r 
 
 REESE LIBRARY 
 
 UNIVERSITY OF CALIFORNIA. 
 JUN 14 1893 
 
 ^eceive-ii 
 successions No. 
 
INDIAN FINANCE 
 
INDIAN FINANCE. 
 
 THREE ESSAYS, 
 
 (Republished from the " Nineteenth Century,") 
 
 WITH AN INTRODUCTION AND APPENDIX. 
 
 BY 
 
 HENRY FAWCETT, M.P., 
 
 FELLOW OF TRINITY HALL, 
 AND PROFESSOR OF POLITICAL ECONOMY IN THE UNIVERSITY OF CAMBRIDGE. 
 
 /^- /L ^ 
 
 UI'MXY 
 ^^/fORNiA. Z^ 
 
 MACMILLAN AND CO. 
 
 1880. 
 
 The li'ujht of Translation ami Re production is Reserved. 
 
LONDON : 
 
 R. CLAY, SONS, AND TAYLOR, PRINTERS, 
 BREAD STREET HILL, B.C. 
 
PREFACE. 
 
 THE three Essays which form the chief contents 
 of this volume were published last year in the 
 Nineteenth Century, and I wish to express my best 
 thanks to my friend, Mr. James Knowles, the 
 Editor of that Eeview, for his kind courtesy in 
 permitting their republication. In some introduc- 
 tory remarks I have endeavoured to show the 
 importance of placing the present system of 
 financial control on a different basis. Although it 
 is generally supposed that the entire control over 
 the expenditure of the revenues of India was 
 vested in the Council of the Secretary of State by 
 the Government of India Act of 1858, yet by an 
 Act which was passed in 1869 the tenure of the 
 office of the Members of Council was materially 
 modified, and the discussion which took p]ace 
 when this Act was passing through Parliament 
 plainly shows that the law had been left in a 
 
vi PREFACE. 
 
 state of such extreme uncertainty by the Act of 
 1858 as to make inquiry into the entire subject 
 by a Parliamentary Committee urgently necessary. 
 
 In a short Appendix to the last Essay, attention 
 is directed to some important Amendments which, 
 within the last few weeks, the Government of 
 India have proposed to introduce into the Trades 
 Licence-Tax, and some remarks are made on the 
 intention which was at the same time expressed to 
 relinquish the Famine Fund. 
 
 As I have always felt that Indian questions 
 should as far as possible be discussed free from 
 any party bias, I hope it will be found that none 
 of the remarks contained in this volume have in 
 any way been influenced by a feeling of political 
 partisanship. 
 
 I desire to say how much I am indebted in the 
 preparation of this book to my wife, who has 
 revised the volume as it was passing through the 
 press, and to my secretary, Mr. F. J. Dryhurst, who 
 has acted as my amanuensis, and who has carefully 
 verified the statistics which have been quoted from 
 official and other documents. 
 
 HENRY FAWCETT. 
 
 CAMBRIDGE, January 21, 1880. 
 
CONTENTS. 
 
 PAGE 
 
 INTRODUCTORY REMARKS 1 
 
 THE FINANCIAL CONDITION OF INDIA 17 
 
 THE INDIAN BUDGET OF 1879 73 
 
 THE NEW DEPARTURE IN INDIAN FINANCE 114 
 
 APPENDIX (THE AMENDMENT OF THE LICENCE-TAX, AND THE 
 
 RELINQUISHMENT OF THE FAMINE FUND) 170 
 
INDIAN FINANCE 
 
 INTRODUCTORY KEMARKS. 
 
 IT is now generally recognised that no public ques- 
 tion is of more urgent importance than the reform of 
 Indian finance, and I have decided to republish the 
 three essays contained in this volume, in the hope 
 that they may possibly render some assistance in 
 showing what is the true character of the financial 
 condition of India, and what are the measures which 
 it will be necessary to adopt to place her finances 
 on a sound and satisfactory basis. In the first 
 Essay, which was published in February last year, I 
 endeavoured to describe the most salient features of 
 the actual financial condition of India. Particular 
 attention was directed in this essay to the erroneous 
 conclusions which are frequently arrived at with 
 regard to the amount of the real revenue which is 
 available to meet the ordinary expenses of govern- 
 
2 INDIAN FINANCE. [INTRO. 
 
 ment. By arranging the various items of revenue 
 and expenditure under different classes, and by care- 
 fully distinguishing the net from the gross receipts, 
 it was shown that the real revenue of India is less 
 than 40,000, OOO/. 1 With a comparatively stationary 
 revenue of this amount, a rapidly-increasing expendi- 
 ture had to be met. All available sources of taxation 
 had been so nearly exhausted that large loans had 
 each year to be raised to meet the deficits which 
 were regularly accruing. Constant borrowing had 
 consequently become the normal condition of Indian 
 finance, and her indebtedness was rapidly and steadily 
 growing. The budget for 1879-80, which was in- 
 troduced at Calcutta soon after this Essay was pub- 
 lished, strikingly corroborated the conclusions which 
 were thus sought to be established. During this 
 year the finances of India were prejudicially affected 
 by various adverse circumstances. The cost of the 
 Afghan war had to be met ; an increasing loss by 
 exchange, produced by the depreciation in the value 
 of silver, put a severe strain upon her resources ; 
 various public works, which involved a heavy outlay, 
 had already been sanctioned ; the diminished revenue 
 returns yielded in certain districts showed that in 
 some parts of the country the effects of the recent 
 famines were still severely felt ; and the financial 
 
 1 See table, p. 21. 
 
INTRO.] INTRODUCTORY REMARKS. 3 
 
 situation was further aggravated by an increase 
 in the military and other branches of expenditure. 
 From the budget arrangements of the year it at once 
 became evident that all the worst anticipations as to 
 the financial exigencies of India were to receive a 
 practical corroboration. In the second Essay, which 
 was published in May, soon after these arrangements 
 were made known, it was shown that the Govern- 
 ment, from the measures which they proposed, 
 apparently thought that India was so entirely with- 
 out any financial reserve, and that all the sources 
 of fresh taxation were so exhausted, that no effort 
 could be made to obtain additional revenue. Con- 
 sequently the whole of the exceptional expenditure 
 could only be met by borrowing. The loan opera- 
 tions of the year were to be on so extended a scale 
 that the critical state of Indian finance was at onca 
 disclosed, and on all sides the gravity of the situa- 
 tion was at length fully recognised. A loan of 
 3,500,0002. was to be raised in India; 2,000,0002. 
 was to be advanced by England to India, free of 
 interest, towards the expenses of the Afghan war ; 
 and soon after the budget was introduced at Calcutta, 
 it was announced that the Government would ask 
 Parliament for authority to borrow 10,000,0002. in 
 England. But serious as was the state of things 
 disclosed by these exceptionally large borrowing 
 
 B 2 
 
4 INDIAN FINANCE [INTRO. 
 
 operations, the outlook for the future became far 
 worse when it was seen that in the midst of this 
 embarrassment the Government of India were sur- 
 rounded by influences which compelled them, in the 
 administration of her finances, to sacrifice her in- 
 terests to the interests of England. Simultaneously 
 with the announcement of the large loan operations 
 which were about to be undertaken, it was stated that 
 the revenue of India, which was admitted to be in- 
 adequate to meet the cost of government, was not to 
 be maintained, but that 200,OOOZ. of this revenue 
 was to be sacrificed by a partial repeal of the cotton 
 duties. It need scarcely be remarked that nothing 
 can be more indefensible than to reduce taxes when 
 there is a deficit, and when, consequently, every 
 shilling of the taxation remitted necessitates a 
 corresponding addition to the debt. 
 
 When the Indian budget was considered in Par- 
 liament (May 22, 1879), the Government made 
 no attempt to conceal the extreme gravity of the 
 financial situation. It was unreservedly admitted 
 that as the revenue could not be added to by in- 
 creased taxation, a reduction of expenditure became 
 a matter of imperative necessity. In the last of the 
 three Essays in this volume, which was published in 
 October, I have endeavoured to show that this 
 recognition by the Government of the true state of 
 
INTRO.] INTRODUCTORY REMARKS. 5 
 
 Indian finance, and the promises with which it was 
 accompanied of carrying out in every department a 
 policy of the most rigorous economy, are so important 
 that they may be regarded as constituting a new epoch 
 in Indian finance. It is not too much to say that 
 unless a policy of retrenchment is resolutely persisted 
 in, nothing can prevent India being involved in the 
 most serious financial embarrassment. All experience 
 shows* that any Government which attempts to carry 
 out a policy of retrenchment will have to encounter 
 many most formidable difficulties, and in surmount- 
 ing these difficulties they may fairly claim all the 
 assistance which public opinion can afford. 
 
 It will, I believe, be found that in order perma- 
 nently to place the finances of India on a sound 
 basis it will be necessary to effect some important 
 changes in her present system of financial adminis- 
 tration. It will now be generally admitted that when 
 the Government of India was transferred from the Com- 
 pany to the Crown, many safeguards for economy 
 were swept away, and the substitutes which took their 
 place have proved to be comparatively ineffective. 
 
 It was perhaps impossible at the time the transfer 
 took place to foresee many of the defects of the new 
 system of government which was then introduced. 
 As, however, more than twenty years have now 
 elapsed since the commencement of this new system 
 
6 INDIAN FINANCE. [INTRO. 
 
 of administration, the time has, I think, arrived when 
 great good would be likely to result if the Act of 
 1858, by which the transfer of the Government of 
 India from the Company to the Crown was effected, 
 and the amending Acts which have been subsequently 
 passed, were subjected to a careful parliamentary 
 inquiry. Among the many reasons that may be 
 urged in favour of such an inquiry, it may be men- 
 tioned that the experience of the past has shown 
 that it is in the highest degree desirable that Indian 
 affairs should be periodically investigated. In the 
 days of the Company such an investigation was 
 insured a*t regular intervals, because the Charter of 
 the Company, from which it derived its authority, 
 was only granted for twenty years, and each renewal 
 of the Charter was invariably preceded by a parlia- 
 mentary inquiry. The three Committees which were 
 thus appointed before the Charter was renewed in 
 1813, in 1833, and in 1853, collected information, 
 the importance of which can hardly be over- 
 estimated. This was so fully recognised at the time 
 when the Committees were appointed that many of 
 the most eminent members of the House served upon 
 them. The Committee which preceded the renewal 
 of the Charter in 1813 first sat in 1808, and con- 
 tinued its sittings until 1812. During this time it 
 made five reports. Among those who served on this 
 
INTRO.] INTRODUCTORY REMARKS. 7 
 
 Committee may be mentioned Lord Castlereagh, 
 Mr. Tierney, Mr. Wilberforce, Mr. Dundas, Mr. 
 Charles Grant, the Duke of Wellington (then Sir 
 Arthur Wellesley), and Sir Eobert Peel. The next 
 Committee was appointed in January, 1832, and 
 consisted of no less than forty-eight members, among 
 whom were Mr. Baring, Sir James Mackintosh, Mr. 
 Labouchere, Lord Cavendish, Mr. Villiers, Mr. 
 O'Connell, Mr. Hume, Mr. Warburton, Viscount 
 Morpeth, Mr. Sheil, Mr. E. Lytton Bulwer, Mr. 
 Charles Grant, and Mr. Eobert Grant. The Com- 
 mittee which preceded the last renewal of the Charter 
 was appointed in November, 1852, and concluded 
 its inquiry at the end of the session of 1853. The 
 Committee consisted of thirty members ; the late 
 Mr. Thomas Baring was its chairman; and among 
 those who served on the Committee were Mr. Disraeli, 
 Lord John Russell, Mr. Gladstone, Sir James Graham, 
 Sir W. Molesworth, Mr. Cobden, Mr. Hume, Mr. 
 Macaulay, Lord Stanley, and Lord Palmerston. If 
 the questions which these various Committees had 
 to investigate were at the time considered to be 
 so important as to make it desirable to enlist the 
 services of the most eminent members of the House, 
 I think it can without difficulty be shown that there 
 are now many subjects connected with the govern- 
 ment of India which not less urgently demand a 
 
8 INDIAN FINANCE. [INTRO. 
 
 most careful and thorough parliamentary inquiry. 
 Although there may be much difference of opinion 
 as to what principles should regulate the government 
 of India, there can, I believe, be no difference of 
 opinion that those principles, when once determined, 
 ought to be embodied in precise and intelligible 
 legislation. As already stated, the government of 
 India is at the present time mainly controlled by the 
 Act which was passed in 1858, and this Act is so 
 obscurely worded that in attempting to interpret 
 some of its most important provisions, the highest 
 authorities have arrived at diametrically opposite 
 conclusions. This will be at once seen by reference 
 to a remarkable debate which took place in the House 
 of Lords in 1869. In that year the Duke of Argyll, 
 who was then Secretary of State for India, introduced 
 a Bill which effected an important change in the tenure 
 by which the members of the Council of the Secre- 
 tary of State had hitherto held their offices. By the 
 Act of 1858 the members of Council were to hold 
 their offices on the same permanent tenure as an 
 English judge. It was apparently thought that as to 
 them was to be entrusted the duty of controlling 
 expenditure, it was essential that their position should 
 be made as independent as possible. Soon after the 
 Duke of Argyll became Secretary of State it was 
 evident that he held a different view from that which 
 
INTRO.] INTRODUCTORY REMARKS. 9 
 
 had been held by some of his predecessors, as to the 
 functions which ought to be exercised by the Council. 
 Considering that they were rather a consultative than 
 a controlling body, he, with the object of securing 
 the advice of those who had recently returned from 
 India with fresh experience, effected a fundamental 
 change in the tenure of the office. By the Bill to 
 which reference has already been made the indepen- 
 dent position of a member of Council was to a great 
 extent weakened. He was no longer to be the holder 
 of a permanent office, but was, in the first instance, 
 to be appointed only for ten years, and at the end of 
 this period he might be re-appointed by the Secretary 
 of State for five years. As the character of the office 
 was thus greatly changed, it almost necessarily hap- 
 pened that in the discussions which took place on the 
 Bill the powers which could be exercised by the 
 Council had to be considered. Directly, however, an 
 attempt was made to define these powers it appeared 
 that the highest authorities entertained entirely 
 opposite opinions. 
 
 Thus, the Duke of Argyll, in order to bring out 
 with distinctness the absolute divergence in the 
 views as to the functions of the Council held by 
 himself and by Lord Salisbury, who had recently 
 been Secretary of State, quoted the following passage 
 from a speech Lord Salisbury had lately made : 
 
10 INDIAN FINANCE. [INTRO. 
 
 " In reference to every question in which expendi- 
 ture is involved that is to say, as you well know, 
 in reference to every question of every kind, because 
 I believe there is hardly any question in which 
 expenditure is not involved, directly or indirectly 
 the Indian Council have the power of absolute and 
 conclusive veto by a bare majority over the decision 
 of the Secretary of State." 
 
 Lord Salisbury, challenged to prove the accuracy 
 of this opinion, re-affirmed it in the most positive 
 manner, and said that he arrived at this interpreta- 
 tion of the Act of 1858 after consulting the very 
 highest legal authority, who, as subsequently ap- 
 peared, was Lord Cairns. On the other hand, the 
 Duke of Argyll maintained that in arriving at 
 exactly the opposite opinion he was supported by 
 the Law Officers of the Crown. As the discussion 
 proceeded this extraordinary conflict of authority 
 became, if possible, still more marked. Lord 
 Hatherley, who at the time was Lord Chancellor, 
 supported the opinion that had been expressed by 
 the Duke of Argyll as to the functions of the 
 Council, and said Lord Cairns "appeared to give a 
 meaning to the words of the Act which they could 
 not bear in any sound legal construction." Com- 
 menting on these differences of opinion, Lord Salis- 
 bury maintained that it was imperatively necessary, 
 
INTRO.] INTRODUCTORY REMARKS. 11 
 
 where such vast interests were at stake, that the law 
 should be unmistakably clear, and said that " about 
 the doubtfulness of the law there could be no doubt 
 whatever. When the Lord Chancellor said a thing 
 was black, and two ex- Chancellors said it was white, 
 there must be some doubt about the law." 
 
 A striking example of the consequences that may 
 be produced by leaving the law in such a state of 
 uncertainty is afforded by an event which has recently 
 happened, Lord Salisbury and Lord Cairns, having, 
 as has just been shown, expressed a decided opinion 
 that "in reference to every question in which 
 expenditure is involved .... the Indian Council 
 have the power of absolute and conclusive veto by 
 a bare majority over the decision of the Secretary 
 of State," are members of a Cabinet which adopted 
 a " forward " frontier policy in India, involving an 
 expenditure, of millions, not only without the con- 
 sent of the Council being obtained, but without the 
 matter being brought within their cognizance. 
 
 There is apparently the same difficulty in inter- 
 preting other provisions of the Act of 1858 which 
 are not less important than those which refer to 
 the members of the Council of the Secretary of 
 State. This has lately been shown in a striking 
 manner by the controversy which arose out of the 
 remission of the cotton duties. A majority of the 
 
12 INDIAN FINANCE. [INTRO. 
 
 members of Council of the Viceroy were opposed to 
 the reduction of these duties, and it has been main- 
 tained on high legal authority that under these 
 circumstances the Viceroy, in overruling the majority 
 of his Council, put a very strained interpretation on 
 the legal power conferred upon him. The legal 
 member of the Council of the Viceroy may be con- 
 sidered the highest legal authority in India, and the 
 present holder of that office, Mr. Whitley Stokes, 
 referring to the course taken by the Viceroy with 
 regard to the reduction of the Cotton Duties, used 
 the following words : " The proposed exemption of 
 cotton goods, if made by a mere executive order, 
 will thus resemble what lawyers call a fraud on the 
 power; and there is, unfortunately, no Court of 
 Equity to relieve the people of India against it." 1 
 
 After what has just been stated, it cannot be 
 necessary to multiply instances to show that the 
 law which now regulates the Government of India 
 is in a state of chaotic confusion. It cannot be right 
 that there should be the widest divergence of opinion 
 between the highest official authorities both in India 
 and in England as to the powers which can or ought 
 to be exercised by those who hold most influential 
 
 1 See " Copy of Dissents recorded by Members of the Council of the 
 Governor-General of India regarding the late Reduction of the Cotton 
 Duties in that Country," presented to Parliament in May, 1879. 
 
INTRO.] INTRODUCTORY REMARKS. 13 
 
 positions in the Government of India. When the 
 Act of 1858 was passed it was intended to vest the 
 chief financial control in the Councils of the Secretary 
 of State and of the Viceroy. Before the abolition 
 of the Company this control was in a great degree 
 exercised by the Directors and by the Court of 
 Proprietors. It invariably happened that several 
 Directors of the East India Company were in Parlia- 
 ment, and the Company was thus able to exert great 
 influence, both on English public opinion and on 
 the English Government. If it was thought that 
 with regard to any question in which the interests 
 of England and India came into conflict, India was 
 unfairly treated, the influence which was possessed 
 by the Company both within and without the walls 
 of Parliament was sure to be vigorously exerted on 
 behalf of India. Under the present system, how- 
 ever, it is a mere matter of chance whether any one 
 will be found in Parliament specially to watch over 
 the interests of India. It is perfectly well known 
 that seldom has any measure been passed which was 
 more disliked by the people of India than the recent 
 reduction of the cotton duties. Sir Alexander 
 Arbuthnot, a member of the Council of the Viceroy, 
 speaking with official responsibility, has said : 
 
 " There can be no doubt that the people of India 
 attribute the action which has been taken by Her 
 
14 INDIAN FINANCE. [INTRO. 
 
 Majesty's Government in this matter to the influences 
 which have been brought to bear upon it by persons 
 interested in the English cotton trade, or, in other 
 words, by the manufacturers of Lancashire." 
 
 He adds : 
 
 "It is very undesirable that an impression should 
 exist which, if it were well founded, would go far to 
 justify the forebodings of those who deprecated the 
 transfer of the direct government of India from the 
 East India Company to the Crown on the ground 
 that India would be sacrificed to the exigencies of 
 political parties in Parliament. For many years after 
 that transfer took place the propriety, and indeed the 
 necessity, of treating Indian questions, and especially 
 questions connected with the internal administration 
 of India, as a thing apart from parliamentary politics, 
 was recognised by both the great parties in the state. 
 By a tacit but well- understood compact, India was ex- 
 cluded from the arena of party politics in the House of 
 Commons. Now, for the first time, there is a prevalent 
 belief that this understanding has been departed from. 
 A measure seriously affecting the finances of India 
 has been, and is being, pressed upon Parliament by a 
 powerful section of the English mercantile community, 
 and the general opinion is that that pressure has 
 so far produced an effect that at a juncture of the 
 gravest financial difficulty and anxiety the Govern- 
 ment of India has been impelled to incur a sacrifice 
 of revenue which the most ordinary considerations of 
 financial prudence should have led it to retain, with 
 the certainty that the present concession will only 
 
INTRO.] INTRODUCTORY REMARKS. 15 
 
 encourage further pressure, until the whole of the 
 particular branch of the state revenue which has been 
 the subject of attack shall have been abandoned." 1 
 
 So impossible does it appear to be to interpose 
 with any effect on behalf of India, if the wishes of 
 her people have to be weighed against the support 
 of a certain section of English voters, that when the 
 action that had been taken in reference to the cotton 
 duties was called in question in the House of Com- 
 mons, the protest had to be made by a mere handful 
 of members. 
 
 When considering in the following pages the causes 
 which have made the present financial condition 
 of India so unsatisfactory, numerous instances are 
 adduced which, I believe, conclusively show that there 
 is little hope of effecting any real and permanent im- 
 provement in her finances, unless some more adequate 
 financial control is provided than that which is fur- 
 nished by the present system of administration. As 
 previously stated, the two bodies in whom this control 
 was chiefly vested have, through the uncertainty of the 
 law and other circumstances, been gradually deprived 
 of much of the power which it was supposed they 
 could exercise. If a Viceroy in a period of severe 
 financial pressure can sacrifice an important branch 
 of revenue in direct opposition to the wishes of a 
 
 1 See Parliamentary paper just referred to. 
 
16 INDIAN FINANCE. [INTRODUCTORY. 
 
 majority of his Council ; if a Secretary of State can 
 decide upon a policy which will involve the outlay of 
 millions, and free himself, not only from the control, 
 but from the criticism of his Council by availing 
 himself of the undefined powers which are vested in 
 him of placing the despatch which orders the expendi- 
 ture in the secret department it is at once obvious 
 that the control which these two Councils can exercise 
 is most inadequate. Few problems in government 
 can be more difficult than to devise the best means 
 by which this control can be supplied. It is a 
 problem which can only be properly solved after 
 the most careful inquiry, which will enable due con- 
 sideration to be given to the opinions of those who 
 can speak with the greatest authority and experience. 
 Although therefore it would now be premature to 
 attempt to indicate the changes which should be 
 introduced into the Government of India, no one, I 
 think, can deny that events are every day happening 
 which show that the reform of her administration is 
 a matter of such urgent importance that an inquiry 
 as to the best means of effecting it ought to be one 
 of the first subjects to engage the attention of the 
 new Parliament. 
 
I. 
 THE FINANCIAL CONDITION OF INDIA. 1 
 
 As there seems to be every probability that during 
 the next few months an unusual amount of public 
 attention will be directed to Indian affairs, I think 
 the present may be regarded as a suitable time to 
 consider the financial condition of that country. 
 With the view of treating the subject with as much 
 clearness as possible, it will be desirable in the first 
 instance to ascertain what is the real revenue of India. 
 Much of the complexity which so often confuses dis- 
 cussions on Indian finance arises from the want of 
 any definite understanding as to the sense in which 
 certain terms are employed. From the last financial 
 statement of the Indian Finance Minister, it appears 
 that he estimates the real revenue of India at between 
 37,000,000?. and 39,000,000?. ; whereas a short time 
 afterwards the revenue was officially stated at more 
 than 63,000,000?. This great disparity of course 
 arises from the gross revenue being referred to in the 
 one case and the net revenue in the other. It has 
 not unfrequently been said, in discussions on Indian 
 
 1 February, 1879. 
 
 C 
 
18 INDIAN FINANCE. [i. 
 
 finance, that it cannot be of any moment whether the 
 revenue is estimated at its gross or its net amount ; 
 it is, after all, simply a matter of account. In one 
 sense this, no doubt, is true ; but there will be no 
 difficulty in showing that it is of the first importance 
 to give as much prominence as possible to the net, as 
 distinguished from the gross, revenue of India. 
 
 Few things have done so much harm to Indian 
 finance in the past, or may cause greater embarrass- 
 ment in the future, than an exaggerated idea as to the 
 revenue which the Indian Government has to spend. 
 Although there is much in the present financial con- 
 dition of India to cause serious apprehension, yet 
 there is one circumstance connected with it which 
 may fairly be regarded as a most hopeful omen for 
 the future. Until quite lately, Indi^^as looked upon 
 as an extremely wealthy country, and there was no 
 project, however costly, that India was not supposed 
 to be rich enough to pay for. Now, however, juster 
 ideas of the resources of the country and of the condi- 
 tion of the people prevail. The recurrence of famines, 
 and other circumstances which have caused more 
 attention to be directed to Indian questions, have 
 at length led the English public to take firm hold 
 of the fact that India is an extremely poor country, 
 and that the great mass of her people are in such a 
 state of impoverishment that the Government will 
 have to contend with exceptional difficulties if it 
 
i.] THE FINANCIAL CONDITION OF INDIA. 19 
 
 becomes necessary to procure increased revenue by 
 additional taxation. It is not more true of an' indi- 
 vidual than it is of a nation -that, if it is desirable to 
 check all extravagance, and secure rigid economy, the 
 amount of the income which is available for expen- 
 diture should not be over-estimated. It is often said 
 that if a man comes into possession of an encumbered 
 estate, the mere amount of the mortgages and other 
 debts upon the property does not form an accurate 
 measure of the real extent of his embarrassments, for 
 he has constantly to contend with the difficulty of 
 possessing an income so much less than its nominal 
 amount. Having perhaps ten thousand a year to 
 spend, he is regarded by the world as the possessor of 
 twice as much, and is expected every hour of his life 
 to live accordingly. The position of India is not dis- 
 similar to this. Year after year the Government of 
 India has been living beyond its means. Deficits 
 have been repeatedly recurring, and debt has been 
 steadily and surely accumulated. Nothing, therefore, 
 can be of greater importance, and nothing can be 
 more likely to bring about a better state of things, 
 than to ascertain what is the real amount of the 
 revenue which the Indian Government has at the 
 present time to spend. 
 On official authority l it was stated when the Indian 
 
 1 See speech of Mr. Stanhope, the Under-Secretary of State for India, 
 in the House of Commons, August 13, 1878, Hansard, vol. ccxlii. 
 
 c 2 
 
20 INDIAN FINANCE. [i. 
 
 Budget was discussed in the House of Commons, 
 that the revenue of India in 1876-77 was 55,995,785?, 
 in 1877-78 58,635,472?., and the revenue for 1878-79 
 was estimated at 63,195,000?. Without desiring to 
 question the correctness of these figures as mere state- 
 ments of account, I believe it can be easily proved 
 that they are calculated to produce the most mis- 
 chievous and misleading conclusions as to the true 
 position of Indian finance. In the first place they 
 would seem to show that the revenue of India, which 
 is almost stationary, is rapidly increasing ; and in the 
 second place a most exaggerated opinion is likely to 
 be formed of the resources of the Indian Government. 
 If the items of revenue and expenditure for any year 
 are examined, it will be at once seen that the large 
 foregoing totals of revenue are arrived at by estimating 
 gross instead of net revenue, and by including amongst 
 the receipts many items which really do not represent 
 revenue, but expenditure. Thus the following is an 
 official statement of the ordinary revenue and expen- 
 diture for the year 18 76-77. l In making a com- 
 parison between revenue and expenditure, I think it 
 is fairer to select this year, because since the year 
 1876-77 the finances of India have been seriously 
 disturbed by the large expenditure caused by the 
 famine in Southern India and by the cost of the 
 
 1 See Finance and Revenue Accounts, printed as a Parliamentary 
 paper, No. 176, May 16, 1878. 
 
I.] 
 
 THE FINANCIAL CONDITION OF INDIA. 
 
 21 
 
 Afghan war. In the following table all the items of 
 receipt and expenditure are included which are con- 
 tained in the official return. I have, however, with a 
 view of exhibiting the accounts in the simplest possible 
 manner, arranged the items of receipt under three 
 classes. In the first class all those receipts are in- 
 cluded which represent real revenue. The second 
 class embraces those receipts which are exceeded in 
 amount by the expenditure necessary to obtain them, 
 and must therefore be regarded as items of expendi- 
 ture rather than as sources of revenue. In the third 
 class various items of expenditure are included, against 
 which, as a set-off, there are no corresponding 
 receipts. 
 
 ORDINARY KEVENUE AND EXPENDITURE, 1876-77. 
 
 
 
 
 
 CLASS I. 
 
 Gross Receipts. 
 
 Expenditure. 
 
 Net Revenue. 
 
 It&TYLS of IiCCC t i/f)tt ivjlicll, ))TOdliCB 
 
 
 
 
 Revenue. 
 
 
 
 
 
 
 
 Land 
 
 1 Q 8^7 1 f\9 
 
 2K(\A fil 1 
 
 1*7 OKO K.A1 
 
 Opium .... . . 
 
 JL y, o*> / , J. t)j 
 
 9,122,460 
 
 ,OU4,Dli 
 
 2 841 647 
 
 I/, DO/, 041 
 
 6980 81 ^ 
 
 Salt 
 
 6 304 658 
 
 488 480 
 
 , ^OU, O.LO 
 50-1 a -\ 70 
 
 Excise on Spirits and Drugs 
 
 2, 523, 045 
 
 obOO, TtoV/ 
 
 90,693 
 
 , OlD, I/O 
 
 2,432,352 
 
 Customs 
 
 2,483,345 
 
 194 230 
 
 O OQQ 11^ 
 
 Stamps 
 
 2,838,628 
 
 Qfi 9fifi 
 
 ^u, ^O7, Jl JLv 
 
 2749 ^fi9 
 
 Forest 
 
 598,687 
 
 yo, zuu 
 436 181 
 
 ^ / ttZ . 'JDZ 
 
 Mint 
 
 258,' 854 
 
 130*601 
 
 1989^ 
 
 Provincial contributions . . 
 
 45,894 
 
 
 45,' 89 4 
 
 /Adjusting receipts from Pro- 
 vincial Governments (pro- 
 
 
 
 
 J vincial deficits) .... 
 
 159,568 
 
 
 
 | Adjusting receipts to Pro- 
 vincial Governments (pro- 
 
 
 
 
 \ vincial surpluses) . . . 
 Miscellaneous . . 
 
 411,335 
 
 153,726 
 
 249 622 
 
 5,842 
 1 fil 71 ^ 
 
 
 
 
 1U 1 j / 1O 
 
 
 44,603,626 
 
 7,186,057 
 
 37,417,569 
 
 Net Revenue . . 
 
 ... 
 
 
 37,417,569 
 
22 
 
 INDIAN FINANCE. 
 
 Brought forward 
 CLASS II. 
 
 Gross Receipts. 
 
 
 44,603,626 
 
 Expenditure. Net Revenue. 
 
 
 
 7,186,057 37,417,569 
 
 Items of receipt which, being 
 balanced by a larger expen- 
 diture, do not represent re- 
 venue, but outlay. 
 
 Post-Office 794,328 859,783 
 
 Telegraph ; 341,227 473,127 
 
 /Gain by exchange on trans- ! 
 
 J actions with London . j 505,129 
 
 ^ Loss by exchange on trans 
 
 \ actions with London . 2,181,611 
 
 Law, Justice, and Police 854,105 5,433,853 
 
 Education 105,516 730,013 
 
 [Tributes and contributions 694,934 
 
 / Allowances and assignments 
 
 ^ under treaties and engage- 
 
 l ments . ... 1,672,543 
 
 ( Receipts in aid| of superan- 
 nuation, retired, and com- I 
 
 x passionate allowances . . j 607,242 
 Superannuation, retired, and 
 
 compassionate allowances . 1,798,569 
 
 Army. 925,473 15,792,112 
 
 Marine 233,179 699,584 
 
 Receipts for interest ... 536,281 
 
 Payment for interest on per- 
 
 x manent and floating debt . . 4,512,722 
 
 Payment for interest on ser- 
 
 [ vice funds, &c 394,514 
 
 Public works 198,371 3,519,668 
 
 CLASS III. 
 
 Items of expenditure to which 
 
 there are no corresponding 
 
 items of receipt. 
 
 Administration ... 1,474,095 
 
 Minor departments ... ... 320,138 
 
 Ecclesiastical ... 163, ! 
 
 Medical ... 596,887 
 
 Stationery and printing . . ... 443,776 
 
 Political agencies . . . . i ... 505,228 
 Civil, furlough, and absentee 
 
 allowances ... 235,990 
 
 Refunds and drawbacks . . ... 291,106 
 
 Famine relief i ... 2,145,431 
 
 TOTALS 50,399,411 
 
 51,430,673 I 37>417,,569 
 
 I 
 
I.] THE FINANCIAL CONDITION OF INDIA. 23 
 
 From these figures certain conclusions can be drawn, 
 which may be regarded as of fundamental importance 
 in forming a correct opinion as to the actual position 
 of Indian finance. It thus appears, and it is a fact 
 which cannot be kept too prominently in view, that 
 the entire revenue of India, with the exception of 
 504,208?., is derived from the six following sources : 
 land, opium, salt, excise, customs, and stamps. The 
 various other items of revenue mentioned in the 
 accounts cannot be fairly considered as sources of 
 revenue. They do not in fact produce revenue ; but, 
 on the contrary, should be regarded as causes of 
 expenditure. Thus the revenue of 794,328?. from 
 the Post Office requires an expenditure of 859,783?. 
 to obtain it. A receipt of 341,227?. from the telegraph 
 is more than balanced by an expenditure of 473,127?. 
 But if any further illustration were needed to show 
 that no accurate idea can be formed of the real revenue 
 of India by adding together all the items of receipt 
 which are now included in the statement annually 
 published of revenue and expenditure, it is only 
 necessary to refer to the items of receipt which have 
 been arranged under Class II. Amongst these there 
 is one of 505,129?. described as "gain by exchange." 
 When it is remembered that in this very year India 
 had to bear a most serious loss from exchange, 
 amounting to no less than 2,181,611?., it is evident 
 
24 INDIAN FINANCE. [i. 
 
 that, if any good could result from augmenting her 
 nominal revenue, 2,000,000?. might be added to each 
 side of the account, and the gain by exchange might 
 be represented as 2,500,000?. * But unless the subject 
 is confused by unnecessary complications, nothing can 
 be more easy than to arrive at correct conclusions with 
 regard to the amount of the real revenue of India. It 
 has been already stated that the revenue, with the 
 exception of the sum of 504,208?., is derived from 
 land, opium, salt, excise, customs, and stamps, and 
 if, as has been done in the above table, the cost of 
 collecting each of these items of revenue is deducted 
 from their gross amount, the real revenue of India 
 is shown to be only 37,417,569?. The conclusion 
 which has been just arrived at as to the amount of 
 
 1 It is sometimes said that no harm can result from exhibiting 
 the Indian revenue at its gross instead of its net amount, because 
 the same course is adopted with regard to the English revenue and 
 expenditure. There is, however, such a fundamental difference between 
 the position of English and Indian finance, that a mode of exhibiting 
 revenue which may be perfectly suited to the one country is altogether 
 unsuited to the other. Thus the difference between the gross and net 
 revenue of England is much smaller than the difference between the 
 gross and net revenue of India. In 1877 the gross revenue of England 
 was 78,565,036?., and its net revenue was not less than 68,000,0002. 
 Many of the items of receipt which in India are balanced by a larger 
 corresponding expenditure represent in England important sources of 
 revenue. Thus, the Post Office, as has been shown, causes to India a 
 loss of about 65,000/., while it yields in England a net revenue of 
 more than 2,000,000 L, after allowing for the cost of the packet 
 service. 
 
i.] THE FINANCIAL CONDITION OF INDIA. 25 
 
 the real revenue of India is fully confirmed by the 
 Indian Finance Minister, Sir John Strachey, who, 
 about twelve months since, estimated the net ordinary 
 expenditure of India at between 3 7, 000, 000 1. and 
 38,000, 000?., and said that the ordinary revenue is 
 only just sufficient to meet it. 
 
 It may perhaps be thought that I have laid too 
 much stress on the importance of keeping steadily in 
 view the distinction between the gross and net revenue 
 of India ; but it can scarcely be denied that, if exces- 
 sive expenditure is bringing embarrassment upon the 
 finances of a country, nothing is more essential to 
 secure strict economy than, as far as possible, to 
 discourage any exaggerated estimate being formed 
 of the actual amount of such a country's revenue. 
 Thus, as one illustration, it may be mentioned that 
 the military expenditure of India is estimated by Sir 
 John Strachey at more than 17,000,000?. a year. 
 Such an expenditure would be sufficiently serious if 
 it were defrayed out of a revenue which was, as the 
 Indian revenue has been represented to be, rapidly 
 increasing from 56,000,000?. to 63,000,000?. ; but 
 how incalculably more serious must such an expendi- 
 ture be, and how much more likely is it that retrench- 
 ment will be demanded as an imperative necessity, 
 when it appears that this enormous charge of more 
 than 17,000,000?. a year has to be met, not out of an 
 
26 INDIAN FINANCE. [i. 
 
 increasing revenue of 63,000,000?., but out of an 
 almost stationary revenue of about 38, 000, 000 . 
 
