which the subject of Indian finance had recently evoked, that no one who had ever occupied the post which he had the honour to hold deserved more the consideration and indulgence of the House. But whatever might be about to happen in the course of the debate, he felt it to be his duty, in the interests of India, to make as clear and as impartial a Statement as he could, even if, in so doing, he should have to trespass for some considerable time upon that indulgence. No subject was more commonly discussed in the debates of last year than the difficulty which some hon. Members experienced in consequence of the changes that had taken place in the form of the Revenue accounts. At that time he had pointed out that these changes had been adopted in consequence of representations made in the House at different times as to the desirability of assimilating, as far as possible, the form of the Indian to that of the English accounts. It was, however, quite impossible to deny that there was a great deal of force in the arguments of some hon. Members; and, therefore, he had endeavoured to prepare a Statement in accordance with their views. And before leaving the subject of the forms of accounts, he would remark that the India Revenue accounts were, as usual, converted in accordance with the conventional system of taking 10 rupees to the pound. The main reason for this was convenience. Indeed, it would scarcely be possible in any other way to make the accounts really intelligible. It would, of course, be open to the Government to convert the accounts at the rate of exchange of the year; but that would prevent any possibility of comparison, and would cause great difficulty in the presentation of Estimates for a coming year, as the rate of exchange itself would be a mere guess. It would, also, be productive of inconvenience in other ways for instance, if the Government should want to convey to the House a clear idea of the salary of a member of the Council, or other official, such salary would necessarily appear in varying amounts, whereas they all knew it was really a fixed payment in gold, quite independent of the rate of exchange.

He now came to the figures which it was his duty to lay before the House for the three years under review. The

accounts for 1877-8 showed a gross Revenue of £58,969,300, and a gross Expenditure of £62,512,400, leaving a deficit of £3,543,100. This result, as the House was aware, was mainly due to the famine in Southern India. It approximated so closely to the regular Estimate which was given last year that there was no need for him to trouble the House by dwelling upon the details.

The figures for 1878-9, as set out in the regular Estimates, showed a considerable increase on both sides of the account. As he explained last year, this was mainly due to the incorporation into the general accounts of provincial income and expenditure amounting to about £2,000,000, and on the Revenue side, also, to the proceeds of the new taxation imposed last year. The gross Revenue was accordingly taken at £64,687,000, and the gross Expenditure at £63,236,000, leaving a surplus of £1,451,000. When it was remembered that, in addition to the expenditure which he anticipated last year, they had had an enormously increased loss by exchange, and had paid £670,000 on account of the war in Afghanistan, this result did not compare unfavourably with that which was predicted last year, or with the Estimate which he gave in December last, based upon such information as the Government then had. It was then calculated that, after payment of the war charges of the year, the surplus would not exceed the sum of £600,000. The real surplus had turned out to be £1,451,000.

The finances of India had been terribly affected by the recent famine. The direct loss of Revenue, owing to this cause, was estimated at about £9,400,000, in addition to the loans to Native States and the cost of a railway constructed as a famine relief work. Altogether, the Government of India believed that the disbursements necessitated by the famine amounted to no less than £13,000,000, the loss to the country being still greater. From Mysore and Madras, in which parts of the country the famine had made such terrible havoc among the people, the Government had, he was glad to say, received the most conclusive testimony of the great good effected by the charitable funds so largely subscribed in this. country. Houses had been restored, thousands of horses had been given or let on hire, seed had been provided, and

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by that House, and extend the limits of exemption to all those portions of the duties that were distinctly protective. The Government of India chose the latter course, and what had happened since? A discussion had taken place in that House, and the course determined upon by the Government of India had been entirely approved by a vast majority. Whatever objection might be made, either in reference to the merits of the course pursued or to the mode in which it had been carried out, he was perfectly satisfied that the Governor General of India would not have sanctioned that course except in the belief that it was the best, under all the circumstances, for the interests of India.

He came now to the Budget of the year. Including, then, the whole of the war expenditure which could at present be in any way foreseen, but excluding, as he had throughout done, the capital expenditure upon productive Public Works, the figures for 1879-80 were as follows:-The gross Revenue was taken at £64,562,000, the gross Expenditure at £65,917,000; or, according to the calculation of net income and expenditure which had been placed in the hands of hon. Members, the net Revenue amounted to £43,623,100, and the net charges to £44,978, 100, leaving a deficit for the year of £1,355,000. But if the Bill which his right hon. Friend the Chancellor of the Exchequer would introduce for the advance of £2,000,000 from the Imperial Exchequer became law, there would remain in hand a sum of £600,000 to meet any contingencies which might arise. Before he proceeded to attempt any general view of the financial position of India, it was right that he should call attention to the changes in some of the items of Revenue and Expenditure which the tables recently distributed would enable any hon. Member to follow as he traced them during the three years under review. Some of the principal variations which were to be observed were due to the great disturbing element of the famine in Southern India and the scarcity which prevailed elsewhere. The net proceeds of land revenue, for instance, were abnormally depressed in 1877-8, and they were largely swollen in the intermediate year by the arrears which had been collected in Madras to an extent beyond expectation. Although a small amount of

