HL Deb 20 July 1900 vol 86 cc595-618

My Lords, I rise to call attention to the Report of the Royal Commission on Indian Expenditure; to ask Her Majesty's Government whether they propose to accept the recommendations of the Commission; and to move for copies of any correspondence between the Secretary of State for India in Council and the Treasury on the subject. The terms of reference to the Royal Commission were that they were to inquire into the administration and management of the military and civil expenditure incurred under the authority of the Secretary of State for India in Council, or of the Government of India, and the apportionment of charge between the Governments of the United Kingdom and of India for purposes in which both are interested. I, however, propose to confine my remarks to-day to the second head of the order of reference—namely, the apportionment of charge between the two Governments, and of that apportionment almost entirely to the charge on account of Her Majesty's forces serving in India. The history of this question is rather a sad one. For twenty-five years successive Governors General of India in Council and successive Secretaries of State for India in Council have protested against what they considered to be the excessive charge which has been put upon the revenues of India on account of Her Majesty's forces serving in that country, but with little or no result. They protested against these charges under two heads—firstly, on the pure arithmetical calculations upon which the charges were founded; and, secondly, on the ground that certain equitable considerations which ought to have been taken into account in settling how much India ought to pay had not been so taken into account. Twenty years ago I was asked to preside over a small Commission to inquire into the subject. I had the assistance of two able and distinguished public servants—Sir Thomas Seccombe, of the India Office, and Sir Ralph Knox, of the War Office—and the Government, in appointing that Commission, undoubtedly intended, judging from the words Mr. Stanhope used in the House of Commons, that we should settle the whole of this vexed question, after sitting ten years we determined unanimously what the charge to be paid by India should be on the arithmetical basis, and the result of our work was a reduction of the charges against India of £1,000,000 sterling. We then approached the question of the equitable considerations, and requested that we should know what was the opinion of the Government of India on the subject. We asked the noble Viscount the present Lord Privy Seal (Viscount Cross), who was then Secretary of State for India, to confer with India, and in March, 1890, my noble friend the Marquess of Lansdowne, who was then Governor General, sent an elaborate despatch home giving in full the opinions of the Government of India in respect to the equitable considerations which should be taken into account by the English Government in fixing these charges. I may mention, as somewhat important, that Lord Roberts was then Commander-in-Chief in India, and therefore the opinion of the Government of India came fortified by the opinion also of Lord Roberts, than whom no man is more capable of giving an opinion upon the question. That despatch was not communicated to the Commission over which I presided till the autumn of 1891, more than twelve months after its receipt in this country, and then it was sent accompanied by two letters—one from the Secretary of State for War stating that, although not objecting to the despatch being sent us for consideration, he was not prepared to accept our opinion upon the matter; and the other from the Treasury, stating that the Chancellor of the Exchequer was also not prepared to accept any opinion which the Commission might express on this despatch. That, of course, put any consideration by us of the equitable claims of India out of the question. I declined to proceed with the matter, and so far as my Commission was concerned the matter dropped. I had some communication at that time with the then Chancellor of the Exchequer, Mr. Goschen, and I suggested that a different kind of body should be formed to take these matters into consideration. There was, however, as your Lordships know, a change of Government in 1892, and nothing was done till 1895, when Sir Henry Fowler, then Secretary of State for India, appointed the Commission to the Report of which I now beg to call your Lordships' attention. That is the history of this question. I think it is unfortunate that Sir Henry Fowler, in appointing the Commission, overweighted it by adding the obligation to inquire into the whole question of Indian expenditure. They had to go into very minute statistics from the year 1860, and it is no wonder that they were two years taking evidence and throe years more making their Report. My noble friend Lord Welby has been blamed for the length of time which the Commission took in making their Report; but it must be remembered that they had to master all the details of the financial machinery of the Government of India in England and India, as well as the progress of expenditure during the last forty years. I now come to the Report of the Commission. There was a Report signed by a minority of three—Sir William Wedderburn, Bart., Mr. Dadabhai Naoroji, and Mr. W. S. Caine, which I have read with attention; but I will confine myself to the Report of the majority, and it is interesting to consider of whom the ten members composing it consisted. The Chairman, Lord Welby, is well known to your Lordships as having for a great many years occupied with great ability and distinction the office of Permanent Secretary of the Treasury, and has been rightly placed in the position he now occupies in your Lordships' House in consequence of that distinguished service. The next member was Mr. Leonard H. Courtney, who, as your Lordships know, was a very able and distinguished Secretary of the Treasury. The next was Mr. W. L. Jackson, who was also a very distinguished Secretary of the Treasury. The majority also included Sir E. W. Hamilton, at present a very high Treasury official; Sir Ralph Knox, Under Secretary for War; Sir James Peile, a distinguished member of the Indian Council; Sir Andrew Scoble, who was also connected with India; Mr. G. L. Ryder, a gentleman holding high office in the Treasury; and Mr. Buchanan and Mr. (now Sir) Robert Mowbray, two independent Members of Parliament. Your Lordships will see that no less than five out of the ten members who signed the Report of the Majority were either actually serving or had served in the Treasury; one was actually serving in the War Office; only two had any