 In the statement that has been given of the 
 receipts and expenditure for the year 1876-1877, it 
 was shown that the ordinary revenue fell short of the 
 ordinary expenditure by about 1,000,000^. As it 
 may be thought that this year was an exceptional 
 one, it will be desirable again to refer to the financial 
 statement of Sir J. Strachey ; for nothing can be 
 more explicit than the opinion he expresses that the 
 normal condition of Indian finance is one in which 
 the ordinary revenue is barely sufficient to meet the 
 ordinary expenditure. Thus he says : 
 
 " A careful examination of the accounts of the 
 seven years ending on the 31st of March, 1876, a 
 period long enough to illustrate fairly the state of our 
 finances, made it plain not only that we had, when 
 I spoke, made no proper provision for the cost of 
 famines, but that we possessed no true surplus of 
 revenue over expenditure to cover the many con- 
 tingencies to which a great country is exposed." 1 
 
 Of the many contingencies necessitating increased 
 expenditure to which Sir John Strachey refers, it is 
 
 1 See speech of Sir John Strachey in bringing forward his proposals 
 for the creation of a Famine Fund. Calcutta, December 28, 1877. 
 This speech, which contains a most able review of the finances of 
 India, was published in the session of 1878 as a Parliamentary 
 paper. 
 
i.] THE FINANCIAL CONDITION OF INDIA. 27 
 
 only necessary here to mention two -War and Famine. 
 At the time he spoke India was in a state of profound 
 peace ; but within less than a twelvemonth a war has 
 been undertaken which will throw upon her finances 
 a charge, the amount of which it is impossible at the 
 present time to calculate. For the other contingency 
 famine, Sir John Strachey was at the time attempting 
 to make some provision by imposing additional taxa- 
 tion on the people of India. In view of the occurrence 
 within twelve years of four serious famines in different 
 parts of India, and of the fact that between 1873 and 
 1878 famines have thrown a charge upon the Indian 
 revenues of no less than 16,000,000?., no other alter- 
 native presents itself to the Indian Government 
 than to treat famines, not as exceptional or acci- 
 dental occurrences, but as calamities which are so 
 certain to recur that provision should be made 
 to meet them out of the ordinary revenue of the 
 year. The amount that is required to provide an 
 adequate fund for the relief of famines was estimated 
 at 1,500,000?. a year. As the Government of India 
 have repeatedly declared that they are fully sensible 
 of the very serious consequences, both financial and 
 political, that may be produced by adding to the 
 taxation of India, it cannot be supposed that they 
 would sanction additional taxation unless they were 
 compelled to do so by urgent necessity. Nothing, 
 
28 INDIAN FINANCE. [,. 
 
 therefore, can more conclusively show that the 
 ordinary revenue of India is only just sufficient to 
 meet its ordinary expenditure, no margin being left 
 to provide for those many contingencies which it is 
 officially stated are certain to recur, than the fact that 
 a careful financier like Sir John Strachey admitted 
 that, in order to create the Famine Fund which he 
 says is essential to place the finances of India on a 
 sound basis, no other course was open to him than to 
 provide this fund from new taxation. I shall subse- 
 quently have occasion to describe the particular taxes 
 which have been imposed with the object of creating 
 this fund ; and fully admitting that the Indian 
 Government would not wantonly or unnecessarily 
 impose taxation which is exceptionally unjust and 
 burdensome, nothing can more forcibly illustrate the 
 gravity of the financial position of India at the 
 present time than the circumstance that, amongst the 
 new taxes which have recently been imposed, it has 
 been thought requisite to levy what is virtually an 
 income-tax of fivepence in the pound on incomes of 
 no more than four shillings a week. But, before con- 
 sidering the nature of the new taxation that has 
 lately been imposed in India, and before showing to 
 what straits the Indian Government will be reduced 
 if in future years they should have to obtain addi- 
 tional revenue to meet recurring deficits, it will be 
 
i.] THE FINANCIAL CONDITION OF INDIA. 29 
 
 desirable to make as careful an estimate as possible of 
 tlie future prospects of the revenue and expenditure 
 of that country. 
 
 It must be evident that no question relating to 
 Indian finance can be of more fundamental import- 
 ance than to examine the chief items of her revenue 
 and expenditure, with the object of ascertaining 
 whether, if expenditure increases, it is likely to be 
 met by a corresponding growth of revenue. If 
 such an examination is made, I am afraid that no 
 other conclusion can be arrived at, than that the out- 
 look for the future is gloomy in the extreme. It will 
 be shown that if India continues to be governed as 
 she now is, and if no change is introduced into the 
 administration of her finances, it is inevitable that 
 any possible growth of her revenue will be altogether 
 inadequate to meet the certain increase in her ex- 
 penditure, and no other prospect will lie before 
 her Government but augmented indebtedness and 
 additional taxation. 
 
 Reverting to the six sources from which the 
 revenue of India is derived namely, land, opium, 
 salt, excise, customs, and stamps I will, as briefly 
 as possible, consider what is the probability of an 
 increase in each separate head of revenue. With 
 regard to the land revenue, from which nearly one- 
 half of the entire net revenue of India is obtained* 
 
30 INDIAN FINANCE. [i. 
 
 it is scarcely necessary to remark that there cannot, 
 from the manner in which the land revenue has been 
 settled, be any material increase in its amount for a 
 considerable number of years. Over a large portion 
 of the most fertile districts of India, the land revenue 
 is permanently settled ; the Government having 
 commuted the land revenue for a fixed annual rent- 
 charge to be paid in silver. Of the entire land 
 revenue about one-fifth is derived from the perma- 
 nently settled districts, and therefore, as far as this 
 portion is concerned, it is incapable of any augmenta- 
 tion. In the North- West Provinces, and in other 
 parts of India, what are known as thirty years' 
 settlements prevail. The amount of the land revenue, 
 in these districts, is fixed for thirty years, and until 
 the expiration of this period it is of course impossible 
 that there can be any increased assessment. From 
 time to time, as these thirty years' settlements fall in, 
 the land can be reassessed ; but many who are most 
 competent to express an opinion confidently assert 
 that the agricultural classes in India, except in the 
 pemanently settled districts, where an increase of the 
 land revenue cannot be obtained, are not in a 
 condition to bear a heavier assessment. 
 
 Although there would thus appear to be no im- 
 mediate probability of the amount derived from the 
 land revenue being materially increased, there is 
 
i.] THE FINANCIAL CONDITION OF INDIA. 31 
 
 unfortunately no room whatever for doubt that the 
 real value of this revenue has been within the last 
 few years most seriously lessened. The land revenue 
 is really a rent paid to the Indian Government in 
 silver, and the amount of this silver rent is fixed, 
 either permanently or for a defined period. A very 
 considerable part of the expenditure of the Indian 
 Government consists of payments which have to be 
 made in gold. At least 17,000,0007., or about 45 per 
 cent, of the entire net revenue of India, is expended 
 in England in paying the interest on the Indian debt, 
 in the purchase of stores, in salaries, pensions, &c., 
 and this large and increasing outlay, known as the 
 home charges, has to be made in gold. The Indian 
 Government receives its revenue in silver, but has to 
 find gold for the purpose of defraying 45 per cent, of 
 its expenditure. Within the last few years there has 
 been a most serious depreciation in the value of silver 
 when compared with gold. Silver has fallen from 
 GQd. to about 5Qd. an ounce : a sovereign, which 
 
 o ' 
 
 could formerly be purchased with four ounces of 
 silver, can now only be purchased with five ounces. 
 Consequently about 20 per cent, more silver is now 
 required to pay the home charges than would be 
 needed if there were no depreciation in the value of 
 silver. The net land revenue is about equivalent in 
 amount to the net home charges, and consequently, 
 
32 INDIAN FINANCE. [i. 
 
 if this revenue were appropriated to defray these 
 charges, it would virtually be reduced in value at 
 least 3,000,000?. a year, owing to the depreciation in 
 the value of silver. With regard, therefore, to the 
 future prospects of the land revenue, I think it may 
 be concluded, first, that there is little probability of 
 any immediate increase in its amount, and secondly, 
 that the depreciation of silver seriously lessens the 
 real value of this revenue. 
 
 Next proceeding to consider the revenue derived 
 from opium, there is no branch of Indian revenue 
 which has lately shown so large an increase. It 
 appears from an official paper which was laid before 
 Parliament as recently as December, 1878, that the 
 revenue from opium during the current financial year 
 is likely to exceed the estimate by no less a sum than 
 . ],240,000/. It has been stated that a part of this 
 large increase is due to the Government, pressed by 
 the necessity of finding funds for the Afghan war, 
 having brought an unusually large quantity of opium 
 into the market. But, whether this be so or not, I 
 think it cannot be denied that no inconsiderable part 
 of this increase in the revenue from opium must be 
 due to a rise in the price of opium produced by the 
 depreciation in the value of silver. For some time 
 after the fall in the price of silver took place there 
 appeared to be no movement in general prices in 
 
i.] THE FINANCIAL CONDITION OF INDIA. 33 
 
 India, Silver, in fact, had simply fallen in value in 
 relation to gold. Now, however, there seems to be a 
 depreciation in the general value of silver in India, 
 and prices are beginning to rise ; for in the same 
 official return in which an estimate is given of the 
 large increase of revenue expected to be derived from 
 opium, it is stated that on account of a rise in. the 
 price of food, the army expenditure in India is esti- 
 mated during the present financial year to exceed the _ 
 estimate by 330,000/. As the Indian Government M]S C r 
 opium in the open market, the amount of the opmin 
 
 ^^ ^ 
 
 revenue will, in the absence of any counteracting ci^ 
 cumstances, increase with the rise in general prices. 
 Although, therefore, there is this favourable circum- 
 stance connected with the opium revenue, namely, 
 that it is not prejudicially affected in the same way 
 as the land revenue must be, by the depreciation in 
 the value of silver, yet no prudent financier should 
 ignore the fact that this revenue depends almost for 
 its existence upon the action of the Chinese Govern- 
 ment in admitting Indian opium to their ports, while 
 they forbid the cultivation of opium in China. Much 
 valuable information on the subject of the opium 
 revenue is contained in the evidence given before 
 the Parliamentary Committee on Indian Finance. 
 Among the many witnesses who were examined on 
 this question there is no one whose opinion is entitled 
 
 D 
 
34 INDIAN FINANCE. [r. 
 
 to more consideration than Sir Eutherford Alcock, 
 who had not only resided in China for twenty- 
 five years, but who at the time was her Majesty's 
 Minister in that country. In the evidence he gave 
 before the Select Committee on Indian Finance 
 (May 23, 1871), he expressed the opinion that the 
 Chinese Government were seriously contemplating 
 putting an end to the importation of opium, and 
 allowing its cultivation without stint in China. I 
 do not presume to express any opinion of my own on 
 the extent to which the opium revenue is likely to 
 be affected by any action that may be taken by the 
 Government of China. My sole object in calling 
 attention to the subject is to show that the most 
 productive of all the sources of Indian revenue, next 
 to land, may, in the opinion of some most competent 
 judges, be seriously reduced in consequence of a fall- 
 ing off in the Chinese demand for Indian opium ; 
 and it therefore becomes the more essential that the 
 finances of India should be administered with the 
 utmost care and thrift. 
 
 Next proceeding to consider the prospect of an 
 increased revenue being obtained from salt, it will, 
 I think, be admitted that, although a small increase 
 of revenue may be derived from an increase of popu- 
 lation, yet nothing could justify an attempt to obtain 
 an additional revenue from salt by raising the rate 
 
i.] THE FINANCIAL CONDITION OF INDIA. 35 
 
 of the existing duties. The duty now imposed, 
 amounting to no less than 2,000 per cent, on the 
 prime cost of the article, cannot but be regarded as 
 a most onerous impost, when it is remembered that 
 salt is as much a necessary of life as the air we 
 breathe or the water we drink. It seems, moreover, 
 that taxation on salt has reached that point when 
 it produces a most serious effect in checking consump- 
 tion. This is particularly the case in the poorest 
 parts of India, such as Madras. This was felt so 
 strongly by the late Lord Hobart, the able Governor 
 of that Presidency, that he declared that nothing 
 would induce him to be a consenting party to an 
 increase of the salt duty. At the time Lord Hobart 
 made that declaration, the duty levied on salt in 
 Madras was one rupee, thirteen annas per maund. 
 Within the last twelvemonth, the salt duty has been 
 raised in Madras and Bombay from one rupee, thirteen 
 annas to two rupees, eight annas. This increase of 
 nearly 40 per cent, in the duty, has been defended as 
 a part of a scheme for the equalisation of the salt 
 duties throughout India. If, however, the equalisa- 
 tion of duties is an object of so much importance as 
 to justify a large addition to the duty being imposed 
 on the people of Madras and Bombay at the very 
 moment when they were recovering from the ravages 
 of a terrible famine, it at once becomes evident that 
 
 D 2 
 
36 INDIAN FINANCE. ' [i. 
 
 the duties cannot be raised in India without departing 
 from this policy of equalisation ; for I believe it will 
 be admitted that nothing could justify the raising 
 of the salt duty in Madras and Bombay beyond the 
 point to which it has recently been advanced. 
 
 With regard to the last three branches of revenue 
 excise, customs, and stamps little need be said. 
 The present aggregate net revenue obtained from 
 customs and excise does not amount to more than 
 5,000, OOO/. a year ; and the policy of the Government 
 in recent years has been rather to diminish than to 
 increase these duties. Moreover, one of the most 
 important items in the receipt from customs, namely, 
 that derived from the import duty now imposed on 
 cotton goods, must be regarded as existing on a 
 somewhat precarious tenure. The repeal of this duty 
 has been earnestly demanded by the cotton -manu- 
 facturing interest in England ; and the Government 
 entered into an undertaking that the duty should be 
 repealed as soon as the financial condition of India 
 permitted. It is somewhat difficult to define the 
 exact interpretation to be given to this promise ; but 
 it is evident that its fulfilment will be persistently, 
 and possibly successfully, urged. For when it was 
 recently affirmed on the authority of the Secretary 
 of State that India possessed a balance from which 
 the expenses of the Afghan war could be defrayed, 
 
].] THE FINANCIAL CONDITION OF INDIA. 37 
 
 it was immediately said by the manufacturing interest 
 in Lancashire that if such a balance really existed its 
 appropriation had been beforehand pledged to the 
 repeal of the import duty on cotton goods. As, 
 therefore, this important item of receipt in the 
 customs duties of India will be liable to constant 
 attack from persons possessing great power and 
 political influence in England, and as there is no 
 new excise duty which it has been suggested could be 
 imposed, I think no other conclusion can be arrived 
 at than that not only is there little chance of 
 obtaining additional revenue from customs and excise, 
 but, on the contrary, the Indian Government may, 
 in face of the promises they have made about the 
 cotton duties, find it difficult to maintain the revenue 
 which they now receive. 
 
 In reference to stamps, it is only necessary to 
 remark that if it were practicable to obtain additional 
 revenue from this source, stamps would certainly not 
 have escaped the watchful eye of the Indian finan- 
 ciers, who, when last year they were creating a 
 famine fund, were apparently so hard pressed that, 
 as previously stated, they were compelled to subject 
 to direct taxation incomes of only four shillings a 
 week. 
 
 This brief review of the general prospect of the 
 Indian revenue is, I think, sufficient to show not 
 
38 
 
 INDIAN FINANCE. 
 
 [i 
 
 only that this revenue is comparatively stationary 
 in amount, but that as the revenue is received in 
 silver, and a large part of it has to be devoted to 
 making payments in gold, the real value of this 
 revenue has been, and may continue to be, most 
 seriously diminished by the depreciation of silver. 
 This conclusion as to the inelasticity of the Indian 
 revenue is strongly confirmed by the extremely slow 
 growth of the revenue during the past ten years, 
 from 1868 to 1877. This particular period is selected 
 for comparison because the figures are to be found 
 in the latest number which has been published of 
 the Statistical Abstract of British India. It appears 
 from the table already given that four- fifths of the 
 entire net revenue of India is derived from land, 
 opium, and salt ; and the inelastic character of the 
 Indian revenue is at once shown if the average yield 
 of these three sources of revenue, from 1868 to 
 1872, is compared with their average yield from 
 1873 to 1877. 
 
 Net Land Revenue . . . 
 Net Opium ,, .... 
 Net Salt .... 
 
 TOTALS .... 
 
 Average during 
 five years, 
 from 1868 to 1872. 
 
 Average during 
 five years, 
 from 1873 to 1877. 
 
 
 17,991,951 
 6,720,672 
 5,466,370 
 
 
 18,526,451 
 6,388,555 
 5,735,936 
 
 30,178,993 
 
 30,650,942 
 
i.] THE FINANCIAL CONDITION OF INDIA. 39 
 
 It will be extremely important to keep these con- 
 clusions as to the inelasticity of the Indian revenue 
 steadily in mind when considering, as I now propose 
 to do, the prospects of Indian expenditure. It 
 will not be necessary to examine all the detailed 
 items of this expenditure, for I believe it will be 
 perfectly possible to obtain data from which a correct 
 opinion on the subject can be formed, by directing 
 attention to the four chief branches of expenditure 
 namely, military expenditure, cost of administration, 
 loss by exchange, and interest on loans for the 
 general purposes of government, as well as for 
 public works. 
 
 No subject connected with Indian finance demands 
 such prompt and anxious attention as the enormous 
 and increasing burden which is thrown upon India 
 by her military expenditure. I have already referred 
 to the fact that, even in a time of peace, the cost 
 of the army to India is upwards of 17,000,000?. 
 a year, 45 per cent, of her entire net revenue of 
 37,500,000?. being thus absorbed. It seems more- 
 . over that no limit can be placed to the extent to 
 which India may not be exhausted by this drain 
 on her resources. In the financial statement of 
 1878, allusion was made to the significant fact that 
 the cost of the army being at that time more 
 than 17,000,000?., had increased by "upwards of 
 
40 INDIAN FINANCE. [t. 
 
 1, -000,000 J. since 1875-76, and that a large part 
 of this increase was in the expenditure recorded in 
 the home accounts." But serious as seemed to be 
 the danger, at the time when these words were 
 spoken, that India was gradually having thrown 
 upon her a military expenditure which with her 
 stationary revenue she would be absolutely powerless 
 to bear, yet how indefinitely has this danger been 
 increased by the events of the last few months. 
 I shall carefully abstain from saying a single word 
 on the Afghan war which is not most strictly relevant 
 to the subject now under discussion. It is, however, 
 of the utmost importance to the future of India that 
 the consequences involved in carrying out what is 
 known as a " forward " frontier policy should be 
 considered in their financial as well as in their 
 military aspects. It would not be more unreason- 
 able to decide what is the best house for a particular 
 individual to live in, without having any regard to 
 his income, than it is, on a mere consideration of 
 military tactics, to determine to advance the frontier 
 of India, without .first ascertaining the expenditure 
 which such an advance would necessitate. It is 
 particularly worthy of remark that those who have 
 been foremost in advocating a " forward " frontier 
 policy in India have apparently ignored any con- 
 sideration of its cost. The long and able statements 
 
I.] THE FINANCIAL CONDITION OF INDIA. 41 
 
 of Sir Henry Rawlinson, Sir Bartle Frere, and Lord 
 Napier of Magdala, contain scarcely a single refer- 
 ence to the financial aspects of the policy which they 
 advocate. On the other hand, nothing can be more 
 precise than the declarations of many of those most 
 competent to express an opinion on the question, 
 that the frontier could not be advanced without 
 causing a most serious permanent addition to the 
 military expenditure of India. Lord Lawrence, 
 speaking of such an advance as is now contemplated, 
 declared that it would " paralyse the finances of 
 India." This was not simply his individual opinion. 
 It has been often said that no Governor-General 
 was ever surrounded by abler men than those who 
 constituted the Council of the Viceroy in 1867, 
 and the despatch which contains this remarkable 
 declaration was signed not only by Lord Lawrence, 
 but by the Commander-in-Chief, Sir W. H. Mansfield 
 (afterwards Lord Sandhurst), Sir H. S. Maine, Mr. 
 G. N; Taylor, Mr. W. N. Massey, Sir Henry Durand, 
 and Mr. G. U. Yule. This despatch, moreover, was 
 addressed to Sir Stafford Northcote, who was then 
 Secretary of State for India, and its conclusions 
 were accepted by him and the Government of which 
 he was a member. In view of these facts I think 
 it may be fairly asked, if the expenditure necessary 
 to carry out a particular policy would have paralysed 
 
42 INDIAN FINANCE. [i. 
 
 the finances of India in 1867, what single circum- 
 stance can be pointed to which would show that 
 such an expenditure would produce less serious con- 
 sequences at the present time ? No one can pretend 
 to say that India's financial condition is more flourish- 
 ing now than it was then. Since 1867 she has had 
 to bear the severe strain of successive famines ; and 
 in 1867 there seemed to be no probability that her 
 finances would be crippled by that depreciation of 
 silver which has been said by one who spoke with 
 the authority of a Finance Minister " to cast a grave 
 shadow on the future of Indian finance." 1 In case 
 it may be objected that these opinions of Lord 
 Lawrence and his Council were expressed before 
 the publication of the memorandum of Sir Henry 
 Eawlinson, who throughout has been the most 
 influential advocate of a "forward" policy, it may 
 be well to point out that after this memorandum 
 had been submitted to all the highest authorities in 
 India, there is not a single word to be found in 
 any of the minutes which they wrote upon it, which 
 can be interpreted as the expression of a more 
 favourable opinion of the financial results which 
 would be produced by advancing the frontier into 
 Afghanistan. Thus Sir R. H. Davies, the Lieutenant- 
 Go vernor of the Punjaub, says : "Sir H. Rawlin son's 
 
 1 See speech of Sir W. Muir at Calcutta, April 10, 1876. 
 
i.] THE FINANCIAL CONDITION OF INDIA. 43 
 
 proposals would again plunge us into the ever-shifting 
 sands of Central Asian intrigue at a cost which we 
 cannot afford." Sir Eichard Temple, who has filled 
 many influential positions in India, says : " Under 
 Providence we are trustees for the public funds of 
 India, and we are responsible for the careful applica- 
 tion of them. When there are so many objects of 
 certain usefulness and necessity within India itself 
 on which to spend this money, it is a grave thing 
 to expend such money in foreign regions on objects 
 of doubtful expediency." l The very evil which Sir 
 K. Temple thus anticipated has actually come to 
 pass ; for as Governor of Bombay he has himself 
 been obliged, under the financial pressure caused by 
 the military expenditure in Afghanistan, to per- 
 emptorily order that all public works, nay, even all 
 repairs except those which are absolutely necessary, 
 should be stopped in that Presidency. 
 
 In order to obtain as distinct an idea as possible of 
 the consequences which may be produced on the 
 financial condition of India by carrying out this 
 " forward " frontier policy, it will be desirable to refer 
 to some estimates which have been made of its cost 
 by those most competent to form an opinion. The 
 late Lord Sandhurst, who was scarcely less distin- 
 guished as a financier than as a soldier, writing in 
 
 1 See Afghan Papers, 1878. 
 
44 INDIAN FINANCE. [i. 
 
 1875, declared that the occupation of the advanced 
 positions which it is proposed should be held beyond 
 our present frontier, would require an addition to the 
 strength both of the European and native army in 
 India which would permanently increase her military 
 expenditure by more than 3,000, OOOZ. a year. One 
 of the very highest of Indian military authorities, Sir 
 Henry Norman-, has lately declared that if the advance 
 were confined simply to the occupation of Koorrum, 
 Jellalabad or Daka, and Candahar, at least thirteen 
 or fourteen thousand additional troops would be re- 
 quired, one-third of whom would have to be British, and 
 that their cost would be 1, 000, 000 Z. per annum ; this 
 sum, moreover, is independent of the large amount that 
 would have to be expended on fortifications and other 
 military works, and also in subsidising the hill tribes. 
 It is, however, scarcely necessary to refer even to such 
 high authorities as those just quoted. It can no 
 longer be regarded as a matter of surmise that the 
 frontier policy, which is now being pursued in India, 
 will make a most serious permanent addition to her 
 military expenditure. Less than a month had elapsed 
 from the time our troops had crossed the frontier 
 when it was announced that it had been decided to 
 increase the native army by 15,000 men, or about 12 
 per cent. There is no point connected with the 
 government of India on which there is greater 
 
].] THE FINANCIAL CONDITION OF INDIA.^ r \ 45 
 
 V C 
 unanimity of opinion than that it would not be 
 
 prudent to add to the number of the native army 
 without proportionately increasing the strength of 
 the European army. An increase of 12 per cent, 
 in the European and native army will certainly 
 involve a cost of not less than 1,5 00, 000 . a year. 
 It would therefore appear that two powerful agencies 
 will be brought simultaneously into operation most 
 seriously to augment the military expenditure of 
 India, In the first place, as Sir John Strachey has 
 pointed out, the army, from administrative causes, is 
 becoming more costly in proportion to its numbers ; 
 and, in the second place, the policy which is now being 
 pursued is necessitating a very material addition to 
 the strength of the army. The extremely grave con- 
 sequences involved in such an increase of military 
 expenditure will be shown when considering whether, 
 in the present financial condition of India, there is 
 any probability that such new charges can be met, 
 without imposing taxes intolerably burdensome to the 
 people, or accumulating an indebtedness which will 
 augment the taxation that will ultimately have to be 
 imposed. 
 
 Passing on to consider the second of the four chief 
 branches of expenditure namely, the general cost of 
 administration the evidence which was given before 
 the Parliamentary Committee on Indian Finance 
 
46 INDIAN FINANCE. [i. 
 
 affords almost innumerable examples of the striking 
 manner in which the various items which compose 
 this general cost of administration have increased 
 during the last twenty years. A most valuable table 
 was furnished to the Committee by Mr. Gay, the 
 Deputy Comptroller-General of the Finances, in which 
 a comparison is made between the cost of administra- 
 tion in 1871 and 1856, two years before the abolition 
 of the East India Company. From this table it 
 appears that the cost of the government of India, ex- 
 cluding expenditure on the army and public works, 
 has increased during the period referred to from 
 14,964,8672. to 23,27l,OS2Z. 1 There is scarcely a 
 single item in which there has not been a marked 
 augmentation, and this growth has continued up to 
 the present time. Thus, taking a few instances : 
 
 1856-57. 1870-71. 
 
 Superannuation, retired, and compassionate 
 
 allowances 424,930 655,969 
 
 Stationery and printing .... 128,197 233,675 
 
 Medical services 175,714 523,486 
 
 I believe it can be shown that a part at least of the 
 large increase in the general cost of administration is 
 undoubtedly due to a want of adequate economy ; 
 but without, for the moment, inquiring what portion 
 of this increase of expenditure could have been 
 
 1 See Appendix to Report of Committee on East Indian Finance, 
 1872, p. 518. 
 
i.j THE FINANCIAL CONDITION OF INDIA. 47 
 
 prevented if India, since the abolition of the East India 
 Company, had been governed with less extravagance, 
 it is obvious that the greater the extent to which this 
 additional outlay has arisen from causes the operation 
 of which cannot be controlled, the more serious is the 
 prospect for the future. If money has been wasted 
 in the past, the continuance of this waste can be pre- 
 vented ; but a remedy cannot be so easily applied if 
 the cost of a particular department becomes greater 
 in consequence, for instance, of a rise in prices. The 
 very detailed evidence which was given before the 
 Indian Finance Committee by Mr. Harrison, Comp- 
 troller-General of India, leaves no room for doubt 
 that a not inconsiderable portion of the increase in 
 the cost of administration between 1856 and 1871 
 was due to a rise in general prices. There was during 
 this period, and especially at the time of the American 
 Civil War, a very large influx of silver into India. A 
 portion of this silver was sent to purchase cotton at 
 extremely high prices ; and another portion repre- 
 sented capital which was raised in England and sent 
 to India for the construction of railways and other 
 works. At the present time there seem to be indica- 
 tions that the financial position of India may be 
 prejudicially affected by a rise in general prices 
 consequent on a depreciation in the value of silver. 
 Allusion has already been made to the fact that as 
 
48 INDIAN FINANCE. [i. 
 
 recently as December, 1878, an official paper was 
 published from which it appears that the military 
 expenditure of the present year will be greater than 
 its estimated amount by 330,000/., which is described 
 as " compensation for high price of food." It is 
 evident that if there is a rise in general prices there 
 is scarcely a single department, the cost of which may 
 not, sooner or later, very materially increase. It is 
 not, however, necessary here to pursue the subject 
 further, because the extent to which general prices in 
 India may be affected by the depreciation of silver 
 can be more appropriately considered when discussing 
 the third of the four branches of expenditure namely, 
 that which arises from loss by exchange. 
 
 In the current financial year the loss by exchange 
 was estimated, when the budget was brought forward, 
 at no less than 3,000,OOOZ. ; but, large as this sum 
 is, the Government, in a revised estimate issued 
 within the last few weeks, calculate that it will be 
 exceeded by 500,000/. In 1876-7 the loss by ex- 
 change, as appears from the table already given, was 
 1,676,482Z. In 1874-75 the loss by exchange was 
 only about 500,000?. A few years previous to this 
 the loss was so trifling as scarcely to be worth notice ; 
 and in 1870 the amount which was gained by ex- 
 change exceeded, by a few thousand pounds, the 
 amount lost. These figures show, with striking 
 
i.] THE FINANCIAL CONDITION OF INDIA. 49 
 
 distinctness, with what remarkable rapidity this item 
 in Indian expenditure has assumed its present serious 
 proportions. Whether it is more likely that this 
 charge on the Indian revenues will in future years 
 diminish or increase, depends upon so many un- 
 certain conditions that it would not be prudent to 
 make a confident prediction on the subject. The loss 
 by exchange, as previously explained, is primarily 
 due to a depreciation in the value of silver, and one 
 of the chief causes of this depreciation is the large 
 additional supply of silver yielded by the Nevada 
 mines in recent years. In 1875 the aggregate pro- 
 duction of silver throughout the world is estimated 
 to have been about 15,000,000^, more than half of 
 this amount, 8,000,000/. being obtained from the 
 American mines. Twenty years previously namely, 
 between 1852 and 1862 the average annual pro- 
 duction was only from 8,000,OOOZ. to 9,000,0002., and 
 at that time no appreciable quantity came from the 
 United States. Simultaneously with this large in- 
 crease in the supply of silver many circumstances 
 occurred which greatly diminished the demand for 
 silver. Silver was demonetised in Germany; and 
 Germany consequently not only ceased to require the 
 large amount of silver which she had previously used 
 for coinage, but a great portion of the silver in 
 circulation was withdrawn and sold by the German 
 
 E 
 
50 INDIAN FINANCE. [i 
 
 Government. Another circumstance which has pro- 
 duced a very important effect in diminishing the 
 demand for silver is the great increase in recent 
 years in the Indian home charges. The value of the 
 products exported from India has always been much 
 in excess of the value of those imported. Until 
 quite lately the balance was liquidated by trans- 
 mitting silver to India. In some years the silver 
 thus sent amounted to more than 10,000,000/. Such 
 a transmission of silver constituted one of the chief 
 sources of the demand for silver, and was indeed 
 one of the most important factors in maintaining its 
 value. Each addition, however, that is made to the 
 home charges diminishes pro tanto this demand for 
 silver. An English merchant, for instance, who has 
 purchased a hundred thousand pounds' worth of 
 Indian produce, instead of sending silver to India 
 to pay for it, purchases bills from the Indian Govern- 
 ment in England, drawn upon the Indian Govern- 
 ment in Calcutta, and the amount of bills which the 
 Government has to sell in England increases, of 
 course, with each increase in the home charges. It 
 is, I think, made sufficiently clear from this brief 
 review of the various circumstances which have pro- 
 duced a depreciation in the value of silver, and a 
 consequent loss by exchange to the Indian Govern- 
 ment, that the value of silver depends upon various 
 
i.] THE FINANCIAL CONDITION OF INDIA. 51 
 
 causes, some of which may be regarded as entirely 
 beyond the power of any Government to control. 
 Thus the value of silver will be to a very consider- 
 able extent determined by the future yield of the 
 American mines. It is impossible to foresee whether 
 the future productiveness of these mines will increase 
 or diminish, and it may of course happen that silver 
 mines may be discovered in other parts of the world. 
 It has, however, been shown that a powerful effect 
 is being exerted at the present time in depreciating 
 the value of silver by the large amount of bills which 
 have to be sold by the Indian Government in Eng- 
 land to provide for the home charges. The amount 
 of the home charges has increased to a most serious 
 extent in recent years. Nothing, moreover, can avert 
 a still further increase, if the expenditure is permitted 
 so habitually to exceed the revenue that money has 
 to be borrowed to make good the deficit. The loans 
 being chiefly raised in England, it is obvious that 
 the interest on these loans represents so much more 
 which has to be transmitted from India to England, 
 or, in other words, so much added to the home 
 charges. 
 
 It is important to direct particular attention to 
 the influence exerted by each increase in the home 
 charges in adding to the loss by exchange which 
 India has to bear, since under any circumstances it 
 
 E 2 
 
52 INDIAN FINANCE. [i. 
 
 would be a cause for apprehension to see a con- 
 stantly augmenting proportion of the revenue of a 
 country not spent in the country itself; but this 
 circumstance becomes more serious when it can be 
 shown that this expenditure of the revenues of India 
 out of India exerts a direct influence in depreciating 
 the value of silver, and in thus lessening the value 
 of all that large part of the Indian revenue which, 
 either permanently or temporarily, is received in the 
 form of a fixed payment made in silver. 
 
 With regard to the fourth and last branch of 
 expenditure to which I have called attention 
 namely, the interest on loans it is manifest that this 
 subject is closely connected in many of its aspects 
 with the question which has just been considered. 
 The largest portion of the money which has been 
 borrowed in recent years by the Indian Government 
 has been obtained by loans raised in England ; and 
 the additional amount which has to be provided 
 to meet the interest on these loans represents so 
 much added to the home charges. In 1856 the sum 
 annually required to pay the interest on the Indian 
 Debt was 2,190,000?., in 1870-71 it was 3,200,000/., 
 and in 1876-77 it was 4,350,000?. From these figures 
 it appears that in twenty years the annual charge for 
 interest on the Indian Debt increased by about 100 
 per cent. Nothing can be more certain than that, 
 
i.] THE FINANCIAL CONDITION OF INDIA. 53 
 
 in the present financial condition of India, this in- 
 debtedness must continue steadily to increase. The 
 figures which have already been quoted, conclusively 
 show that the ordinary revenue of India is only 
 barely sufficient to meet the ordinary expenditure, 
 and that consequently, in the words of one who 
 speaks with official authority, every fresh contingency 
 and every new charge involve some addition to the 
 debt of India. Thus, within the last few years, 
 16, 000,000^ has been spent in famine relief, and 
 nearly the whole of this amount has been obtained 
 by loans, the interest on which involves an annual 
 charge of about 700, OOO/. Money, however, is not 
 borrowed by the Indian Government simply to meet 
 such charges as these ; it has for some time been 
 their settled policy to borrow each year not less than 
 4, 000, 000 /. for the construction of railways and 
 works of irrigation. . The public works, which are 
 thus constructed out of borrowed money, are no 
 doubt undertaken by the Indian Government with 
 the idea that they will be reproductive, or, in other 
 words, that they will yield a net revenue sufficient 
 to pay the interest on the capital expended. The 
 experience of the past, however, proves that, although 
 it is intended that these public works should be re- 
 productive in the sense just described, yet, regarding 
 the transaction simply as a financial one, the money 
 
54 INDIAN FINANCE. [i. 
 
 thus spent is really embarked in a most speculative 
 and uncertain investment. Lord Salisbury, speak- 
 ing at Manchester in January 1875, when he was 
 Secretary of State for India, said : 
 
 " The difficulties which surround the question of 
 irrigation are very great. We can scarcely yet be 
 said to have had one genuine instance of financial 
 success. The irrigating projects that have been 
 carried out, if they have had for their basis the 
 former works of native rulers, have in many instances 
 been a financial success ; but then of course that 
 favourable appearance of the account has been ob- 
 tained by not charging the former expenditure of 
 the native ruler. In those cases where we have 
 begun the projects of irrigation for ourselves we have 
 not reached, I believe, in any one instance, the 
 desired result of a clean balance-sheet." 
 
 Although I think that Lord Salisbury, in making 
 this sweeping assertion about the unsatisfactory 
 financial results of these irrigation works, somewhat 
 overstated the case, yet it is impossible for any one 
 to deny the absolute correctness of the conclusion 
 which has been officially arrived at, that on the 
 9,000,000/. which has been spent in recent years on 
 schemes of irrigation in Bengal, the return which is 
 yielded is only ^ per cent. 1 When it is remembered 
 
 1 See Speech of Lord G. Hamilton, when Under-Secretary of State 
 for India, in the House of Commons, January, 1878. Hansard, 
 vol. ccxxxvii. p. 331. 
 
i.] THE FINANCIAL CONDITION OF INDIA. fi5 
 
 that every one of these particular works, at the time 
 it was undertaken, was regarded as reproductive, 
 nothing more need be said to show that, however 
 useful or desirable public works may be in India, it is 
 more than probable that they will not yield a return 
 sufficient to meet the interest on the capital ex- 
 pended ; and consequently there will be a deficit 
 which will represent another item of expenditure, 
 another charge upon the revenues of India. It 
 therefore appears that at the present time the 
 indebtedness of India must almost inevitably con- 
 tinue to be augmented by two distinct causes. In 
 the first place, as there is no surplus of ordinary 
 revenue beyond ordinary expenditure, every such 
 contingency as war or famine is certain to lead to the 
 debt being increased ; and, secondly, so long as the 
 present policy is continued of constructing public 
 works out of borrowed money, the loans which are 
 raised for these works represent constant additions 
 to the debt of India. 
 
