Government repudiates its liabilities, which, of course, is impossible. Such being the position of affairs, the Secretary of State must find ways and means to meet this Home liability. Of course, prima facie, nothing can be more objectionable than getting out of his difficulties by constantly borrowing in this country, because there can be little doubt that one of the main causes of the present condition of things was the system, adopted some years ago, of always borrowing in London for the benefit of the Indian Government. Unfortunately, owing to the peculiar system of accounts adopted, all the liability for the railways was excluded from the capital expenditure, and it was not until a very short time back that this House and the public became aware how great a debt the Indian Government had in England. If, then, it be objectionable, permanently to increase the debt by borrowing in England, I think it may very fairly be asked why the Government ask leave to raise a loan of £5,000,000 in this country? My hon. Friend the Member for Hackney (Mr. Fawcett) made a very unjust criticism upon the proposal, when he called it a proposal to speculate in silver. Now, Sir, so far from the Secretary of State for India having any wish to speculate in silver, I am quite sure I am only expressing the wish of everybody in the Office, when I say that their wish is to have nothing whatever to do with silver. Unfortunately, the Secretary of State, from the exigencies of his position, is the largest seller of silver in the world, and he is obliged to force his silver on the market, whether it is wanted or not. Now, the silver market is like an individual-it has got a digestion, and it can assimilate a certain amount of food. But, if you overload its digestion, like an individual, also, it has a fit of indigestion, and then it cannot assimilate the amount that it could before. I think there are indications that the exchange will improve. I saw a statement, the other day, in the newspapers, and it has not been since contradicted, that there is a complete failure of the Italian silk crop, and that the French crop has been materially affected. In the year 1876 there was a similar failure in the silk crop, and the result, though the House will hardly believe so incredible a statement, is that it made the exchanges rise 20 per cent. If there

be this failure of the European silk crop, there will be an increased demand for Eastern silk, and that cannot fail to engender an increased demand for silver. and a rise in the exchanges. Suppose, then, by a judicious use of this loan of £5,000,000, though I hope the Secretary of State for India will only find it necessary to use a part of it, we are able to raise the price of the rupee. It by no means follows, although you may increase the permanent liability of the Indian Government in England, that therefore you are causing a larger number of rupees to be remitted from there. If, through the use of this loan, silver rises a penny in the rupee, that is a gain of 4 per cent, and upon a payment of £15,000,000, taking the rupee at 28., it is a gain of £600,000; while if the Indian Government were to spend the whole of this loan, which is most improbable, it will only add permanently to the annual liability of India the sum of £200,000. What we have to consider to-night is not so much the net amount of pounds sterling which have to be paid, as the number of rupees which the Indian Government will have to get to England to meet these payments. Of course, the House may say, although I can hardly believe it under the circumstances, that it does not think it desirable that the Secretary of State for India should have any borrowing powers. If it does that, it will have the effect of forcing him to get home an enormous amount of silver from India. I read only the other day a letter in The Economist, written by an Indian merchant, which expresses so well what the position of the Secretary of State for India is with regard to these Bills, that I will just read two sentences—

those who trade to the countries where silver is the standard of value; but what is absolutely ruinous to the trade are these constant fluctuations up and down, because they render unstable the standard of value, which is the basis of calculation of the profits of the individual. I hope, if it was necessary to make out any case after the speech of my hon. Friend, that I have made out a case which will justify the House in giving its assent to this loan. The course of treatment which we are adopting very much resembles that course of medicine known as homoeopathy, which, by giving the patient infinitesimal doses of the poison from which he is suffering, finally ejects it from the system altogether. Perhaps I may be permitted also to say a few words with regard to Indian finance. Undoubtedly the Resolution withdrawn last night which commenced with these words, This House views with apprehension the condition of Indian finance,' did give expression to a feeling of inquietude which it would be very foolish of me to ignore. One may very fairly ask-"What is the cause of that uneasi ness?"