connection with India, and there were two independent Members of Parliament. It is to be noted that two members of the Commission, Sir Ralph Knox and Mr. Ryder, prepared the case of the War Office in answer to that which was laid before the Commission on the part of the Secretary of State for India in Council. Although the constitution of the Commission might be taken exception to on behalf of India, I take no such exception. I am perfectly satisfied with the impartiality and ability of those who served; but at any rate the English Government cannot say that there was any bias in favour of India in the composition of the Majority. Moreover, the two independent members of the Commission—Mr. Buchanan and Sir Robert Mowbray—made additional Reports, which were more favourable to India than the Report of the Majority. The main recommendations of the Report were, first, a plan for settling any questions which might in future arise as to the charge for troops, English or Indian, lent by either Government to the other. I will not go into the details of that plan, but it seem to me to be a very reasonable one, and likely to prevent the recurrence of those unfortunate disputes which have taken place between the two Governments on former occasions. There is, however, one difficulty in regard to this. It is easy enough to lay down certain cases in which there could be no direct and substantial interest to India on the one hand, or to this country on the other; but when it comes to be a question of doubt the point is, who is to decide the question? The noble Viscount opposite, Viscount Cross, when he was Secretary for India, and Sir Henry Fowler, when he held a similar position, came to the conclusion that the decision might be left to the two Governments respectively. But other high authorities, including, I believe, the noble Marquess the Prime Minister, think this would not be a proper arrangement. The second recommendation was a plan for settling smaller matters of dispute by arbitration before some judicial authority who would decide after hearing both sides. I am not particular as to what arrangement is made. What I do hope is that some plan based upon these two recommendations of the Commission will be accepted by the Government in order that these disputes may be put an end to. Your Lordships must know how unfortunate it has been that educated natives in India, who are studying these questions, should find that the Governors General, the Secretaries of State, and other high authorities have constantly asserted that India has been treated unjustly in these matters, and that no reasonable answer can be produced on the other side. The third recommendation of the Commission was that the arithmetical arrangement which was settled by the Commission over which I presided—£7 10s. per effective man—should be maintained. I trust that this will be accepted by the Government. The fourth subject is the equitable pleas raised on behalf of India, and these mainly depend on Lord Lansdowne's despatch of 25th March, 1890, to which I have referred. The summary of that despatch, given in Lord Lansdowne's evidence before the Commission, was that— Indian foreign policy is really determined by Imperial rather than by Indian considerations. and— The Indian Army serves for Imperial as well as for Indian purposes. As regards the first plea what better authority can there be than that of Lord Lansdowne in his despatch, which is signed also by Lord Roberts? He said— Millions of money have been spent on increasing the Army of India, on armaments and fortifications, to provide for the security of India, not against domestic enemies, or to prevent the incursions of the warlike people of adjoining countries, but to maintain the supremacy of British power in the East. The scope of all these great and costly measures reaches far beyond Indian limits, and the policy which dictates them is an Imperial policy. We claim, therefore, that in the maintenance of the British forces in this country a just and even liberal view should be taken of the charges which should legitimately be made against Indian revenues. That opinion, given on the authority of Lord Lansdowne and his Council, of which Lord Roberts was a member, seems to me to settle that matter, and I do not find in the Report of the Commission any sufficient answer to this plea. The second plea—namely, that the Indian Army serves for Imperial as well as for Indian purposes—it is hardly necessary to argue in view of the fact that Indian forces are now engaged in South Africa and in China. I hear that the Secretary of State for India stated to-day in another place that 20,000 men in all have left India either for the Cape of Good Hope or for China. The Commission suggested that these two-pleas should be considered when the capitation rate is revised, but they recommended in the meantime an immediate and substantial relief to the revenues of India of about £300,000 a year. Speaking for myself, I wish that the question could have been finally settled, but I think those who have been urging the question may be content by seeing their main arguments accepted. For my part I am quite ready to accept the Report of the Commission as I should any other arbitration, but with the reservation that India should receive proper consideration for the great delay in the settlement of her claims. I believe that in arbitrations the date for the payment of the award is usually fixed in regard to the date at which the matter in dispute could have been settled if both parties had exercised reasonable diligence in bringing; forward their cases—no one can say that India has been in default in this respect. But the Treasury had Lord, Lansdowne's despatch stating India's case before them in 1890, and the question might have been settled in 1893. Now it cannot be settled before 1901, and therefore I contend that the award, on all equitable principles, should take effect from 1893. I do not think it is too much to ask that eight years arrears of this £300,000 should be paid. It is a mere trifle. Those eight years of arrears amount to £2,400,000, and if £2,400,000 of the Indian debt was taken over by this country it would only create a. charge of about £66,000 a year upon the British Exchequer. I hope Her Majesty's Government may be able to give your Lordships' House an assurance that at last equitable treatment will be given to India in this long-standing controversy, and that it will be announced at once. The condition of the finances of India must be very serious owing to the famine, and if some such treatment as I have suggested is carried out by the Government I feel sure that it will be exceedingly well received in India.