 Many other branches of Indian expenditure might 
 be referred to, besides those to which attention has 
 been here directed. I think, however, enough has 
 been said on the subject of revenue and expenditure 
 to establish the following conclusions with regard to 
 the financial position of India : 
 
 1. The revenue is characterised by great inelasticity. 
 
56 INDIAN FINANCE. [i. 
 
 2. The expenditure has increased in a marked 
 manner in recent years, partly from the general 
 increase in the cost of administration, and partly 
 from a depreciation in the value of silver. 
 
 3. The military expenditure is excessive, absorbing 
 45 per cent, of the entire net revenue of the country ; 
 and this expenditure is likely to be greatly augmented 
 if the frontier of India is advanced, as now seems to 
 be contemplated. 
 
 4. A comparatively stationary revenue having to 
 meet an increasing expenditure, it will be necessary 
 sooner or later to add to the taxation of India. If a 
 deficit is temporarily met by borrowing, the money 
 which will have to be provided to pay the interest on 
 the loan must ultimately increase the deficit, which 
 will have to be met by increased taxation. 
 
 5. There has already been a most serious increase 
 in the indebtedness of India, amounting in twenty 
 years to 100 per cent. 
 
 Such being the present condition of Indian finance, 
 scarcely another word need be said to show that if 
 some fundamental change is not promptly introduced, 
 if expenditure is not rigorously curtailed, it will be 
 absolutely impossible to avoid the necessity of im- 
 posing on the people of India a large amount ol 
 additional taxation. In order adequately to appre- 
 ciate the grave consequences which may be produced 
 
I.] THE FINANCIAL CONDITION OF INDIA. 57 
 
 by an increase of taxation in India, it is essential to 
 bear in mind that the question cannot be regarded 
 as if it were simply a financial one. Between Eng- 
 land and India, in matters of taxation, there is a 
 fundamental difference. If some contingency should 
 occur in England which would render it necessary 
 to obtain . 5,000,000?. by additional taxation, it is 
 perfectty well known how easily the money could be 
 provided. More than 5,000,000?. could be raised 
 by adding twopence in the pound to the income- 
 tax, and by slightly increasing the duty on some 
 article of general consumption, such as tea or spirits. 
 But in India, if it became necessary to raise, not 
 5,000,000?., but even a smaller sum, say 3,000,000?., 
 by additional taxation, it will scarcely be denied that 
 taxes might have to be imposed which would be 
 regarded by the people as so burdensome as to create 
 a most serious amount of discontent. When ex- 
 amining in detail the present sources of revenue, I 
 believe it was clearly proved that they present so 
 little prospect of increase that, if additional revenue 
 has to be obtained, it will be absolutely necessary to 
 have recourse to some new forms of taxation. The 
 truth of this conclusion is corroborated in a most 
 striking manner by the recent action of the Indian 
 Government. In order to obtain the comparatively 
 trifling sum of 750,000?., the Government came to 
 
58 INDIAN FINANCE. [i. 
 
 the conclusion, as already stated, that no better 
 course was open to them than to impose a trades 
 licence tax of fivepence in the pound upon all trade 
 incomes, even on those as small as 4=s. a week. As 
 the Government of India must have been fully aware 
 of the discontent which such a tax would inevitably 
 cause, it may be fairly concluded that they would 
 never have sanctioned it, if they could have dis- 
 covered any less unsatisfactory way of obtaining the 
 money required. But if the trades licence tax was 
 regarded, a twelvemonth since, as the best mode of 
 obtaining additional revenue, one of two things must 
 occur if it becomes necessary still further to add to 
 taxation in order to provide for the increasing ex- 
 penditure which is now taking place either the rate 
 of the licence tax must be advanced, or some tax 
 which the Government considered, a twelvemonth 
 since, still more objectionable must be resorted to. 
 It is already rumoured that the income-tax will again 
 be imposed ; and although this tax has often been 
 supported on the ground that it will reach a wealthy 
 class who are least heavily taxed, yet nothing can be 
 more unwise than to ignore the very serious dis- 
 advantages associated with the levying of such a tax 
 in India. It was unequivocally condemned by three 
 successive Indian Finance Ministers. The practical 
 objections to the tax, as distinguished from the 
 
i.] THE FINANCIAL CONDITION OF INDIA. 59 
 
 theoretical arguments that may be adduced in its 
 favour, have been stated with remarkable clearness 
 by Mr. Laing, who for many years served in India as 
 Finance Minister. He has said that he regarded the 
 income-tax as " about as bad and obnoxious a mode 
 of raising revenue as it is possible to imagine in a 
 country like India .... I think that for an Oriental 
 country, and with the Eastern habit of mind, any tax 
 which imposes inquisition into individual means is 
 attended with innumerable evils which are little felt 
 in a country like England." And he further expressed 
 an opinion that, in consequence of the impossibility 
 of preventing abuses connected with the assessment 
 of the tax in a country like India, "for every rupee 
 that comes into the Treasury, two rupees are extorted 
 from the population that have to pay the tax." 
 
 Probably, however, one of the most weighty objec- 
 tions that can be urged against the imposition of an 
 income-tax in India is that a great machinery of 
 assessment, which it has been shown is liable to the 
 gravest abuse, is brought into active operation over 
 the length and breadth of the country, in order to 
 realise a very trifling financial result. When this tax 
 was last levied in India, it was at the rate of two- 
 pence-halfpenny in the pound, and the net revenue 
 realised was little more than 500,000?. From an 
 income-tax of twopence-halfpenny in the pound in 
 
60 INDIAN FINANCE. [r. 
 
 England about 5,000,000/. would be obtained, and 
 many small incomes which would be exempted in 
 England would certainly be assessed in India. No fact 
 can bring out with more striking distinctness the 
 remarkable contrast between the wealth of England 
 and the poverty of India. India contains a popula- 
 tion more than seven times as great as that of 
 England, and yet a tax which in England produces 
 5,000,000/. yields little more than 500,000.1 in India. 
 The amount, therefore, which can be raised by any 
 form of direct taxation in India is, in consequence of 
 the general poverty of the country, extremely small ; 
 and the amount which can be raised by indirect taxa- 
 tion may be regarded as having already nearly reached 
 its utmost possible limits. Nothing more than a very 
 trifling amount can ever be raised by imposing taxes 
 on luxuries which are consumed by the few. The in- 
 direct taxes which are really productive are those 
 which are imposed on articles of general consump- 
 tion. In India the mass of the people are so poor 
 that they use no article which can be taxed except 
 salt, and the taxation on salt has already reached 
 that extreme point when any increase of duty would 
 seriously diminish consumption. Lord Lawrence, in 
 the evidence he gave before the Indian Finance Com- 
 mittee in 1873, had his attention specially directed 
 to the question of obtaining additional revenue by 
 
j.] THE FINANCIAL CONDITION OF IND. C 
 
 increased taxation in India. It will be 
 admitted that, from his long official experience, am 
 from his intimate knowledge of the habits and feelings 
 of the Indian people, no one could speak on such a 
 subject with greater authority than Lord Lawrence, 
 and he unhesitatingly said : " I am not prepared to 
 mention any new sources of revenue which I think it 
 would be politic to make use of. Succession duties, 
 and the tobacco-tax, and so forth, have been constantly 
 talked of; but we went into the subject very carefully, 
 and came to the conclusion, almost unanimously, that 
 it was unwise to introduce such taxes." As since this 
 evidence was given, the suggestion has from time to 
 time been revived that a tobacco duty should be 
 imposed in India, it is desirable to refer to the reasons 
 that were urged against it by Lord Lawrence. He 
 showed that, in order to levy it, it would be necessary 
 either to increase the assessment on the land on which 
 it was grown and this would be interpreted as an 
 augmentation of the land revenue or to levy an 
 excise duty on tobacco. As tobacco is freely grown 
 in all the native states whose boundaries are conter- 
 minous with our own territories, it would become 
 requisite, in order to prevent the importation of 
 tobacco from these states, to establish customs lines 
 extending over thousands of miles. As, moreover, 
 
 1 See Report of Committee on East India Finance, 1873, p. 330. 
 
62 INDIAN FINANCE. [i. 
 
 tobacco is often grown by the Indian people for 
 their own use, it would in all probability be found 
 essential, in order to prevent the evasion of the duty, 
 to make the growth of tobacco a Government 
 monopoly. Scarcely any arrangement that could be 
 adopted would be regarded as more harassing by the 
 people of India. The opinion of other high author- 
 ities against a tobacco duty might be quoted. Thus 
 Sir Donald McLeod, who was for many years Lieu- 
 tenant-Grovernor of the Punjaub, and who was 
 admitted to be one of the ablest financial adminis- 
 trators India ever produced, objected to the tax, and 
 when examined before the Finance Committee directed 
 its attention to an elaborate minute that had been 
 prepared condemnatory of a tobacco duty, by Mr. 
 (now Sir John) Strachey. 
 
 Unless it can be shown that the description which 
 has been here given of the financial condition of India 
 is inaccurate, I think it must be admitted that the 
 subject is one which should cause the gravest anxiety. 
 But it will probably be said : If the finances of India 
 are in so critical a condition, can nothing be done I 
 Can no effort be made to avert impending embarrass- 
 ment ? Of all the things connected with the financial 
 administration of India that require to be done, 
 nothing is so essential as the immediate recognition 
 of the fact that India has hitherto been governed on 
 
i.] THE FINANCIAL CONDITION OF INDIA. 63 
 
 far too costly a scale. Her position is like that of a 
 landowner who has been living beyond his income. 
 Each year some new mortgage has to be raised to 
 make good the deficiency ; and as the interest on 
 these successive mortgages accumulates, and as there 
 is no reduction but rather an increase in the scale 
 of his expenditure, his estate steadily becomes more 
 burdened with debt. To add to his difficulties, he 
 has borrowed large sums of money to carry out 
 various improvements ; and, however desirable these 
 improvements may be, many of them do not pay the 
 interest on the capital expended. If, under such cir- 
 cumstances as these, a practical man of business were 
 called in to advise what ought to be done, it is obvious 
 that he would insist above all things that expenditure 
 should be reduced. He would probably soon discover 
 that which is usually the case when a man lives 
 beyond his means, that in all directions too much 
 money had been spent. There would be no chance of 
 placing the estate in a secure position, unless its owner 
 were prepared by rigorous retrenchment to bring his 
 expenditure well within his income. Mortgages might 
 then be gradually reduced, and when a surplus had 
 been secured many improvements might be carried 
 out which could not prudently be undertaken when 
 there was a risk that they would burden the property 
 with a still heavier load of debt. The remedy which 
 
G4 INDIAN FINANCE. [i. 
 
 would have to be applied under the circumstances just 
 described not inaccurately represents what is neces- 
 sary to be done in order to place the finances of India 
 in a sound position. For some years the Indian 
 Government has been living beyond its means. In 
 almost every direction too much money has been 
 spent ; and those who have been responsible for this 
 expenditure seem too often to have forgotten that 
 India, instead of being one of the wealthiest, is one of 
 the poorest countries in the world. Page after page 
 might be filled with instances of reckless extrava- 
 gance. At one time a private irrigation company 
 with a capital of a million, the lOOl. shares of which 
 are unsaleable at the nominal quotation of 601., is 
 bought by the Indian Government at par, and in 
 addition a large bonus is given to be distributed 
 among the officials of the company. At another time 
 175,0001. is expended in building and furnishing a 
 country house for the Governor of Bombay. It is no 
 exaggeration to say that it would not be one half so 
 mischievous to permit a million of English money to 
 be spent in building a mansion for an English minister. 
 It is quite within recent years that the Public "Works 
 Department has assumed its present large proportions. 
 No care apparently has been taken to adjust the 
 supply of highly paid European officers in this de- 
 partment to the demand, and it is now admitted 
 
i.] THE FINANCIAL CONDITION OF INDIA. 65 
 
 that there is a complete block in the higher grades of 
 the service. Employment cannot be found for many 
 who are drawing large salaries from Indian revenues, 
 and it is acknowledged that many are simply holding 
 on to become eligible for pensions. But it is not 
 simply that money has been thus recklessly squandered. 
 It is just the same with a nation as it is with an indi- 
 vidual. Whether or not a particular outlay can be 
 justified depends upon the amount of income out of 
 which it has to be made. Nothing, for instance, may 
 be more appropriate than for a man with 4,OOOZ. a 
 year to live in a house the rent of which is 400/. But 
 if his income is only 1,OOOZ., to live in such a house 
 would be an act of reckless folly. It is no use to 
 dilate upon the advantages which a man would derive 
 from keeping a carriage. If he cannot afford a car- 
 riage, he must submit to the discomfort of a cab. 
 Without an hour's delay the fact should be recognised 
 that India is not in a position to pay for various 
 services- which she receives at their present rate of 
 remuneration. A most important saving might be 
 effected by more largely employing natives in posi- 
 tions which are now filled by highly paid Europeans, 
 and from such a change political as well as financial 
 advantages would result. A single example .will show 
 the great economy which might thus be effected. Mr. 
 Eendel, Consulting Engineer of the East Indian 
 
66 INDIAN FINANCE. [i. 
 
 Bail way Company and of the Government Bail ways, 
 stated in his evidence before the Public Works 
 Committee in 1878 that three years ago not a single 
 native engine-driver was employed in India ; that on 
 one railway, the East Indian, 150 are now employed, 
 and that the saving thus effected is 15,OOOZ. a year. 
 Mr. Bendel added that the European is paid at least 
 ten times as much as the native driver, and "the 
 native does a lot more work he works longer hours 
 and gives less trouble. We are entirely satisfied with 
 the native drivers." 
 
 It is, however, scarcely necessary to remark, after 
 what has been said about the present and prospective 
 cost of the Indian army, that excessive military ex- 
 penditure has done more than anything else to create 
 the present financial embarrassment. It is particu- 
 larly to be borne in mind that the great increase in 
 this branch of expenditure has not been brought about 
 by its being necessary for India to maintain a larger 
 army. A few years after the abolition of the East 
 India Company, what is known as the army amalga- 
 mation scheme was carried out in direct opposition to 
 the advice of the most experienced Indian statesmen. 
 India was thus, as it were, bound hand and foot to 
 our own costly system of army administration, with- 
 out any regard apparently being had to the fact that 
 various schemes of military organisation, which may 
 
I.] : THE FINANCIAL CONDITION OF INDIA. 67 
 
 be perfectly suited to a country so wealthy as England, 
 may be altogether unsuited to a country so poor as 
 India. A single example will show to what an extent 
 the pecuniary interests of India may, under the pre- 
 sent system, be sacrificed. When, a few years since, 
 the plan of short service was introduced, it was solely 
 considered as an English question, and not a thought 
 was apparently given to the effect it would have upon 
 India. It need scarcely be said that a more costly 
 scheme for India could hardly have been devised. 
 The shorter the term of service the greater must be 
 the charge for transport ; and the men, after they 
 have completed a short term of service, are a reserve 
 ready at hand for England, but many thousands of 
 miles away from India. I cannot do more on this 
 occasion than thus incidentally allude to the question 
 of army organisation, with the view of showing that, 
 in order to reduce the military expenditure of India, 
 it is not necessary to diminish the numerical strength 
 of the Indian army. It is, however, not to be for- 
 gotten that most distinguished Indian statesmen have 
 declared that it would be far better to incur whatever 
 risks may be involved in the reduction of the Indian 
 army, than to face the danger which is certain to arise 
 from an increase of taxation in India. No man could 
 be less likely than Lord Canning inconsiderately to 
 recommend a reduction in the Indian army, for he 
 
 F 2 
 
68 INDIAN FINANCE. [i. 
 
 was Viceroy during the troublous days of the Mutiny ; 
 and yet Lord Canning unhesitatingly affirmed, and 
 the opinion has subsequently been endorsed by Lord 
 Northbrook, that if it were a question between impos- 
 ing new and irritating taxes in India, such as the 
 income-tax, " danger for danger, he (Lord Canning) 
 would prefer to reduce the army." It is well known 
 that an equally strong opinion as to the peril of adding 
 to the taxation of India was expressed by Lord Mayo, 
 a Viceroy who was alike distinguished for prudence, 
 courage, and common sense, He had the sagacity to 
 see that taxation in India could not be regarded as 
 simply a financial question, but that it involved poli- 
 tical consequences of the gravest moment. In a 
 passage which has been often quoted, he said that it 
 was almost impossible to exaggerate the discontent 
 which was produced among all classes in India, both 
 European and native, by the " constant increase of 
 taxation which had for years been going on." Deaf 
 to these warnings, instead of anything effectual having 
 been done to arrest the growth of taxation, the financial 
 position of India now is far more unsatisfactory than 
 it was in Lord Mayo's time. Not only has there been 
 an increase of Imperial taxation new and irritating 
 taxes, such as the licence tax, have been imposed 
 but in recent years the country has been enveloped in 
 a network of local taxation. Lord Northbrook, in 
 
i.] THE FINANCIAL CONDITION OF INDIA. 69 
 
 August, 1878, in presenting an important petition 
 from India in the House of Lords, endorsed the state- 
 ment that " within the last seven years, in Bengal 
 alone, there has been an increase of about a million, 
 and for the whole of India more than three millions, 
 per annum by provincial taxation." 
 
 When such opinions as these have been expressed 
 by those who must be regarded as the very highest 
 authorities on all questions affecting the government 
 of India, it is not too much to say that the very exist- 
 ence of our rule in India may be gravely imperilled 
 unless the finances of that country are placed in a 
 more satisfactory position. The English people should 
 awaken to the fact that the question is one which 
 vitally concerns themselves as well as the people 
 of India. There is scarcely any event which would 
 bring greater discredit and greater misfortune on 
 England than for the Indian Government to be forced 
 to say : " Our financial exigencies are such that it 
 is impossible to pay our way without coming to 
 England for pecuniary aid." A burden might thus 
 be cast upon English taxpayers which they would 
 find hard to bear, and the consequences to India 
 would be still more disastrous; for from the hour 
 in which she was obliged to seek subventions from 
 England, her virtual insolvency would be proclaimed. 
 Before it is too late, England should resolve that 
 
70 INDIAN FINANCE. [i. 
 
 such a contingency should be averted. Hitherto, 
 it has unfortunately too frequently happened that 
 the influence of England has been exerted not to 
 save, but to spend, the money of the Indian people. 
 The well-known saying of one who held a high 
 official position is only too true, that " Indian finance 
 has again and again been sacrificed to the exigencies 
 of English estimates." No one can reasonably desire 
 that the English Parliament should perpetually 
 meddle in the details of Indian administration. It 
 should, however, never be forgotten that when the 
 East India Company was abolished, the English 
 people became directly responsible for the govern- 
 ment of India. It cannot, I think, be denied that 
 this responsibility has been so imperfectly discharged, 
 that in many respects the new system of government 
 compares unfavourably with the old. Figures have 
 already been quoted to show to what a remarkable 
 extent the cost of administration has increased since 
 the East India Company was abolished. There was 
 at that time an independent control of expenditure 
 which now seems to be almost entirely wanting. It 
 was, no doubt, intended, when the government of 
 India by the Act of 1858 was transferred from the 
 Company to the Crown, that the Council of the 
 Secretary of State should exercise the same control 
 over Indian expenditure, as had formerly been 
 
i.] THE FINANCIAL CONDITION OF INDIA. 71 
 
 exercised by the Directors of the Company and by 
 the Court of Proprietors. But gradually the influence 
 and control of the Council have been so completely 
 whittled away that it is now openly declared by a 
 Secretary of State that he can spend the revenues 
 of India, beyond her frontiers, without obtaining 
 the consent, or even bringing the subject under the 
 notice, of his Council. Whether or not the power 
 thus claimed is really conferred upon him by the 
 Act of 1858, and by Acts which have subse- 
 quently been passed, raises questions which I can- 
 not attempt to enter upon here. The whole subject, 
 however, of the inadequacy of the control now 
 exercised on the expenditure of the revenues of India, 
 is one that urgently demands the most careful in- 
 vestigation. Nothing can be more unsatisfactory 
 than the present state of things. When the Secretary 
 of State desires to avoid responsibility, he can shelter 
 himself behind his Council ; when he desires to act, 
 untrammelled by their control and unhampered by 
 their advice, he can ignore them as completely as 
 if they did not exist. 1 
 
 In attempting to direct attention to the present 
 financial condition of India, I am chiefly desirous 
 
 1 The inadequacy of the control exercised over the financial adminis- 
 tration of India by the Act of 1858, and the Acts subsequently passed, 
 has been referred to in the Introduction to this volume. 
 
72 INDIAN FINANCE. [i. 
 
 to show how important are the issues involved, and 
 how urgently the subject demands prompt considera- 
 tion. Englishmen of all political parties are alike 
 anxious that no misfortune should befall our Indian 
 Empire. Opinions may differ as to the importance 
 to be attributed to certain dangers with which she 
 is sometimes said to be threatened ; but no one can 
 deny the reality of the peril which will be brought 
 upon her by financial embarrassment ; and the day, 
 I believe, is not far distant when, with common 
 consent, it will be said that those are the wisest 
 governors of India who act steadily upon the maxim 
 of a great statesman, that " finance is the key of 
 England's position in India." 
 
II. 
 
 THE INDIAN BUDGET OF 1879. 1 
 
 IN the previous Essay, I endeavoured to describe 
 the financial condition of India, and I hope to be 
 able in the following remarks to show the additional 
 light which has been thrown on the present financial 
 condition of that country by the budget which has 
 been lately introduced at Calcutta, and by the 
 financial arrangements which it is proposed to carry 
 out both in England and India during the present 
 year. The simple announcement that an exception- 
 ally large addition to the indebtedness of India is 
 to be accompanied not by an increase, but by a 
 remission of taxation, is sufficient to show the 
 extreme gravity of the financial situation in India. 
 During the current year it is proposed to raise a 
 4j per cent, loan of 3,500,000/. 2 in India; the 
 
 1 May, 1879. 
 
 2 The amount of the loan to be raised in India is 5,000,0007., and 
 not, as here represented, 3,500,000?. It appears, however, from the 
 budget statement for 1879-80, recently issued at Calcutta (see para- 
 graph 268), that about 1,500,0002. of the 5,000,0007. which it is 
 proposed to borrow is "needed to discharge, on the 1st of May 
 next, the untransferred portion of the 5-| per cent, loan," and, 
 
74 INDIAN FINANCE. [IT. 
 
 Government have already announced their intention 
 to introduce into the House of Commons a Bill 
 which will authorise the Indian authorities to borrow 
 10,000,000^ in England ; and 2,000,000/. is to be 
 advanced, free of interest, by England to India, as 
 a contribution towards the expenses of the Afghan 
 war. It therefore appears that in a single year it 
 is proposed either to borrow, or to take authority 
 to borrow, no less a sum than 15,500,000?., an 
 amount which represents more than one-tenth of 
 the entire national debt of India. If it were possible 
 to obtain additional revenue by fresh taxation, no 
 one can suppose that the Indian Government would 
 be so improvident as to sanction proposals which 
 will cause such a large addition to be made to Indian 
 indebtedness, without making any attempt to supply, 
 by increased taxation, a portion of the deficit which 
 has to be met. It may, therefore, be concluded that, 
 in the opinion of the Indian Government, the extreme 
 limit of taxation has now been reached in that 
 
 therefore, the "net amount thus called for is only 3,500,OOOZ." I 
 am so anxious not to overstate the financial exigencies of India, 
 that I accept this conclusion, although it is important to bear in 
 mind, as appears from the same paragraph of the budget statement, 
 that the necessity of raising a still larger loan to meet this year's 
 heavy deficit has only been avoided by resorting to the temporary 
 expedient of providing 1,200,000. "from the public balances." 
 
 1 This amount, after a strong remonstrance from the House of 
 Commons, was eventually reduced to 5,000,000^. 
 
ii.] THE INDIAN BUDGET OF 1879. 75 
 
 country, and that, unless expenditure can be reduced, 
 there is no margin from which to make any provision 
 for such contingencies as war and famine, which we 
 are officially told are certain to recur. Constant 
 borrowing must consequently be regarded as the 
 normal condition of Indian finance. 
 
 Although it may be thought that nothing can 
 exceed the seriousness of the state of things thus 
 disclosed, the outlook for the future becomes even 
 much worse when it is seen that, in the midst of 
 this embarrassment, the Indian Government are 
 surrounded with influences that compel them to 
 surrender a portion of the revenue, which they 
 themselves admit is altogether inadequate to satisfy 
 the demands now made upon it. The import duties 
 on cotton goods are, during the present year, to be 
 partly remitted, at a cost to the Indian revenue of 
 about 150,000^., which next year will be increased 
 to 20 0,0 00 1. No one for a moment will even pre- 
 tend to say that, in the present state of Indian 
 finance, the idea would have been entertained of 
 remitting these duties if the finances of India were 
 administered in the interest of that country alone. 
 
 The partial remission of these duties has been 
 defended on the ground that they are protective in 
 their character, and that it is wrong for free-trade 
 England to sanction, in any form, the continuance 
 
76 INDIAN FINANCE. [n. 
 
 of a protective duty. It is not, I believe, difficult 
 to show that these duties are much less protective 
 than is ordinarily supposed. It is important to 
 bear in mind that in the Bombay mills, which are 
 said to enjoy protection at the expense of Lancashire, 
 the manufacture is almost entirely confined to the 
 coarser sorts of cotton goods, upon which, when 
 imported, no duty is imposed. But even if it is 
 admitted that the import duties on cotton goods 
 are as protective as they are alleged to be by the 
 representatives of the manufacturing interest in 
 England, it would be necessary, in order to justify 
 the repeal of these duties, to show either that India 
 could spare the revenue which they yield, or that 
 it could be obtained in some other less objectionable 
 form. When it is remembered that not a single 
 year passes without a most serious addition being 
 made to the indebtedness of India, it at once becomes 
 evident that, as India has no surplus, she cannot 
 surrender a single shilling of revenue without an 
 equivalent amount being added to her debt. As 
 long, therefore, as the state of Indian finance is such 
 that she not only has no surplus, but has annually 
 to borrow in order to make good a heavy deficit, 
 it is impossible to justify any remission of taxation, 
 unless the sacrifice of revenue which such a remission 
 involves is to be compensated for from some other 
 
ii.] THE INDIAN BUDGET OF 1879. 77 
 
 source. No one, so far as I am aware, has suggested 
 new taxation, by which it would be practicable to 
 obtain the revenue which is yielded by these cotton 
 duties. In considering questions of taxation nothing 
 can be more unwise than to conclude that that 
 particular tax must be the best which is most in 
 accord with the principles of economic science. The 
 tastes, the habits, and the wishes of the people on 
 whom the tax is to be imposed ought to be most 
 carefully considered, and I believe it will not be 
 denied that of all the taxes which are levied in 
 India, there are none to which the people of that 
 country feel so little objection as the import duties 
 on cotton goods. It is, moreover, particularly worthy 
 of remark, that the repeal of these duties must 
 certainly tend to create greater inequality in the 
 incidence of taxation in India. It will be generally 
 admitted that, owing to the difficulty of imposing 
 taxes which reach the wealthy classes, an unduly 
 large part of the revenue of India is contributed by 
 those who are extremely poor. As the cotton duties 
 are now almost entirely imposed on the finer sorts 
 of goods, which are chiefly consumed by the rich, 
 it is obvious that the repeal of these duties would 
 reduce the amount of taxation paid by the wealthy, 
 and would consequently still further increase the 
 inequality in the taxation borne by the poor. 
 
78 INDIAN FINANCE. [n. 
 
 It is sometimes urged that the real objections to 
 these duties are not adequately understood by the 
 people of India, and that they fail to appreciate the 
 loss that is caused to them by their continuance. But 
 precisely the same remark holds true with regard to 
 every country in which a protectionist tariff is main- 
 tained. The people of Canada, for instance, appear 
 to be altogether insensible to the injury which they 
 are about to inflict upon themselves, by the more 
 onerous protective duties with which they seem 
 determined to fetter their commerce. But even if 
 India could afford the sacrifice of revenue which is 
 involved in the reduction of the cotton duties, it is of 
 the first importance most carefully to inquire whether 
 there are not other taxes in India which could with 
 greater advantage be reduced. It is now universally 
 acknowledged, that no circumstance connected with 
 the financial condition of India is so serious as the 
 increased burden which is imposed upon her through 
 the loss by exchange. It need scarcely be remarked 
 that, in order to bring about a more favourable state 
 of exchange, it is necessary either to increase the 
 remittances which other countries have to make to 
 India, or to diminish the remittances which India has 
 to make abroad. If her export trade should increase, 
 there will be a larger amount to remit to India. 
 There will consequently be a greater demand for bills 
 
ii.] THE INDIAN BUDGET OF 1879. 79 
 
 on India, and the price of these bills will advance ; in 
 other words, the exchange will become more favourable. 
 At the present time an export duty is levied on rice 
 and some other articles of Indian produce. If these 
 export duties were repealed, the export trade of India 
 might receive an important stimulus, and an influence 
 would thus be brought into operation to diminish the 
 loss by exchange which she now has to bear. The 
 policy which is now being pursued by the Indian 
 Government will produce an exactly opposite result. 
 The reduction of the cotton duties will increase the im- 
 ports into India. The amount, therefore, which India 
 will have to remit to other countries will be propor- 
 tionately increased ; the demand for bills on India 
 will consequently be diminished; and thus, at the very 
 time when the loss by exchange is causing a most 
 severe strain upon the finances of India, the Indian 
 Government adopts a policy which not only involves 
 an indefensible sacrifice of revenue, but which directly 
 tends to create a still more unfavourable exchange. 
 
 Greatly as the remission of the cotton duties is, for 
 the reasons just adduced, to be deprecated, there are 
 other objections of a much more weighty kind to be 
 urged against this needless sacrifice of revenue. The 
 most prominent feature in the Indian Budget of 1878 
 was the formation of what was described as a famine 
 fund. The present Finance Minister, Sir John 
 
80 INDIAN FINANCE. [n. 
 
 Strachey, came to the conclusion, after a careful 
 and exhaustive review of the state of Indian finance, 
 that, the ordinary revenue of that country being 
 barely sufficient to meet its ordinary expenditure, 
 there was no margin left from which any provision 
 could be made for such contingencies as war and 
 famine. During the past twelve years there have 
 been four famines in India ; and since 1873 the 
 famine in Bengal and the recent famine in Southern 
 India have entailed an expenditure of 16,000,000?. 
 As there was no margin of surplus revenue from 
 which this large expenditure could be provided, the 
 money had to be obtained by borrowing, and the debt 
 of India has been proportionately increased. In order 
 to prevent the recurrence of such a state of things, it 
 would obviously be necessary, in years in which there 
 were no famines, to secure a surplus that would enable 
 a fund to be formed, from which the money required 
 for the relief of famine could be provided. After 
 calculating the amount of famine expenditure during 
 the period above mentioned, Sir John Strachey came 
 to the conclusion that, in order to establish a fund 
 adequate for the purposes intended, it would be 
 necessary to obtain an additional revenue of about 
 1,500,000?. a year. In order to provide this extra 
 revenue, a licence tax of about 2 per cent, waa 
 imposed, and this tax was made to reach those who 
 
IL] THE INDIAN BUDGET OF 1879. 81 
 
 earned no more than four shillings a week. New 
 cesses were levied in Bengal and other parts of India ; 
 and although the salt tax was reduced in the parts of 
 the country which paid these new cesses, an addi- 
 tional revenue was raised from salt, and the people of 
 Madras and Bombay, who were just recovering from 
 the effects of a most terrible famine, found the salt 
 duty increased by no less than 40 per cent. It was 
 so generally admitted that, in the present condition 
 of India, nothing but extreme necessity could 
 justify this new taxation, that the Government 
 lost no opportunity of declaring that the money 
 which was to be obtained from this new and excep- 
 tionally burdensome taxation, was to meet a national 
 emergency, and that it should be scrupulously devoted 
 to the relief of famine. Nothing could be more 
 specific than the following declaration of the 
 Viceroy : 
 
 " The sole justification of the increased taxation 
 which has just been imposed upon the people of India 
 for the purpose of insuring their Empire against the 
 worst calamities of future famine, so far as such an 
 insurance can now be practically provided, is the 
 pledge we have given that a sum not less than a 
 million and a half sterling, which exceeds the amount 
 of the additional contributions obtained from the 
 people for this purpose, shall be annually applied to 
 it. ... We have pledged ourselves not to spend one 
 
82 INDIAN FINANCE. [n. 
 
 rupee of the special resources thus created upon works 
 of a different character." 
 
 When the nature of the new taxation which was 
 imposed upon the people of India is considered, a 
 most ready assent must be given to the opinion thus 
 expressed by the Viceroy, that the "sole justification" 
 for the taxation was to be found in the purpose to 
 which it was to be applied. The trades licence tax is 
 an income tax in its most aggravated form, for it is 
 an income tax from which every official and pro- 
 fessional income is exempted. 1 doubt if the English 
 people would consider the gravest emergency to 
 justify the imposition of an income tax which would 
 fall upon almost every artisan, and would leave un- 
 touched the entire official class, all the officers in the 
 army, and all professional men. The salt duty had, 
 before its recent increase, been one of the heaviest 
 imposts ever levied on a first necessary of life. And 
 yet the starving millions of Madras and Bombay, 
 when they were scarcely able to raise their heads from 
 the terrible affliction that had visited them, were told 
 that the salt duty was to be increased by 40 per cent. 
 Under these circumstances it can be readily under- 
 stood how necessary it was deemed by the Viceroy to 
 endeavour to allay discontent, by giving the most 
 distinct promises language could convey, that not " one 
 rupee " of the money which was thus collected from 
 
ii.] THE INDIAN BUDGET OF 1879. 83 
 
 the poorest of the Indian people should be devoted to 
 any other purpose than providing a fund which might 
 relieve their future necessities. The new taxes have 
 been collected, and not a shilling of the money which 
 they yield has been devoted to the purposes to 
 which they were pledged. A few months after the 
 famine fund was called into nominal existence, the 
 invasion of Afghanistan was undertaken, and the 
 fund was absorbed in defraying the expenses of 
 this military expedition. It will perhaps be said that 
 the whole of the famine fund has not been devoted 
 to this purpose, and that a portion of it is to be 
 devoted to the partial remission of the cotton duties ; 
 for if these famine taxes had not been imposed, the 
 Indian Government would not have thought that 
 they could possibly spare the 200,OOOZ. which the 
 reduction of these duties will cost the revenue of 
 India. But whatever conclusion may be adopted as to 
 the precise manner in which the money which was 
 intended to create a famine fund has been spent, 
 there can be no question that not a fraction of the 
 new taxation which was imposed for famine purposes 
 has been devoted to this object. The pledge which 
 was made to the Indian people has been alike broken, 
 whether the money which they have been called upon 
 to contribute has been expended for military purposes, 
 or has been spent in enabling the Government in part 
 
 G 2 
 
84 INDIAN FINANCE. [n. 
 
 to satisfy the demands which have been so persis- 
 tently pressed upon them by the cotton-manufacturing 
 interest in England. 
 
 It may not improbably happen that, in discussions 
 on Indian finance, the famine fund will be referred to 
 as if it still had an existence. Financial complexity 
 has apparently for some people a strange fascination ; 
 and there are those who always seem to cling to the 
 belief, that a considerable improvement can be effected 
 in the finances both of a nation and of an individual 
 by a dexterous arrangement of figures. Nothing can 
 be more precise than the declarations which were 
 made when the famine fund was established, that a 
 part of the additional revenue yielded by the new 
 taxation should be devoted to the reduction of debt; 
 The reductions in the debt which would thus be 
 effected in the years when there were no famines 
 would, it was supposed, be equivalent to the addition 
 that had to be made to the debt when famines had to 
 be relieved ; and consequently, over a series of years, 
 the relief of famine would involve no increase in the 
 indebtedness of India. It is obvious that the whole 
 of this arrangement at once falls to the ground when, 
 as is the case during the present year, although there 
 is no famine, the necessities of the Indian Government 
 are such that, instead of the debt of India being 
 diminished, it is proposed to make to that debt an 
 
ii.] THE INDIAN BUDGET OF 1879. 85 
 
 unprecedented^ large addition. It may be urged that 
 India, in the present state of her finances, cannot 
 possibly do without the additional revenue which is 
 obtained from the taxes imposed for the creation of a 
 famine fund. But if this be so, then it is far better 
 at once to recognise the fact that these new taxes have 
 
 o 
 
 not been applied to the creation of a famine fund, 
 but that they are required for the general purposes of 
 the Indian Government ; and amongst these purposes 
 it is particularly to be noted that the one which is 
 considered of most pressing urgency is to reduce the 
 import duties on cotton goods. 
 
 Although the amount of revenue which will be lost 
 through the reduction of the cotton duties is com- 
 paratively small, yet it is almost impossible to over- 
 estimate the importance of the principles involved in 
 this particular financial measure. It at once suggests 
 the inquiry, To what extent ought the interests of 
 England to control the finances of India ? Not only, 
 as has been already shown, have the most positive 
 promises which the Viceroy made to the Indian people 
 been disregarded, but I think it will scarcely be 
 denied that a resolution which, at the instance of the 
 Government, was unanimously passed by the House 
 of Commons, has been entirely set aside. On the 
 10th of July, 1877, a motion was brought forward 
 demanding the immediate repeal of the cotton duties. 
 
