, especially works of irrigation, past experience has proved to be unremunerative." (Mr. Smollett.) GENERAL SIR GEORGE BALFOUR said, he did not take up the same unfavourable idea which the hon. Member for Cambridge (Mr. Smollett) had placed before the House with regard to the state of the finances of India. He thought that, considering the nature of the excesses, we had no reason to despond, provided we kept an attentive eye upon the expenditure in future. No doubt, expenditure had kept pace with increased income, but it should be remembered that our expenditure had been swollen. The Correspondent went on to express by the year of Famine. In 19 years his astonishment that people should there had been 14 deficits and five shut their eyes to such facts. The surpluses; in the last three years the late lamented Governor General of Expenditure had exceeded the ReveIndia (Lord Mayo) earnestly protested nue by £10,000,000, which included of £200,000. And I have the best reason to Mr. Smollett £6,300,000 on account of the Famine, | were political and commercial advanleaving £3,700,000, which could have tages in extending its cultivation in been saved by diminishing the expendi- Assam, as we should thus be brought ture on Public Works by £1,000,000 a- into contact with many millions of the year. The Revenue had risen from best educated and most enterprizing race £33,330,000 in 1857 to £50,000,000 at in China, besides giving employment to the present time. Although the Debt had many additional thousands of our counbeen doubled, being about £60,000,000 trymen. The military expenditure of in 1856-7 and £120,000,000 now, the in- India was, he thought, capable of conterest had not risen proportionately, for siderable reduction. At present India was it was £3,000,000 then and £5,100,000 unfairly charged with much of the exnow, which showed that we were able to penditure that went on in this country. borrow money on more easy terms than He had expected that the Committee the East India Company. He attached which sat on Indian Finance would have the greatest importance to accuracy in effected a diminution of those charges, the accounts, which had been much and he regretted that the inquiry, which improved of late years, but still needed it was understood would be made by a appendices to exhibit details which were Special Commission, had not already led needed for clearness. The expenditure to a very considerable reduction of exon Public Works scarcely received the penditure. There was another point to attention its importance demanded. On which he took exception, and that was Ordinary, Extraordinary, and other pro- the growth of the expenditure upon milivincial works the annual expenditure tary transports. That was an expenditure was £10,000,000, and the accounts ought which was growing every year, and for to be so clear that the hon. Member for which there was no reason whatever. Cambridge could understand them. He The building of these vessels was a great was glad to hear that the Government wrong to India, which did not need of India intended carefully to consider transports, seeing that the trade supthe question of the salt duty, for there plied first-class vessels. He should have was no branch of Indian affairs that liked to see the money which was more required looking into. For the so wasted expended in remunerative last 19 years the consumption of salt Public Works, or in a remission of the could hardly be said to have increased duty on salt. Then, again, there was in India, although the duty had risen the increased expenditure occasioned by from £2,000,000 to £6,000,000. No- the short-time service. He did not wish thing would bind the affections of the to discuss the merits of Lord Cardwell's Natives to England more than the total measure, but there had never been the abolition of the duty on salt. It would least difficulty in getting men to take take a long time before the Government service in India, and consequently the of India could part with a revenue of service in India did not need this in£6,000,000, but every reduction of this ducement to enlist. There was not a duty would be an immense benefit, and regiment in Aldershot which would not, nothing was more likely to extend com- if it had the offer, willingly go there merce between the Provinces of India to-morrow. The hon. Member for Camthan the freedom of salt from duty. It bridge had attacked the Madras Irrigawas a most important article of neces- tion works, but irrigation was a subject sity with the population, and by aiding upon which the hon. Member could the people with the means of conveying never be convinced or induced to change it through the country from Madras and his mind. Ought not the fact, that other places where it was largely manu- 18,000,000 acres of land which had not factured, a great and remunerative trade the benefit of irrigation did not produce might be established. The time might so much revenue as 2,000,000 acres that also come when Customs' duties might had water applied, to be convincing even cease, and it would be a noble thing to to the hon. Member for Cambridge? say that we had in India 3,000 miles of He did not deny that mistakes had been coast entirely free from Customs' duties. made in constructing these works, but It was also desirable to give every en- he believed that if an account were taken couragement to tea cultivation. In 10 of expenditure on the one hand and or 20 years Assam would become one of results on the other, it would be demonthe finest Provinces of India, and there strated that there was no just ground for the attack which the hon. Member had | maintained out of the revenues of that made against Irrigation Works. He country an inordinate body of Staff hoped the noble Lord, who might yet be officers: their name was legion; and advanced to a high position in India, although many of them were no doubt would go out and judge of those things men of great ability, still they were unfor himself. The hon. Member for Cam- employed men, and no Army could long bridge must be well aware that the irri- permit of men drawing large pay withgation works constructed in the Madras out giving any service for it. The noble Presidency since 1835 had almost en- Lord had told them that the Public tirely prevented those dreadful famines Works-on which they had expended which were formerly very frequent. The £11,000,000-were now yielding a surhon. Member could not have forgotten the plus revenue of £600,000, which was Famine of 1833, in which year he was equivalent to 5 per cent on the outlay. Secretary of the Board of Revenue. That was no doubt satisfactory; but if That famine cut off the largest portion the interest on the capital from the inof the people of Guntoor and extended ception of the works to the period at to Madras itself. Even in the neigh- which they became remunerative were bourhood of that capital the deaths were added to the outlay, the result would many. The roads were covered with the not look so satisfactory. Still, when they dead, the dying, and the emaciated. were called upon to spend £4,500,000 But that calamity was now impossible, annually upon Public Works, it was enfor the extended and improved works couraging to find that they had already had secured food for the people, and a