Moved, "That an humble Address be presented to Her Majesty for copies of any correspondence between the Secretary of State for India in Council and the Treasury on the subject of the Report of the Royal Commission on Indian Expenditure."—(The Earl of Northbrook.)


My Lords, I am very glad indeed that this question should have fallen into the hands of my noble friend, for not only has it fallen into the hands of a noble Lord whose authority on Indian matters is second to none, but, if I may say so without presumption, it has fallen into the hands of one whose government of India is marked as a model of prudent and wise financial administration. I am pleased to hear my noble friend support the recommendations of the Commission. I feel that the fact that Lord Northbrook endorses and supports those recommendations will have great weight with Her Majesty's Government. The Commission over which I had the honour to preside, like most Commissions, was not unanimous, but I think I can show your Lordships that on the practical points which are now under consideration the Commission was unanimous. It is often the case that in questions connected with the immense Empire of India, men who take a keen interest in the claims and in the needs of India sometimes forget the claims of the British taxpayer. The opinions of these gentlemen are entitled to every consideration, but for practical purposes we must endeavour to hold a just balance between the claims of the Indian taxpayer and the claims of the British taxpayer. The minority of the Commission, so far as the recommendations go to which Lord Northbrook has alluded, far from differing from them, endorsed them, their only complaint being that they did not go far enough. Therefore, I think I may venture to say that, in regard to these particular recommendations, the Commissioners were unanimous. The noble Lord has alluded to the somewhat wide scope of the terms of reference to the Commission, and I venture to trouble your Lordships with one or two remarks upon that point. It is a matter of great interest to Parliament to know that on an independent inquiry a favourable verdict has been given upon the financial administration of the Indian Empire during the period since it came under the direct control of Her Majesty. That period divides itself into two parts. There is, first of all, the period from 1861, the time when financial equilibrium was restored, to 1884. Before that time the taxes of India were largely increased to meet the demands of the Mutiny, but at the end of that period I think it may be said that they had fallen to the level of the taxes before the Mutiny broke out. That was the result of remarkable economy both in regard to civil and military administration. The history of financial administration in India between 1861 and 1884 was very remarkable, and is paralleled in very few countries in the world. I now come to the second period—that from 1884 to 1896. I stop at 1896 on account of the famine that followed. From 1884 to 1896, owing to the fall in exchange and the demands for military expenditure, the taxation which had been remitted was reimposed. It should, however, be mentioned that, but for the fall in exchange, the natural growth of the Indian revenue was so satisfactory that after the increased demands for military expenditure had been met there would have been left a considerable surplus applicable to the reduction of debt. In following out this review the Commissioners were struck by the satisfactory natural growth of revenue, showing, on the whole, a healthy state of things in the Empire; but it appeared to us that the increase was not more that might naturally be expected in the case of a growing Empire. I come next to the most important question of debt. The debt of India at the close of the Mutiny was what is called an unproductive debt. In the interval between the Mutiny and the date to which I have carried the review—namely, 1896—not only did the growth of that unproductive debt entirely cease—a great contrast to the closing twenty years of the administration of the East India Company, when the debt increased by leaps and bounds—but before 1896 that debt had been reduced by 25 per cent., although in the interval expenditure of no less, than £23,000,000 had been incurred in war and in those famine demands which are, in a sense, unproductive. Therefore, I submit that the result of the financial administration of India since India passed under the direct control of Her Majesty is such as should give satisfaction to Parliament. Further than that, the Indian Government class certain of their services under the head of commercial services which do earn a revenue. On each of these heads the Commission was able to report that the result was fairly satisfactory. The Post Office and the Telegraph have both become paying branches, and when we came to the large expenditure on irrigation we were able to report that that very large system of works, which is of immense importance to India at all times, does not impose any charge whatever on the Indian taxpayers. Passing on to the railways, I think the result is very remarkable. Although the manner in which the accounts are drawn does not show the figures favourably for a commercial result, the Commission found that, if the cost of military lines and lines simply made for famine protection, which ought to be carried to a separate account, were deducted, the commercial railways of India were paying their way, and that the Indian people had the benefit of them without a farthing of burden being placed on the present taxpayers. The Commission came to the conclusion that the financial machinery was sound, well organised, and effectively controlled. The Commission, as my noble friend informed your Lordships, did not come to its inquiry with any foregone conclusion in favour of India. It was composed largely of officials, and officials are conscious of one another's infirmities. The Report of the Commission deserves weight because it is unbiassed and unprejudiced. During the forty years that India has been under the rule of Her Majesty, her financial administration has been entrusted to faithful stewards. The system under which the finances of India are administered is sound, and one in which the Parliament may fairly have confidence. We ventured to call the attention of Her Majesty to two points: one of them was the large growth