86 INDIAN FINANCE. [n. 
 
 The Government resisted it, on the ground that India 
 could not at that time afford such a sacrifice of 
 revenue ; and the truth of this was so generally 
 recognised that, without one dissentient voice, it was 
 affirmed that the repeal of these duties should be 
 postponed until the financial condition of India 
 became more satisfactory. Is it possible to point to 
 one single circumstance, which would justify the con- 
 clusion that the finances of India are in a more 
 satisfactory state now than they were two years since, 
 and that India can now afford a sacrifice of revenue 
 which she could not afford then ? It is repeatedly 
 said that the loss by exchange has done far more than 
 anything else to cause embarrassment to Indian 
 finance. In 1877 the loss by exchange was estimated 
 at about 1,676,482Z. ; during the present year it is 
 calculated that India will lose by exchange 3, 9 00, 000?. 
 In 1877 the amount added to the debt of India was 
 6,380,000?. ; during the present year the Indian 
 Government desires to borrow, or take authority to 
 borrow, no less than 15,500,000?. It is, however, 
 needless to multiply examples to show that if in 1877 
 India could not afford to sacrifice any existing source 
 of revenue, she is in a far worse position to afford such 
 a sacrifice at the present time. On all sides opinions 
 are now expressed about the state of Indian finance, 
 which only a short time since would have been 
 

 it.] THE INDIAN BUDGET OF 1879. 87 
 
 v,- 
 described as the idle forebodings of sensational 
 
 alarmists. The following is a description of the 
 budget of the present year by one who certainly 
 cannot be regarded as a prejudiced critic of the Indian 
 Government : 
 
 "The Indian press and the public continue to discuss 
 the Financial Statement, and all classes, both Euro- 
 pean and native, show singular unanimity in condemn- 
 ing it, all sides describing it as the most melancholy, 
 the most disheartening, and the most un statesman- 
 like ever issued by the Government since the 
 budget system was introduced." 1 
 
 Although the opinion may be readily endorsed that 
 nothing can be more unstatesmanlike than to sur- 
 render revenue at the very time when an exceptionally 
 large deficit has to be met by increased borrowing, 
 yet I think it would be unfair to single out Sir John 
 Strachey for special censure, and to assume that he, 
 being Finance Minister, is solely responsible for the 
 financial arrangements which he has had to propose. 
 It is probably impossible for any one who is outside 
 the Government properly to appreciate the difficulties 
 with which the Finance Minister has had to contend. 
 One of his predecessors in office not many years since 
 bitterly complained of the " extent to which Indian 
 
 1 Times Calcutta correspondent, in the Times of the 24th of March, 
 1879. 
 
88 INDIAN FINANCE. [11. 
 
 finance was often sacrificed to the exigencies of 
 English estimates ; " and, if there were no occasion 
 for official reserve, the present remission of the duties 
 on cotton goods would not improbably be referred to 
 as an example of the " extent to which Indian finance 
 has to be sacrificed to the exigencies of English " 
 politics. Not only, therefore, would it be unfair to 
 concentrate all the blame either upon Sir John 
 Strachey or the authorities at Calcutta, but I think 
 it would be unjust to hold the present Indian Govern- 
 ment, whether at Calcutta or in London, solely 
 responsible for the existing embarrassment in Indian 
 finance. Some of the causes which have brought about 
 embarrassment have no doubt been solely the creation 
 of the present Government. They alone are respon- 
 sible for the addition to the strength of the army, 
 and the consequent increase* in military expenditure, 
 which are said to be rendered necessary by the 
 attempt to secure a more " scientific " frontier for 
 our Indian empire. There are, however, many causes 
 that have contributed to bring upon India her present 
 financial difficulties, which came into operation long 
 before the present Government took office. Thus it 
 will be generally admitted that, in order to place the 
 finances of India on a more satisfactory basis, it is 
 above all things essential to reduce her present exces- 
 sive military expenditure, which absorbs no less than 
 
ii.] THE INDIAN BUDGET OF 1879. 89 
 
 45 per cent, of her entire net revenue. Although this 
 expenditure must be increased by the addition to the 
 strength of the army to which reference has just been 
 made, yet, in order to effect any important reduction 
 in the cost of the Indian army, it will be necessary 
 fundamentally to change the present military system, 
 and to undo a great part of the work which was done 
 when, under the auspices of Lord Palmerston's 
 Government, and in spite of the remonstrances of 
 every Indian statesman of experience, the army 
 amalgamation scheme was carried out, and India was 
 compulsorily made a partner in all the costly military 
 arrangements of England. Next to military expendi- 
 ture it will, I think, be acknowledged that there is no 
 question which more urgently demands immediate 
 attention than the large outlay on public works which 
 has been continued for many years in India. It 
 cannot, however, be said that the present Government 
 is more responsible than its predecessors for the 
 policy, which has proved financially so disastrous, of 
 borrowing large sums of money each year for the 
 construction of public works, which, though called at 
 one time " reproductive," and at another time " remu- 
 nerative/' seldom, as is now shown by official returns, 
 repay even a small part of the interest on the capital 
 expended. Then again, the present unfavourable 
 exchange is due to many causes, some of which at 
 
90 INDIAN FINANCE. [n. 
 
 least are altogether beyond the control of the Indian 
 Government As already explained, an unfavourable 
 exchange is a necessary accompaniment of a deprecia- 
 tion in the value of silver ; and the present great 
 depreciation in the value of silver is partly due to the 
 discovery of new silver mines in the United States, 
 to a falling off in the demand for silver consequent on 
 a demonetisation of silver by Germany, and to the 
 restriction of the silver coinage in those countries 
 which have joined what is known as the Latin Union. 
 Although the present unfavourable state of the Indian 
 exchange is no doubt in part to be attributed to the 
 causes just mentioned, yet as the rate of exchange is 
 intimately connected with the amount which India 
 has to remit to England, each addition to the home 
 charges must make the exchange more unfavourable ; 
 and these home charges have been permitted to 
 increase, not under one, but under successive Indian 
 Governments. 
 
 If for no other reason, I should think it particu- 
 larly important fully to acknowledge that the present 
 Government is not solely responsible for the existing 
 condition of Indian finance, because I believe it is 
 almost impossible to exaggerate the harm that may 
 be done, if, in attempting to remedy the present 
 state of things, the subject is approached in a spirit 
 of political partisanship. It is scarcely necessary to 
 
ii.] THE INDIAN BUDGET OF 1879. 91 
 
 remark that when the financial condition of a country 
 is such as that of India at the present time, it is 
 impossible for her finances to be placed in a more 
 satisfactory position unless a policy of rigorous re- 
 trenchment is carried out with the most persistent 
 determination. Any government that is prepared 
 to do this is certain to have to bear a load of un- 
 popularity. Expenditure cannot be curtailed, salaries 
 cannot be reduced, and unnecessary offices abolished, 
 without producing a great amount of discontent, and 
 without bringing into active operation the keen oppo- 
 sition of those who consider that they have a vested 
 interest in the continuance of the present system. 
 Far, therefore, from desiring in the slightest degree 
 to add to the difficulties which have now to be en- 
 countered by those who are responsible for the finances 
 of India, no effort should be spared to give every 
 possible assistance to any ministry that is willing at 
 once to frankly recognise the fact that India has 
 hitherto been far too expensively governed, and that 
 consequently it is necessary at all hazards to reduce 
 expenditure by adopting a policy of the strictest 
 economy. The financial proposals embodied in the 
 budget of the present year unfortunately afford 
 scarcely any indication that the extreme gravity of 
 the present financial situation is adequately appre- 
 ciated either by the Government at Calcutta or by 
 
92 INDIAN FINANCE. [n. 
 
 the Secretary of State. With the single exception 
 of a redaction of 1,000,000/. in the outlay on public 
 works, it appears that no serious attempt is to be 
 made to effect retrenchment in any other branch of 
 expenditure. Enormous as have been the military 
 charges during the last few years, there is only too 
 much reason to fear that these charges are more likely 
 to increase than to diminish. The Afghan war is 
 estimated to cost 2,600,000/., and I believe those 
 military and financial authorities, on whose judgment 
 most reliance is to be placed, unanimously agree that 
 this is far too low an estimate of cost. Moreover, it 
 is to be remembered that when this estimate was 
 made it was assumed that the war was virtually 
 concluded, and that our occupation of territory 
 would be confined within, comparatively speaking, 
 very narrow limits. The Prime Minister, speak- 
 ing in the House of Lords (13th of February, 
 1879), said: " Her Majesty's Government have 
 the satisfaction of feeling that the object of their 
 interference in Afghanistan has been completely 
 accomplished. . . . We have secured the object 
 for which the expedition was undertaken, and we 
 have obtained that frontier which we hope and be- 
 lieve will render our Empire invulnerable." There 
 seems little chance that this confident expectation 
 will be realised. As long as active operations have 
 
ii.] THE INDIAN BUDGET OF 187P. 93 
 
 to be undertaken, a heavy outlay must be incurred, 
 and, far from the war having been concluded, scarcely 
 a day elapses without the news of some movement in 
 the field, and of skirmishes more or less important. 
 The negotiations with Yakoob Khan do not appa- 
 rently promise so speedy a termination of the war 
 as was expected; for it is now (May, 1879) stated 
 that the Viceroy and his advisers consider it to be not 
 improbable that, in order to bring Yakoob Khan to 
 terms, it will be necessary, at least temporarily, to 
 occupy Cabul. If such an onward movement is 
 undertaken, it is obvious that all estimates of the 
 cost of the war which were based on the calculation 
 that peace was near at hand, and that our occupation 
 of territory would, as was said by the Prime Minister 
 in his speech already quoted, be confined to re- 
 taining possession of the " three highways which 
 connect Afghanistan with India," will have to be 
 entirely modified. An advance on Cabul might lead 
 to a prolongation of the war, and might involve an 
 expenditure so large that, in order to defray it, a 
 very considerable portion of the 15, 500,000 1, which 
 the Indian Government propose to take authority to 
 borrow during the present year, would have to be- 
 expended. It is therefore most important to bear 
 in mind that, whatever may be the reasons which 
 are put forward to justify the exceptionally large 
 
94 INDIAN FINANCE. [n. 
 
 borrowing powers the Indian Government seek to 
 obtain, almost the entire proceeds of the loans which 
 they desire to have authority to raise may have to be 
 devoted to meet the expenses of continued military 
 operations in Afghanistan. I desire, however, on the 
 present occasion not to discuss the subject from this 
 point of view, because I think it is very important 
 carefully to consider the reasons which are adduced 
 by the Government in support of their financial 
 proposals. 
 
 The reduction of the cotton duties having been 
 already referred to, it will only be necessary to direct 
 attention to the three different ways in which the 
 Indian Government propose to borrow money during 
 the present year. As already stated, a 4^ per cent, 
 loan of 3,500,OOOZ. is to be raised in India. Parlia- 
 ment is asked to give authority to the Indian 
 Government to borrow 10,000, 000 /. in England, and 
 2, 000, 000 . is to be advanced, free of interest, by 
 England to India, as a contribution towards the 
 expenses of the Afghan war. Before the announce- 
 ment was made that it was the intention of the 
 Government to take authority to borrow the ex- 
 ceptionally large amount of 10,000,000^. in England, 
 it was supposed that the entire borrowing opera- 
 tions of the year would be confined to raising a 
 loan of 3,500,0002. in India. For some years past 
 
IT.] THE INDIAN BUDGET OF 1879. 95 
 
 successive Secretaries of State have agreed that it 
 is most important, both on political and financial 
 grounds, not to increase the obligations of India in 
 England. In a despatch to the Government of India, 
 in which Lord Salisbury reviewed the budget of 1874, 
 he declared it to be indispensable that none but works 
 which were likely to prove remunerative should be 
 constructed from borrowed money, and he insisted, 
 with the utmost emphasis, that the money required 
 for their construction should be obtained by loans 
 raised in India and not in England. No one ques- 
 tioned the soundness of this policy, for the fact was 
 beginning to be recognised that from political con- 
 siderations it was not prudent to be constantly adding 
 to the obligations incurred by India abroad. Upon 
 financial grounds it was agreed to be equally im- 
 portant not to increase the Indian debt in England, 
 because each addition to this debt, by increasing the 
 amount which India had to remit to England, tended 
 to produce a more unfavourable rate of exchange. 
 Jt is obvious that the principles which were thus to 
 regulate the future financial administration of India 
 have been completely set aside, when, in a single 
 year, it is sought to obtain authority to borrow in 
 England more than twice as much as it is proposed 
 to borrow in India. So far as can be ascertained, the 
 only reasons which are alleged in explanation of this 
 
96 INDIAN FINANCE. [n. 
 
 departure from the policy which was so distinctly 
 enunciated by Lord Salisbury, are that it may be 
 found difficult to borrow in India the whole amount 
 required ; and, secondly, that it is necessary to raise 
 a large loan in England, in order that the Govern- 
 ment may have a reserve to fall back upon, and so be 
 enabled to withhold their bills from the market when 
 the exchange is unfavourable. It will at once be 
 seen that it is impossible for the Government to put 
 forward the first of these pleas, without virtually 
 endorsing all the most unfavourable opinions that 
 have been expressed with regard to the state of 
 Indian finance. If it is difficult for the Government 
 to borrow comparatively so small a sum as 3,500,OOOZ. 
 from the people of India themselves, it is evident 
 either that they are too poor to lend, or that they 
 are unwilling to entrust their savings to the State. 
 Again, it must be borne in mind that those who 
 lend one year have probably so much less to lend 
 the next year, and consequently, if it is now found 
 difficult to borrow 3,500,OOOZ. in India, there will 
 be still greater difficulty in borrowing a similar 
 amount hereafter. Unless, therefore, something is 
 immediately done to place the finances of India on 
 a sounder basis, the deficits which will have to be 
 annually met must necessarily, in an increasing 
 proportion, be made good by loans raised in England. 
 
ii.] THE INDIAN BUDGET OF 1870. 97 
 
 At the present time there appears unfortunately little 
 ground for hope that there will be any diminution in 
 the amount of the Indian deficits. As already stated, 
 it appears that no attempt is to be made to carry out 
 in any of the spending departments such a policy of 
 rigorous economy as India urgently needs ; and, 
 serious as is the loss which she now has to bear in 
 consequence of an unfavourable exchange, I believe. 
 it can be shown that it is only too probable that the 
 financial proposals which are now brought forward 
 will, if they are carried out, exercise a very material 
 influence in making the exchange even more un- 
 favourable than it now is. If 10,000,000^. is 
 borrowed in England, the financial position of India 
 may no doubt for a time be made to wear a somewhat 
 improved appearance. But the improvement will be 
 just as unreal as if an embarrassed landowner, in 
 order to meet his pressing obligations, raised another 
 mortgage on his estate. It cannot be too persistently 
 pressed on those who have to administer Indian 
 finance, that each addition which is made to the debt 
 of India in England must increase the amount which 
 has to be transmitted, in the form of interest, from 
 India to England. If, therefore, by devoting the 
 proceeds of a loan to meet the obligations of 
 India in England, the amount of bills on India 
 which the Secretary of State has to sell in London 
 
 H 
 
98 INDIAN FINANCE. [n. 
 
 is diminished, the relief can only be temporary ; the 
 loss by exchange is diminished this year only to be 
 increased in future years. In defence of such a 
 policy it is said, "something may happen." The 
 Government at Calcutta seem to derive the greatest 
 encouragement from the fact, that they have been 
 informed that the Secretary of State and his council 
 are taking the relative value of gold and silver into 
 their consideration; and this is apparently regarded 
 as such a hopeful omen for the future, that revenue 
 is sacrificed at the very time when a great amount 
 of additional indebtedness is being incurred. The 
 relative value of gold and silver is determined by 
 precisely the same laws as those which regulate the 
 value of any other products. If, compared with gold, 
 there is a large increase in the supply of silver, 
 accompanied by a considerable falling off in the 
 demand, a Secretary of State is just as powerless to 
 arrest a depreciation in the value of silver as he is to 
 stop the flow of the tide. It has sometimes been 
 suggested that an Act of Parliament should be passed 
 to fix the relative value of gold and silver, by 
 declaring that so many rupees should be always 
 worth a sovereign. Such a proposal is not less 
 unreasonable than it would be to enact that, whatever 
 the seasons might be, whether the harvest was good 
 or bad, a sack of wheat should always exchange for 
 
ii.] THE INDIAN BUDGET OF 1879. 99 
 
 a ton of coal. Such tampering with values can 
 produce no other result than, by creating confusion 
 and spreading a feeling of distrust, to aggravate the 
 evils which it is sought to remedy. If silver becomes 
 depreciated, there is only one way of restoring 
 its value, and that is by acting either on the supply 
 or the demand. In consequence of the large amount 
 of silver, variously estimated at from 15,000,OOOZ. 
 to 20,000,000^., that has been accumulated in 
 Germany since silver was demonetised in that 
 country, the supply of silver which can now be 
 brought into the market depends to a considerable 
 extent upon the German Government. The in- 
 fluence, however, which can thus be exerted upon 
 the supply of silver must be regarded as temporary 
 and accidental. The supply of silver is determined 
 by precisely the same natural laws as those which 
 regulate the supply of any other similar commodity. 
 If new and more productive mines are discovered, 
 the supply of silver will increase. If, however, the 
 value of silver becomes depreciated, the profit 
 obtained from existing mines will diminish, and 
 the supply will consequently decrease. 
 
 It, therefore, appears that it would be alike unwise 
 and futile to make any attempt to regulate the 
 supply of silver. So far as the supply of silver de- 
 pends upon the action of the German Government, 
 
 H 2 
 
100 INDIAN FINANCE. [n. 
 
 we have, obviously, no power to exercise any control. 
 Whatever may be our wishes on the subject, Ger- 
 many will treat the disposal of her silver as a 
 purely commercial transaction, and will bring her 
 silver into the market at whatever time she thinks 
 she will be able to sell it to the most advantage. It 
 seems only too probable that the first effect of the 
 policy which the Indian Government now seem 
 anxious to carry out, may be to enable Germany to 
 dispose of a large portion of her silver at a better 
 price than she is now able to obtain. As already 
 stated, if an Indian loan of 10,000,OOOZ. is raised 
 in England, the Government will be able for a 
 time to withhold their council drafts from the 
 market ; the rate of exchange will improve, and the 
 price of silver will advance. Germany will not be 
 slow to take advantage of this advance ; she will 
 at once bring a large quantity of silver into the 
 market ; the price of silver will again fall ; and the 
 chief effect of the loan will have been to enable 
 Germany to sell a portion of her silver on better 
 terms, while India will be left to meet her increased 
 obligations with the price of silver still further 
 reduced, and the exchange made more unfavourable 
 than before. 
 
 Although, therefore, from the considerations just 
 adduced, it appears to be of the first importance not 
 
ii.] THE INDIAN BUDGET OF 1879. 101 
 
 to attempt artificially to regulate the supply of silver, 
 yet much can undoubtedly be done by Government 
 action to affect the demand for silver, and con- 
 sequently to influence its value ; and I believe it 
 can be shown that the Indian Government can exert 
 a special influence on the demand for silver. Allusion 
 has already been made to the heavy duty, amounting 
 in some instances to 10 per cent., that is imposed 
 on so important an article of Indian export as rice. 
 If the state of Indian finance permitted this duty to 
 be repealed, the export trade of India might be 
 considerably developed, and the extra amount which 
 would be required to pay for the additional quantity 
 of produce exported would proportionately increase 
 the demand for silver. But this is by no means 
 the only way in which the demand for silver may 
 be influenced by the action of the Indian Govern- 
 ment. With regard to various proposals which are 
 from time to time brought forward to deal with 
 the Indian currency, it may be remarked that they 
 one and all labour under the fatal defect, that instead 
 of increasing, they would materially diminish the 
 demand for silver, and thus ultimately lower its 
 value. It has, for instance, been suggested that a 
 gold currency should take the place of silver in India, 
 and that the amount of the silver coinage should be 
 restricted. But if these measures were carried out, 
 
102 INDIAN FINANCE. [n. 
 
 it is evident that one of the largest of the existing 
 sources of demand for silver would be to a great 
 extent closed, and silver might become indefinitely 
 more depreciated in value than it is even at the 
 present time. As previously explained, the chief 
 cause of the fall ing- off in the Indian demand for 
 silver arises from the curtailment of her export trade, 
 and from the constant increase in the amount which 
 India has annually to remit for payments in England. 
 The only legitimate method, therefore, which can be 
 adopted to increase her demand for silver is to 
 stimulate her export trade, and to diminish the 
 amount of the home charges. Unfortunately, the 
 course which is now being taken by the Indian 
 Government, instead of diminishing, will seriously 
 augment these home charges. If sanction is given 
 to the proposal to raise a loan of 10,000,000/. in 
 England, provision will have to be made to pay the 
 interest on this loan ; an additional sum of at least 
 400,OOOZ. a year will consequently have to be trans- 
 mitted from India to England, and the demand for 
 silver will be lessened by this amount. Again, the 
 2,000,000/. which during the present year is to be 
 advanced by England to India to assist her in 
 defraying the expenses of the Afghan war will give 
 her some temporary relief, but the relief can only 
 be temporary ; it will add to her difficulties in the 
 
ii.] THE INDIAN BUDGET OF 1879. 103 
 
 future, because, as the money advanced is to be 
 repaid in seven equal annual instalments, India will, 
 during each of the next seven years, in addition to 
 the other home charges, have to transmit about 
 300,000/. Such an arrangement only affords another 
 example of the many that may be given to show that 
 at the present time the difficulties of Indian finance, 
 instead of being fairly faced, are merely being trifled 
 with ; but it cannot be too distinctly stated that, 
 however heavily and recklessly the future may be 
 discounted, a day of reckoning must inevitably come. 
 Unless all considerations of prudence are to be com- 
 pletely set aside, it is evident that as the excessive 
 amount of the home charges is embarrassing Indian 
 finance by causing the serious loss by exchange, the 
 greatest care should be taken, not only that another 
 shilling should not be added to these charges, but 
 that effectual measures should at once be adopted to 
 diminish their amount. 
 
 It is often stated that the home charges do not 
 admit of any important reduction, because, to a 
 great extent, they represent payments for liabilities 
 which have already been incurred. Thus, it is said, 
 the interest must be paid on money which has been 
 borrowed, and faith cannot be broken with those who 
 are entitled to pensions. No one, of course, can be 
 so unreasonable as to suggest that a policy of 
 
104 INDIAN FINANCE. [n. 
 
 repudiation should be adopted, and that India should 
 not meet the obligations which have been incurred on 
 her behalf. Such considerations as these, however, do 
 not in the slightest degree affect the importance of 
 preventing in the future that which has happened in 
 the past. Nothing can more conclusively show the peril 
 involved in adding to the debt of India, than the 
 fact that the interest which she has annually to pay 
 on the debt already incurred imposes on her a burden 
 which she finds it difficult to bear. The pensions and 
 allowances which she has undertaken to grant must 
 of course be paid ; but if these pensions and allow- 
 ances throw upon her a charge altogether dispropor- 
 tionate to her resources, an irresistible argument is at 
 once supplied in favour of a fundamental change in 
 the system. Taking the figures of the actual expen- 
 diture in 1876-77, the latest year for which they are 
 available, it appears that no less an amount than 
 2,800,000?. of the revenues of India has annually to 
 be paid in England in pensions, and furlough, com- 
 passionate, and absentee allowances. The real signi- 
 ficance of this drain upon the resources of the country 
 will be understood, when it is remembered that her 
 entire net or available revenue is not more than 
 38,000,000?. The home charges for the <mny are 
 constantly increasing. In December, 1877, the 
 present Finance Minister, in bringing forward his 
 
ii.] THE INDIAN BUDGET OF 1879. 105 
 
 financial measures for the creation of a famine fund, 
 said : " I examined in some detail, in my minute laid 
 before the Council on the 15th of March, the accounts 
 of the army. I showed that it now costs upwards of 
 17,000,000/. a year; that its cost has increased by 
 upwards of 1,000,OOOZ. since 1875-76 ; and that 
 a large share of this increase is in the expendi- 
 ture recorded in the Home Accounts." Sir John 
 Strachey added : " 1 do not assert that the whole 
 of the additional expenditure on the army has not 
 been incurred for excellent objects, or that it could 
 have been avoided ; but that the Indian revenues 
 are liable to have great charges thrown upon them 
 without the Government of India being consulted, 
 and almost without any power of remonstrance, 
 is a fact the gravity of which can ha,rdly be ex- 
 aggerated." Serious as is the state of things just 
 disclosed, it is not difficult to understand how it has 
 been brought about. Change after change is intro- 
 duced into the organisation of our army, without a 
 moment's thought being given to the effect which 
 will be produced on Indian finance. A large part 
 of the increase in the home military charges, to 
 which reference has just been made, is no doubt 
 to be attributed to the short-service system which 
 has lately come into operation. As previouslv 
 remarked, although short service may be an excellent 
 
106 INDIAN FINANCE. [n. 
 
 arrangement for England, it was scarcely possible to 
 have devised a more costly scheme of army organi- 
 sation for India ; and yet it appears from evidence 
 given before a parliamentary committee by Sir 
 Thomas Pears, late Secretary of the Military De- 
 partment at the Indian Office, that there is no 
 official record that the influence which would be 
 exercised on the finances of India by the short- 
 service system was ever considered by the English 
 Government. 1 
 
 Although it may be fairly contended that, what- 
 ever reforms in administration are introduced, a 
 considerable time must elapse before such great 
 items of charge as those just referred to can be 
 materially reduced, yet an important saving might at 
 once be effected if the work of retrenchment were 
 vigorously taken in hand. An examination of the 
 home charges will at once show that a year never 
 elapses without various acts of extravagance being 
 sanctioned. In some instances the amounts in- 
 volved may be small, but it not unfrequently 
 happens, that the want of due economy is most 
 strikingly brought to light by some transaction in 
 which the expenditure involved is not large. I 
 might quote almost innumerable examples to show 
 this. Looking over the latest accounts of the home 
 
 1 See Report of East India Finance Committee, 1874, p. 53. 
 
IL] THE INDIAN BUDGET OF 1879. 107 
 
 charges, it will be found that India is charged 
 1,200. for the "Passage and Outfit of a Member 
 of the Council of the Govern or- General." In the 
 same year she is charged 2,450/. for the " Passage 
 and Outfit of the Bishops of Calcutta and Bombay 
 and Chaplains/' 1 But if any one requires to have 
 brought home to him the lavishness with which 
 the money of India is spent, it is only necessary to 
 pay a visit to the India Office, and remember, as 
 we pass along its spacious corridors, that that 
 palatial building was erected by the Indian Govern- 
 ment, and its costly establishment is maintained 
 at the expense and for the use of one of the poorest 
 countries in the world. 
 
 In thus directing attention to the great import- 
 ance of reducing the home charges, it must not be 
 
 1 An attempt has been made to justify these charges, on the plea 
 that they are " fixed by Act of Parliament." (See speech of Mr. E. 
 Stanhope, House of Commons, 22nd of May, 1879.) It is, however, 
 obvious that if such a plea is brought forward, the Indian Government 
 must accept one of these two alternatives -either they must consider 
 the charges are not justifiable, and then it is their duty at once to 
 propose the repeal of the Acts by which they are enforced ; or if 
 they consider the charges are justifiable they then make themselves 
 just as responsible for the continuance of the charges as if the Acts 
 by which they are imposed had never been passed. It appears from 
 the Finance accounts that India, in 1877-8, had to pay 158,039 for 
 ecclesiastical charges. It is unnecessary to remark that none of this 
 money is devoted to the support of the religions of the people of 
 India. 
 
108 INDIAN FINANCE. [n. 
 
 supposed that this policy of retrenchment ought alone 
 to be carried out with regard to the expenditure 
 of Indian revenues in England. I have, however, in 
 the previous essay, referred to the general costliness 
 of Indian administration, and I have thought it im- 
 portant to make here special reference to the home 
 charges, because the chief object which the Govern- 
 ment seem anxious to obtain is a diminution of the 
 loss by exchange, and there is, I believe, no hope 
 that the exchange will become more favourable, 
 unless the home charges are reduced. I trust it 
 will not be thought that I underrate the difficulties 
 which will have to be encountered, in carrying out 
 a policy of rigid economy in the administration of 
 Indian finance. Many who, until quite lately, always 
 spoke of India as a country which could scarcely be 
 administered on too liberal a scale, are now going to 
 the opposite extreme, and express the most alarmist 
 views as to her future financial position. In some 
 of the leading English journals scarcely a week 
 elapses without reference being made to the hopeless 
 embarrassment of the finances of India, and her 
 future insolvency is alluded to as if it could not be 
 averted. Although I do not share these desponding 
 views, yet it must be evident that, unless something 
 is promptly done, the financial condition of India 
 will indeed soon become one of hopeless embarrass- 
 
ii.] THE INDIAN BUDGET OF 1879. 109 
 
 ment. It is not more certain that a stone, if it is 
 not checked in its fall, will gather increased mo- 
 mentum, than it is that the system, which is now 
 to receive its greatest development, of perpetually 
 adding to the indebtedness of India, will, if it is not 
 arrested, soon burden her with charges which she 
 will be powerless to meet. The simple truth cannot 
 be too persistently insisted upon, that India, through- 
 out every department, has of late years been far too 
 expensively governed. Although great economies 
 may be effected, the smallest saving should not be 
 neglected, and to those who are responsible for the 
 management of Indian finance the fact should ever 
 be present, that India is so poor that the waste of 
 a shilling of her money may be of far more serious 
 consequence than the waste of a pound of the money 
 of England. 
 
 As I have now considered three of the four financial 
 proposals of the Indian Government for the present 
 year, namely, the reduction of the cotton duties, the 
 raising of 3,500,000/. in India, and the borrowing of 
 10,000,000^. in England, it only remains to say a 
 few words on the last of the four proposals the 
 advance of 2,000,0002. by England to India, free of 
 interest, as a contribution towards the expenses of the 
 Afghan war. This advance may be regarded from two 
 entirely distinct points of view. In the first place, 
 
110 INDIAN FINANCE. [n. 
 
 it may be considered as a gift or a charitable offering ; 
 and, secondly, it may be looked on as a discharge 
 of an obligation legally and equitably imposed on 
 England to bear some share of the cost of the Afghan 
 war. If no such obligation really rests on England, 
 then this advance of 2,000, 000 , without interest, is 
 a gratuitous sacrifice on the part of England on behalf 
 of India. It is scarcely necessary to remark that the 
 consequences involved in the grant of such a sub- 
 vention are most serious. The financial relations 
 between England and India are at once placed on 
 an entirely new footing. The Indian Government, 
 by the acceptance of such an eleemosynary loan, 
 virtually confess that the strain now put on the 
 finances of India is more than she can bear, and 
 that she is obliged to come to England for assistance. 
 Not only is it an admission of financial exhaustion, 
 but the granting of such assistance may produce a 
 most disastrous effect upon the future financial 
 administration of India. If the idea is once per- 
 mitted to spread that the Indian authorities, when- 
 ever they are pressed for money, can draw upon 
 the English Exchequer, every guarantee for economy 
 will be swept away, and an incalculable injury may 
 be inflicted both upon England and India. 
 
 It will, however, be probably said that the advance 
 of this 2,000,OOOZ. is not intended in any way as a gift, 
 
ii.] THE INDIAN BUDGET OF 1879. ill 
 
 but that it must be solely regarded as a contribution, 
 which England is legally bound to make, towards 
 the expenses of the Afghan war. By the fifty-fifth 
 section of the Government of India Act of 1858 it 
 is distinctly provided, that when the Indian army is 
 employed for imperial purposes beyond the frontiers 
 of India the cost shall be borne by England, and 
 when for Indian purposes the cost shall be borne 
 by India. There seems to be no room for doubt 
 that the present war has been undertaken, in part 
 at least, for imperial purposes, and, therefore, India 
 cannot be legally called upon to bear its entire cost. 
 It has, in fact, been most distinctly stated by the Prime 
 Minister that the military expedition into Afghanistan 
 w r as not simply an Indian war, but was undertaken for 
 imperial purposes ; for, in a speech which he made in 
 the House of Lords on the 10th of December, 1878, 
 he said : " This is not a question of the Khyber Pass 
 merely, and of some small cantonments at Dakka or 
 at Jellalabad. It is a question which concerns the 
 character and the influence of England in Europe." 
 As no one would for a moment think of throwing 
 upon India the entire cost of maintaining the influ- 
 ence and character of England in Europe, no other 
 conclusion is possible, than that the advance of 
 2,000,0002., without interest, to India is intended 
 
112 INDIAN FINANCE. [n 
 
 to be England's contribution towards the expense 
 of an expedition which has been undertaken in 
 the interest of the two countries. This being the 
 case, it will be desirable to explain the exact share 
 of the expense which will be borne by England and 
 India respectively. As the 2,000,0002., which Eng- 
 land can borrow at 3 per cent., is to be repaid by 
 seven equal annual instalments, and as the first 
 instalment will become due at the end of next year, 
 the amount which England will contribute by fore- 
 going the interest on the loan is somewhat less than 
 32 0,000 Z. This sum, therefore, represents the amount 
 which England will pay towards the expense of an 
 expedition which, it is officially stated, will cost 
 2,600,000/., and which, in the opinion of almost all 
 independent military authorities, will greatly exceed 
 this amount. But, assuming that the official estimate 
 should prove strictly correct, it appears that India 
 will pay 2,280,000/. and England 320,000/. India, 
 therefore, will contribute more than seven pounds 
 for every pound that is contributed by England. It 
 is scarcely credible that a proposal should have been 
 brought forward which would lead to such a result. 
 It is, perhaps, only fair to conclude that when the 
 real nature of the scheme is understood it will be 
 promptly abandoned. At any rate it is difficult to 
 
ii] THE INDIAN BUDGET OF 1879. 113 
 
 suppose that it will ever be sanctioned by Parliament. 1 
 The English people, whatever may be their faults, 
 have never been charged, even by their bitterest 
 detractors, with meanness. But it is not easy to 
 see how we can escape from such a charge, if, when 
 an expedition has been undertaken, not simply in 
 the interest of India, but to maintain the " influence 
 and character of England in Europe," we compel the 
 Indian people, whether they wish it or not, sur- 
 rounded as they are with poverty and financial 
 embarrassment, to pay more than seven times as 
 much as is contributed by all the wealth of 
 England. 
 
 1 The Bill which authorised this advance of 2,000,OOOJ. to India was 
 discussed in the House of Commons on the 25th of July, 1879, and a 
 resolution against its second reading was defeated by the narrow 
 majority of twelve. 
 
III. 1 
 
 THE NEW DEPARTURE IN INDIAN FINANCE. 
 
 IT has been specially provided by the Government 
 of India Act, of 1858, that there shall be annually 
 made in the House of Commons an Indian Financial 
 Statement. Although the statement thus made is 
 usually described as the Indian budget, the financial 
 measures which constitute the budget arrangements 
 for the year are first brought forward at Calcutta, 
 and are generally in operation some time before 
 the budget is considered in the House of Commons. 
 The budget of 1879, which was discussed in the 
 last Essay, was admitted on all sides to exhibit the 
 financial condition of India in an extremely grave 
 aspect. Hitherto the true character of the financial 
 situation in India had been ignored by successive 
 Governments ; but when the time arrived for the 
 discussion of the budget of 1879 in Parliament, 
 the Government felt that they were brought face 
 to face with a state of things so serious that they 
 wisely resolved to abandon all attempts at palliation 
 or excuse, and determined fully and frankly to 
 
 1 October, 1879. 
 
in.] THE NEW DEPARTURE. 115 
 
 recognise the true character of the difficulties which 
 had to be encountered. The admissions which were 
 made on behalf of the Government were so unre- 
 served that the discussion of the Indian budget of 
 1879 in Parliament will not improbably be long- 
 referred to as marking the commencement of a new 
 epoch in Indian finance. 1 As previously remarked, 
 the true financial condition of India had never up 
 till this time been officially recognised. Liberal and 
 Conservative Governments had not only persistently 
 denied that there was anything in the state of Indian 
 finance to cause apprehension, but year after year, 
 as the time for the introduction of the Indian 
 budget recurred, her actual financial condition was 
 depicted in roseate hues, and her future was described 
 in a spirit of increasing hopefulness. So little cause 
 was there said to be for uneasiness or alarm, that 
 the Indian budget used always to be postponed till 
 a period of the session when all other important 
 business had been disposed of. When the budget 
 was considered, it was little more than a repetition 
 of an oft-told tale. By classing some branch of 
 
 1 The debate on the Indian budget of 1879 commenced at an 
 unusually early period of the session (May 22nd), and the discussion 
 excited such general interest that it was continued for three nights. 
 This affords a striking contrast to what has taken place in previous 
 years, when the Indian budget has genera^y been hurriedly considered 
 in the closing hours of the session. 
 
 1 2 
 
110 INDIAN FINANCE. [in. 
 
 expenditure as " extraordinary," and by regarding 
 some outlay as exceptional, the Indian accounts were 
 almost invariably arranged so as to exhibit a surplus. 
 The public works expenditure was habitually com- 
 pared to the profitable investment of capital by a 
 wise and beneficent landowner in the improve- 
 ment of a judiciously-administered estate. A most 
 significant change, however, has lately occurred. A 
 large portion of the outlay on public works is now 
 officially admitted to be unremunerative ; and the 
 Finance Minister, Sir John Strachey, has been forced 
 to admit that a review of the finances of India for 
 seven years, a period long enough to show their 
 normal position, " made it plain that we possessed 
 no true surplus of revenue over expenditure to cover 
 the many contingencies to which a great country is 
 exposed/* Events which have recently happened 
 only too clearly show that contingencies which may 
 put a severe strain upon the finances of India may 
 at any moment occur. When, a few months since, the 
 war with Afghanistan was concluded, and the Treaty 
 of Gundamuk was signed, there seemed some reason to 
 hope that India might enjoy a period of peace and 
 repose. It now, however, appears that the fanatical 
 fury of a dissolute monarch may lead to another 
 Burmese war ; and the revolt at Cabul, by necessi- 
 tating the renewal of hostilities in Afghanistan, 
 
in.] ;\v, THE NEW DEPARTURE. 117 
 
 involves an increase of expenditure, and may, if the 
 greatest care and prudence are not shown, make a 
 most serious permanent addition to the military 
 expenditure of India. 
 