arrears had still to come in, the revenue under that head was almost restored to its normal condition. In the same way, the drought in Upper India seriously affected the proceeds from the Forests and from Excise; but under both those heads some improvement was expected this year. The receipts from Customs were more difficult of comparison, because of the changes in taxation and the reforms in the import tariff. Last year, mainly by the abolition of the sugar duties, but also by striking out of the tariff articles which yielded only an insignificant amount, and certain coarse cotton goods, revenue was sacrificed to the extent of £232,000. This year the exemptions from the protective import duty of all cotton goods containing no yarn finer than 30's and the changes in the tariff valuations involved a loss of £192,000, making a total of £424,000. In spite of this, and also of the very great commercial depression which had existed, some recovery had taken place in the Revenue. The net receipts from opium_showed an extraordinary fluctuation. In 1878-9, they exceeded the estimate by no less than £1,584,000. In consequence of the abundant crop of 1876-7 the stock in hand in 1877-8 was very large. Owing to a reduction of the payments to the cultivators and a failure of the crop, the charges were considerably less; but the saving appeared in the accounts of 1878-9. It was altogether an exceptional year, and the Estimates this year, though very much lower, showed, when compared with ordinary years, the expectation of more than the average receipts. The new taxation recently imposed, and which could be traced in the accounts, partly under the head of assessed taxes and partly under that of provincial rates, was expected to bring in this year about £1,300,000; and there would still remain for future years a small addition for a portion of the famine cess in the North-Western Provinces, which had not yet been levied.

The salt revenue showed only a very slight increase. The rise which was to be noticed last year, as compared with 1877-8, was due partly to the rectification of an erroneous procedure in the accounts from Madras, and partly to the fact that in the earlier year traders held back in the expectation of the reduction of duty, which did, in fact, take place a few months later. The revenue [First Night.]

was now in its normal condition, the recent reforms in the salt duties having produced no particular effect upon the net proceeds. But, even at the risk of keeping the House from subjects of more general interest, he was bound, in justice to the Government of India, to explain what had recently happened with respect to these duties. Last year, he had described at some length the various steps in the process of equalization, and showed how the great and scandalous barrier of the Inland Customs Line-at one time 2,300 miles in length-might very shortly, in consequence of the reforms which had been effected, be altogether dispensed with. This line virtually ceased to exist on the 1st of April last, with the exception of the Trans-Indus section, about 400 miles in length, which it would be necessary to maintain for a short time. The accomplishment of that great reform, accompanied as it had been by the abolition of the sugar duties, which operated as protective duties against our own and in favour of foreign sugar, could not but be regarded as a great step in advance. It had enabled the Government to get rid of the vexatious system of search, of the transit duties upon salt, and, in the case of four of the Native States, of all other local transit duties also. Although the arrangements with the Native States, which had been rendered necessary in consequence, were not yet in perfect order, they were working more smoothly than could possibly have been expected. As the House was aware, it was no part of the original scheme for the equalization of the salt duties throughout India to add anything to the salt revenue. Nor was the increase of duty imposed in Southern India intended to form part of the Famine Insurance Fund. It was intended only to enable the Government to get rid of the Customs Line, while it was expected that the revenue would be the same as formerly. It was now thought that, after deducting the compensation payable to the Native States, and the loss of revenue ncurred by the remission of the sugar duties, the net results of the equalization were to cause a loss to the Exchequer of £48,000 a-year, at first, but that this would speedily be recovered by the increased consumption in many parts of British territory, and in some Native States. It was, of

Mr. E. Stanhope

course, too soon to form any confident opinion as to the effect of these measures upon consumption. Among the 130,000,000 of people to whom the duty and the cost of salt had been reduced, it was, naturally enough, expected to increase. And, accordingly, there had been a steady increase in the quantity consumed in Bengal. The amount which paid duty last year was larger than in any previous year. Among the 47,000,000 of people to whom the tax had been increased, it was necessary to watch the effect very carefully. The amount that paid duty in Madras and Bombay in 1877-8 was exceptionally large. Since that time the duty had been raised; but, in spite of the terrible losses of wealth and population which those districts had sustained, the consumption last year was only 3 per cent less than in 1877-8, and, with that exception, greater than in any previous year. As showing the effect of the spread of railways and other causes upon the price of salt, he might say that although in 10 years the duty on salt in Southern India had been increased 66 per cent, the price had only risen 20 per cent; and when hon. Members spoke of the oppressive nature of the tax, he thought they did not pay sufficient attention to the way in which it was collected-namely, by infinitesimal payments reaching over the whole year. It had been stated last year by a very high authority- he meant Lord Northbrook-that the tax which weighed least upon the people and caused least discontent was the salt tax. On the whole, he thought he might say that the great work of equalization had been accomplished without undue strain upon the people, and with remarkable success. It was an achievement of which Lord Lytton and his Government might very justly be proud.

Having detained the House, he was afraid, too long in considering some of the details of the Estimates, he had to ask its attention to a more general review of their financial position, and before coming to the special case of the present year it would tend to a clearer understanding if he dwelt for a moment upon the results of the last few years. He would take the five years ending with the 31st of March last, during which the present Government had been in Office, and the finances in India had