of the non-effective service. The Commission, however, pronounced no opinion upon it, knowing well that in the case of a tropical climate the non-effective service must naturally be heavy; but the growth of this service did strike us as serious, and we considered that the Indian Government ought to subject the regulations relating to that service to careful actuarial examination, so that the public might be assured that there was no extravagance. I hope the recommendations of the Commission, so far as they come from the majority, will have the favourable attention of Her Majesty's Government. I go considerably further in one respect. I do not think the audit system of India will over be complete or perfect until the independence of the Comptroller and Auditor General is completely established. The chief desire of the Commission was to remove all plausible, or perhaps even good, grounds for complaint on the part of India. On one point we were met by the fact that the Imperial Government pays, without asking any return from the Colonies, the whole cost of the Colonial Office. I do not think the India Office is on all fours with the Colonial Office, but I think the India Office can fairly consider that they are not treated the same as the Colonies if not a farthing is contributed by the Imperial Exchequer to the cost of the India Office. I think it is desirable to remove any such impression which should arise in the minds of the people. I need not enter at length into many of the other points. I think we were justified in recommending that the Imperial Government should pay half the cost of the garrison of Aden. If ever the Empire was organised as a whole, Aden would be an Imperial fortress to which the whole Empire would contribute. That being the case, it is only right that half the military charge of Aden should be borne by the Imperial Exchequer'. In regard to one point we entered upon a rather adventurous course. We put ourselves up to be criticised by attempting to suggest geographical limits within which India might have a separate and distinct interest in military expeditions, and the Commission deserve a certain amount of credit for their boldness if for nothing else. I think a very great end will be gained, and every reason will be given for India to be satisfied, if it is provided that the Imperial Government will not impose a contribution on India except with the assent of India, or until the previous assent of Parliament had been obtained. There is one other subject to which I, as an old Treasury official, attach the greatest importance—namely, that of putting an end to administrative disputes. I know of no other method by which they can be put an end to except by the appointment of an unbiassed and unprejudiced man, in whom both parties have confidence — a man of judicial rank —who should hear both sides and give a decision which should be final. I think both parties would accept that decision, and it would have this further advantage, that the two parties would agree without going to arbitration unless they had a very good case. Although the recommendations of the Commission fall short in many respects of the desires of the Indian Government, and certainly of the people of India, their adoption would go far to remove just grounds of complaint, and grants such as are recommended, which are based upon reasons and are in their nature to a great extent permanent, would be of greater value than those occasional and spasmodic grants which Her Majesty's Government are asked to make in cases of pressure.


The noble Lord who has just sat down commenced his observations by expressing his gratification that this subject has fallen into the hands of the noble Earl who called attention to it, and who has had so very wide an experience of the administration of Indian affairs. I wish to associate myself entirely with the noble Lord in those remarks, and I would even go further and say that it appears to me that the evidence which was given by the noble Earl before the Commission, has led to perhaps the most valuable part of the Report which your Lordships are now considering. The noble Lord expressed the hope that Her Majesty's Government would accept the Report as the decision of a competent and a judicial tribunal. So far at any rate as that part of it is concerned which deals with the history of the finances and the administration of India, I have no complaints whatever to make, and I certainly am prepared to accept entirely the opinions which they arrived at. The Commission also expressed their opinion that the general administration of India is not expensive —that law and justice in India are self-supporting, and that the non-effective expenditure upon pensions and upon furlough pay, etc., is not excessive as compared with that upon Imperial and diplomatic services, and similar services rendered in our more important Crown Colonies. I think the Commission might even have gone further; they might have said that perhaps there is no country in the world, considering the vast extent of its area and of its population, which is as economically administered as is the Government of India. The noble Earl who moved the resolution complained that the reference to the Commission perhaps somewhat overweighted them. The noble Earl the Secretary of State for War a few years ago expressed to your Lordships his opinion that most Royal Commissions appointed in this country in their proceedings were guided with great care and with great deliberation. I certainly can- not say that anything but the utmost care has been devoted by this Commission to the consideration of this Report. I think they took evidence for upwards of two years, and they were something like three years in considering what should be their Report. If it took that Commission five years to consider and report upon the reference which was submitted to them, I do not think your Lordships will think Her Majesty's Government wholly unreasonable if they say that they have not been able to consider the whole of that Report in all its bearings in the three years since it was presented. It has seemed to us, and I think the noble Earl will agree with me, that the most important point in the Report of that Commission is upon the question of the apportionment of charge between the Imperial Government and the Indian Government, and it is to that question that Her Majesty's Government