 In order still further to show the striking change 
 of tone recently adopted by those who are responsible 
 for the government of India, it is particularly worthy 
 of remark that the Viceroy and the Secretary of State 
 now unreservedly accept the conclusion that the 
 limit of taxation has been reached in India, and that 
 it has consequently become imperatively necessary 
 that expenditure should be reduced. In a despatch 
 which has been lately issued by the Viceroy and his 
 Council to the local Governments, it is declared that 
 " immediate measures must be taken for the reduc- 
 tion of the public expenditure in all its branches." 
 On behalf of the Secretary of State it has been with 
 equal positiveness announced that the balance be- 
 tween revenue and expenditure must be restored, not 
 by the imposition of new taxation, but by " a large 
 reduction of expenditure." 1 It is impossible to over- 
 estimate the importance of so full and frank a 
 recognition of the real financial position of India. It 
 is not too much to say that one obstacle which stood 
 in the way of all attempts to reform Indian finance 
 
 .' r l See Speech of Mr. Stanhope in introducing the Indian budget, 
 May 22, 1879. 
 
118 INDIAN FINANCE. [in. 
 
 has now been surmounted. All experience, however, 
 shows that any Government that is determined to 
 carry out a policy of rigorous retrenchment will find 
 itself beset by the most formidable difficulties. 
 Devoted friends of economy in the abstract not un- 
 frequently become its bitter assailants when the 
 particular economy proposed happens to touch some 
 branch of expenditure in which they themselves, 
 either from pecuniary or philanthropic motives, are 
 interested. Whatever may be thought of the pre- 
 vious mismanagement of Indian finance, nothing can 
 be more useless than to indulge in vain regrets and 
 recriminations about the past. Accepting unre- 
 servedly the promises which have been given that 
 in the future a different policy shall be pursued, no 
 effort should be spared to strengthen the hands of 
 the Indian Government by rendering them every 
 possible assistance in effecting those reductions in 
 expenditure which they are now so absolutely 
 pledged to secure. 
 
 From the reference that has just been made to the 
 opinions recently expressed by the Governor- General 
 and the Secretary of State, it not only appears that 
 the necessity of immediately obtaining a large reduc- 
 tion of expenditure is fully acknowledged, but it 
 can be shown that this reduction is a matter of such 
 urgent importance that no excuse can be put forward 
 
in.] THE NEW DEPARTURE. 119 
 
 to justify even its temporary postponement. In the 
 memorandum of the Governor-General from which 
 I have already quoted, it is stated that "rigid 
 economy in every branch of the public service is, in 
 present circumstances, the policy which must be 
 
 followed No fresh establishments must be 
 
 entertained ; no new offices must be created ; no new 
 works which it is possible to postpone must be com- 
 menced." And now it may be naturally asked, what 
 are the circumstances which have induced the Govern- 
 ment to adopt so entirely new an attitude with regard 
 to Indian finance ? As previously remarked, until 
 quite lately, instead of a large reduction of expendi- 
 ture being peremptorily insisted upon, expenditure 
 was year after year permitted to increase without 
 apparently exciting even a semblance of uneasiness. 
 For some time past it has been the settled policy of 
 the Government to borrow from four to five millions 
 a year for the construction of public works. The 
 importance of curtailing this outlay is now so fully 
 acknowledged, that sanction has been given to the 
 most drastic measures of retrenchment. The amount 
 to be borrowed for public works is in no single year 
 to exceed 2,500,OOOZ., and this limit is not to be 
 exceeded even if its maintenance should involve the 
 necessity of suspending works which are already in 
 process of construction. It need scarcely be remarked 
 
120 INDIAN FINANCE. [in. 
 
 that it would have been far better if this awakening 
 to the real position of Indian finance had not been so 
 long delayed. The difficulties of carrying out a policy 
 of economy are indefinitely increased, if such a policy 
 has suddenly to be introduced where before there 
 have been carelessness and extravagance. However 
 desirous the Indian Government may now be to 
 reduce expenditure, they will find themselves per- 
 petually hampered, and their efforts to save money 
 constantly thwarted by the effects of past lavishness 
 still continuing in operation. If costly establish- 
 ments have been allowed to grow up, a large part 
 of the expense which their maintenance involves will 
 have to be borne long after it has been decided that 
 these establishments shall be reduced. When a 
 government finds that there are more persons in its 
 employment than there is work for them to do, it 
 cannot suddenly dismiss them without any compensa- 
 tion ; pensions on a liberal scale have to be granted ; 
 and these pensions will for some time absorb a con- 
 siderable part of the saving which may be ultimately 
 secured. As an illustration of what has just been 
 stated, it may be mentioned that the Government 
 hope during the present year to obtain in the civil 
 departments a reduction of expenditure which will 
 amount to 1,000,000?. a year. A considerable part of 
 this reduction, however, must be regarded as prospec- 
 
iij.1 THE NEW DEPARTT,-. l'$ 121 
 
 ^W^5g/VM. 
 
 tive, for the Governor-General admits that **~there 
 must be a serious set-off on account of pensions and 
 other forms of compensation to the officers with 
 whose services it will be necessary to dispense." 
 Without desiring to make any unnecessary reference 
 to errors that have been committed in the past, I 
 think it is important to lay special stress upon the 
 fact that the results of a policy of laxity and 
 extravagance will cause a severe drain upon the 
 resources of a country, long after such a policy has 
 been replaced by one of the most rigorous economy. 
 The special circumstances which are now imposing so 
 severe a strain upon the finances of India may to a 
 great extent cease to exist. If this should be the 
 case, the necessity far care and thrift appearing not 
 to be so pressing as it now is, the Government may 
 drift back into its old course, and the present zeal for 
 economy may pass away. The fact, however, should 
 never for a moment be lost sight of, that new con- 
 tingencies may arise ; these may suddenly create 
 financial difficulties as serious as those which now 
 have to be encountered, and these difficulties will be 
 indefinitely increased, if, in addition to the actual 
 needs of the day, there has to be met in a season of 
 adversity a considerable portion of the expenditure 
 sanctioned in more prosperous times. 
 
 In endeavouring to give an explanation of the 
 
122 INDIAN FINANCE. [m. 
 
 causes which have produced the present remarkable 
 change in the official view of Indian finance, it will 
 not be necessary to attempt to apportion the exact 
 amount of blame which may be fairly laid to the 
 charge of successive governments, for having so long 
 and so persistently given an inaccurate account of 
 the financial condition of India. No useful end can 
 be served by embarking on such a controversy. It 
 may, no doubt, be fairly argued that some of the 
 circumstances which, at the present time, are so 
 prejudicially affecting the finances of India, have only 
 recently come into operation ; it would not, however, 
 on the other hand, be difficult to show that for years 
 past India has had no financial reserve, and that 
 additional expenditure has consequently had to be 
 met either by increased borrowing, or by imposing 
 fresh taxation most burdensome to the people. But 
 however greatly we may regret that those who have 
 been responsible for the government of India should, 
 during so lengthened a period, have administered her 
 finances in a manner which has brought her to the 
 brink of the gravest financial embarrassment, yet it 
 may now be regarded as a subject for the most sincere 
 congratulation that the peril of the situation has at 
 last been recognised, and that efforts are to be made 
 which, if steadily persisted in, will place her finances 
 on a sound and satisfactory basis. 
 
in.] THE NEW DEPARTURE. 123 
 
 In enumerating the causes that have produced the 
 striking change of opinion with regard to Indian 
 finance to which reference has been made, chief 
 prominence must be given to the four following 
 circumstances, which I will proceed separately to 
 consider : 
 
 1. The necessity of providing for famines out of 
 ordinary revenue, and the character of the new taxa- 
 tion which had to be imposed for the establishment 
 of a famine fund. 
 
 2. The increasing loss by exchange. 
 
 3. The necessity of providing for the cost of the 
 Afghan war by borrowing. 
 
 4. The unremunerative character of a large portion 
 of the expenditure on public works. 
 
 With regard to the first of these causes, it may be 
 mentioned that at the close of 1877 the Finance 
 Minister, in view of the fact that in twelve years 
 four famines had occurred in different parts of India, 
 most wisely came to the conclusion that famines could 
 not be treated as events of an exceptional character" ; 
 but that, as they were certain to recur, the money 
 which had to be spent in famine relief ought to be 
 provided out of the ordinary revenue of the year. 
 As the amount which had been expended in the two 
 most recent famines, namely, those in Bengal and in 
 Southern India, had been more than 15, 000, 000 ., he 
 
124 INDIAN FINANCE. [m. 
 
 calculated that it would be necessary to provide out 
 of ordinary revenue 1,500,000?. a year for the pur- 
 poses of famine relief. It is supposed that if this 
 sum is devoted to the reduction of debt in years 
 when there are no famines, the debt might be reduced 
 by an amount equivalent to the addition which has 
 to be made to it in famine years, and thus the relief 
 of famine over a series of years would involve no 
 augumentation of the debt of India. But at the 
 time when it was determined to devote this 
 1,500,000?. a year to the creation of a famine fund, 
 the ordinary revenue was barely sufficient to meet 
 the ordinary expenditure. As there was no surplus 
 out of which the money could be provided, and as 
 no material reduction in expenditure was attempted, 
 it became absolutely necessary to obtain the larger 
 portion of the money that was required by additional 
 taxation. Of the 1,500,000?., the sum which had 
 to be provided by new taxation was 1,100,000?. 
 It must, in justice to the Government of India, be 
 assumed that before deciding as to the particular 
 way in which this 1,100,000?. should be obtained, 
 the entire fiscal system of India was most carefully 
 reviewed, with the object of ascertaining what new 
 tax could be imposed, or what existing tax could be 
 increased with the least hardship to the people. It 
 was ultimately decided that about two-thirds of the 
 
in.] THE NEW DEPARTURE. 125 
 
 amount required should be procured by the imposi- 
 tion of a licence tax. Starting with the assumption 
 that the Government came to the deliberate conclusion 
 that the licence tax was the best and most available 
 means of obtaining comparatively so small an addition 
 to the revenue as 750,000^., it will only be necessary 
 to describe the nature and the incidence of this tax, 
 and to refer to the deep discontent which the levying 
 of such a tax is already producing among the people, 
 in order to show with striking distinctness how nearly 
 the limits of practicable taxation in India have been 
 approached, and what incalculable evils may be pro- 
 duced, if, either from laxity or from any other cause, 
 it should become necessary again to impose additional 
 taxation in India. The licence tax as now levied is 
 virtually an income tax of about fivepence in the 
 pound imposed upon all those who derive an income 
 from trade or from skilled labour. Professional and 
 official incomes are entirely exempted from the tax. 
 The Governor- General with 25,000?. a year, the 
 officers in the army, the well-paid civilians, successful 
 barristers and doctors do not contribute a farthing 
 to the tax, but it is levied from every petty trader 
 and every handicraftsman, although their scanty 
 earnings may amount to no more than 4s. a week. 1 
 
 1 By a bill which was brought forward at a meeting of the Legis- 
 lative Council of the Viceroy (Nov. 14, 1879) several weeks after this 
 
126 INDIAN FINANCE. [m. 
 
 But the inequality of such taxation and the severity 
 of the burden which it imposes on those who are so 
 poor that their income is only 101. a year, may be 
 regarded as by no means the most serious objection 
 to such taxation. Although the tax has been in 
 operation for little more than a twelvemonth, no one 
 can deny that it has already produced a feeling of 
 widespread and deep discontent, and facts can be 
 mentioned which show that this discontent is far 
 more due to the abuses inseparably connected with 
 the levying of the tax than to the mere amount of 
 the burden which the tax, if it could be fairly raised, 
 would impose on the people. During many months 
 the Indian papers have contained numerous instances 
 of the tax being assessed at an excessive amount, 
 and of its being levied on classes who were never 
 intended to pay it. These newspaper reports are 
 abundantly confirmed by communications which I 
 have received from persons who hold high official 
 positions in the Civil Service of India. I thus find 
 it stated, on authority which cannot be disputed, that 
 in one district in Bombay, out of 25,000 assessments 
 made by one official nearly one half were appealed 
 against, and in all these appeals the assessments had 
 to be modified by the revising officer. It is well 
 
 essay was written, it is proposed to amend the Trades Licence Tax in 
 many important particulars. These amendments are considered in the 
 Appendix. 
 
in.] THE NEW DEPARTURE. 127 
 
 known that the cost and annoyance involved in these 
 appeals are so great, that in a vast number of cases . 
 people submit to an unjust assessment rather than 
 travel many miles and then incur the outlay and the 
 worry of appearing in court to protest. The indefen- 
 sible exemption of the official and professional classes 
 from contributing to the licence tax converts it into 
 an income tax in its most obnoxious form ; and not 
 only is this the case, but the present licence tax is 
 levied with far more rigour than was the income tax 
 when imposed in India a few years since. Although 
 that tax was of the same nominal amount, it appears 
 that the licence tax, in spite of its exemptions, 
 enforces a much larger contribution from the mass 
 of the people. Thus in the district of Mymensing 
 the licence tax has been assessed at 158,373 rupees, 
 whereas the income tax only produced 39,295 rupees. 
 In Tangail 52,412 rupees are to be obtained from the 
 licence tax, while only 10,752 rupees were produced 
 by the income tax. When it is borne in mind that 
 the official and professional classes, who are exempted 
 from the licence tax, were assessed to the income tax, 
 and that the net yield of the former tax is estimated 
 to be considerably greater than that of the latter, it 
 seems to be conclusively proved that the licence tax 
 falls with extreme severity upon numerous classes of 
 the very poor who were not reached by the income 
 
128 INDIAN FINANCE. [m. 
 
 tax. It must moreover be remembered that through- 
 out a considerable part of India the burden of this 
 new taxation falls upon many who are only just 
 recovering from the effects of a terrible famine. 
 
 The object I have in view in making these remarks 
 is not to condemn the Government for imposing the 
 licence tax. The more unreservedly we accept all 
 that has been urged to justify what has been done, 
 the more irresistibly are we led to the conclusion that 
 the financial condition of India is one of such extreme 
 peril that economy is not only desirable, but is a 
 matter of imperative necessity. If, in order to in- 
 crease the revenue by an amount comparatively so 
 small as 750,000/., the best course that can be 
 adopted by the Government is to impose such taxa- 
 tion as that which has just been described, the 
 question may be asked, to what straits may not the 
 Government be reduced, if any fresh contingency, 
 such as the renewal of hostilities with Afghanistan, 
 should make it necessary to increase the revenue by 
 an amount compared with which 750,0002. would 
 be but a trifle ? In order adequately to appreciate 
 the financial situation in India, the answer which 
 must be given to this question should never be absent 
 from the thoughts of those who are responsible for 
 the administration of her finances. If such an addi- 
 tional amount of revenue had to be obtained, we 
 
in.] THE NEW DEPARTURE. 129 
 
 are brought face to face with these alternatives : 
 either recourse must be had to some new form of 
 taxation which is more objectionable than the licence 
 tax, because, if it were not so, it would have been 
 selected in preference to the licence tax ; or the yield 
 from the licence tax must be augmented either by 
 increasing its rate, or by assessing it on incomes even 
 smaller than those on which it is now imposed. Such 
 considerations as these cannot have been absent from 
 the minds of those who are responsible for the 
 government of India, and, if they stood alone, they 
 might be regarded as sufficient to account for the 
 remarkable change in the official view which is now 
 taken of Indian finance. 
 
 It cannot, however, be doubted that in considering 
 the causes which have brought home to the Govern- 
 ment the necessity of increased economy, a prominent 
 position ought to be given to the serious loss which has 
 resulted from a depreciation in the value of silver pro- 
 ducing an unfavourable exchange. As I have already 
 referred to this subject, it is not necessary again to 
 explain in detail the manner in which a fall in the 
 value of silver prejudicially affects the finances of 
 India. As, however, the home charges have hitherto 
 steadily increased, it may be desirable not only to 
 show the manner in which the loss by exchange 
 depends on the amount of these charges, but also 
 
 K 
 
130 INDIAN FINANCE. [in. 
 
 to point out the direct influence which is exerted 
 by any increase in these charges in depreciating the 
 value of silver, and in thus adding to the loss by 
 exchange. It is obvious that any country which 
 receives its revenue in one metal and undertakes 
 to make large payments in another, enters into a 
 very speculative undertaking. If the value of the 
 metal in which the revenue is received becomes 
 depreciated when compared with the value of the 
 metal in which payments have to be made, the 
 real amount of these payments is proportionately 
 increased. On the other hand, their amount will 
 be diminished if the value of the metal in which 
 the revenue is received becomes appreciated when 
 compared with that in which payments have to be 
 made. It is manifestly very undesirable that the 
 fiscal system of a country should be deranged by 
 such risks of loss and gain as those to which reference 
 has just been made, and therefore the greatest care 
 ought to be taken to prevent a country pledging itself 
 to make unduly large payments in a metal different 
 from that in which her revenue is received. It is 
 now admitted that the entire net revenue of India 
 is only about 38,000,000?. The whole of this revenue 
 is received in silver, and more than one half of the 
 amount has, in order to defray the home charges, 
 to be devoted to make payments in gold. The net 
 
in.] THE NEW DEPARTURE. 131 
 
 amount of these home charges during the present 
 year has been officially stated at 17,000,000?. In 
 calculating the Indian revenue in pounds sterling 
 it is assumed that ten rupees are equivalent to one 
 pound. The net revenue of India may therefore be 
 stated as 380,000,000 rupees. But now that silver 
 has fallen from what was long its normal value, about 
 60d. an ounce, to about 52c?. an ounce, twelve rupees 
 and not ten are equivalent to a pound sterling. In 
 order therefore to make a payment of 17,000,000?., 
 204,000,000 rupees are required, and it consequently 
 appears that as the home charges now amount to 
 17,000,000?., these charges absorb more than one- 
 half the entire net revenue. As, therefore, India 
 is liable to the most serious risks as long as so 
 large a portion of her revenue has to be expended 
 in making payments in gold, it is of the first im- 
 portance that these home charges should not be 
 permitted to increase, but measures ought at once 
 to be taken to effect in them every possible reduction. 
 During the last few years the home charges have 
 increased to a most serious extent. It was shown 
 by Mr. J. K. Cross, in the able speech which he 
 made in the debate last session on the Indian budget, 
 that the home charges, which in 1868 absorbed 43J 
 per cent, of the net land revenue, will during the 
 present year absorb the whole of that revenue. The 
 
 K 2 
 
132 INDIAN FINANCE. [m. 
 
 necessity of securing a reduction in the home charges 
 is the greater, because each increase in them exerts 
 a direct influence in still further depreciating the 
 value of silver, and thus adds to the loss by exchange 
 which India has to bear ; while every reduction 
 in the amount of these charges must exercise a 
 corresponding effect in restoring the value of silver. 
 Any question referring to the value of the precious 
 metals is liable to be so confused by the irrelevant 
 intrusion of currency theories, that it cannot be too 
 carefully borne, in mind that the value either of gold 
 or silver is regulated by just the same causes as those 
 which regulate the value of any other commodity. 
 If there is a diminution in the demand, or an increase 
 in the supply, an influence is at once brought into 
 operation to lower values. It has already been 
 shown that many agencies have come into operation 
 during the last few years which have caused an 
 increase in the supply of silver to be accompanied 
 by a considerable falling off in the demand, and thus 
 a double influence has been exerted to lower its 
 value. Amongst the many circumstances which have 
 contributed to lessen the demand for silver, a position 
 of chief prominence must undoubtedly be given to 
 the great augmentation in the home charges during 
 the past few years. It is well known that these 
 charges are usually not defrayed by the remission of 
 
in.] THE NEW DEPARTURE. 133 
 
 specie from India, but that bills drawn on India are 
 sold by the Secretary of State in London. About 
 300,000/. worth of these bills are each week offered 
 for sale. They are purchased by merchants and 
 others who have payments to make in India, and as 
 these bills thus take the place of specie, it is obvious 
 that each increase in the amount of these bills pro- 
 portionately diminishes the demand for silver to be 
 transmitted to India. For many years the large 
 loans which were annually raised in England for the 
 construction of Indian railways to a great extent 
 neutralised the prejudicial effect which is now 
 exercised on Indian finance by the home charges. 
 Previous to 1874, during a period of twenty years, 
 a sum of not less than 5,000,OOOZ. was on the 
 average annually raised in England for the construc- 
 tion of guaranteed railways in India. Instead of 
 transmitting this capital to India in the form of 
 money, a very considerable portion of it was used 
 to meet the home charges, and thus the amount of 
 bills which had to be sold by the Secretary of State 
 to defray these charges was proportionately dimin- 
 ished. This system of constructing Indian railways 
 on the guaranteed system has been finally abandoned. 
 It has also now been decided that when money is 
 borrowed for public works in India, the loan should 
 be raised there and not in England j and conse- 
 
134 INDIAN FINANCE. [m. 
 
 quently, as the home charges will have in future to 
 be entirely met either by the transmission of specie 
 from India to England, or by the sale in England 
 of bills drawn upon India, the prejudicial effect 
 which must be exercised upon the rate of exchange 
 will, unless these charges are diminished, continue with 
 unabated force. For a long time the Government 
 in India seemed to cling to the idea that by some 
 artificial currency arrangement the value of silver 
 could be restored, and the exchange rendered less 
 unfavourable. It is unnecessary again to discuss 
 the many theories which have from time to time 
 been propounded. I believe it can be shown that 
 any tampering with the currency would have in- 
 definitely aggravated the evil it was sought to 
 remove. No surer means can be adopted of still 
 further depreciating the value of silver than to 
 diminish the demand for it, and if any of the many 
 proposals which have lately been propounded with 
 regard to the silver question are considered, such, 
 for instance, as the introduction into India of a 
 gold currency, or the limitation of the amount of 
 silver annually coined, it will be at once seen that 
 all these suggested remedies alike labour under the 
 defect that they could not be carried out without 
 lessening the demand for silver. No circumstance 
 that has recently occurred in connection with Indian 
 
in.] THE NEW DEPARTURE. 135 
 
 ^^-v j_ ^ 
 
 finance is a subject for more sincere congratulation, 
 than that it seems to have been finally determined by 
 the authorities in England not to sanction any change 
 whatever in the Indian currency. Independently 
 of the objections to which allusion has just been 
 made, it would be difficult to overestimate the 
 mischief which would result from altering the 
 currency of a people who are so stationary in their 
 habits that they dislike change with an intensity 
 which Europeans find it almost impossible to under- 
 stand. A large majority of the population of India 
 are cultivators of the land. They have entered into 
 engagements to pay, either permanently or for a fixed 
 period, a certain number of rupees to the Govern- 
 ment for the land which they cultivate. If, because 
 silver has become depreciated, they were ordered to 
 make this payment in gold, or if they found that 
 the weight of silver in the rupee was increased in 
 order to get from them more silver than they had 
 stipulated to pay, a feeling would spread among the 
 people from one end of India to the other that they 
 were the victims of a breach of faith ; there would 
 naturally arise the deepest distrust of the Govern- 
 ment ; and the harm that would be done would be 
 indefinitely more serious than any mischief which 
 can possibly result from the loss by exchange. It 
 appears that India has had a very narrow escape from 
 
136 INDIAN FINANCE. [in. 
 
 the danger to which reference has just been made. 
 Up to the very last the authorities at Calcutta 
 apparently indulged the hope that the loss by 
 exchange might be aveited by some currency device. 
 Sir John Strachey, in his budget speech of the 
 present year, refers with satisfaction to the fact that 
 measures which were suggested by the Viceroy and 
 his Council for dealing with the exchange difficulty 
 were at the time under the consideration of the 
 Secretaiy of State. It is well known that the sug- 
 gestion to effect some alteration in the Indian 
 currency was favourably entertained by some mem- 
 bers of the Council of the Secretary of State, and 
 by other authorities at the India Office. Fortu- 
 nately, however, advice was sought from the outside ; 
 a departmental committee was appointed which 
 comprised amongst its members some officials who 
 were not connected with the India Office ; and it is 
 probable that to the investigations of this committee 
 it is to a great degree due that the wise decision has 
 been arrived at, that, so far as the currency is con- 
 cerned, things must be left alone. The decision 
 which was thus come to, seems at once to have 
 produced a most marked effect. The authorities in 
 India and in England had brought home to them 
 with convincing force, that as the loss by exchange 
 was a serious burden on the finances of India, which 
 
in.] THE NEW DEPARTUEE. 137 
 
 could not be lightened by any modifications of the 
 currency, there would continue to be increasing 
 deficits, unless measures were at once taken to reduce 
 expenditure. Other difficulties, moreover, besides 
 the loss by exchange had to be met. Provision had 
 still to be made for the larger part of the expenses 
 incurred in the Afghan war, and for years there had 
 been carried on an expenditure on public works, 
 which it was every day becoming more evident India 
 could not afford. 
 
 With regard to making provision for the expenses 
 of the Afghan war the difficulty has been rather 
 evaded than encountered. Assuming that the cost 
 of the war did not exceed the official estimate of 
 2, 60 0,00 0?., only one quarter of this amount has so 
 far been provided by India, for 2,000,000?. has been 
 lent to her free of interest by England. As this 
 2,000,000?. is to be repaid by India in seven years, 
 the exact amount of the contribution which England 
 will make to this war is less than 320,000?., this sum 
 representing somewhat more than the loss of interest 
 on a loan of 2,000,000?. made in the manner just 
 described. I do not here intend again to consider 
 whether England in contributing 320,000?., or less 
 than a seventh of an aggregate expenditure of 
 2,600,000?., is either legally or equitably bearing 
 her proper share of the cost of a war which was 
 
138 INDIAN FINANCE. [in. 
 
 said, both by the Viceroy and the Prime Minister, 
 to have been undertaken for Imperial purposes. The 
 question, however, as to the exact proportion in 
 which the cost of pursuing a " forward policy " in 
 Afghanistan should be borne by England and India 
 respectively, will have again to be considered, now 
 that it has become necessary to renew hostilities in 
 Afghanistan. 
 
 The 2,000,000?, which has been thus advanced 
 by England will no doubt afford India some tem- 
 porary relief ; but it is obvious that this relief is 
 obtained by having recourse to the expedient of 
 discounting the future. The loan will, during the 
 present year, diminish by 2,000, OOOZ. the sum which 
 will have to be provided from India to defray the 
 home charges, and in this way the rate of exchange 
 may, to a certain extent, be favourably affected. 
 During the next seven years, however, as the instal- 
 ments for the repayment of the loan become due, 
 India will have to provide the money for these 
 payments, and consequently a more favourable 
 exchange during one year is secured by making 
 the exchange more unfavourable during the succeed- 
 ing seven years. It is obvious that nothing but 
 extreme necessity can be pleaded as an excuse for 
 the adoption by any government of such financial 
 expedients. 
 
in.] THE NEW DEPARTURE. 139 
 
 The fact that India has had to be assisted by 
 England with a loan of 2, 000, GOO/, affords a striking 
 proof that, in considering all Indian questions, a 
 position of first importance must be given to their 
 financial aspects. In deciding upon any particular 
 course of policy, the element of cost should never 
 for a moment be absent. It may be premature to 
 attempt to determine what should be our future 
 action in Afghanistan under the present change of 
 circumstances, but it cannot be too strongly insisted 
 upon that, in the existing financial condition of 
 India, no peril can be more serious than the adoption 
 of a policy which, if it should lead to a large addi- 
 tional expenditure, would sooner or later necessitate 
 an increase of taxation. It has already been shown 
 that, to obtain the comparatively small sum of 
 750,000^., the Government thought that the best 
 course which was open to them was to impose 
 the licence tax. In order to form an idea of what 
 increased taxation may signify in India, it is only 
 necessary to bear in mind the effect which this tax 
 is producing, and to remember that, if fresh taxation 
 has again to be resorted to, some impost even more 
 obnoxious than the licence tax will have to be levied. 
 Those who are most competent to form an opinion 
 seem unanimously to agree that any policy which 
 would lead to annexation in Afghanistan would 
 
140 INDIAN FINANCE. [in. 
 
 cause a large permanent addition to the annual 
 expenditure of India. If such a policy should be 
 adopted, both the present Secretary of State and 
 the Viceroy would stand self- condemned ; for after 
 the admissions which within the last few months 
 they have so unreservedly made as to the financial 
 condition of India, it is impossible for them "to 
 sanction new and heavy charges being thrown upon 
 her, without the conclusion being ever present to 
 their minds that the additional taxation which must 
 be the inevitable accompaniment of increased expen- 
 diture will bring upon India the gravest perils. 
 
 It has been previously mentioned that in addition 
 to the various unfavourable circumstances already 
 enumerated, which brought home with striking dis- 
 tinctness to the Indian Government the present 
 critical state of Indian finance, facts have gradually 
 come to light which have led irresistibly to the 
 conclusion that a large part of the outlay on works 
 which are classed as " reproductive " does not yield 
 even a small fraction of the interest which has to 
 be paid on the capital borrowed for their con- 
 struction. Early in the Session of 1878, the Under- 
 secretary of State for India, in moving for the 
 appointment of a Select Committee to inquire into 
 this public works expenditure, stated that on the 
 9,000,000^. spent in recent years on schemes of 
 
in.] THE NEW DEPARTURE. 141 
 
 irrigation in Bengal, the return which is yielded is 
 only -J per cent. This conclusion was abundantly 
 verified after a most careful and exhaustive in- 
 vestigation of the entire subject by the committee 
 which sat during the Sessions of 1878 and 1879. 
 In their report, which has lately been published, 
 and which was drawn up with much ability by the 
 chairman of the committee, Lord George Hamilton, 
 it is shown that, in the case of many irrigation 
 works, the return which is yielded, far from paying 
 the interest on the capital expended, does not even 
 suffice to meet the working expenses. Some works 
 of irrigation have undoubtedly proved to be very 
 remunerative ; but it is clearly shown by elaborate 
 statistical returns which have been summarised in 
 the report of the committee, that, with the single 
 exception of the works in Scinde, the schemes from 
 which large profits are secured are either old native 
 works, like the Eastern and Western Jumna Canals, 
 and the Cauvery anicut, which have been restored 
 by British agency, or works which have been con- 
 structed under exceptionally favourable conditions, 
 such as the Godavery and Kristnah. Thus, taking 
 the year 1875-76, the latest for which the official 
 figures are given, it appears that up to that time, 
 without including the value of the old native works, 
 1 5,562, 6551. had been expended on schemes of 
 
142 
 
 INDIAN FINANCE. 
 
 [in. 
 
 irrigation in India. The net return in that year 
 on this outlay, after allowing for working expenses, 
 was 832,243?. As 700,319?. would represent the 
 charge for interest at 4^- per cent, on a capital of 
 15,562,655?., it follows that the irrigation expendi- 
 ture yields a net profit of 131,924?. But on further 
 examination it is at once seen that, as previously 
 stated, the whole of this profit is obtained from old 
 restored native works, and from those which have 
 been constructed in Scinde and in the deltas of the 
 Madras rivers. This is shown by reference to the 
 following table, in which are given the results of 
 the profitable irrigation works : 
 
 
 Capital. 
 
 Eeceipts after 
 meeting working 
 expenses and 
 interest at 
 4| per cent. 
 
 Excess 
 Revenue 
 per cent. 
 
 Scinde Irrigation Works . . 
 East Jumna . ... 
 
 
 667,704 
 231,743 
 
 
 132,103 
 47,946 
 
 19-66 
 20-68 
 
 West Jumna 
 
 432,764 
 
 84,010 
 
 19-42 
 
 
 116,072 
 
 108,923 
 
 81'30 
 
 
 736,444 
 
 94,351 
 
 12-94 
 
 Kristnah. . ... 
 
 463,590 
 
 45,630 
 
 9'8 
 
 
 2,826,479 
 
 42,808 
 
 1-51 
 
 
 
 
 
 With regard to the irrigation works which are not 
 included in the above table, and on which a capital 
 of no less than 10,197,869?. has been expended, the 
 return yielded in 1875-76 was barely sufficient to 
 meet the working expenses, and fell short by no less 
 
in.] THE NEW DEPARTURE. 143 
 
 a sum than 4 2 1,8 5 9 1. of the amount which was re- 
 quired to defray these expenses and the interest on 
 the capital expended. This result is made still more 
 unfavourable if the outlay on the Madras Irrigation 
 Company's works is taken into account. These 
 works, constructed with capital raised by a private 
 company in England, were subsequently purchased 
 by the Government, and on a capital expenditure of 
 1,372,000?. it appears that the net annual loss 
 is 46,453?. 
 
 With regard to railways, which represent the other 
 great branch of public works expenditure, the finan- 
 cial results which have up to the present time been 
 obtained are no doubt in some respects more satis- 
 factory, but as railways have now been constructed 
 along the most important lines of communication, 
 the returns which are yielded on the money expended 
 on railways in the past ought not to be regarded 
 as affording any evidence that similar returns will 
 be obtained from capital which may be expended in 
 the future. The construction of railways in India 
 was first undertaken in 1846, and between that time 
 and 1867 railways were made through the agency 
 of private companies, who obtained from the Govern- 
 ment a guarantee of interest, generally at 5 per cent., 
 on the capital expended. It appears from the last 
 official report on Indian railways, which brings the 
 
144 INDIAN FINANCE. [in. 
 
 figures down to a year later than those contained 
 in the report of the Public Works Committee, that 
 the amount expended on the guaranteed railways up 
 to March 1879 was 96,725,679Z. 
 
 In 1867 it became apparent to the Government 
 that the guarantee system afforded no adequate 
 securities for economy. So long as private companies 
 were insured somewhat more than the current rate 
 of interest on whatever amount of capital they might 
 expend, it is obvious that there could be no sufficient 
 motive to restrain waste. It was accordingly decided 
 to abandon the guarantee system, and from that time 
 all new railways have been constructed by the 
 Government. On these railways, which are known 
 as the State railways, 21, 291, 076 1. had been expended 
 up to March 1879. It is scarcely possible to make 
 any fair comparison between the financial results of 
 the two systems, because, in the first place, the most 
 profitable lines of communication were occupied by 
 the guaranteed railways before the State railways 
 were commenced, and, in the second place, a con- 
 siderable portion of the capital which has been raised 
 for these State railways has been expended on lines 
 which are still in process of construction. It is 
 shown in the report of the Public Works Committee 
 that although there has recently been, on the average 
 of years, an improvement in the returns of the 
 
in.] THE NEW DEPARTURE. 145 
 
 guaranteed railways, yet in no single year except 
 1877-78 has the return on the aggregate expenditure 
 on railways been sufficient to meet the interest on 
 the capital expended. The entire loss on the 
 guaranteed railways amounted up to 1877-78 to no 
 less a sum than 22,437,307?. The comparatively 
 favourable results which were obtained in that year 
 are proved by the latest official reports to have been 
 entirely exceptional, being favourably affected by the 
 large quantities of grain which had to be taken to 
 the famine districts in Southern India ; between 
 1877-78 and 1878-79 there has been a very serious 
 falling off in the returns from the guaranteed rail- 
 ways. The gross receipts have fallen nearly 12 per 
 cent. ; and as this falling off has been accompanied 
 by an increase in the working expenses, there has 
 been a still greater diminution in the net receipts, 
 amounting to no less than 18 per cent. There has 
 at the same time been an improvement in the returns 
 from the State railways, as the net receipts from 
 these have risen from 131,243?. to 195,787?. This 
 increase is no doubt mainly due to the fact that 
 nearly a thousand additional miles of railway were 
 opened during the year. Assuming that a third or 
 7,000,000?. of the aggregate capital of 21,000,000?. 
 raised for the State railways is being expended on 
 lines which are not yet completed (and this is 
 
146 INDIAN FINANCE. [in. 
 
 probably an excessive estimate), it appears from 
 the figures just quoted that an outlay of 14,000,000^. 
 only yields a return of 195,787Z. It therefore follows 
 that if, as is stated in the report of the Public Works 
 Committee, the capital for the State railways has been 
 borrowed at 4J per cent, the lines which have been 
 now completed do not yield a return sufficient to pay 
 one third of the interest on the capital expended. 
 
 In view of such facts as those which have just 
 been mentioned, it became impossible for the Govern- 
 ment to resist the conclusion that, however great 
 may be the advantages of extending railways and 
 works of irrigation in India, the financial results of 
 these undertakings were most uncertain, and were 
 proved to be in many instances most disastrous. 
 The continuance of the policy which had been for 
 some time pursued of annually borrowing between 
 4,000,0002. and 5,000,000/. for public works would 
 inevitably increase the deficit, which, as there 
 was no surplus revenue, would have to be met 
 either by an immediate increase of taxation, or 
 by an increase of debt, which would sooner or 
 later lead to the same result. The consequences 
 produced by the new taxation which it has been 
 found necessary to impose for the creation of a 
 famine fund must have brought home to the Govern- 
 ment with irresistible force that no misfortune which 
 
IIL] THE NEW DEPARTURE. 147 
 
 could happen to India could be greater than having 
 to make her people bear the burden of increased 
 taxation. It has therefore been most wisely resolved 
 to lose no time in reducing the public works expen- 
 diture, and it has been ordered that in future the 
 amount which shall be borrowed in any year for 
 the construction of public works shall not exceed 
 2,500,000/. As it is strictly enjoined that the money 
 shall be borrowed in India and not in England, it 
 may be fairly concluded that the Government have 
 at last recognised the political and financial dis- 
 advantage of adding to the indebtedness of India in 
 England, and thus rendering it necessary each year 
 to transmit a larger portion of the revenue of India 
 in order to discharge her obligations to England. 
 