system which was remunerative. He grass for the cattle; so that the cultiva- was afraid that the establishment at tion of the land, by the cattle so saved, Cooper's Hill, which was nothing else was certain, after the dearth had passed than a new Civil Service, would lead to away, and the rains had fallen. There the growth of another inordinate Staff, were still great openings for extension similar to that which existed in the of irrigation works. That noble work Army. He protested against a large on the Godavery, which Sir Arthur source of Indian Revenue - that of the Cotton planned and carried on, under import duties on cotton goods-being difficulties of the most formidable cha- surrendered by the Indian Government racter, would, in after years, make in obedience to a cry from the Manchesthe name of Arthur Cotton foremost ter manufacturers of this country, whose amongst the benefactors of India. If system of trade would not bear the light the time should come for our rule to of day. The chief cause of the growing cease, that work would remain as a monu- aversion of the Natives of India to ment of our beneficent sway. Manchester goods was the amount of adulteration. The Native cotton goods had always been superior to those manufactured in this country; and it was only their cheapness, coupled with some honesty of manufacture, that had given them a place in the Indian market. If, to replace the revenue so abandoned, it should become necessary to impose fresh taxation on the people of India, the Indian Government must be prepared for an outburst of indignation. He could not see how the Government of India could be carried on without imposing a moderate import duty on foreign manufactures. Free Trade doctrines were very wholesome in the hands of experts, he would admit; but in the hands of men who did not know how to apply them, they had in the Orissa Famine led to the loss of a million lives. MR. BECKETT-DENISON said, he entirely concurred in the eulogy which the noble Lord the Under Secretary of State for India had passed on the conduct of Lord Northbrook and his able assistants during the late Famine. The hon. Member for Cambridge (Mr. Smollett) was a little unjust in omitting from the list of those who deserved the thanks of the public for their conduct during the Indian famine, the hon. Member for Kirkcaldy (Sir George Campbell) and Sir Richard Temple. He had heard with great satisfaction that it was intended to abolish the inland customs, and he received as a good sign and a guarantee of our future security in that country, and as an important political indication the fact that the recent Government loan had been taken up largely by the native population of India. He regretted there should be General Sir George Balfour must be made moderate, and the lower it was made, the more people wanted it to be lower still. In fact, we seemed to be coming to a permanent settlement of the question. The Excise revenue of India was happily very slowly increas grounds, because they could not desire to encourage a great amount of drinking among the population. He thought the Customs revenue of India was doomed, and that they must make up their minds to find some substitute for it. The Customs duties yielded £2,500,000, nearly £1,000,000 of which was derived from cotton goods. Export duties on sugar and rice also contributed towards that revenue, and if the duty on cotton goods was abolished, the rest of the Customs revenue could hardly be maintained. Again, as to the measure which the noble Lord had indicated in regard to the salt duty; if that measure were adopted, no doubt there would be a con SIR GEORGE CAMPBELL said, he was unable to take the sanguine view of Indian finance which had been expressed by the noble Lord opposite (Lord George Hamilton) and other Members, at the same time that he could not share the extremely gloomy view of the hon. Mem-ing. That was a good thing on moral ber for Cambridge (Mr. Smollett). It had been the custom to talk of the prosperity of the Indian Revenue, but there was, it seemed to him, a great deal of misapprehension on the subject. A great many charges which used to be debited to Revenue were now kept separate as "Extraordinary Charges," a source, as it seemed to him, of some danger. In regard to some items, this system was justifiable but not so in regard to many others. Notwithstanding the separation of "Extraordinany Charges, the apparent surplus had been getting smaller, and this year it had nearly disappeared, having come down to £500,000, which was the smallest possible working surplus. If the ex-siderable reduction in that source of rependiture on works which were really unreproductive was added to the ordinary expenditure, he was afraid that, instead of a surplus, there would be a large deficit. The main items of Revenue were progressing very slowly. The opium revenue had increased greatly, but was not now increasing. It seemed as if we had reached the limit of our resources in regard to the production of opium. The production had of late fallen much short of the limit which the Government had sought to reach namely, 66,000 chests a-year, having only reached from 45,000 to 48,000, and although this had led to an increase in price, yet it was to be feared that raising the price might be killing the goose which laid the golden eggs, for it might lead to an increased production of opium in other countries. Of course, in touching on this subject, he spoke purely from the financial point of view. The opium revenue was most precarious. A war with China or a blight might ex-annuations, was nearly £17,000,000 per tinguish it. He agreed, therefore, with the noble Lord the Under Secretary of State, in thinking that it was desirable to render India independent of that revenue; but he confessed he saw, at present, no prospect of that result. As to the land revenue, there was very little likelihood that it would rapidly increase. The doctrine was becoming more and more prevalent that the land assessment venue. A comparison of the amounts raised during the last four years from the land revenue, the Excise, the Customs, and the salt duty showed that the increase under those heads had been very slow and gradual. On the other hand, they must be prepared for a considerable increase of charge. He was sure that the railways in which the Government had embarked, and which were mainly undertaken for political purposes, would not pay, and, considering the interest which had to be met on accumulated loans and the deficiency also on the guaranteed railways, it was inevitable that they should have a considerable addition to their expenditure. The charge for Law and Justice was increasing, and if they were to carry out the improvements incident to a modern civilization they must expect to pay for them. The net charge for the Army of India, including military works, barracks, and the cost for super annum. The number of their force was 180,000 men, and 10,000 officers, a very small number of men for so large a sum. No other so extensive a country was guarded by so small an army, and there could be no doubt that if political difficulties should arise that army would have to be largely increased. Again, it was impossible to put out of sight the fact that famines occurred from time to |