have in the first place devoted their attention. They have not as yet carefully considered the suggestion which is made for the purpose of a reference to settle all questions of the payment for Indian troops when they are employed beyond the frontiers of India; they have not considered in detail the suggestion that a tribunal of arbitration should be established to consider questions of difference between the Government of India and the Imperial Government, and between the India Office, the War Office, the Treasury, and the other Departments of State with which the India Office are brought into communication. But all those matters are receiving very careful attention, and I will go thus far—I will say that I agree entirely with the noble Lord the chairman of the Commission that the publication and the knowledge which is brought to the people of India that there are going on in England disputes and discussions between the public offices is, as the noble Lord describes it, little short of a scandal. We in this country thoroughly understand what is the meaning of a dispute between two Departments of the Government—each Department is naturally doing the best for its own views and its own interests; but it does not commend itself in that light to the people of India. They are led away by the impression that the Imperial Government is trying to take an advantage and to deal illiberally with the people of India. That, I quite agree with the noble Lord, is something which we ought to do all that we can to diminish if not to put an end to altogether. Now, my Lords, what are the points upon which these differences of opinion arise? They are, for the most part, in connection with those undertakings of the Imperial Government in which India is supposed to have, and I think has, an interest, whether it is direct and substantial or whether it is only a comparatively small interest—they are questions in which India undoubtedly is to some extent interested. For example, the noble Lord will recollect that the Government of India agrees to pay a contribution towards the expenditure on our consular and diplomatic service in China. It agrees to pay a contribution towards the consular and diplomatic service in Persia. It agrees to pay a subsidy towards the cable which runs from Zanzibar to Mauritius, and there are certain other small consular services to which the Government of India makes contribution. Those are the most frequent cases of friction between the Departments in this country, and I for one should have been more glad if the Commission could have seen their way to make some suggestion which would enable us to get rid altogether of these subjects of difference which are constantly arising between the Departments at home; and I cannot help hoping that when we are able to give full consideration to this Report we may see some way in which we may avoid these disputes in the future. Then the noble Earl drew your Lordships' attention to certain other charges which are laid upon the Government of India, and he expressed a hope that Her Majesty's Government might in every case refer those to arbitration. I think he suggested that it should be a judicial arbitration carried on by one of Her Majesty's judges. The noble Earl on the Woolsack may have something to say upon that. I am not sure whether he would be disposed to hold that the functions of the judges should be extended to such cases as that. But I may point out to your Lordships that, although we have not called in the services of any of Her Majesty's judges, we have called in the services of several very distinguished Members of this House and of the other House to consider and to arbitrate on differences which have arisen between the Departments. For example, the noble Earl the late Prime Minister, Lord Rose- bery, took into consideration the question of the apportionment of the charge for Her Majesty's Navy in Indian waters, and he came to the conclusion that for ten years at least £117,000 was a proper contribution for India to make. The noble Earl the Chairman of Committees in this. House—who, although he is not a judge, has, I think all your Lordships will agree, a judicial mind—was good enough to consider what should be the amount that should be paid by the Indian Government towards the mail service between this country and India, and for at least five years that question has been removed from any possibility of conflict between the two authorities. Her Majesty's. Government are quite prepared to extend the principle of arbitration. I do not think that we could go quite as far as I understood the noble Earl to wish—namely, that there should be a permanent tribunal.


I did not suggest that.


As I understand, the noble Earl says he did not suggest that. At any rate I can say that the Government agree with the noble Earl in the desire to refer as far as-possible all the larger questions of dispute which may arise between the Imperial Government and the Government of India to competent arbitration. Then, my Lords, the noble Lord who presided over the Commission whose Report your Lordships are considering expressed his opinion—which is to be found in the Report of the minority, and which I know he holds very strongly—that it is desirable that the practice of auditing in India, should be assimilated to the practice of auditing in England. The recommendation was not one to which the noble Lord was able to secure the adherence of all his colleagues, and as it has not been put forward with the weight which would attach to the names of the majority of that Commission I cannot hold out any hope to him that Her Majesty's Government will give it very serious or very favourable consideration. I should, perhaps, point out to the noble Lord, though he is probably aware of it already, that in India the audit is carried on continuously;, the Comptroller and Auditor General's officials are in every department, they can check and disallow any item which in their opinion ought not to be charged, it is recoverable immediately, and the charge comes home for the sanction of the Secretary of State in the course of a very short time; and, in addition to that, it is the practice in India to carry on a test audit, which I think the noble Lord himself admits in the Report is of very great value, and a test audit, as your Lordships know, is a practice which docs; not obtain in England.


I think it does.