 This sudden curtailment of the public works 
 expenditure cannot of course be regarded with un- 
 mixed satisfaction. Many most useful undertakings 
 will undoubtedly be stopped ; and it cannot be denied 
 that many works which are not directly remunera- 
 tive may produce such beneficial results that, if the 
 financial condition of India were different from what 
 it is, they might most properly be undertaken. But 
 in her present situation the Government had only 
 a choice of evils. No other alternative was open 
 to them than either to continue an expenditure 
 which would lead to increased taxation, or to adopt 
 
 L 2 
 
148 INDIAN FINANCE. [in. 
 
 a policy which will only too certainly cause the 
 stoppage of many useful works. Whilst fully acknow- 
 ledging that the Government, in the course they 
 have adopted, have chosen the less of these two 
 evils, it is at the same time very important not to 
 lose sight of the disadvantage that will result from 
 this necessary reduction in the public works expen- 
 diture u Although I have for many years past had 
 frequent occasion to call attention to the impolicy 
 of raising large loans for the construction of public 
 works, it is impossible to insist too strongly upon 
 the fact that, whilst it may be most inexpedient to 
 continue to carry out an extensive system of railways 
 and irrigation schemes by loans, it may be most 
 desirable to undertake them, if such a surplus of 
 revenue can be obtained as will enable the works to 
 be completed without increasing the taxation or 
 adding to the debt of India. If any fresh induce- 
 ment were required to make those who are respon- 
 sible for the administration of the finances of India 
 resolutely persist in a course of the most rigorous 
 economy, it would be afforded by the fact that, until 
 a large surplus is regularly obtained, many works 
 will have to be suspended which would greatly 
 promote the proper development of the resources 
 of that country. 
 
 Enough has probably now been said to prove that 
 
in.] THE NEW DEPARTURE. 149 
 
 the time has arrived when, in order to restore the 
 finances of India and prevent them drifting into hope- 
 less embarrassment, it is absolutely essential that the 
 policy of " rigid economy in every branch in the public 
 service/' which has been recently announced by the 
 Government, should be carried out with promptitude 
 and thoroughness. The necessity for this economy 
 being fully admitted, it will naturally be asked, 
 What are the measures which have been proposed 
 by the Government to insure it ? After what has been 
 said with regard to public works, no detailed refer- 
 ence need be made to the contemplated reductions in 
 this branch of the expenditure. . During the present 
 year the expenditure on public works is to be re- 
 duced from 4,599,000/., its amount in 1878-79 to 
 3,500,OOOZ., and, as previously stated, the amount 
 which is to be borrowed for public works in succeed- 
 ing years is to be limited to 2,500, OOO/., with the 
 proviso that the entire amount required is to be raised 
 in India. Considering the large public works estab- 
 lishments which exist in India, and the heavy sums 
 which will be required to provide pensions for the 
 engineers and others for whom, under the reduced 
 scale of expenditure, no employment will be avail- 
 able, and also bearing in mind the serious loss that 
 may be incurred in having suddenly to abandon 
 works which are approaching completion, it may 
 
150 INDIAN FINANCE. [m. 
 
 perhaps be fairly concluded that it would scarcely 
 be prudent to make a larger immediate reduction 
 in the public works expenditure than that which is 
 now proposed. Unless, however, a decided improve- 
 ment can be effected in the financial condition of 
 India during the next few years, the Government 
 will undoubtedly be compelled still further to reduce 
 the outlay on public works. 
 
 In addition to these important reductions in the 
 public works expenditure, the Government have 
 given the most distinct pledges that no effort shall 
 be spared to secure every possible retrenchment in 
 all the other branches of civil administration. It is 
 anticipated that an immediate saving of 250, OOO/. 
 a year can thus be obtained, and it is evidently 
 thought that a much larger saving can be secured, 
 when sufficient time has elapsed to enable all the 
 civil departments to be thoroughly overhauled. No 
 one who has watched the steady and rapid growth 
 in the cost of the civil administration since the 
 government of India was transferred from the Com- 
 pany to the Crown, can doubt that there is an 
 almost unlimited opportunity for effecting a most 
 important saving if the government is conducted 
 with greater care and thrift. It has been previously 
 pointed out that the cost of administration, ex- 
 cluding expenditure on the army and public works, 
 
in.] THE NEW DEPARTURE. 151 
 
 increased in the fifteen years from 1856 to 1871 
 from 14,964,8672. to 23,271,082?., and this growth 
 of expenditure has steadily continued up to the 
 present time. It is shown in almost every item 
 in the cost of administration. Thus, in 1856, the 
 cost of printing and stationery was 128,1972. ; in 
 1871, it was 233,6752., and in the present year it is 
 estimated at no less an amount than 490,0002. net. 
 The advantage which would result from reducing 
 this excessive outlay within proper limits is by no 
 means to be measured by the amount of money which 
 would be saved, for it will scarcely be denied that 
 in the government of India administrative efficiency 
 is often smothered in a mass of paper details. This 
 remark admits of a very wide application, for there 
 is good reason to believe that economy, instead of 
 lessening, would in almost every instance greatly 
 promote administrative efficiency in India. One of 
 the chief defects in the present system of govern- 
 ing that country is the weakening of individual 
 responsibility. Experience has again and again 
 proved that no task is more hopeless than to at- 
 tempt to fasten responsibility upon a particular 
 department or individual for any mistake that may 
 be committed, or for any waste that may result 
 from laxity of control. Some years since barracks 
 were erected in India at an enormous cost, and 
 
152 INDIAN FINANCE. [in. 
 
 although it was afterwards found that in some 
 instances they were so badly constructed as to be 
 totally unfit for use, it has to this day remained 
 impossible to discover to whom the blame ought to 
 be attached. The subject was most carefully in- 
 vestigated by a select committee of the House of 
 Commons, but it was soon seen that the members 
 of that committee had a tangled skein before them, 
 which no amount of patience or ingenuity could 
 unravel. The responsibility in rapid succession was 
 shifted from the Public Works Department to the 
 various grades of engineers who were engaged in 
 the work, and then again it was transferred 
 from the engineers to the local contractors. The 
 weakening of responsibility is always so much 
 promoted by the undue multiplication of depart- 
 ments, that the rumoured decision of the Govern- 
 ment to reduce the number of departments in India, 
 many of which have been called into existence during 
 the last few years, is to be welcomed not only on 
 account of the important saving which will result 
 from the abolition of many highly paid offices, but on 
 account of the influence which it will undoubtedly 
 exert upon the efficiency of administration. 
 
 The annual migration to Simla may be referred 
 to as affording another example of the fact that, 
 although economy may be the primary motive for 
 
in] THE NEW DEPARTURE. 153 
 
 adopting some particular measure, yet other conse- 
 quences may be produced by it, which are at least 
 as important as the pecuniary saving involved. It 
 has been estimated that on the most moderate cqm- 
 putation a saving of 10,000/. a year might be effected 
 in connection with this migration. While, in the 
 present state of the finances of India, it is imper- 
 atively incumbent on the Government to effect an 
 economy comparatively so small as 10,000/., such 
 an amount altogether fails to represent the indirect 
 loss which is caused to India by this transfer of the 
 seat of government from Calcutta to Simla during 
 the greater part of the year. The personnel of many 
 of the most important offices is annually removed 
 from Calcutta to Simla during seven months. As a 
 fortnight is occupied both in going and returning, 
 it follows that one-twelfth of the working year i& 
 lost. It has lately been well observed that no item 
 in the Indian accounts " could be more safely or more 
 advantageously cut down, if not swept away alto- 
 gether. Up to about fifteen years ago the idea of 
 removing all the departments to a summer capital 
 seems never to have suggested itself. The Governor- 
 General might, and often did, spend two or three 
 months at one of the hill sanitaria, but never dreamt 
 of taking with him the whole apparatus of govern- 
 ment. . . . Such public opinion and independent 
 
154 INDIAN FINANCE. [in. 
 
 criticism as there are in India are to be found only 
 in the Presidency towns, and it is no light evil that 
 the Government should be out of the reach of the 
 wholesome effect of these for over half the year. 
 Moreover, Simla is situated in a remote and inacces- 
 sible corner of the Empire, and the Government 
 might be easily cut off for days from all communica- 
 tion with the rest of the country. If, however, the 
 Government cannot make up its mind to give up 
 this luxury, it may fairly be asked whether the 
 officers whose work lies for five months in Calcutta 
 and seven in Simla in other words, who enjoy an 
 almost perfect climate for the entire year should 
 receive salaries and have furlough privileges which 
 were originally fixed with the view of tempting 
 
 equally good men to spend their whole time in the 
 
 i "i 
 plains. 
 
 As already stated, the Government, with the view 
 of securing economy, have undertaken that all 
 branches of expenditure shall be most carefully 
 scrutinised. It will no doubt be found that by 
 abolishing many unnecessary offices a considerable 
 saving may be effected, but in order to make such 
 retrenchment as is rendered absolutely necessary by 
 the present financial condition of India, it will be 
 essential that something more shall be done. The 
 
 1 See Calcutta correspondent of the Times, July 7, 1879. 
 
in.] THE NEW DEPARTURE. 156 
 
 entire system on which the government of India has 
 been conducted must be changed. The illusion is 
 only just beginning to pass away that India is an 
 extremely wealthy country. Misled by certain signs 
 of barbaric riches, people have too generally supposed 
 that India could afford to have her government carried 
 on upon a lavish scale. There is probably no country 
 in which official salaries range so high, and this 
 remark holds true not only with regard to those 
 who are employed in the public service in India, 
 but also with regard to many of the salaries which 
 are paid at the India Office in London. One who 
 holds a high position in the English Civil Service 
 informs me that he has lately had occasion to make 
 a comparison between the rates of pay in the English 
 and Indian services, and that he finds that in nume- 
 rous instances, for precisely the same work done in 
 England, a poor country like India pays 20 or 30 
 per cent, more than is paid by England with all 
 her wealth. In determining at what amount official 
 salaries should be fixed, it is not sufficient merely to 
 consider whether a particular individual is overpaid. 
 The financial circumstances of the country must also 
 be most carefully taken into account. The worst of 
 all things for a state as well as for an individual is, by 
 living beyond its means, to burden itself with a load 
 of debt. If a comparison is made between the finan- 
 
156 INDIAN FINANCE. [m. 
 
 cial resources of England and India, it will be found 
 almost impossible to convey an adequate idea of the 
 poverty of the latter country. In India, with a popu- 
 lation of more than 200,000,000, a net revenue is 
 raised of less than 38,000,0002. A much larger 
 revenue than this is raised in England by taxes im- 
 posed on articles of general consumption ; but in India 
 the mass of the people are in a condition of such 
 deplorable poverty, many of them earning only 3d. a 
 day, that with the exception of salt, which is already 
 heavily taxed, they consume scarcely an article on 
 which a duty can be imposed, and consequently it is 
 found that taxation in India has reached almost its 
 extreme limits. An expenditure which may be per- 
 fectly suited to England may be altogether beyond 
 the means of India ; and if India cannot afford to 
 pay some of those who are now receiving seven or 
 eight thousand a year, it is far better that she should 
 get others to do the work for a smaller remuneration 
 than incur debt and thus ultimately be driven to bear 
 fresh burdens of taxation. 
 
 It will unfortunately only too surely happen that a 
 policy of retrenchment cannot be carried out without 
 causing much loss and suffering to individuals. If, 
 for instance, the public works expenditure is reduced 
 by one half, many thousands of labourers who are 
 now employed by the Government will have to be 
 
ft 
 
 in.] THE NEW DEPARTURE. 157 
 
 * 
 
 dismissed. The Indian newspapers already ^contain 
 
 accounts of the suffering which is thus caused by 
 the curtailment of the outlay on public works. Not 
 the least of the many evils that result from extra- 
 vagance is that, when the inevitable time arrives for 
 retrenchment, many old servants have to be dismissed, 
 and many, through no fault of their own, are deprived 
 of employment to which they have been long accus- 
 tomed. At such a time it is of the first importance 
 that a Government should mete out even-handed 
 justice, and that retrenchment should not fall upon 
 the poor alone, and leave the wealthy and the influen- 
 tial untouched. The difficulties which must always be 
 encountered by a Government in carrying out a policy 
 of economy are sure to be most formidable ; but the 
 Government of India will find that the task which 
 they have undertaken is rendered much more easy if 
 they are able to give proofs that, in order to secure a 
 reduction of expenditure, they do not shrink from 
 encountering the opposition of those whose influence 
 will enable them to make their complaints heard. 
 
 In attempting to describe the advantages which will 
 be produced by this new policy of economy to which 
 the Indian Government is now pledged, it is hardly 
 possible to lay too much stress upon the fact that one 
 of the chief agencies on which reliance seems to be 
 placed is to secure a more economical administration 
 
158 INDIAN FINANCE. [m. 
 
 by a larger employment of natives in the public 
 service. The question is alike important whether re- 
 garded in its political or its financial aspects. There 
 can be no surer way of attaching the people of India 
 to our rule than to place within their reach an educa- 
 tion which will fit them for the public service, and 
 then freely to throw open to them all positions which 
 they are qualified to fill. In spite of repeated pledges 
 that no unnecessary barriers should be placed in the 
 way of the natives obtaining admission to the public 
 service, it is now officially acknowledged that the 
 efforts to give these pledges practical effect have been 
 " spasmodic, unsystematic, and altogether incompre- 
 hensible to the mass of the native population, while 
 the great increase which has taken place in the 
 number of Europeans in some branches of the public 
 service, and various other acts, may have seemed to 
 them to be in partial violation of this policy. It can- 
 not be denied that, whatever inay have been the 
 intentions of successive Secretaries of State, very little 
 progress has been made in giving effect to it." l As I 
 have had occasion to express strong dissent from many 
 acts of the present Viceroy, I more gladly take this 
 opportunity of bearing testimony to the efforts which 
 he is understood to have made during the whole time 
 
 1 See the Budget Speech of Mr. Stanhope, House of Commons, 
 May 22, 1879. 
 
m.] THE NEW DEPARTURE. 159 
 
 he has been in India to secure a larger employment of 
 natives in the public service. In pursuing this course 
 it will, I believe, be subsequently proved that Lord 
 Lytton has acted with not less wisdom than justice. 
 Indications, however, are not wanting that, in carrying 
 out this policy, the Government will be attacked from 
 two opposite quarters. No sooner was the announce- 
 ment made that, in order to admit natives to some of 
 the higher offices, the number of appointments in the 
 covenanted service thrown open to competition in 
 England would be diminished, than the course which 
 the Government intended to adopt was severely criti- 
 cised. All the old and well-known objections were 
 brought forward. It was alleged that the natives 
 were defective in physique, and that they were 
 morally unfit to have entrusted to them the higher 
 offices of the State. It is only reasonable to suppose 
 that such objections as these have been carefully con- 
 sidered both by the Viceroy and the Secretary of 
 State before they came to their recent decision, and 
 in arriving at it it is easy to show that they are sup- 
 ported by those whose intimate knowledge of India 
 has qualified them to speak with- great authority on 
 this subject. Selecting a few from many similar 
 expressions of opinion that might be quoted, General 
 Sir George Jacob, formerly Special Political Commis- 
 sioner, Southern Mahratta country, said : " During the 
 
160 INDIAN FINANCE. [ni. 
 
 last thirty years that I have been at the head of a 
 province or provinces, I have made it a rule to select 
 men for employ under me from the different colleges 
 and schools of the Presidency, both Mahometan and 
 Hindu, and there are numbers who have been so 
 selected who are now filling high and responsible 
 appointments in the different parts of Western India. 
 The accounts that have reached me of them since 
 my return to England bear testimony to their use- 
 fulness and trustworthiness/ 7 After saying that only 
 one had failed, he continued : "I certainly should 
 not have expected so large a proportion of good men 
 and true even from the educated classes of my own 
 country." Sir Bartle Frere, writing in 1868, when 
 he was Governor of Bombay, said : " We have at 
 this moment in the educated youth of Western 
 India, as far as intellectual and moral training can 
 -secure it, an excellent raw material for manning 
 -every branch of the public service." The present 
 Governor of Bombay, Sir Eichard Temple, who has 
 also held important positions in Bengal, bears testi- 
 mony to the capacity possessed by some of the natives 
 for the highest administrative work. He says that 
 -duriDg our supremacy in India there have been in the 
 native States " good ministers, really capital adminis- 
 trators, who have adorned the service to which they 
 belong : such as Purnea of Mysore, the Tantia Jogh 
 
in.] THE NEW DEPARTURE. 161 
 
 of Indore, in the past, and Sir Sala Jung of Hydera- 
 bad, Sir Dinker Kao of Gwalior, Sir T. Madhava Eao 
 of Travancore, in the present." In a report which the 
 Government of India published a few years since on 
 Sir T. Madhava Kao's administration of Travancore, 
 it is stated that "he found Travancore, when he 
 went there in 1849, in the lowest stage of degrada- 
 tion ; he has left it a model State/' Everything 
 was in a condition of the most utter disorder ; the 
 treasury was exhausted ; the pay of the police and 
 other public servants was so much in arrear that 
 they compensated themselves by the most irregular 
 exactions. Sir Madhava Eao, by the exercise of the 
 greatest care and thrift, was able to place the 
 finances of Travancore in a thoroughly sound posi- 
 tion ; a considerable surplus was secured, large sums 
 were spent on education and in the construction of 
 public works, the salaries of the officials were regu- 
 larly paid, the people were not harassed by taxes 
 unsuited to them, but his intimate knowledge of their 
 tastes and their habits enabled him to effect all these 
 great reforms with the minimum of inconvenience to 
 the people. If any other proof were wanted of the great 
 advantage that would result from more largely employ- 
 ing natives who are capable of rendering important 
 service to the Government, it would be afforded by 
 the fact that almost all the public works in India have 
 
 M 
 
162 INDIAN FINANCE. [m. 
 
 in recent years been constructed by English engineers, 
 and yet, as previously shown, by far the most 
 successful schemes of irrigation are those which were 
 designed by natives, who possessed a knowledge of the 
 climatic conditions of the country which can be very 
 rarely acquired by a foreigner. This success of the 
 native works is so remarkable that when Lord Salis- 
 bury was Secretary of State he went so far as to 
 declare that the only schemes of irrigation which 
 showed the desirable result of a clean balance-sheet 
 were those of native origin. 
 
 As previously indicated, the extended employ- 
 ment of natives in the public service ought not to 
 be simply considered as a measure of justice and 
 of improved administration. The Government 
 wisely consider that by the adoption of this policy, 
 it will be possible to effect a very important re- 
 duction in expenditure. It is, however, evident 
 that claims may be put forward by the people of 
 India themselves, which, if conceded, would prevent 
 any direct pecuniary gain being secured from the 
 increased employment of natives in the public 
 service. It is often contended by influential repre- 
 sentatives of native opinion that there should be 
 no difference in the remuneration of natives and 
 Europeans respectively for the same work. The salary 
 of a European official in India should, however, be 
 
in.] THE NEW DEPARTURE. 163 
 
 considered as composed of two elements : one part 
 of the pay which he receives remunerates him for 
 the actual work which he does, and the other 
 compensates him for leaving his country, and for 
 various expenses to which he is subjected, such, for 
 instance, as having to send his children to Europe 
 to be educated. A native, therefore, not being 
 subject to these disadvantages, would really receive 
 much higher remuneration than a European if he 
 were paid the same salary. One simple principle 
 should regulate the official pay both of natives and 
 of Europeans. The Government, being trustees of 
 the public revenue, are not justified in spending 
 one shilling of this revenue unnecessarily, and 
 consequently they are bound not to pay more for 
 any work which may require to be done than is 
 sufficient to secure the services of those who are 
 competent to perform it. If a qualified native 
 is willing to accept 1,0 OOZ. a year where it would 
 be requisite to give an equally competent European 
 2,000/. a year, a strong argument is afforded, not for 
 making an unnecessary addition of 1,000?. a year to 
 the salary of the native, but for saving this amount 
 by employing him instead of the European. 
 
 Although much may be undoubtedly done to 
 improve the financial position of India by carrying 
 out a policy of strict retrenchment in all depart - 
 
 M 2 
 
164 INDIAN FINANCE. [m. 
 
 ments of civil administration, yet it will scarcely 
 be denied that, in order to effect the saving which 
 is needed, chief reliance must be placed on largely 
 diminishing the present cost of the Indian army. 
 It appears, from the latest official statement, 1 that 
 the net cost of the Indian army for the present 
 year is estimated at 17, 375, 000 1. A considerable 
 portion of the cost of the late Afghan war will 
 have to be borne during the present year ; but as, 
 at the time when the military expenditure was 
 estimated at 17,375,OOOZ., peace had been restored, 
 and no renewal of hostilities was anticipated, it 
 may be only too certainly concluded that the mili- 
 tary expenditure for the present year will greatly 
 exceed the amount stated. Even in the time of 
 peace the cost of the army has of late years shown 
 a tendency to increase, for in 1877, when there 
 was no war, Sir John Strachey laid special stress 
 upon the fact that in a single year there had been 
 an increase of no less than 1,000, 00 OZ. in military 
 expenditure. It is evident that, if decided measures 
 are not at once taken, the military expenditure will 
 soon absorb one half of the entire net revenue of 
 India. It would be difficult for any country, and 
 it is impossible for one so poor as India, to bear 
 such a drain on her resources. The Government 
 
 1 See Budget Speech of Sir John Strachey, Calcutta, March, 1879. 
 
in.] THE NEW DEPARTURE. 165 
 
 seem at length fully to have recognised the neces- 
 sity of immediately adopting measures to reduce 
 this expenditure. A commission, with Sir Ashley 
 Eden, the present Lieutenant-Governor of Bengal, 
 as its president, has been appointed in India, " with 
 a view to assist Government in determining what 
 share of the unavoidable reductions in public ex- 
 penditure can be borne by the military charges 
 without injury to the general efficiency of the 
 army, and in what manner such savings can best 
 be effected/' Simultaneously a small commission 
 has been appointed in England to investigate 
 the home army charges which are borne by 
 India, especially those connected with the cost 
 of recruits. This commission consists of Lord 
 Northbrook, Sir Thomas Seccombe, who for many 
 years ably discharged the duties of Financial Secre- 
 tary at the India Office, and Mr. Knox, Deputy 
 Accountant-General at the War Office, who has 
 deservedly gained the confidence of successive 
 Secretaries of State for War. It may be anticipated 
 that much good will result from these inquiries, 
 and that many suggestions will be made which, if 
 adopted, will lead to a considerable reduction of ex- 
 penditure. Thus it can hardly be doubted that the 
 Commission in India will recommend the abolition 
 of the offices of Commander-in- Chief at Bombay 
 
166 INDIAN FINANCE. [in. 
 
 and Madras, with a considerable portion of their 
 costly and unnecessary staff. Public opinion in 
 India is almost unanimously in favour of this change, 
 and it was long since strongly advocated by some 
 of the highest authorities, such as Lord Sandhurst 
 and Sir Henry Durand, not only on the ground 
 of economy, but also as likely to add to the efficiency 
 of the army. The experience of the recent Afghan 
 war must enforce upon the Commission the conclusion 
 that the present commissariat system is alike costly 
 and defective. The large amount which India has 
 annually to spend in non-effective army charges 
 cannot fail to be a prominent subject in any inquiry 
 which has for its object the reduction of the military 
 expenditure of that country. The sum which India 
 has annually to pay in pensions is steadily increasing, 
 and many of these pensions, earned after a com- 
 paratively short period of service, are received by 
 those who are still capable of doing useful work 
 for the State. Thus, in an account of the Indian 
 army lately published, it is stated that " at the 
 present moment there are thousands of soldiers who 
 have completed little over fifteen years' service in 
 India in receipt of pensions for life." If some kind 
 of civil employment in India were given to these 
 men, the army would become more popular, and the 
 burden of the pension establishment be sensibly 
 
in.] THE NEW DEPARTURE. 167 
 
 lightened. The question of the non-effective charges 
 presents itself in a still more serious aspect when 
 the pensions and furlough allowances received by 
 officers in the Indian army are considered. It was 
 stated before the Indian Finance Committee in 1872 
 by Sir Thomas Pears, then Military Secretary at 
 the India Office, that India was at that time annually 
 paying no less than 1,600,000?. to officers in the 
 form of pensions and furlough allowances, and he 
 showed that about one-fourth of the entire number 
 of officers of the Indian army, who are wholly 
 maintained by India, were not in India, but in 
 England. When such questions as these are investi- 
 gated, I believe the Commissions which have just 
 been appointed, will arrive at the conclusion that 
 in order to effect any important .reduction in the 
 military expenditure of India, it will not be sufficient 
 simply to deal with details, but it will be necessary 
 to introduce fundamental changes into the system 
 on which the present Indian army is based. With 
 regard to the army, a partnership has been established 
 between England and India, and as one of these 
 countries is extremely rich, and the other extremely 
 poor, much of the same incongruity and many 
 of the same inconveniences arise as if two in- 
 dividuals were to join in housekeeping, one of 
 whom had 20,000/. a year, and the other only 
 
168 INDIAN FINANCE. [in. 
 
 1,000/. An expenditure which may be quite appro- 
 priate to the one whose income is 20,OOOZ. would 
 bring nothing but embarrassment to the one 
 whose income is only 1,000. The money which is 
 expended may be judiciously laid out, but if the 
 man with the smaller income finds that he is 
 gradually becoming embarrassed with debt because 
 he has to live beyond his means, it is no compen- 
 sation to him to be told that he is only called on 
 to contribute his proper share of the expenses. His 
 position would be the more intolerable if he were 
 treated as India was as regards her army, and, after 
 having been compelled against his wish to join the 
 partnership, he is forced to continue it whether he 
 desires to do so or not. In 1861 the English and 
 Indian armies were amalgamated in. direct opposition 
 to the strongly- expressed remonstrances of Lord 
 Canning, who was then Viceroy, and of almost every 
 Indian statesman of authority and experience. The 
 Council of the Secretary of State unanimously ob- 
 jected to it, but they were informed that although 
 they could, of course, exercise their right of protest, 
 it would be time wasted, for the amalgamation of 
 the two armies had been made a Cabinet question^ 
 and was an accomplished fact. 
 
 The description just given of the consequences 
 which may occur if two individuals share the cost 
 
in.] THE NEW DEPARTURE. 169 
 
 of joint housekeeping, fails fully to indicate the 
 position of India with regard to army expenditure. 
 Not only has she been compelled to enter into part- 
 nership with England, but, the partnership having 
 been once established, she is obliged to contribute 
 her share towards the expenses of many costly 
 arrangements, as to the adoption of which she was 
 not even consulted. Thus, a few years since, the 
 system of short service was introduced. Under the 
 arrangement which previously prevailed, a man was 
 enlisted for twenty-one years, during twelve of which 
 he served with the colours. Now, the enlistment is 
 for twelve years ; there is only six years' service with 
 the colours ; for the remaining six he passes into the 
 reserve. Whatever may be urged in favour of this 
 new arrangement, it is obvious that short service 
 may produce very different consequences to India 
 and England respectively. For instance, the cost 
 of transporting troops from England to India is an 
 important item in the military expenditure of the 
 latter country, and it is evident that the shorter the 
 term of service, the more frequently will troops have 
 to be sent from England to India, and back again 
 from India to England, with the result of very 
 materially adding to the charge for transport. This 
 charge has to be borne entirely by India, and does 
 not in the slightest degree affect England. Again, it 
 
170 INDIAN FINANCE. [m. 
 
 may very possibly happen that six years' service in 
 England may be sufficient to enable a man to pass 
 into the reserve as a thoroughly trained soldier ; if, 
 however, the great majority of those who have com- 
 pleted six years' service in India do not remain 
 there, but return to England, India will have 
 scarcely any reserve of well-trained troops, and the 
 larger part of her European forces will consist of 
 young soldiers, who have not been long enough in 
 the country to become either properly trained or 
 properly acclimatised. From these and other con- 
 siderations which might be mentioned, it is at once 
 evident that although the system of short service 
 may be a good arrangement for England, it does 
 not necessarily follow that the system is calculated 
 to promote either the economy or the efficiency of 
 the military organisation of India. The interests of 
 India, however, in this matter were so entirely 
 ignored or lost sight of by the English Govern- 
 ment that it appears from official evidence given 
 before a committee of the House of Commons, that 
 there is no record to show that when the short 
 service system was adopted, those who were respon- 
 sible for the government of India were even con- 
 sulted on the subject. 1 
 
 1 See evidence given by Sir Thomas Pears, late Secretary of the 
 Military Department at the Indian Office, before the East India Finance 
 Committee, 1874, p. 53. 
 
in.] THE NEW DEPARTURE. 171 
 
 When it is proved, as it repeatedly has been before 
 parliamentary and departmental committees, that 
 India has at the present time to pay at least twice 
 as much for her recruits as she would have to pay if 
 she could obtain them for herself, and when it is 
 pointed out how costly to her in various other ways 
 is the army partnership which has been established 
 between her and England, it is usually urged that 
 the general interests of England and the rest of the 
 Empire render the maintenance of this partnership 
 necessary. Thus it is said, " If England and India 
 both competed in the English labour market for re- 
 cruits, various inconveniences might arise." In the 
 days of the Company, India had a European army 
 of her own, and although she obtained her recruits 
 at an extremely cheap rate, yet service in the Com- 
 pany's European army was always eagerly sought 
 after. India, if she were again permitted to recruit 
 for herself, might make service in her army so 
 attractive, that, to the disadvantage of England, she 
 would draw away some of the best recruits. But, if 
 for any such reasons as these, it is necessary to make 
 India compulsorily share in the costly military organi- 
 sation of England, the greatest care should be taken 
 not to throw upon her any charge which she would 
 not have to bear if she were allowed to obtain re- 
 cruits on her own terms, and make her own arrange- 
 
172 INDIAN FINANCE. [,n. 
 
 ments with the officers she employed. There is too 
 much ground for the suspicion that an exactly 
 opposite course is now often followed, for facts may 
 be mentioned which seem to show that the large 
 amount which India in some instances pays, diminishes 
 the amount which England would otherwise have 
 to give for services which she receives. Thus, before 
 a Committee of the House of Commons which sat 
 in 1877, it was stated that although the pay of 
 the private soldier and the non-commissioned officer 
 is the same in India as in England, yet the com- 
 missioned officers are much more highly paid when 
 serving in the former country than in the latter. 
 An official return was laid before the Committee by 
 which it was shown that the pay of officers of the 
 higher ranks is " at least three times as much in India 
 as in England." l The unhealthiness of the Indian 
 climate cannot be pleaded as a sufficient reason 
 why this higher rate of pay should be given to 
 officers of the English army serving in India ; the 
 climate is not worse for them than it is for the 
 private soldier or the non-commissioned officer, and 
 their pay is the same in India as in England. India 
 is not a worse place for an English officer to live 
 in than Sierra Leone or Canton : if he. is stationed 
 
 1 See Report of the Army (Royal Artillery and Engineer Officers' ) 
 Arrears of Pay Committee, 1877, p. 72. 
 
in.] THE NEW DEPARTURE. 173 
 
 at these places his pay is provided by the English 
 taxpayer, and the amount he receives is almost 
 precisely the same as if he were serving in England. 
 It may no doubt be contended that the aggregate 
 remuneration which an officer of the British army 
 receives for service- in England and in India admits 
 of no reduction, and that, as he is certainly not 
 overpaid, if he were to receive less in India it would 
 be necessary to give him more in England ; but 
 even if this were fully admitted, it would only 
 supply one more unanswerable argument to show 
 that, when the respective financial interests of 
 England and India are in question, sufficient care 
 is not taken to give adequate protection to India. 
 
 Nothing would be more unwise than to underrate 
 the difficulties which will have to be encountered by 
 any Government that is determined to effect such 
 reductions in Indian expenditure as those which 
 have here been indicated. It will only too certainly 
 be found that it is impossible to advance a single 
 step in the path of economy without an attempt 
 being made to bar the way by those who wish to 
 maintain the particular item of expenditure which 
 it is proposed to touch. If the Government should 
 give proof that they are determined to pursue a 
 policy of rigorous retrenchment with unflinching 
 courage, they have a right to expect that they shall 
 
174 INDIAN FINANCE. [m. 
 
 be generously and cordially supported by every one 
 who is interested in the future of India. .The work 
 cannot be done by the Government alone. It will be 
 necessary that they shall be aided both by Parliament 
 and by public opinion in this country. Hitherto 
 it has unfortunately too frequently happened that 
 the influence of the House of Commons has, with 
 regard to the expenditure of Indian money, been 
 on the side of extravagance. But Parliament reflects 
 the opinion of the constituencies, and the humblest 
 elector may help on the work which is to be 
 done, if, awakening to the responsibility which 
 every Englishman owes to the great dependency 
 we have to govern, he makes it clear that it is 
 his wish that no charge which ought in justice 
 to be borne by England should be thrown upon 
 India, and that the spending of Indian money 
 should be watched with at least as much care as 
 the spending of English money. It was once well 
 said that in politics as in other affairs the difficulty 
 of doing a particular thing is not unfrequently the 
 measure of the good which its accomplishment will 
 secure. This is certainly true with regard to the 
 reform of the finances of India. Few tasks can be 
 more difficult, but no labour will yield a richer 
 harvest of results. Two paths are now before the 
 Indian Government : the one will lead to augmented 
 
in.] THE NEW DEPARTURE. 175 
 
 indebtedness, increased taxation, and growing dis- 
 content ; the other, if resolutely followed, will enable 
 debt to be diminished, taxation to be reduced, and 
 will cause our rule in India to rest on its only sure 
 foundation the contentment and happiness of the 
 people. If three or four millions in the annual 
 expenditure of India can be saved, the licence tax 
 could be repealed, the salt duty reduced to a uniform 
 rate of two rupees per maund, and many useful 
 works which have now to be suspended could be 
 resumed without incurring fresh indebtedness. When 
 it is remembered that such results as these may be 
 effected by a policy of retrenchment, we may with 
 confidence indulge the hope that the work, having 
 been undertaken, will not be abandoned until it 
 has been accomplished. 
 
APPENDIX. 
 
 N 
 
APPENDIX. 
 
 THE AMENDMENT OF THE TEADES LICENCE-TAX, AND 
 THE RELINQUISHMENT OF THE FAMINE FUND. 
 
 IN the last Essay, reference was made to the many 
 gratifying indications afforded by recent events that, 
 with the general recognition of the true financial 
 condition of India, a new spirit would in future be 
 likely to control the administration of the finances 
 of that country. During the few months which 
 have elapsed since this opinion was expressed many 
 circumstances have occurred which afford additional 
 proof that reforms which before seemed to be un- 
 attainable will now be readily conceded. Thus, in 
 directing attention to the trades' licence -tax and to 
 the famine fund, I have had frequent occasion to 
 refer to the extremely oppressive character of the 
 tax as it affected the very poor, to the great in- 
 equality in its incidence, and to the confusion which 
 was introduced into Indian finance by the nominal 
 maintenance of a famine fund, after the revenue 
 
 N 2 
 
180 INDIAN FINANCE. 
 
 yielded by the taxes from which this fund was 
 created had been devoted to objects in no way con- 
 nected with the relief of famine. From the first 
 moment that the trades' licence-tax was imposed, 
 public opinion in England and in India condemned 
 with remarkable unanimity the injustice of a tax 
 which, while it was levied from petty traders and 
 handicraftsmen whose incomes were only four shillings 
 a week, left altogether untouched the highly-paid 
 officials, all military officers, and all professional 
 men. Petitions most numerously and influentially 
 signed by all classes of natives in India were 
 presented in both Houses of Parliament against the 
 continuance of these inequalities in the tax, and 
 on several occasions the prayer of these petitions 
 was supported by those who could speak with most 
 authority and weight on a question of taxation. 
 Striking instances were given of the abuses and 
 difficulties inseparably associated with the assessment 
 and levying of direct taxation imposed upon the 
 very poor in such a country as India ; but for a long 
 time the Government, both in England and in India, 
 appeared to be deaf to all remonstrance. 
 