66

It is not caused, as was said last night, by the hon. Member for Orkney (Mr. Laing), by any falling off in the Indian Revenues. Figures show that the Revenue, under seven years of extraordinary pressure, remain firm. Eliminating all disturbing influences, the taxes, which, seven years ago, brought in a certain sum, bring in now a larger sum. Neither can it be found in an increase of the ordinary Expenditure. I can show that there is very little increase in the Civil and Military Expenditure. Excluding the war in Afghanistan, there was no considerable increase in the Military Expenditure, and what increase there is was due almost exclusively to changes at home, in consequence of alterations in the terms on which men are enlisted. If, then, these apprehensions were not on account either of a great diminution of income or a great increase in Expenditure, what is the cause of it? I think the cause is that our Government, from the time it came into Office up to the present time, has been subjected to an almost unparalleled pressure. I can illustrate how enormous the strain has been by giving one set of figures. The Expenditure over and Lord George Hamilton

above the ordinary Expenditure of India, for which the Indian Government have had during the past seven years to find Ways and Means, taking the rupee at the ordinary rate of 28., amounts to the enormous sum of upwards of £57,000,000. The items are £2,600,000 for the war in Afghanistan. That is an expenditure for which, no doubt, Her Majesty's Government are responsible, and they are quite ready to defend their action. The other items are £16,000,000 incurred on behalf of Famines, £28,700,000 incurred for Public Works, which, whether the system is right or wrong, is a system that was in existence when we came into Office, and £9,700,000 loss by exchange. I arrive at this last item by taking the average loss on exchange to India during the seven preceding years, and during the seven years we have been in Office, and the sum lost in the last seven years exceeds that lost in the first period by £2,700,000. Now, how has that £57,000,000 of exceptional Expenditure been met? It is very frequently said that the India Office takes a very optimistic view of Indian finance; but I think I may say in regard to myself and my hon. Friend that no figure or fact ever set by us before the House has been disputed. Nor do I think that even in my most sanguine mood I should ever have ventured to predict that India, during seven years of such extraordinary depreciation, would be able to meet so large a proportion of the charges out of her ordinary Revenue. Now, how has this amount been met? In three ways. By loans, by the reduction of cash balances, and by payments out of ordinary Revenue. The increase in loans during this seven years has been £33,400,000. There has been a decrease in the cash balances of £8,000,000, but, of that, £4,000,000 to municipalities; so that that makes a total, with the loans, of £37,400,000. Therefore, during these seven years of extraordinary depression, the Revenues of India have found very nearly £20,000,000 to meet the extraordinary charges. From these figures we may draw one very safe conclusion. If you could altogether eliminate from consideration these abnormal charges, no doubt the prospects of Indian finance would be most flourishing. If, on the other hand, every seven years these enormous charges are to be im

posed upon the Indian Revenues, and we are to be required to find Ways and Means to the amount of £57,000,000 over and above the ordinary Expenditure, no words used in this House are sufficiently gloomy to depict the prospects of Indian finance. But I believe the right and correct view is that although these difficulties will from time to time occur, it is almost impossible for them to occur again simultaneously, as they have done. If we can only reduce our Expenditure, so as to increase that great margin between Expenditure and income which I have already mentioned, and if we are only fortunate enough in the future to have our one difficulty at a time to deal with, I believe, by thrifty and judicious administration of Indian finances, we can so increase the present margin between Revenue and Expenditure, that in a very short time those who now use such strong and gloomy language concerning the state of our finance will be the first to laugh at their own fears.

Motion made, and Question proposed, "That the Debate be now adjourned." (Mr. J. K. Cross.)

THE CHANCELLOR OF THE EXCHEQUER said, the arrangement was that the debate should be taken on the Motion that Mr. Speaker do leave the Chair, and that if it lasted more than two nights, that the Resolutions should be passed, and the debate resumed at another stage of the proceedings. He hoped the House would permit that arrangement to stand, and the Vote for the loan to be taken now. The Government, of course, would feel bound, on the second reading of the Bill, for instance, if that were convenient, to put that stage of the Bill in such a position as would give full opportunities for further discussion.

MR. GLADSTONE, if he understood the Chancellor of the Exchequer rightly, believed what was of importance was to get through the first stage of the Loan Bill, and that the passing of the Budget Resolution was a matter of form of no practical importance. Unfortunately, they had not had two full nights' debate; and, under the circumstances, he thought the most convenient course would be that his debate should continue on a future night, but that the Government should be allowed at once to take the first stage

of their Loan Bill. Otherwise, those who had already spoken would be able to speak again; while, as to the Under Secretary of State for India, he was sure the House would do in his case what it had not unfrequently done before, and permit him again to address it on matters arising in the debate.