I am content at any rate to rely upon the Report of the majority of the Commission that the sufficiency of the audit in India is not questioned by them, and that they consider it to be well organised and. efficient. The whole gist and sum, I may say, of the contentions of the Government of India to which the noble Earl has referred during the time when the noble Earl, now the Secretary of State for War, was Viceroy of India, was that India is entitled to liberal treatment at the hands of Her Majesty's Government and the Imperial Parliament—liberal treatment in the apportionment of the charges between the Governments; and I think I understood the noble Earl to say that in his opinion the capitation grant of £7 10s. is one to which he is not prepared to demur. I think his only point was that when the question of the capitation grant comes to be revised he would plead for liberal treatment for India at the hands of Her Majesty's Government. I have nothing to say in opposition to either of those propositions. My Lords, the resources of India are not small. India in the past has been a very wealthy community. Its people individually may be poor, but its revenues are large. The times have to a large extent altered, and at the present moment India is labouring under a series of calamities which enlist the sympathies not only of every member of your Lordships' House, but of everybody in this country and throughout the Empire. Her Majesty's Government are as much alive to this as any other members of the community, and I can assure the noble Earl and the noble Lord who presided over the Commission that Her Majesty's Government do intend to accept the recommendations of the noble Lord as regards the amount which, in their opinion, ought to be contributed by the Imperial Government towards the revenues of India. That amount is, I think, £293,000, but the noble Lord will pardon me if I point out to him that his Commission made an error which somewhat vitiates those figures. They have in estimating half the cost of the maintenance of the establishments at Aden put it down at £108,000. Now the moiety, as a matter of fact, is Rx. 108,000. Well, the good old days when ton rupees were equal to a sovereign, unfortunately, are days that are bygone, and at the present rate of exchange the noble Lord will see that that Rx.108,000 ought to be £72,000, reducing the total amount which the noble Lord thought ought to be contributed by Imperial revenues to Indian revenues to £257,000. Now, my Lords, I am not prepared to pledge myself to the particular items and the particular heads under which the noble Lord wished that this contribution should be made. This I can say on the part of Her Majesty's Government, that they are willing to accept the recommendations of the noble Lord's Commission, and to give at least £250,000, and probably more, towards the relief of the revenues of India. I trust that this will meet with the approval of the noble Earl, and show him that Her Majesty's Government are desirous of meting out not only equitable treatment but liberal treatment to India, and if he will give us time I hope that we shall be able to go a long way towards meeting the other recommendations which have been so ably put forward by the Commission of which the noble Lord was the chairman.


My Lords, I have no desire to keep the House whilst I make anything like a detailed examination of this very interesting Report. With regard to the large portion of it which relates to the past expenditure and management of finance in India I can only echo what has been said by others. I think it must be extremely satisfactory to all those connected with Indian affairs to see that a Commission composed largely of what I may call British Treasury experts have pronounced so complete an encomium on the management of the finance and expenditure of India. That I think is a very valuable thing to have effected. But, my Lords, I would rather to-night deal with some of the other parts of this Report. I admit at once that I do not think it at all unreasonable that, after the Commission having taken five years to produce this Report, Her Majesty's Government should have a reasonable time to consider how they should act upon it. I never have taken, and I do not now by any means entirely take, the view that India has been unfairly treated by this country. It is very natural indeed, and very proper, that Viceroys who go out to India should espouse the cause of India in matters in dispute between them and the Imperial Government, but I confess I do not think that their arguments have always been sound, and such as could be really acted upon. I am sorry to see that the noble Marquess the Secretary of State for War is not here to-night, because I wished to refer to that despatch which my noble friend who introduced the subject read to your Lordships. The whole gist of the important paragraph—the last one quoted in this Blue-book—is— That millions of money have been spent on increasing the Army of India, on armaments and fortifications to provide for the security of India, not against domestic enemies or to prevent the incursions of the warlike people of the adjoining countries, but to maintain the supremacy of British power in the East. The scope of all these great and costly measures reaches far beyond Indian limits, and the policy which dictates them is an Imperial policy. I do not agree with that statement. It may be Imperial policy; India is part of the Empire, and it must share in the policy of the Empire as long as it remains part of the Empire. I have never considered that there was any force in the complaint that India is obliged to provide a large military force at great expense to guard her frontier against external enemies, and that she should not have to maintain that force, because, forsooth, that is not an Indian interest. In all I say I trust I assume—I am bound to assume—that our presence in India is an advantage to the Indian people. Assuming that, I do not see that India on account of her connection with us is, as a rule, exposed to any dangers which she would not have to meet if she were entirely independent —nay, more, my opinion is that her position would be one of far less security than it is now if she had no connection with this country. There seems to be an idea on the part of those who administer the affairs of India in India that the military forces in India are only required for domestic purposes against the tribes on the frontier. Is there not a Power beyond the frontier—would that Power cease to exist and be a danger if we were to cease to hold India? Would the ambition which is generally attributed to that Power—and which I attribute to her in no sense of finding fault, because the ambition is a natural one, and it is because it is a natural one that it is a. dangerous ambition to India—does anyone suppose that if this country ceased to be connected with India and India was left to protect herself she would be exposed to no dangers from the great frontier Empire which is actually almost on a boundary with her own possessions? My Lords, I am not by any means wishing to attribute any extraordinary designs to that Power, but I say that no one who found himself then in the position of having to administer Indian affairs with such strength as India itself would possess would for a moment neglect that danger beyond her frontier. Therefore I do not admit to the full extent, at all events, the argument used in that despatch. I think that in the past there has been some reason to complain, because it was formerly a policy which I agree with the noble Marquess opposite, the Prime Minister, is a policy which may now be considered to be, if I may use the expression, played out. It was formerly a. principle of our policy that India was so deeply interested in the maintenance of