 Within the last few weeks, however, a change, 
 as remarkable as it is satisfactory, has taken place 
 in the attitude which had hitherto been officially 
 assumed with regard to the licence-tax. On the 
 
APPENDIX. 181 
 
 14th of November, the Finance Minister, Sir John 
 Strachey, brought forward, at a meeting of the 
 Legislative Council of the Viceroy, a Bill for the 
 amendment of this tax, which, though it left some 
 inequalities unredressed, introduced many important 
 improvements. It will be at once seen from a brief 
 description of the provisions of the Bill that it 
 fully recognised the justice of the most serious 
 objections which had been urged against the tax. 
 As previously stated, only those traders whose 
 incomes were less than 100 rupees a year were 
 exempted from the tax ; by the Bill the limit of 
 exemption was raised from 100 rupees to 250 rupees. 
 It is supposed that the number of persons to whom 
 relief would thus be given would not be less than 
 a million. The Bill effected another not less im- 
 portant change, by subjecting to a uniform tax of 
 1| per cent, the incomes derived from professions, 
 and the salaries of all those in Government and 
 other employment. The previous exemption of 
 many who were among the wealthiest people in 
 India had naturally provoked strong and widespread 
 discontent. It was calculated that the proposed 
 exemption of incomes below 250 rupees a year 
 would cause a loss to the revenue of about 240,000?.? 
 and that this would be approximately made good 
 by the additional revenue yielded by the new classes 
 
182 INDIAN FINANCE. . 
 
 of incomes to be brought within the operation of 
 the tax. Although the tax would thus undoubt- 
 edly have been placed on a much fairer basis, 
 yet the Bill created some new anomalies and 
 left many inequalities unredressed. Thus, % cf it is 
 proposed to exempt from liability to the tax the 
 military servants of Government, not in civil 
 employment, whose pay and allowances do not 
 exceed 500 rupees per mensem, or 6,000 rupees per 
 annum ; " and for all other salaried persons "it is 
 proposed to make 100 rupees per mensem, or 1,200 
 rupees per annum, the lower limit of taxable 
 income/' It is difficult to suggest any valid reasons 
 in support of an arrangement which would impose 
 taxation on a petty trader whose income is only 250 
 rupees, and exempt from taxation persons in receipt 
 of salaries five times as large, and military officers 
 with incomes twenty-four times as large. These 
 exemptions excited much hostile criticism in India 
 when the Bill was introduced, and it was generally 
 felt that too small a sum had been taken in fixing 
 the lower limit of taxation at 250 rupees. The 
 Indian Government very wisely showed an inclina- 
 tion to yield to these expressions of public opinion, 
 and accordingly, on the 24th of December, Sir John 
 Strachey brought forward the Licence-Tax Bill in 
 an amended form, and proposed at a meeting of 
 
APPENDIX. 183 
 
 the Legislative Council that the Bill should be 
 referred to a Select Committee, with the object of 
 passing it after the introduction of the next Indian 
 Budget. The full details of these amendments have 
 not yet been published. 
 
 It appears, however, that one important change 
 is to be effected, for the limit of exemption is to 
 be raised from 250 to 500 rupees. Jt is also pro- 
 posed that the maximum amount to be taken from 
 any person who is not an official should be 800 
 rupees, but that a tax of li per cent, should be 
 imposed on official salaries without limitation. It 
 is not stated, in the accounts which have reached 
 England of the Bill in its new form, whether or not 
 military officers whose pay and allowances are less 
 than 6,000 rupees a year, and persons in receipt of 
 salaries of less than 1,200 rupees a year, are still 
 to be exempted from the tax. Although it seems 
 impossible to defend the continuance of these ex- 
 emptions, yet enough has been said to show that 
 the tax in its new form will bear a striking contrast 
 to the tax as it was originally, and is still, imposed. 
 Many of the most glaring inequalities in its incidence 
 will be removed, and so much relief will be afforded 
 to the very poor by raising the limit of exemption 
 from incomes of 100 to 500 rupees, that it is 
 estimated that no less than 1,750,000 persons who 
 
184 INDIAN FINANCE. 
 
 now pay the tax will in future be freed from all 
 liability to contribute to it. This important measure 
 of relief will not involve any serious sacrifice of 
 revenue, for it is officially calculated that the tax 
 in its new form will produce only 100,000?. less than 
 it now yields. It may be hoped that the experience 
 which has been derived from the licence- tax since 
 it has been in operation will not be lost on future 
 Indian Governments. It has been shown by what 
 has occurred, that nothing can politically be more 
 unwise and financially more inexpedient than to 
 impose direct taxation in India upon the possessors of 
 very small incomes. The difficulty of equitably assess- 
 ing and collecting direct taxation when it reaches 
 the very poor in such a country is so great, and the 
 revenue which is yielded is so trifling, that it may 
 be fairly said that the maximum of inconvenience 
 is caused in order to secure a minimum of revenue. 
 
 By the Bill for the amendment of the licence-tax 
 it is proposed to carry out another change of much 
 importance. It will be remembered that this tax, 
 with others, was originally imposed with the object 
 of creating a famine fund. In the preamble of the 
 Act by which the licence -tax is now levied, it is 
 stated that these taxes were imposed with the object 
 of effecting " a permanent increase of the revenue, 
 in order to provide means for defraying the public 
 
expenditure from time to time incurred, anc to be 
 incurred, for the relief and prevention of famine in 
 British India." In the preamble of the new Bill all 
 reference to the relief of famine is omitted. I think 
 there will be general concurrence with the opinion 
 expressed by Sir John Strachey, that the retention 
 of these words would " undoubtedly serve to create 
 misapprehension." I have already adduced reasons 
 which seem to me to show that, at a time when it 
 is necessary for the Indian Government to raise 
 loans both in England and in India, the employment 
 of any language which would encourage the idea 
 that a separate fund had been called into existence 
 for the relief of famine, could produce no other 
 result except to introduce unnecessary confusion 
 into Indian finance. It is in every respect far better 
 to adopt the course which is now about to be taken 
 by the Indian Government, and to treat the licence- 
 tax as an impost levied in order to obtain the 
 additional revenue which was required, when, in 
 consequence of the frequent occurrence of famine, 
 the decision was arrived at that the relief of famine 
 was an ordinary charge, for which it was just as 
 incumbent to make provision as it is for "proper 
 courts of justice, police, education, and so forth." l 
 
 1 See speech of Sir John Strachey in introducing the amended 
 Licence-tax Bill. 
 
186 INDIAN FINANCE. 
 
 Although the famine fund has, for the reasons just 
 stated, been wisely relinquished, yet it cannot be too 
 carefully borne in mind that the obligation to make 
 provision for the relief of famine, in those years when 
 there are no famines, remains precisely the same as 
 it was before. As the Government have arrived at 
 the conclusion that the amount which ought to be 
 thus appropriated is about 1,500,000?. a year, it is 
 manifest that in years when there are no famines 
 a surplus of at least this amount ought to be regularly 
 secured. There now seems to be every reason to 
 hope that the present financial year, which ends on 
 the 31st of March next, will in many respects afford 
 a gratifying contrast to those which have immedi- 
 ately preceded it. The seasons have been favourable, 
 and the harvests have been good ; arrears of land 
 revenue, which the people had before been too poor 
 to pay, are now beginning to come in ; and it is 
 expected that the land revenue will yield about 
 350,OOOZ. more than was estimated. During the time 
 that large districts of India were afflicted with famine 
 the people were obliged to lessen their consumption 
 even of an article so necessary to life as salt. With 
 the return of better times the consumption of salt 
 is increasing, and the salt revenue is likely to yield 
 200,OOOZ. more than was estimated. Although little 
 more than eight months have elapsed since the 
 
APPENDIX. 187 
 
 Government, at the time of the discussion of the 
 last Indian Budget in the House of Commons, first 
 announced their determination that greater economy 
 should be introduced into the administration of 
 Indian finance, and that a policy of rigorous re- 
 trenchment should be carried out in every branch 
 of expenditure, yet, short as the time has been, it 
 has been long enough to show how important are 
 the results which may be achieved if such a policy 
 is resolutely and persistently pursued. This im- 
 provement, however, in the financial condition of 
 India does not render vigilance and caution in the 
 slightest degree less necessary. If there is not con- 
 stant watchfulness, nothing will be more easy than 
 to glide back into the old ways of carelessness and 
 extravagance, and although the seasons may this 
 year be propitious, the experience of the past should 
 ever be present to remind us that a period of plenty 
 may be succeeded by years of famine, and that it 
 is the first maxim of prudent and wise finance to 
 make provision in prosperous days to meet the 
 difficulties of adverse times. 
 
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 MACMILLAN & Coss CATALOGUE of Works 
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 HISTORY, BIOGRAPHY, TRAVELS, &c. 
 
 Albemarle. FIFTY YEARS OF MY LIFE. By GEORGE 
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 REVIEW. 
 
 Anderson. MANDALAY TO MOMIEN ; a Narrative of the 
 Two Expeditions to Western China, of 1868 and 1875, under 
 Colonel E. B. Sladen and Colonel Horace Browne. By Dr." 
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 peditions. With numerous Maps and Illustrations. 8vo. 2I/. 
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 Atkinson. AN ART TOUR TO NORTHERN CAPITALS 
 OF EUROPE, including Descriptions of the Towns, the Museums, 
 and other Art Treasures of Copenhagen, Christiania, Stockholm, 
 
 5,000.8.79. A 
 
2 MACMILLAWS CATALOGUE OF WORKS IN 
 
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 "Although the main pur-tose of the book is strictly kept in view, and we 
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 a book in which what is principal and what is accessory have been kept in 
 better proportion to each other." SATURDAY REVIEW. 
 
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 of Egypt. With Portraits, Map, and fifty full-page Illustrations 
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 tion of the Nile Sources. Fifth Edition. Maps and Illustrations. 
 Crown 8vo. 6s. 
 
 " Charmingly ivritten;" says the SPECTATOR, "full, as might be 
 expected, of incident, and free from that wearisome reiteration of useless 
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 THE NILE TRIBUTARIES OF ABYSSINIA, and the Sword 
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 Sixth Edition. Crown 8vo. 6s. 
 
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 tells a story well, and can describe nattire with uncommon power. " 
 
 Bancroft. THE HISTORY OF THE UNITED STATES 
 
 OF AMERICA, FROM THE DISCOVERY OF THE CON- 
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 vised Edition. Six Vols. Crown 8vo. 54^. 
 
HISTORY, BIOGRAPHY, TRAVELS, ETC. 3 
 
 Barker (Lady). Works by LADY BARKER : 
 
 A YEAR'S HOUSEKEEPING IN SOUTH AFRICA. With 
 Illustrations. New and Cheaper Edition. Crown 8vo. 6s. 
 
 ft We have to thank Lady Barker for a very amusing book, over which 
 we have spent many a delightful hour, and of which we will not take 
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 POST. 
 
 Beesly. STORIES FROM THE HISTORY OF ROME. By 
 
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 "A little book for which every cultivated and intelligent mother will be 
 grateful for. " EXAMINER. 
 
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 Crown 8vo. iSs. 
 
 The TIMES says : " The publication of Bismarck's after-dinner talk, 
 whether discreet or not, will be of priceless biographical value, and English* 
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 picture as true to life as Boswell 's ( Johnson ' of the foremost practical 
 genius that Germany has produced since Frederick the Great.' 1 
 
 Blackburne. BIOGRAPHY OF THE RIGHT HON. 
 
 FRANCIS BLACKBURNE, Late Lord Chancellor of Ireland. 
 Chiefly in connexion with his Public and Political Career. By his 
 Son, EDWARD BLACKBURNE, Q.C. With Portrait Engraved by 
 JEENS. 8vo. I2J. 
 
 Blanford (W. T.) GEOLOGY AND ZOOLOGY OF 
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 WEMYSS REID. With Illustrations. Third Edition. Crown 
 8vo. 6s. 
 
 Mr. Reid's little volume, which is based largely on letters, hitherto 
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 she was by nature (as Mr. Reid puts it) "a habpy and high-spirited girl, 
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 Possession, and to which she was indebted for her successive victories over 
 trials and disappointments of no ordinary character." 
 
 The book is illustrated by a Portrait of the Rev. Patrick Bronte, several 
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 A 2 
 
4 MACMILLAN'S CATALOGUE OF WORKS IN 
 
 Brooke. THE RAJA OF SARAWAK : an Account of Sir 
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 or Journals. By GERTRUDE L. JACOB. With Portrait and 
 Maps. Two Vols. 8vo. 25"^. 
 
 " They who read Miss Jacob's book and all should read it: all "who 
 are umler the delusion that in our time there is no scope for heroism, and 
 no place for romantic adventure, ond no place for enterprise and ambition 
 will see how incident is crowded upon incident, and struggle upon 
 struggle, till in the very abundance of materials that come to her hand 
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 wonderjul narrative" ACADEMY. 
 
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 Crown 8vo. qs. 6d. 
 
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 THE HOLY ROMAN EMPIRE. Sixth Edition, Revised and 
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 well-informed a jurist travels into regions seldom visited, and even 
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 ing that the impressions he brings home are worthy of being communicated 
 to the world at large, especially when a terrible war is casting a lurid glow 
 over the countries he has lately surveyed" ATHENAEUM. 
 
 Burgoyne. POLITICAL AND MILITARY EPISODES 
 DURING THE FIRST HALF OF THE REIGN OF 
 GEORGE III. Derived from the Life and Correspondence of 
 the Right Hon. J. Burgoyne, Lieut. -General in his Majesty's 
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 Burke. EDMUND BURKE, a Historical Study. By JOHN 
 
 MORLEY, B. A., Oxon. Crown 8vo. 7^. 6d. 
 
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HISTORY, BIOGRAPHY, TRAVELS, ETC. 5 
 
 Burrows. WORTHIES OF ALL SOULS . Four Centuries cf 
 English History. Illustrated from the College Archives. By 
 MONTAGU BURROWS, Chichele Professor of Modern History at 
 Oxford, Fellow of All Souls. 8vo. 14^. 
 "A most amusing as well as a most instructive book. GUARDIAN. 
 
 Campbell. LOG-LETTERS FROM THE "CHALLENGER." 
 By LORD GEORGE CAMPBELL. With Map. Fifth and cheaper 
 Edition. Crown 8vo. 6s. 
 
 "A delightful book, "which we heartily commend to the general reader" 
 SATURDAY REVIEW. 
 
 * ' We do not hesitate to say that anything so fresh, so picturesque, so 
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 ' ' A more lively and amusing record of travel we have not had the 
 fortune to read for some time. The whole book is pervaded by a spirit of 
 life, animation, and fun" STANDARD. 
 
 Campbell. MY CIRCULAR NOTES : Extracts from Journals ; 
 Letters sent Home ; Geological and other Notes, written while 
 Travelling Westwards round the World, from July 6th, 1874, to 
 July 6th, 1875. ^7 J. F. CAMPBELL, Author of "Frost and 
 Fire." Cheaper Is.--ue. Crown ,8vo. 6s. 
 
 " We have read numbers of books of travel, but we can call to mind 
 few that have given us more genuine pleasure than this. A more agree" 
 able style of narrative than his it is hardly possible to conceive. We seem 
 to be accompanying him in his trip round the world, so life-like is his 
 description of the countries he visited" LAND AND WATER. 
 
 Campbell. TURKS AND GREEKS. Notes of a recent Ex- 
 cursion. By the Hon. DUDLEY CAMPBELL, M.A. With Coloured 
 Map. Crown 8vo. 3^. 6d. 
 
 CarstareS. WILLIAM CARSTARES : a Character and Career 
 of the Revolutionary Epoch (16491715). By ROBERT STOKY, 
 Minister of Rosneath. Svo. 12s. 
 
 Chatterton : A BIOGRAPHICAL STUDY. By DANIEL 
 WILSON, LL.D., Professor of History and English Literature in 
 University College, Toronto. Crown Svo. 6s. 6d. 
 
 Chatterton: A STORY OF THE YEAR 1770. By Professor 
 MASSON, LL.D. Crown Svo. 5*. 
 
 Clark. MEMORIALS FROM JOURNALS AND LETTERS 
 OF SAMUEL CLARK, M.A., formerly Principal of the 
 National Society's Training College, Battersea. Edited with 
 Introduction by his WIFE. With Portrait. Crown Svo. js. 6cL 
 
6 MACMILLAWS CATALOGUE OF WORKS IN 
 
 Combe. THE LIFE OF GEORGE COMBE, Author of "The 
 
 Constitution of Man." By CHARLES GIBBON. With Three 
 Portraits engraved by JEENS. Two Vols. 8vo. 32J. 
 "A graphic and interesting account of the long life and indefatigable 
 labours of a very remarkable man." SCOTSMAN. 
 
 Cooper. ATHENE CANTABRIGIENSES. By CHARLES 
 HENRY COOPER, F.S.A., and THOMPSON COOPER, F.S.A. 
 Vol. I. 8vo., 150085, i8j. ; Vol. II., 15861609, i8j. 
 
 Correggio. ANTONIO ALLEGRI DA CORREGGIO. From 
 the German of Dr. JULIUS MEYER, Director of the Royal Gallery, 
 Berlin. Edited, with an Introduction, by Mrs. HEATON. Con- 
 taining Twenty Woodbury-type Illustrations. Royal 8vo. Cloth 
 elegant. 3U. 6d. 
 
 Cox (G. V.) RECOLLECTIONS OF OXFORD. By G. 
 V. Cox, M.A., New College, late Esquire Bedel and Coroner 
 in the University of Oxford. Cheaper Edition. Crown 8vo. 6s. 
 
 Cunynghame (Sir A. T.) MY COMMAND IN SOUTH 
 
 AFRICA, 1874 78. Comprising Experiences of Travel in the 
 Colonies of South Africa and the Independent States. By Sir 
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 Edition. 8vo. 12s. 6d. 
 
 The TIMES says : "// is a volume of great interest, .... full of 
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 "Daily News." THE DAILY NEWS' CORRESPOND. 
 ENCE of the War between Germany and France, 18701. Edited 
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 THE DAILY NEWS' CORRESPONDENCE of the War between 
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 Cheaper Edition. Crown 8vo. 6s. 
 
 FROM THE FALL OF KARS TO THE CONCLUSION OF 
 PEACE. Cheaper Edition. Crown 8vo. 6s. 
 
 Davidson. THE LIFE OF A SCOTTISH PROBATIONER ; 
 
 being a Memoir of Thomas Davidson, with his Poems and 
 Letters. By JAMES BROWN, Minister of St. James's Street 
 Church, Paisley. Second Edition, revised and enlarged, with 
 Portrait. Crown 8 vo. *js. 6d. 
 
HISTORY, BIOGRAPHY, TRAVELS, ETC. 7 
 
 Deas. THE RIVER CLYDE. An Historical Description of the 
 Rise and Progress of the Harbour of Glasgow, and of the Im- 
 provement of the River from Glasgow to Port Glasgow. By J. 
 DEAS, M. Inst. C.E. 8vo. icw. 6d. 
 
 Denison. A HISTORY OF CAVALRY FROM THE EAR- 
 LIEST TIMES. With Lessons for the Future. By Lieut. -Col. 
 GEORGE DENISON, Commanding the Governor-General's Body 
 Guard, Canada, Author of " Modern Cavalry." With Maps and 
 Plans. 8vo. iSs. 
 
 Dilke. GREATER BRITAIN. A Record of Travel in English- 
 speaking Countries during 1866-7. (America, Australia, India.) 
 By Sir CHARLES WENTWORTH DILKE, M.P. Sixth Edition. 
 Crown 8vo. 6s. 
 
 " Many of the subjects discussed in these pages" savs the DAILY NEWS, 
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 Doyle. HISTORY OF AMERICA. By J. A. DOYLE. With 
 
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 " Mr. Doyle's style is clear and simple, his facts are accurately stated, 
 and his book is meritoriously free from prejudice on questions where 
 partisanship runs high amongst us" SATURDAY REVIEW. 
 
 Drummond of Hawthornden : THE STORY OF HIS 
 
 LIFE AND WRITINGS. By PROFESSOR MASSON. With Por- 
 trait and Vignette engraved by C. H. JEENS. Crown 8vo. los. 6d. 
 
 Duff. Works by M. E. GRANT-DUFF, M.P., late Under Secretary 
 of State for India : 
 
 NOTES OF AN INDIAN JOURNEY. With Map. 8vo. los. 6d. 
 
 " These notes are full of pleasant nma-'ks and illustrations, borrowed 
 from every kind of source" SATURDAY REVIEW. 
 
 MISCELLANIES POLITICAL AND LITERARY. 8vo. iw. 6</. 
 
 Eadie. LIFE OF JOHN EADIE, D.D., LL.D. By JAMES 
 
 BROWN, D.D., Author ot "The Life of a Scottish Probationer." 
 With Portrait. Second Edition. Crown 8vo. 7*. 6d. 
 "An ably written and characteristic biography" TIMES. 
 
 Elliott. LIFE OF HENRY VENN ELLIOTT, of Brighton. 
 By JOSIAH BATEMAN, M.A. With Portrait, engraved by JEENS. 
 Extra fcap. 8vo. Third and Cheaper Edition. 6s. 
 
 Elze. ESSAYS ON SHAKESPEARE. By Dr. KARL ELZE. 
 Translated with the Author's sanction by L. DORA SCHMITZ. 
 
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 "A more desirable contribution to criticism has not recently been made" 
 ATHENAEUM. 
 
8 MACMILLAWS CATALOGUE OF WORKS IN 
 
 English Men of Letters. Edited by JOHN MORLEY. A 
 Series of Short Books to tell people what is best worth knowing 
 as to the Life, Character, and Works of some of the great 
 English Writers. In crown 8vo. Price 2s. 6d. each. 
 
 I. DR. JOHNSON. By LESLIE STEPHEN. 
 
 " The new series opens wAl with Mr. Leslie Stephen's sketch of Dr. 
 Johnson, It could hardly have been done better ; and it will convey to 
 the readers for whom it is intended a jttster estimate of Johnson than 
 either of the two essays of Lord Macaulay" PALL MALL GAZETTE. 
 
 II. SIR WALTER SCOTT. By R. H. HUTTON. 
 
 '* The tone of the volume is excellent throughout." ATHENAEUM. 
 " We could not wish for a more suggestive introduction to Scott and 
 his poems and novels.''' 1 EXAMINER. 
 
 III. GIBBON. By J. C. MORISON. 
 
 " As a clear, thoughtful, and attractive record of the life and works of 
 the greatest among the world's historians, it deserves the highest praise." 
 EXAMINER. 
 
 IV. SHELLEY. By J. A. SYMONDS. 
 
 " The lovers of this great poet are to be -congratulated on having at 
 their command so fresh, clear, and intelligent a presentment of the subject, 
 written by a man of adequate and wide culture" ATHEN^UM. 
 
 V. HUME. By Professor HUXLEY. 
 
 " // may fairly be said that no one nozu living could have expounded 
 Hume with more sympathy or with equal perspicuity ." ATHEN^UM. 
 
 VI. GOLDSMITH. By WILLIAM BLACK. 
 
 " Mr. Black brings a fine sympathy and taste to bear in his criticism 
 of Goldsmith's writings as well as in his sketch of the incidents of his life." 
 ATHENAEUM. 
 
 VII. DEFOE. By W. MINTO. 
 
 ' ' Mr. Minto's book is careful and accurate in all that is stated, and 
 faithful in all that it suggests. It will repay reading more than once" 
 -ATHENAEUM. 
 
 VIII. BURNS. By Principal SHAIRP, Professor of Poetry in the 
 University of Oxford. 
 
 " It is impossible to desire fairer criticism than Principal Shairp's 
 
 ?n Burns's poetry None of the series has given a triter estimate 
 
 either of character or of genius than this little volume and all 
 
 who read it will be thoroughly grateful to the author for this monument 
 to the genius of Scotland's greatest poet" SPECTATOR. 
 
 IX. SPENSER. By the Very Rev. the DEAN OF ST. PAUL'S. 
 "Dr. Church is master of his subject, and -writes always with good 
 
 taste" ACADEMY. 
 
 X. THACKERAY. By ANTHONY TROLLOPE. 
 
 ' ' Mr. Trollops' s sketch is excellently adapted to fufil the purpose of 
 the series in "cvhich it appears." ATHENAEUM. 
 
HISTORY, BIOGRAPHY, TRAVELS, ETC. 9 
 
 English Men of Letters. continued. 
 
 BURKE. By JOHN MORLEY. ' ) rAr . , 
 
 MILTON. By MARK PATTISON. \\_Nearlyready. 
 
 Others in preparation. 
 
 Eton College, History of. By H. C. MAXWELL LYTE, 
 M.A. With numerous Illustrations by Professor DELAMOTTE, 
 Coloured Plates, and a Steel Portrait of the Founder, engraved 
 by C. H. JEENS. New and cheaper Issue, with Corrections. 
 Medium 8vo. Cloth elegant. 2is. 
 
 " Hitherto no account of the College, with all its associations, has 
 appeared which can compare either in completeness or in interest "with 
 this. . . . It is indeed a book worthy of the ancient renoivn oj King 
 Henry s College." DAILY NEWS. 
 
 " We are at length presented with a work on England's greatest public 
 school, worthy of the subject of which it treats. . . . A really "valuable and 
 authentic history of Eton College." GUARDIAN. 
 
 European History, Narrated in a Series of Historical 
 
 Selections from the best Authorities. Edited and arranged by 
 
 E. M. SEWELL and C. M. YONGE. First Series, crown 8vo. 6s. ; 
 
 Second Series, 1088-1228, crown 8vo. 6s. Third Edition. 
 
 " We know of scarcely anything" says the GUARDIAN, of this volume, 
 
 "which is so likely to raise to a higher level the average standard of 
 
 English education." 
 
 Faraday. MICHAEL FARADAY. By J. H. GLADSTONE, 
 Ph.D., F.R.S. Second Edition, with Portrait engraved by JEENS 
 from a photograph by J. WATKINS. Crown 8vo. 4^. 6d. 
 PORTRAIT. Artist's Proof. 5*. 
 
 Forbes. LIFE AND LETTERS OF JAMES DAVID 
 
 FORBES, F.R.S., late Principal of the United College in the 
 University of St. Andrews. By J. C. SHAIRP, LL.D., Principal 
 of the United College in the University of St. Andrews ; P. G. 
 TAIT, M.A., Professor of Natural Philosophy in the University 
 of Edinburgh; and A. ADAMS-REILLY, F.R.G.S. 8vo. with 
 Portraits, Map, and Illustrations, i6j. 
 
 Freeman. Works by EDWARD A. FREEMAN, D.C.L.,LL.D. : 
 HISTORICAL ESSAYS. Third Edition. 8vo. i<w. 6d. 
 CONTENTS: /. "The Mythical and Romantic Elements in Early 
 
 English History;" II. "The Continuity of English History;"^ III. 
 The Relations between the Crowns of England and Scotland ;" IV. 
 
 ' Frederick the Hrst, King of Italy ;" X. " The Emperor Frederick the 
 Second;" XI. "Charles the Bold ;" XII. ' ' Presidential Government. 
 
io M ACHILLA WS CATALOGUE OF WORKS IN 
 
 Free man contimicd. 
 
 A SECOND SERIES OF HISTORICAL ESSAYS. 8vo. 
 ioj. 6d. 
 
 The principal Essays are: "Ancient Greece and Mediceval Italy:" 
 " Mr. Gladstones Homer and the Homeric Ages : '' " The Historians 
 of Athens:'" '''The Athenian Democracy:" "Alexander the Great:" 
 ''Greece during the Macedonian Period:" "Mommsen's History of Rome :" 
 "Lucius Cornelius Sulla :" " The Flavian Ccesars." 
 
 HISTORICAL ESSAYS. Third Series. [In the press. 
 
 COMPARATIVE POLITICS. Lectures at the Royal Institution. 
 To which is added the " Unity of History," the Rede Lecture at 
 Cambridge, 1872. 8vo. 14^. 
 
 THE HISTORY AND CONQUESTS OF THE SARACENS. 
 Six Lectures. Third Edition, with New .Preface. Crown 8vo. 
 3J. 6d. 
 
 HISTORICAL AND ARCHITECTURAL SKETCHES : 
 chiefly Italian. With Illustrations by the Author. Crown 8vo. 
 los. 6d. 
 
 " Mr. Freeman may here be said to give us a series of ' notes on the 
 spot ' in illustration oj the intimate relations of History and Architecture, 
 and this is done in so masterly a mannei' there is so much freshness, so 
 much kno^vledge so admirably condensed, that we are almost tempted to 
 say that we prefer these sketches to his more elaborate studies." NONCON- 
 FORMIST. 
 
 HISTORY OF FEDERAL GOVERNMENT, from the Foun- 
 dation of the Achaian League to the Disniption of the United 
 States. Vol. I. General Introduction, History of the Greek 
 Federations. 8vo. 2 is. 
 
 OLD ENGLISH HISTORY. With Five Coloured Maps. Fourth 
 Edition. Extra fcap. 8vo., half-bound. 6s. 
 
 *' The book indeed is full of instruction and interest to students of all 
 ages, and he must be a well-informed man indeed who will not rise 
 from its perusal with clearer and more accurate ideas of a too much 
 neglected portion of English history." SPECTATOR. 
 
 HISTORY OF THE CATHEDRAL CHURCH OF WELLS, 
 as illustrating the History of the Cathedral Churches of the Old 
 Foundation. Crown 8vo. $s. 6d. 
 
 " The history assumes in Mr. Freeman's hands a significance, and, we 
 may add, a practical value as suggestive of what a cathedral ought to be, 
 which make it well worthy of mention" SPECTATOR. 
 
 THE GROWTH OF THE ENGLISH CONSTITUTION 
 FROM THE EARLIEST TIMES. Crown 8vo. 5*. Third 
 Edition, revised. 
 
HISTORY, BIOGRAPHY, TRAVELS, ETC. 11 
 Freeman continued. 
 
 GENERAL SKETCH OF EUROPEAN HISTORY. Being 
 Vol. I. of a Historical Course for Schools edited by E. A. 
 FREEMAN. New Edition, enlarged with Maps, Chronological 
 Table, Index, &c. i8mo. 3*. 6d. 
 
 ft It supplies the great want of a good foundation for historical teach- 
 ing. The scheme is an excellent one, and this instalment has been 
 accepted in a way that promises much for the volumes that are yet 
 to appear." EDUCATIONAL TIMES. 
 
 THE OTTOMAN POWER IN EUROPE : its Nature, its Growth, 
 and its Decline. With Three Coloured Maps. Crown 8vo. Js. 6d. 
 
 Galileo. THE PRIVATE LIFE OF GALILEO. Compiled 
 
 principally from his Correspondence and that of his eldest 
 daughter, Sister Maria Celeste, Nun in the Franciscan Convent of 
 S. Matthew in Arcetri. With Portrait. Crown 8vo. Js. 6</. 
 
 Geddes. THE PROBLEM OF THE HOMERIC POEMS. 
 
 By W. D. GEDDES, LL.D., Professor of Greek in the University 
 of Aberdeen. 8vo. iqs. 
 
 Gladstone Works by the Right Hon.W. E. GLADSTONE, M.P. : 
 JUVENTUS MUND1. The Gods and Men of the Heroic Age. 
 
 Crown 8vo. cloth. With Map. io.r. 6d. Second Edition. 
 " Seldom" says the ATHENAEUM, " out of the great poems themselves, 
 
 have these Divinities looked so majestic and respectable. To read these 
 
 brilliant details is like standing on the Olympian threshold and gazing at 
 
 the ineffable brightness ^vithin." 
 
 HOMERIC SYNCHRONISM. An inquiry into the Time and 
 
 Place of Homer. Crown 8vo. 6s. 
 
 " It is impossible not to admire the immense range of thought and 
 inquiry which the author has displayed" BRITISH QUARTERLY 
 REVIEW. 
 
 Goethe and Mendelssohn (18211831). Translated from the 
 German of Dr. KARL MENDELSSOHN, Son of the Composer, by 
 M. E. VON GLEHN. From the Private Diaries and Home 
 Letters of Mendelssohn, with Poems and Letters of Goethe never 
 before printed. Also with two New and Original Portraits, Fac- 
 similes, and Appendix of Twenty Letters hitherto unpublished. 
 Crown 8vo. 5-r. Second Edition, enlarged. 
 
 " . . . Every page is full of interest, not merely to the musi- 
 cian, but to the general reader. 7^he book is a very charming one, on 
 a topic of deep and lasting interest" STANDARD. 
 
12 MACMILLAN'S CATALOGUE OF WORKS IN 
 
 Goldsmid. TELEGRAPH AND TRAVEL. A Narrative of 
 the Formation and Development of Telegraphic Communication 
 between England and India, under the orders of Her Majesty's 
 Government, with incidental Notices of the Countries traversed by 
 the Lines. By Colonel Sir FREDERIC GOLDSMID, C.B., K. C.S.I., 
 late Director of the Government Indo-European Telegraph. With 
 numerous Illustrations and Maps. 8vo. 2is. 
 
 ' ' 7Yie merit of the ivork is a total absence of exaggeration, which does 
 not, however, preclude a vividness and vigour of style not always character- 
 istic of similar narratives." STANDARD. 
 
 Gordon. LAST LETTERS FROM EGYPT, to which are added 
 Letters from the Cape. By LADY DUFF GORDON. With a 
 Memoir by her Daughter, Mrs. Ross, and Portrait engraved by 
 JEENS. Second Edition. Crown 8vo. 9-r. 
 
 " The intending tourist who wishes to acquaint himself with the country 
 he is about to visit, stands embarrassed amidst the riches presented for his 
 choice, and in the end probably rests contented with the sober usefulness of 
 Murray. He will not, however, if he is well advised, grudge a place in 
 his portmanteau to this book" TIMES. 
 
 Gray. CHINA. A History of the Laws, Manners, and Customs 
 of the People. By the VENERABLE JOHN HENRY GRAY. LL.D., 
 Archdeacon of Hong Kong, formerly H. B.M. Consular Chaplain 
 at Canton. Edited by W. Gow Gregor. With 150 Full-page Illustra- 
 tions, being Facsimiles of Drawings by a Chinese Artist. 2 Vols. 
 Demy 8vo. 32^. 
 "Its pages contain the most truthful and vivid picture of Chinese life 
 
 which has ever been published." ATHENAEUM. 
 
 ' ' The only elaborate and valuable book we have had for many years 
 
 treating generally of the people of the Celestial Empire" ACADEMY. 
 
 Green. Works by JOHN RICHARD GREEN: 
 
 t HISTORY OF THE ENGLISH PEOPLE. Vol. I. Early 
 
 England Foreign Kings The Charter The Parliament. With 
 
 8 Coloured Maps. 8vo. i6j. Vol. II. The Monarchy, 
 
 1461 1540; the Restoration, 1540 1603. 8vo. i6s. Vol. III. 
 
 Puritan England, 1603 1660; thej Revolution, 1660 1688. 
 
 With 4 Maps. 8vo. i6s. {.Vol. IV. in the press. 
 
 " Mr. Green has done a work wJiich probably no one but himself could 
 
 have done. He has read and assimilated the results of all the labours of 
 
 students during the last half century in the field of English history, and 
 
 has given them a fresh meaning by his own independent study. He has 
 
 fused together by the force of sympathetic imagination all that he has so 
 
 collected, and has given us a vivid and forcible sketch of the march of 
 
 English histoty. His book, both in its aims and its accomplishments, 
 
 rises far 'beyond any of a similar kind, and it will give the colouring to the 
 
 popular view to English history for some time to -come" EXAMINER. 
 
HISTORY, BIOGRAPHY, TRAVELS, ETC. 13 
 
 Green . continued. 
 
 A SHORT HISTORY OF THE ENGLISH PEOPLE. With 
 Coloured Maps, Genealogical Tables, and Chronological Annals. 
 f, Crown 8vo. 8*. 6d. Sixty- first Thousand. 
 
 " To say that Mr. Greeris book is better than those which have pre- 
 ceded it, would be to convey a very inadequate impression of its merits. It 
 stands alone as the one general history of the country, for the sake of 
 which all others, if young and old are wise, will be speedily and surely set 
 aside." 
 
 STRAY STUDIES FROM ENGLAND AND ITALY. Crown 
 8vo. Bs, 6d. Containing : Lambeth and the Archbishops The 
 Florence of Dante Venice and Rome Early History of Oxford 
 The District Visitor Capri Hotels in the Clouds Sketches 
 in Sunshine, &c. 
 
 *' One and all of the papers are eminently readable?' 1 ATHEN^UM. 
 
 Guest. LECTURES ON THE HISTORY OF ENGLAND. 
 By M. J. GUEST. With Maps. Crown 8vo. 6s. 
 
 Hamerton. Works by P. G. HAMERTON : 
 THE INTELLECTUAL LIFE. With a Portrait of Leonardo da 
 Vinci, etched by LEOPOLD FLAMENG. Second Edition. Crown 
 ioj. 6ct. 8vo. 
 
 " We have read the whole book with great pleasure, and we can re- 
 commend it strongly to all who can appreciate grave reflections on a very 
 important subject, excellently illustrated from the resources of a mind 
 stored with much reading and much keen observation of real life." 
 SATURDAY REVIEW. 
 
 THOUGHTS ABOUT ART. New Edition, revised, with an 
 
 Introduction. Crown 8vo. 8s, 6d. 
 "A manual of sound and thorough criticism on art" STANDARD. 
 
 Hill. THE RECORDER OF BIRMINGHAM. A Memoir of 
 Matthew Davenport Hill, with Selections from his Correspondence. 
 By his Daughters ROSAMOND and FLORENCE DAVENPORT-HILL. 
 With Portrait engraved by C. H. JEENS. 8vo. i6j-. 
 
 Hill. WHAT WE SAW IN AUSTRALIA. By ROSAMOND 
 
 and FLORENCE HILL. Crown Svo. IDS. 6d. 
 
 " May be recommended as an interesting and truthful picture cf the 
 condition of those lands which are so distant and yet so much like home. " 
 SATURDAY REVIEW. 
 
14 MACMILLAN'S CATALOGUE OF WORKS IN 
 
 Hodgson. MEMOIR OF REV. FRANCIS HODGSON, 
 B.D., Scholar, Poet, and Divine. By his Son, the Rev. JAMES 
 T. HODGSON, M.A. Containing numerous Letters from Lord 
 Byron and others. With Portrait engraved by JEENS. Two 
 Vols. Crown 8vo. i8s. 
 tl A book that has added so much of a healthy nature to our knowledge 
 
 of Byron, and that contains so rich a store of delight/til correspondence." 
 
 ATHEN.EUM. 
 
 Hole. A GENEALOGICAL STEMMA OF THE KINGS 
 OF ENGLAND AND FRANCE. By the Rev. C. HOLE, 
 M.A., Trinity College, Cambridge. On Sheet, ij. 
 