MR. E. STANHOPE said, that, after the expression of the views entertained by the right hon. Gentleman the Member for Greenwich, which seemed to be generally shared by the House, the Chancellor of the Exchequer would be prepared to adopt the course which he suggested. It would, therefore, be understood that the debate going into Committee on the East India Accounts would be postponed to a future day, and that the Government should now be allowed to take the Resolution on the East India Loans Bill.

on

MR. FAWCETT, said. it would be very convenient for hon. Members if the Under Secretary of State for India, when he came to reply, would explain more explicitly what was to be the nature of the Commission of Inquiry into the state of the Indian Army which he proposed to appoint. Some persons thought it was to be a Commission in India, others said it would be a mere departmental inquiry, while others indulged the hope that it was to be a Commission not merely to inquire into departmental questions, but into all questions of military organization. Without such an inquiry, indeed, any attempt to reduce military expenditure would be perfectly ineffectual.

MR. GOSCHEN wished to urge upon the right hon. Gentleman the extreme importance of resuming the debate at the earliest possible date. The attention of the whole mercantile world, both in England and in India, was fixed upon the very serious issues raised in regard to the silver question. It was of the utmost importance that this question of the bearing of the depreciation of silver upon the Revenues of India should be discussed at the earliest possible moment, in order that no hopes might be raised which afterwards were frustated by the impracticability of the schemes proposed. This question of silver must be argued out; and as he was the Chairman of the Committee which considered this question two years ago, and as he also represented this country at the Conferenco [Second Night.]

INTOXICATING LIQUORS (IRELAND) BILL.

THE ADJOURNED DEBATE.

MR. CALLAN said, that the hon. and learned Member (Mr. Sullivan), who had charge of the Bill had asserted that, unless he could move the second reading at an early day, he should move to discharge the Bill. He found that the hon. and learned Member had not put in an appearance, nor had he given any instructions on the subject. Under those circumstances, he (Mr. Callan) did not feel justified in moving that the Order be discharged; but he assured the House that if the Order was postponed until Monday, and the hon. and learned Member then did not move its discharge, he himself would do so.

MR. SPEAKER said, that in the event of no day being fixed for the adjourned debate it became a dropped Order.

COMMON LAW PROCEDURE AND

JUDICATURE ACTS AMENDMENT BILL. (Mr. Waddy, Mr. Wheelhouse, Mr. Ridley.) [BILL 181.] SECOND READING. Order for Second Reading read. MR. WADDY, in moving that the Bill be now read a second time, said, it had been submitted to the Attorney General, and had received his sanction. With the exception of some clauses at the end, which had reference to a matter of procedure, the Bill proposed simply to extend the powers of the official Referees, by giving them the opportunity of doing work which at present they were unable to do, and to prevent their getting into difficulties by conflicts of jurisdiction.

Motion made, and Question proposed, "That the Bill be now read a second time." (Mr. Waddy.)

MR. HERSCHELL did not know whether the Attorney General had given his careful attention to the Bill; but, for his part, he had considerable doubts

as to the correctness of its principle. Instead of referring a matter to the Referee to decide, this Bill proposed to refer a case to him for decision once for all. He thought it was far preferable to adopt the procedure instituted by the Judicature Acts, and to send a matter to the Referee to report. He did not think it was at all an improvement to enable a Judge or the Court to refer a case to the Referee for him to decide as arbitrator. That should only be done by consent of the parties, as at present.

THE ATTORNEY GENERAL (Sir JOHN HOLKER) thought the principle of the Bill was one which ought to be approved. It was at first the opinion that under the Judicature Acts a Referee could deal with the whole matter; but recent decisions had shown that that was not so, and that the Referee's power was very considerably defined and limited. For his part, where the parties to the action consented, and where the Court thought it right that the Referee should have full power to decide the whole matter, and how the costs should go, he could see no objection to such a rule. In his humble opinion, if such a provision were passed into law, it would render the Referees a great deal more useful than they were now, and would induce parties to go before them much more frequently than was at present the case. There were other provisions, with regard to giving bankers' notes in evidence, which he had not very carefully considered, and therefore he reserved to himself the right to consider these in

Committee.

Motion agreed to.

Bill read a second time, and committed for Monday 9th June.

COSTS TAXATION (HOUSE OF COM-
MONS) BILL-[BILL 190.]
(Mr. Raikes, Mr. Mowbray.)
COMMITTEE.

Order for Committee read.

Motion made, and Question proposed, "That Mr. Speaker do now leave the Chair."-(Mr. Raikes.)

MR. W. H. JAMES moved the adjournment of the debate till after Whitsuntide. The Bill was only read a second time the night before; and though