the Ottoman Empire that in any case where that Empire was endangered you might fairly consider that it was a great Indian interest. Well, possibly in the past it may have been so; but if anyone looks at the condition of the world now, they will see—at least this is my opinion—that it is not very likely that in the future India will be called upon to aid this Empire in any great enterprise for the purpose of maintaining the Ottoman in Europe. With regard to the other matters, I think the Commission dealt very fairly with them. It attempted to lay down, and I think laid down not without success, a catalogue of those parts of the world in which India is specially interested, and of those other parts which, though to a certain extent in the neighbourhood of India, may not be considered of special interest to it. I do not think that you could make by an Act of Parliament such a catalogue binding upon both Governments, because, in point of fact, the world does not remain at a standstill, and what might be perfectly and entirely; right when Lord Welby's Commission reported may possibly, as changes in the East are not altogether unknown to us, be hereafter anything but right. Speaking generally, however, I think the Commission arrived at a very fair decision; but what I do not at all like (and I do not think the noble Earl who has just spoken held out any hope that such a course would be adopted) is the suggestion of the appointment of a permanent arbitration Commission, presided over probably by a judge of great repute, which should determine disputes between the Indian Government and the Government of this country. That, in my opinion, would simply come to this that because we find some difficulties in doing our duty between India and this country and accommodating our disputes, therefore we are to have recourse to a system of delegating the government to some eminent judges. Now, I have a very great respect indeed for judges when they are performing duties pertaining to them, but, in my opinion, in matters political, as a rule judges are no more the best people to determine great political questions, depending on the relation between great communities, than I should be to decide a Chancery suit. That, I think, is not the least reflection on the judges; but in order to come to a fair determination on questions affecting great political issues it is essentially necessary to have had some political training. I agree also with the noble Earl that that does not by any means exclude having recourse to a system of arbitration in particular cases, and those cases may not be unfrequent. I am very glad to think that a very tiresome question, not of very great importance, but one which was hung up a great deal too long, with regard to naval expenditure, was determined by the late Prime Minister, Lord Rosebery. I am also extremely glad that so competent a man as Lord Morley was able to decide another question to which the noble Earl referred, and I do not think that these two noble Lords were at all less competent to act in those matters than the eminent judge who might preside over a tribunal, which, as it seems to me, would be something only just below the Crown itself. It would stand apparently above the Government, possibly above Parliament, indeed it would have a kind of supremacy which I look upon with considerable misgivings. It is no doubt a very simple contrivance, but I do not believe that that simple contrivance will solve the difficulties. I repeat that there are a great many questions which, instead of being left for a long time matters of warm dispute between the India Office and the Imperial Government, might be very well submitted to the arbitration of one or two sensible men who could be trusted to come to a sound decision. But whilst I have the greatest possible regard for India and also for the great Government which so ably conducts the affairs of India, yet I hold that in the ultimate resort the Parliament of this country, led by the Cabinet of this country, must be supreme. It is upon that that must ultimately rest the decision of all matters, and in my opinion any attempt to pass by the Government of the country, and to pass by the Parliament of the country, must inevitably fail To guard against too constant interference in Indian affairs you have provided for the Secretary of State for India a very valuable body—the Indian Council; and it has hitherto been the practice, I am happy to say, to avoid as far as possible making Indian affairs a matter of sharp political controversy in the House of Commons. I hope that that will long continue, though there must be exceptions, of course, when great questions are at issue from time to time. I should like to refer to one matter which no doubt is always one of the main matters of dispute —the amount to be paid by India for the services of Her Majesty's Army in India. Here I think also that there is some misconception. We are constantly told, and it is considered to be a most powerful argument, that India is a reserve for the Empire; but what is the fact? Is it the fact that India is a reserve for the Empire? I happened at one time to hold the office of Secretary of State for India when it seemed likely that we might be engaged in a great war beyond our frontiers. The first step we had to take was to mobilise a portion of our Reserves in this country, and we were well aware that every single man in our Reserves would have had to be sent out if that great war had eventuated. Of course the existence of that Reserve was of the very utmost importance, because by it alone should we be enabled to place a sufficient force in India when occasion arose. If the Indian Government had to maintain an additional number of troops equal to that Reserve, it would entail a very large expenditure. Indeed I may say that so far as our military force suffices for the objects in view, the whole of our Army at home—the efficient portion of it—is practically a reserve for India in the case of danger; and it is quite reasonable, it seems to me, that we should regard India also as a reserve on occasions where our interests are threatened in the far East, or it may be, for instance, in Egypt. But when you come to the question whether India shall pay for such expeditions, then I must say I should always be inclined to take what is termed a liberal view of the position of India. There are cases, I think, where India ought to bear a portion of the expenses, but I think we ought always in considering these questions to deal with India in a very liberal and generous spirit. It is a great thing for us to be able to lay our hands on those troops, and to use them when occasion requires, and I do not think we ought to be too stiff with regard to the financial question as to who is to pay for their services when they are taken out of the country. My Lords, there are a number of smaller questions upon which I will only say that I think the recommendations of the Commission are well worthy of attention. I should not like to pledge myself (although it does not very much signify what my opinion may be) to each and every one of those suggestions. They seem very valuable suggestions, and I have no doubt they will receive very careful consideration by the India Office and by Her Majesty's Government. I have very little more to add in the matter. I think that it is highly expedient that there should be no prolonged and acrimonious disputes between the Departments with regard to Indian affairs, and I am quite certain that no one will yield to myself in the strong desire always to support the authority of the Government of India, the authority of the Viceroy, and to deal with our fellow-subjects of the Indian Empire not only in a wise, but in a generous spirit, which I believe to be at the same time the sound and good policy of this country.


My Lords, I do not know that I have any special reason for interposing in this debate, because, on the whole, I concur very much with the sentiments that were addressed to you by the noble Earl who has just sat down. I am glad that the India Office, under the guidance of the Commission, has been able to make pecuniary arrangements which will be satisfactory to those who have charge of the administration of India. But I entirely concur with the noble Earl opposite in repudiating the idea that India has any reason to complain of the treatment which she has received at our hands. I am very glad that this should be a generous and liberal treatment. It is very desirable not only on account of our political position, but also because the mass of the people of India are a much more struggling and suffering race than the mass of the people of this country. But I think that, with whatever qualifications in favour of liberality and generosity, we ought to look upon it as an adjustment and balancing of burdens between the tax payers of the two countries. People talk as if this expense was Imperial, and, therefore, expense that we ought to undertake without considering whether it falls more upon us than it does upon the Indian Exchequer. That seems to me an unsound doctrine. We ought to bear the common burdens of the Empire as far as possible according to an equal and equitable rule, always remembering that we are dealing with a weaker community whoso sufferings at times—and we have had recently terrible examples of it—are singularly severe; but it is a question of the British taxpayer against the Indian taxpayer, and you must observe justice between the two. There is also another—as it seems to me—fallacy in arguing this Indian question, which has been pushed too much forward, and that is that we are bound to bear a certain number of expenses on behalf of India, because, as a matter of fact, we have borne them on behalf of many of our colonies. I cannot see the cogency of that argument at all. "Is thine eye evil because I am good?" We have, partly from policy, partly from reaction on the great American conflict, and from other reasons, been exceedingly generous in our dealings with the colonies during the last fifty years, but I do not think that fey that we incurred an obligation to apply precisely the same rule to every other case that came up for judgment, or that we are bound to discharge this or that claim on the part of India because we have discharged another on the part of our colonies. I would not admit that argument at all. We have to deal with the colonies on the equitable ground; and, remembering always the obligation of liberality and generosity, there is no special call for expenditure which comes upon us because we occupy an Imperial position. It is quite true that it depends on this country to make the expenditure which will defend both India and the colonies, but India does not incur the claim of allegiance as a matter of favour and consideration to us. The less there is of that quasi-sentimental language, and the more we adhere as far as circumstances permit us to do so to the strict rule of justice, the less discontent there will arise. My Lords, we have not gone very far yet into this Report, and at present really the financial burden is one that presses most upon us; but if you consider for a moment you will see how complicated and difficult the relations of India and this country in financial matters are. There is that fortress of Aden; we are told now that we are to take either the whole or the great part of the expenditure on the fortress of Aden. But, if India did not exist, of what possible use would the fortress of Aden be to the British Empire? And I must say that I think much of the expenditure which is thrown upon this country in regard to Persia is subject to the same objection— that it is for India, and for India only, that a certain class of those expenditures in Oriental countries are incurred, and therefore India ought to bear her fair share. What is now happening in the East brings home to us very much how heavy the burden of defending our position in the East may come to be, and we may have in the future to ask whether others besides this little island at this end of the world are not concerned in the maintenance of that great fabric of Chinese trade which has nourished so many parts of the Empire. I will not press into ground which is not open to us yet, but I will only urge upon those who have to deal with this question that we are not dealing with a bottomless purse when we are disposing of the resources of the British Empire. we are bound not to put on others any obligation which they cannot bear; but we may find that, without injustice to others, we cannot accept the exclusive burden which we take as part of our claim to Empire, which belongs to our British ascendency, but which, after all, is borne not for any special advantage of our own, but because it is part of that great fabric of beneficence and of peace which it has fallen to us by the action of history to bear as the British Empire. My Lords, I only rose to say these few words, because I think there is a tendency—certainly not in the language of the noble Earl, but I think there is a tendency—to lean too much to the sentimental side and too little to what I might call the business side. "Short accounts make long friendships," and the more perfect justice we endeavour to observe, the more we shall avoid that greatest of all calamities—any difference of opinion with our great Indian Empire.

On Question, agreed to. Return ordered accordingly.