 A BRIEF BIOGRAPHICAL DICTIONARY. Compiled and 
 Arranged by the Rev. CHARLES HOLE, M.A. Second Edition. 
 iSmo. ^s. 6d. 
 
 Hooker and Ball. MAROCCO AND THE GREAT 
 
 ATLAS: Journal of a Tour in. By Sir JOSEPH D. HOOKER, 
 K.C.S.L, C.B., F.R.S., &c., and JOHN BALL, F.R.S. With an 
 Appendix, including a Sketch of the Geology of Marocco, by 
 G. MAW, F.L.S., F.G.S. With Illustrations and Map. 8vo. 2is. 
 
 Hozier (H. M.) W T orks by CAPTAIN HENRY M. HOZIER, 
 late Assistant Military Secretary to Lord Napier of Magdala : 
 
 THE SEVEN WEEKS' WAR ; Its Antecedents and Incidents. 
 New and Cheaper Edition. With New Preface, Maps, and Plans. 
 Crown 8vo. 6s. 
 
 " All that Mr. Hozier saw of the great events of the "war and he saw 
 a large share of them he describes in clear and vivid language.'' 1 
 SATURDAY REVIEW. 
 
 THE INVASIONS OF ENGLAND : a History of the Past, with 
 Lessons for the Future. Two Vols. 8vo. 28*. 
 
 The PALL MALL GAZETTE says : "As to all invasions executed, or 
 deliberately projected but not carried out, from the landing of Julius 
 Ccesar to the raising of the Boulogne camp, Captain Hozier furnishes 
 copious and most interesting particulars. " 
 
 Hiibner. A RAMBLE ROUND THE WORLD IN 1871. By 
 
 M. LE BARON HUBNER, formerly Ambassador and Minister. 
 
 Translated by LADY HERBERT. New and Cheaper Edition. 
 
 With numerous Illustrations. Crown 8vo. 6s. 
 
 " It is difficult to do ample justice to this pleasant narrative of travel 
 
 . ... it does not contain a single dull paragraph." MORNING POST. 
 
 Hughes. Works by THOMAS HUGHES, Q.C., Author of "Torn 
 
 Brown's School Days." 
 ALFRED THE GREAT. New Edition. Crown 8vo. 6s. 
 
HISTORY, BIOGRAPHY, TRAVELS, ETC. 15 
 
 Hughes. co ntln lie d. 
 
 MEMOIR OF A BROTHER. With Portrait of GEORGE HUGHES, 
 after WATTS. Engraved by JEENS. Crown 8vo. 5-r. Sixth 
 Edition. 
 
 " The boy who can read this book without deriving from it some addi- 
 tional impulse towards honourable, manly, and independent conduct, has 
 no good stuff in him." DAILY NEWS. 
 
 Hunt. HISTORY OF ITALY. By the Rev. W. HUNT, M.A. 
 
 Being the Fourth Volume of the Historical Course for Schools. 
 
 Edited by EDWARD A. FREEMAN, D.C.L. i8mo. 3-r. 
 " Mr. Hunt gives us a most compact but very readable little book, con- 
 taining in small compass a very complete outline of a complicated and 
 perplexing subject. It is a book which may be safely recommended to 
 others besides schoolboys" JOHN BULL. 
 
 Irving. THE ANNALS OF OUR TIME. A Diurnal of Events, 
 Social and Political, Home and Foreign, from the Accession of 
 Queen Victoria to the Peace of Versailles. By JOSEPH IRVING. 
 Fourth Edition. 8vo. half-bound. i6s. 
 
 ANNALS OF OUR TIME. Supplement. From Feb. 28, 1871, 
 to March 19, 1874. 8vo. 4^. 6d. 
 
 ANNALS OF OUR TIME. Second Supplement. From March, 
 
 1874, to the Occupation of Cyprus. 8vo. 4^. 6d. 
 " We have bejore us a trusty and ready guide to the events of the 
 past thirty years, available equally for the statesman, the politician, the 
 public writer, and the general reader" TIMES. 
 
 James. Works by HENRY JAMES, Jun, FRENCH POETS AND 
 
 NOVELISTS. Crown 8vo. Ss. 6d. 
 
 CONTENTS : Alfred de Musset ; Theophile Gautier ; Baudelaire ; 
 Honore de Balzac ; George Sand ; The Two Amperes ; Turgenieff, &c. 
 
 Johnson's Lives of the Poets. The Six Chief 
 
 Lives Milton, Dryden, Swift, Addison, Pope, Gray. With 
 Macaulay's " Life of Johnson." Edited, with Preface, by 
 MATTHEW ARNOLD. Crown 8vo. 6s. 
 
 Killen. ECCLESIASTICAL HISTORY OF IRELAND, from 
 the Earliest Date to the Present Time. By W. D. KILLEN, D.D., 
 President of Assembly's College, Belfast, and Professor of Eccle- 
 siastical History. Two Vols. 8vo. 25^. 
 " Those who have the leisure will do well to read these two volumes. 
 
 They are full of interest, and are the result of great research. . , . We 
 
 have no hesitation in recommending the work to all who wish to improve 
 
 their acquaintance with Irish history." SPECTATOR. 
 
16 MACMILLAN'S CATALOGUE OF WORKS IN 
 
 Kingsley (Charles). Works by the Rev. CHARLES KINGSLEY, 
 M.A., Rector of Eversley and Canon of Westminster. (For 
 other Works by the same Author, see THEOLOGICAL and BELLES 
 LETTRES Catalogues. ) 
 
 ON THE ANCIEN REGIME as it existed on the Continent before 
 the FRENCH REVOLUTION. Three Lectures delivered at the 
 Royal Institution. Crown 8vo. 6s. 
 
 AT LAST : A CHRISTMAS in the WEST INDIES. With nearly 
 Fifty Illustrations. Fifth Edition. Crown 8vo. 6s. 
 
 Mr. Kinsley's dream of forty years "was at last fulfilled, when he 
 started on a Christmas expedition to the West Indies, for the ptirpose of 
 becoming personally acquainted with the scenes which he. has so vividly 
 described in " Westward Ho !" These two volumes are the journal of his 
 voyage. Records of natural history, sketches of tropical landscape, chapters 
 on education, views of society, all find their place. " We can only say 
 that Mr. Kingsley's account of a ' Christmas in the West Indies ' is in 
 every way worthy to be classed among his happiest productions" 
 STANDARD. 
 
 THE ROMAN AND THE TEUTON. A Series of Lectures 
 delivered before the University of Cambridge. New and Cheaper 
 Edition, with Preface by Professor MAX MULLER. Crown 8vo. 6s. 
 
 PLAYS AND PURITANS, and other Historical Essays. With 
 Portrait of Sir WALTER RALEIGH. New Edition. Crown 8vo. 6s. 
 
 In addition to the Essay mentioned in the title, this volume contains 
 other two one on "Sir Walter Raleigh and his Time," and one on 
 Froude's " History of England. " 
 
 Kingsley (Henry). TALES OF OLD TRAVEL. Re- 
 narrated by HENRY KINGSLEY, F.R.G.S. With Eight Illus- 
 trations by HUARD. Fifth Edition. Crown 8vo. $s. 
 *' We know no better book for those ivho want knowledge or seek to 
 refresh it. As for the 'sensational,' most novels are tame compared with 
 these narratives" ATHENAEUM. 
 
 Lang. CYPRUS : Its History, its Present Resources and Future 
 
 Prospects. By R. HAMILTON LANG, late H.M. Consul for the 
 
 Island of Cyprus. With Two Illustrations and Four Maps. 8vo. 14^. 
 
 *' The fair and impartial account of her past and present to be found in 
 
 these pages has an undoubted claim on the attention of all intelligent 
 
 readers" MORNING POST. 
 
 LaOGOOn. Translated from the Text of Lessing, with Preface and 
 Notes by the Right Hon. SIR ROBERT J. PHILLIMORE, D.C.L. 
 With Photographs. Svo. 12*. 
 
HISTORY, BIOGRAPHY, TRAVELS, ETC. 17 
 
 Leonardo da Vinci and his Works. Consisting of a 
 Life of Leonardo Da Vinci, by MRS. CHARLES W. HEATON, 
 Author of " Albrecht Durer of Niirnberg," &c., an Essay on his 
 Scientific and Literary Works by CHARLES CHRISTOPHER 
 BLACK, M.A., and an account of his more important Paintings 
 and Drawings. Illustrated with Permanent Photographs. Royal 
 8vo, cloth, extra gilt. 31*. 6d. 
 
 " A beautiful volume, both without and 'within. Messrs. Macmillan 
 are conspicuous among publishers for the choice binding and printing of 
 their books, and this is got up in their best style. . . . No English 
 publication that we know of has so thoroughly and attractively collected 
 together all that is known of Leonardo." TIMES. 
 
 Liechtenstein, HOLLAND HOUSE. By Princess MARIE 
 LIECHTENSTEIN. With Five Steel Engravings by C. H. JEENS, 
 after Paintings by WATTS and other celebrated Artists, and 
 numerous Illustrations drawn by Professor P. H. DELAMOTTE, and 
 engraved on Wood by J. D. COOPER, W. PALMER, andjEWiTT & 
 Co. Third and Cheaper Edition. Medium 8vo. cloth elegant 
 i6s. 
 
 Also, an Edition containing, in addition to the above, about 40 
 Illustrations by the Woodbury-type process, and India Proofs of 
 the Steel Engravings. Two vols. medium 4*0. half morocco 
 elegant. 4/. 4^. 
 
 " When every strictly just exception shall have been taken, she may be 
 conscientiously congratulated by the most scrupulous critic on the produc- 
 tion of a useful, agreeable, beautifully -illustrated, and attractive book." 
 TIMES. "// would take up more room than we can spare to enumerate 
 all the interesting suggestions and notes which are to be found in these 
 volumes. .... The woodcuts are admirable, and some of the autographs 
 are very interesting." PALL MALL GAZETTE. 
 
 Lloyd. THE AGE OF PERICLES. A History of the Arts and 
 Politics of Greece from the Persian to the Peloponnesian War. 
 By W. WAI KISS LLOYD. Two Vols. 8vo, 2u. 
 " No such account of Greek art of the best period has yet been brought 
 
 together in an English work Mr. Lloyd has produced a book of 
 
 unusual excellence and interest." PALL MALL GAZETTE. 
 
 Macarthur. HISTORY OF SCOTLAND, By MARGARET 
 MACARTHUR. Being the Third Volume of the Historical Course 
 for Schools, Edited by EDWARD A. FREEMAN, D.C.L. Second 
 Edition. i8mo. 2s. 
 
 "It is an excellent summary, unimpeachable as to facts, and putting 
 them in the clearest and most impartial light attainable" GUARDIAN. 
 " No previous History oj Scotland of the same bulk is anything like so 
 trustworthy, or deserves to be so extensively used as a text-book." GLOBE. 
 
 B 
 
i8 MACMILLAN'S CATALOGUE OF WORKS IN 
 
 Macmillan (Rev. Hugh). For other Works by same Author, 
 see THEOLOGICAL and SCIENTIFIC CATALOGUES. 
 
 HOLIDAYS ON HIGH LANDS ; or, Rambles and Incidents in 
 search of Alpine Plants. Second Edition, revised and enlarged. 
 Globe 8vo. cloth. 6s. 
 
 "Botanical knowledge is blended with a love of nature, a pious en- 
 thusiasm, and a rich felicity of diction not to be met with in any works 
 of kindred character, if we except those of Hugh Miller" TELEGRAPH. 
 "Mr. Macmillan s glowing pictures of Scandinavian scenery." 
 SATURDAY REVIEW. 
 
 Macready. MACREADY'S REMINISCENCES AND SE- 
 LECTIONS FROM HIS DIARIES AND LETTERS. Edited 
 by Sir F. POLLOCK, Bart., one of his Executors. With Four 
 Portraits engraved by JEENS. New and Cheaper Edition. Crown 
 8vo. 7-y. 6d. 
 
 " A s a careful and for the most part just estimate of the stage during 
 a very brilliant period, the attraction of these volumes can scarcely be 
 surpassed. .... Readers who have no special interest in theatrical 
 matters, but enjoy miscellaneous gossip, will be allured from page to page, 
 attracted by familiar names and by observations upon popular actors and 
 authors. " SPECTATOR. 
 
 Mahaffy. Works by the Rev. J. P. MAHAFFY, M.A., Fellow of 
 
 Trinity College, Dublin : 
 
 SOCIAL LIFE IN GREECE FROM HOMER TO MEN AN - 
 DER. Third Edition, revised and enlarged, with a new chapter 
 on Greek Art. Crown 8vo. 9^. 
 
 " // should be in the hands of all who desire thoroughly to understand 
 and to enjoy Greek literature, and to get an intelligent idea of the old Greek 
 life, political, social, and religious." GUARDIAN. 
 
 RAMBLES AND STUDIES IN GREECE. With Illustrations. 
 Crown Svo. lew. 6d. New and enlarged Edition, with Map and 
 Illustrations 
 "A singularly instructive and agreeable volume." ATHEN^UM. 
 
 " Maori." SPORT AND WORK ON THE NEPAUL FRON- 
 TIER ; or, Twelve Years' Sporting Reminiscences of an Indigo 
 Planter. By "MAORI." With Illustrations. Svo. 14*. 
 
 Margary. THE JOURNEY OF AUGUSTUS RAYMOND 
 MARGARY FROM SHANGHAE TO BHAMO AND BACK 
 TO MANWYNE. From his Journals and Letters, with a brief 
 Biographical Preface, a concluding chapter by Sir RUTHERFORD 
 ALCOCK, K.C.B., and a Steel Portrait engraved by JEENS, and 
 Map. Svo. IOJ. 6</. 
 " There is a manliness, a cheerful spirit, an inherent vigour which 
 
 was never overcome by sickness or debility, a tact which conquered the 
 
HISTORY, BIOGRAPHY, TRAVELS, ETC. 19 
 
 prejudices of a strange and suspicions population, a quiet self-reliance, 
 always combined with, deep religious feeling, unalloyed by either priggish- 
 ness, cant, or superstition, that ought to commend this volume to readers 
 sitting quietly at home who feel any pride in the high estimation accorded 
 to men of their race at Yarkand or at Khiva, in the heart of Africa, or 
 on the shores of Lake Seri-kul." SATURDAY REVIEW. 
 
 Markham. NORTHWARD HO ! By Captain ALBERT H. 
 MARKHAM, R.N., Author of "The Great Frozen Sea," &c. 
 Including a Narrative of Captain Phipps's Expedition, by a Mid- 
 shipman. With Illustrations. Crown 8vo. IQJ. 6d. 
 
 Martin. THE HISTORY OF LLOYD'S, AND OF MARINE 
 INSURANCE IN GREAT BRITAIN. With an Appendix 
 containing Statistics relating to Marine Insurance. By FREDERICK 
 MARTIN, Author of "The Statesman's Year Book." 8vo. 14*. 
 
 Martineau. BIOGRAPHICAL SKETCHES, 18521875. 
 
 By HARRIET MARTINEAU. With Additional Sketches, and Auto- 
 biographical Sketch. Fifth Edition. Crown 8vo. 6s. 
 " Miss Martineau' s large literary powers and her fine intellectual 
 training make these little sketches more instructive, and constitute them 
 more genuinely works of art, than many more ambitious and diffuse 
 biographies. " FORTNIGHTLY REVIEW. 
 
 Masson (David). For other Works by same Author, see PHILO- 
 SOPHICAL and BELLES LETTRES CATALOGUES. 
 
 CHATTERTON : A Story of the Year 1770. By DAVID MASSON, 
 LL.D., Professor of Rhetoric and English Literature in the Uni- 
 versity of Edinburgh. Crown 8vo. 5-$-. 
 
 THE THREE DEVILS : Luther's, Goethe's, and Milton's ; and 
 other Essays. Crown 8vo. 5 J * 
 
 WORDSWORTH, SHELLEY, AND KEATS; and other 
 Essays. Crown 8vo. 5-r. 
 
 Mathews. LIFE OF CHARLES j. MATHEWS, Chiefly 
 
 Autobiographical. With Selections from his Correspondence and 
 
 Speeches. Edited by CHARLES DICKENS. 
 
 " The book is a charming one from first to last, and Mr. Dickens 
 deserves a full measure of credit for the care and discrimination he has 
 exercised in the business of editing." GLOBE. 
 
 Maurice. THE FRIENDSHIP OF BOOKS ; AND OTHER 
 LECTURES. By the REV. F. D. MAURICE. Edited with Pre- 
 face, by THOMAS HUGHES, Q.C. Crown 8vo. los. 6d. 
 " The high, pure, sympathetic, and truly charitable nature of Mr. 
 Maurice is delightfully visible throughout these lectures, which are ex- 
 cellently adapted to spread a love of literature amongst the people!' 
 DAILY NEWS. 
 
20 MACMILLAN'S CATALOGUE OF WORKS IN 
 
 Mayor (J. E. B.)_ WORKS edited by JOHN E. B. MAYOR, 
 M. A. , Kennedy Professor of Latin at Cambridge : 
 
 CAMBRIDGE IN THE SEVENTEENTH CENTURY. Part II. 
 Autobiography of Matthew Robinson. Fcap. 8vo. 5^. 6d. 
 
 LIFE OF BISHOP BEDELL. By his SON. Fcap. 8vo. 3*. 6d. 
 
 Melbourne. MEMOIRS OF THE RT. HON. WILLIAM, 
 
 SECOND VISCOUNT MELBOURNE. By W. M. TORRENS, 
 M.P. With Portrait after Sir. T. Lawrence. Second Edition. 
 2 Vols. 8vo. 325-. 
 
 " As might be expected, he has produced a book "which -will command 
 and reivard attention. It contains a great deal of valuable matter and 
 a, great deal of animated ', elegant writing." QUARTERLY REVIEW. 
 
 Mendelssohn. LETTERS AND RECOLLECTIONS. By 
 FERDINAND HILLER. Translated by M. E. VON GLEHN. With 
 Portrait from a Drawing by KARL MttLLER, never before pub- 
 lished. Second Edition. Crown 8vo. Js. 6d. 
 " This is a very interesting addition to our knowledge of the great 
 
 German composer. It reveals him to us under a new light, as the warm- 
 
 h: arted comrade, the musician whose soul was in his work, and the home- 
 
 iwing, domestic man" STANDARD. 
 
 Merewether. BY SEA AND BY LAND. Being a Trip 
 
 through Egypt, India, Ceylon, Australia, New Zealand, and 
 America all Round the World. By HENRY ALWORTH MERE- 
 WETHER, one of Her Majesty's Counsel. Crown 8vo. 8j. 6</. 
 
 Michael Angelo Buonarotti ; Sculptor, Painter, Architect. 
 
 The Story of his Life and Labours. By C. C. BLACK, M.A. 
 
 Illustrated by 20 Permanent Photographs. Royal 8vo. cloth 
 
 elegant, 31^. 6d. 
 
 " 77ie story of Michael Angelo s life remains interesting whatever be the 
 manner of telling it, and supported as it is by this beautiful series of photo- 
 graphs, the volume must take rank among the most spltndid of Christmas 
 books, fitted to serve and to outlive the season" PALL MALL GAZETTE. 
 
 Michelet A SUMMARY OF MODERN HISTORY. Trans- 
 lated from the French of M. MICHELET, and continued to the 
 present time by M. C. M. SIMPSON. Globe 8vo. 45. 6a. 
 
 Milton. LIFE OF JOHN MILTON. Narrated in connection 
 with the Political, Ecclesiastical, and Literary History of his Time. 
 By DAVID MASSON, M.A., LL.D., Professor of Rhetoric and 
 English Literature in the University of Edinburgh. With Portraits. 
 Vol. I. i8j. Vol. II., 16381643. 8vo. i6s. Vol. III. 
 1643 1649. 8vo. i8j. Vols. IV. and V. 16491660. 32*. 
 Vol. VI. in the press. 
 
 This work is not only a Biography, but also a continuous Political, Eccle- 
 siastical, and Literary History of England through Milton's whole time. 
 
HISTORY, BIOGRAPHY, TRAVELS, ETC. 21 
 Mitford (A. B.) TALES OF OLD JAPAN. By A. B. 
 
 MiTFORD, Second Secretary to the British Legation in Japan. 
 
 With upwards of 30 Illustrations, drawn and cut on Wood by 
 
 Japanese Artists. New and Cheaper Edition. Crown 8vo. 6s. 
 
 " These very original volumes will always be interesting as memorials 
 
 of a most exceptional society, while regarded simply as tales, they are 
 
 sparkling, sensational, and dramatic, and the originality of their idea 
 
 and the quaintness of their language give them a most captivating 
 
 piquancy. The illustrations are extremely interesting, and for the 
 
 curious in such matters have a special and particular value" PALL 
 
 MALL GAZETTE. 
 
 Monteiro. ANGOLA AND THE RIVER CONGO. By 
 
 JOACHIM MONTEIRO. With numerous Illustrations from Sketches 
 taken on the spot, and a Map. Two Vols. crown 8vo, 2U. 
 " Gives the first detailed account of a part of tropical Africa which is 
 
 little known to Englishmen The remarks on the geography and 
 
 zoology of the country and the manners and customs of the various races 
 inhabiting it, are extremely curious and interesting.'" SATURDAY RE- 
 VIEW. ' ' Full of valuable information and much picturesque description. " 
 PALL MALL GAZETTE. 
 
 MoriSOn. THE LIFE AND TIMES OF SAINT BERNARD, 
 Abbot of Clairvaux. By JAMES COTTER MORISON, M.A. New 
 Edition. Crown 8vo. 6s. 
 
 Moseley. NOTES BY A NATURALIST ON THE CHAL- 
 LENGER : being an Account of various Observations made 
 during the' Voyage of H.M.S. Challenger, Round the World, 
 in 1872-76. By H. N. MOSELEY, F.R.S., Member of the 
 Scientific Staff of the Challenger. 8vo. with Maps, Coloured Plates, 
 and Woodcuts. 2is. 
 
 Murray. ROUND ABOUT FRANCE. By E. C. GRENVILLE 
 
 MURRAY. Crown 8vo. 7*. 6d. 
 
 " These short essays area perfect mine of information as to the present 
 condition and future prospects of political parties in France. . . . It is 
 at once extremely interesting and exceptionally instructive on a subject on 
 which few English people are well informed." SCOTSMAN. 
 
 Napier. MACVEY NAPIER'S SELECTED CORRES- 
 PONDENCE. Edited by his Son, MACVEY NAPIER. 8vo, 14*. 
 " This exceedingly interesting; work. . . . Mr. Napier has certainly been 
 well advised in admitting the general public to the knowledge of a volume 
 which is hardly to be surpassed in point of interest among recent publ, ca- 
 tions." EX AM INER. 
 
22 MACMILLAN'S CATALOGUE OF WORKS IN 
 
 Napoleon. THE HISTORY OF NAPOLEON I. By P. 
 
 LANFREY. A Translation with the sanction of the Author. Vols. 
 
 I. II. and III. 8vo. price 12s. each. [Vol. IV. in the press. 
 
 The PALL MALL GAZETTE says it is "one of the most striking 
 pieces of historical composition of which France has to boast, " and the 
 SATURDAY REVIEW calls it "an excellent translation of a work on every 
 ground deserving to be translated. It is unquestionably and immeasurably 
 the best that has been produced. It is in jact the only work to which we 
 can turn for an accurate and trustworthy narrative of that extraordinary 
 career. . . . The book is the best and indeed the only trustworthy history 
 of Napoleon which has been written." 
 
 Nichol. TABLES OF EUROPEAN LITERATURE AND 
 HISTORY, A.D. 2001876. ByJ. NICHOL, LL.D., Professor 
 of English Language and Literature, Glasgow. 4to. 6s. 6d. 
 TABLES OF ANCIENT LITERATURE AND HISTORY, 
 B.C. 1500 A.D. 200. By the same Author. 4to. qs. 6d. 
 
 Oliphant (Mrs.). THE MAKERS OF FLORENCE : Dante 
 Giotto, Savonarola, and their City. By Mrs. OLIPHANT. With 
 numerous Illustrations from drawings by Professor DELAMOTTE, 
 and portrait of Savonarola, engraved by JEENS. Second Edition. 
 Medium 8vo. Cloth extra. 2is. 
 " Mrs. Oliphant has made a beautiful addition to the mass of literature 
 
 already piled round the records of the Tuscan capital." TIMES. 
 
 " We are grateful to Mrs. Oliphant for her eloquent and beautiful 
 
 sketches of Dante, Fra Angelica, and Savonarola. They are picturesque, 
 
 full of life, and rich in detail, and they are charmingly illustrated by the 
 
 art of the engraver." SPECTATOR. 
 
 Oliphant. THE DUKE AND THE SCHOLAR; and other 
 
 Essays. By T. L. KINGTON OLIPHANT. 8vo. 7*. 6d. 
 " This volume contains one of the most beautiful biographical essays uue 
 have seen since Macaulay's days" STANDARD. 
 
 Otte. SCANDINAVIAN HISTORY. By E. C. OTTE. With 
 
 Maps. Extra fcap. 8vo. 6s. 
 
 " We have peculiar pleasure in recommending this intelligent resume 
 of Northern history as a book essential to every Englishman who interests 
 himself in Scandinavia." SPECTATOR. 
 
 Owens College Essays and Addresses. By PRO- 
 FESSORS AND LECTURERS OF OWENS COLLEGE, MANCHESTER. 
 Published in Commemoration of the Opening of the New College 
 Buildings, October ?th, 1873. 8vo. 14*. 
 
 Palgrave (R. F. D.) THE HOUSE OF COMMONS ; 
 Illustrations of its History and Practice. By REGINALD F. D. 
 PALGRAVE, Clerk Assistant of the House of Commons. New 
 and Revised Edition. Crown 8vo. 2s. 6d. 
 
HISTORY, BIOGRAPHY, TRAVELS, ETC. 23 
 Palgrave (Sir F.) HISTORY OF NORMANDY AND 
 
 OF ENGLAND. By Sir FRANCIS PALGRAVE, Deputy Keeper 
 of Her Majesty's Public Records. Completing the History to the 
 Death of William Rufus. 4 Vols. 8vo. 4/. 4^. 
 
 Palgrave (W. G.) A NARRATIVE OF A YEAR'S 
 
 JOURNEY THROUGH CENTRAL AND EASTERN 
 ARABIA, 1862-3. By WILLIAM GIFFORD PALGRAVE, late of 
 the Eighth Regiment Bombay N. I. Sixth Edition. With Maps, 
 Plans, and Portrait of Author, engraved on steel by Jeens. Crown 
 8vo. 6s. 
 
 "He has not only "written one of the best books on the Arabs and one 
 of the best books on Arabia, but he has done so in a manner that must 
 command the respect no less than the admiration of his fellow-country' 
 men." FORTNIGHTLY REVIEW. 
 
 ESSAYS ON EASTERN QUESTIONS. By W. GIFFORD 
 PALGRAVE. 8vo. icw. 6d. 
 
 " These essays are full of anecdote and interest. The book is decidedly 
 a valuable addition to the stock of literature on which men must 
 base their opinion of the difficult social and political problems sug- 
 gested by the designs of Russia, the capacity of Mahometans for 
 sovereignty, and the good government and retention of India" 
 SATURDAY REVIEW. 
 
 DUTCH GUIANA. With Maps and Plans. 8vo. gs. 
 
 "His pages are nearly exhaustive as far as facts and statistics go, 
 while they are lightened by graphic social sketches as well as sparkling 
 descriptions of scenery."" SATURDAY REVIEW. 
 
 Patteson. LIFE AND LETTERS OF JOHN COLERIDGE 
 
 PATTESON, D.D., Missionary Bishop of the Melanesian Islands. 
 
 By CHARLOTTE M. YONGE, Author of " The Heir of Redclyffe." 
 
 With Portraits after RICHMOND and from Photograph, engraved by 
 
 JEENS. With Map. Fifth Edition. Two Vols. Crown 8vo. I2J. 
 
 " Miss YongJs work is in one respect a model biography. It is made 
 
 up almost entirely of Patteson 's own letters. Aware that he had left his 
 
 home once and for all, his correspondence took the form of a diary \ and 
 
 as we read on we come to know the man, and to love him almost as if we 
 
 had seen him" ATHENAEUM. "Such a life, with its grand lessons of 
 
 unselfishness, is a blessing and an honour to the age in which it is lived ; 
 
 the biography cannot be studied without pleasure and profit, and indeed 
 
 we should think little of the man who did not rise from the study of it 
 
 better and wiser. Neither the Church nor the nation which produces 
 
 such sons need ever despair of its future." SATURDAY REVIEW. 
 
 Pauli. PICTURES OF OLD ENGLAND. By Dr. REINHOLD 
 PAULI. Translated, with the approval of the Author, byE. C. 
 OTTE. Cheaper Edition. Crown 8vo. 6s. 
 
24 MACMILLAWS CATALOGUE OP WORKS IN 
 
 Payne. A HISTORY OF EUROPEAN COLONIES. By 
 
 E. J. PAYNE, M.A. With Maps. i8mo. 4*. 6d. 
 The TIMES says : ' ' We have seldom met with a historian capable o} 
 forming a more comprehensive, Jar-seeing, and unprejudiced estimate of 
 events and peoples, and we can commend this little work as one certain to 
 prove of the highest interest to all thoughtful readers." 
 
 Persia. EASTERN PERSIA. An Account of the Journeys of 
 the Persian Boundary Commission, 1870-1-2. Vol. I. The Geo- 
 graphy, with Narratives by Majors ST. JOHN, LOVETT, and EUAN 
 SMITH, and an Introduction by Major-General Sir FREDERIC 
 GOLDSMID, C.B., K. C.S.I., British Commissioner and Arbitrator. 
 With Maps and Illustrations. Vol. II. The Zoology and Geology. 
 By W. T. BLANFORD, A.R.S.M., F.R.S. With Coloured Illus- 
 trations. Two Vols. 8vo. 42s. 
 " The volumes largely increase our store of information about 
 
 countries with which Englishmen ought to be familiar 
 
 They throw into the shade all that hitherto has appeared in our tongue 
 respecting the local features of Persia, its scenery, its resources, even its 
 social condition. Thev contain also abundant evidence of English 
 endurance, daring, and spirit." TIMES. 
 
 Prichard. THE ADMINISTRATION OF INDIA. From 
 
 1859 to 1868. The First Ten Years of Administration under the 
 Crown. By I. T. PRICHARD, Barrister-at-Law. Two Vols. 
 Demy 8vo. With Map. 2is. 
 
 Raphael. RAPHAEL OF URBINO AND HIS FATHER 
 GIOVANNI SANTI. By J. D. PASSAVANT, formerly Director 
 of the Museum at Frankfort. With Twenty Permanent Photo- 
 graphs. Royal 8vo. Handsomely bound. 3U. 6d. 
 
 The SATURDAY REVIEW says of them, " We have seen not a few 
 elegant specimens of Mr. Woodbury's new process, but we have seen 
 none that equal these." 
 
 Reynolds. SIR JOSHUA REYNOLDS AS A PORTRAIT 
 PAINTER. AN ESSAY. By J. CHURTON COLLINS, B.A. 
 Balliol College, Oxford. Illustrated by a Series of Portraits of 
 distinguished Beauties of the Court of George III. ; reproduced 
 in Autotype from Proof Impressions of the celebrated Engravings, 
 by VALENTINE GREEN, THOMAS WATSON, F. R. SMITH, E. 
 FISHER, and others. Folio half-morocco. 5 $j. 
 
 Rogers (James E. Thorold). HISTORICAL GLEAN- 
 INGS : A Series of Sketches. Montague, Walpole, Adam Smith, 
 Cobbett. By Prof. ROGERS. Crown 8vo. 4*. 6d. Second Series. 
 Wiklif, Laud, Wilkes, and Home Tooke. Crown 8vo. 6s. 
 
HISTORY, BIOGRAPHY, TRAVELS, ETC. 25 
 
 Routledge. CHAPTERS IN THE HISTORY OF POPULAR 
 
 PROGRESS IN ENGLAND, chiefly in Relation to the Freedom 
 
 of the Press and Trial by Jury, 1660 1820. With application to 
 
 later years. By J. ROUTLEDGE. 8vo. i6s. 
 
 " The volume abounds in facts and information, almost always useful 
 
 and often curious" TIMES. 
 
 Rumford. COUNT RUMFORD'S COMPLETE WORKS, 
 with Memoir, and Notices of his Daughter. By GEORGE ELLIS. 
 Five Vols. 8vo. 4/. 145. 6d. 
 
 Seeley (Professor). LECTURES AND ESSAYS. By 
 
 J. R. SEELEY, M.A. Professor of Modern History in the 
 University of Cambridge. 8vo. loj. 6d. 
 
 CONTENTS : Roman Imperialism : I. The Great Roman Revolu- 
 tion; 2. The Proximate Cause of the Fall of the Roman Emptre ; 
 The Later Empire. Milton's Political Opinions Milton's Poetry 
 Elementary Principles in Art Liberal Education in Universities 
 English in Schools The Church as a Teacher of Morality The 
 Teaching of Politics : an Inaugural Lecture delivered at Cambridge. 
 
 Shelburne. LIFE OF WILLIAM, EARL OF SHELBURNE, 
 
 AFTERWARDS FIRST MARQUIS OF LANSDOWNE. 
 
 With Extracts from his Papers and Correspondence. By Lord 
 
 EDMOND FITZMAURICE. In Three Vols. 8vo. Vol. I. 1737 
 
 1766, I2s. ; Vol.jII. 17661776, I2J. ; Vol. III. 17761805. i6s. 
 
 "Lord Edmond Fitzmaurice has succeeded in placing before us a 
 
 "wealth of new matter, which, while casting valuable and much-needed 
 
 light on several obscure passages in the political history of a hundred 
 
 years ago, has enabled us for the first time to form a clear and consistent 
 
 idea of his ancestor." SPECTATOR. 
 
 Sime. HISTORY OF GERMANY. By JAMES SIME, M.A. 
 l8mo. 3-r. Being Vol. V. of the Historical Course for Schools 
 Edited by EDWARD A. FREEMAN, D.C.L. 
 
 " This is a remarkably clear and impressive History of Germany. Its 
 great events are wisely kept as central figures, and the smaller events are 
 carefully kept not only subordinate and subservient, but most skilfully 
 woven into the texture of the historical tapestry presented to the eye." 
 STANDARD. 
 
 Squier. PERU: INCIDENTS OF TRAVEL AND EX- 
 PLORATION IN THE LAND OF THE INCAS. By E. G. 
 SQUIER, M.A., F.S.A., late U.S. Commissioner to Peru. With 
 300 Illustrations. Second Edition. 8vo. 2ls. 
 
 The TIMES says : " No more solid and trustworthy contribution haa 
 been made to an accurate knowledge of what are among the most wonderful 
 ruins in the world. The work in really what its title implies. While of 
 the greatest importance as a contribution to Pei uvian archceology, it is also a 
 thoroughly entertaining and instructive narrative of travel. Not the least 
 important featurcmustbeconsideredthenumerous'wellexecutfd illustrations" 
 
26 MACMILLAWS CATALOGUE OF WORKS IN 
 
 Strangford. EGYPTIAN SHRINES AND SYRIAN SEPUL- 
 CHRES, including a Visit to Palmyra. By EMILY A. BEAUFORT 
 (Viscountess Strangford), Author of " The Eastern Shores of 
 the Adriatic." New Edition. Crown 8vo. Js. 6d. 
 
 Tait. AN ANALYSIS OF ENGLISH HISTORY, based upon 
 Green's " Short History of the English People." By C. W. A. 
 TAIT, M.A., Assistant Master, Clifton College. Crown 8vo. 
 3*. 6d. 
 
 Thomas. THE LIFE OF JOHN THOMAS, Surgeon of the 
 
 "Eari of Oxford" East Indiaman, and First Baptist Missionary to 
 Bengal. By C. B. LEWIS, Baptist Missionary. 8vo. IGJ. 6d. 
 
 Thompson. HISTORY OF ENGLAND. By EDITH THOMP- 
 SON. Being Vol. II. of the Historical Course for Schools, Edited 
 by EDWARD A. FREEMAN, D. C. L. New Edition, revised and 
 enlarged, with Maps. i8mo. 2s. 6d. 
 
 " Freedom from prejudice, simplicity of style, and accuracy of state- 
 ment, are the characteristics of this volume. It is a trustworthy text-book, 
 and likely to be generally serviceable in schools" PALL MALL GAZETTE. 
 " In its great accuracy and correctness of detail it stands far ahead of the 
 general run of school manuals. Its arrangement, too, is clear, and its 
 style simple and straightforward." SATURDAY REVIEW. 
 
 Todhunter. THE CONFLICT OF STUDIES ; AND 
 
 OTHER ESSAYS ON SUBJECTS CONNECTED WITH 
 EDUCATION. By ISAAC TODHUNTER, M.A., F.R.S., late 
 Fellow and Principal Mathematical Lecturer or St. John's College, 
 Cambridge. 8vo. IDJ. 6d. 
 
 CONTENTS : 1. The Conflict of Studies. II. Competitive Exa- 
 minations. III. Private Study of Mathematics. IV. Academical 
 Reform. V. Elementary Geometry. VI. The Mathematical Tripos. 
 
 Trench (Archbishop). For other Works by the same Author, 
 
 see THEOLOGICAL and BELLES LETTRES CATALOGUES, and 
 
 page 30 of this Catalogue. 
 GUSTAVUS ADOLPHUS IN GERMANY, and other Lectures 
 
 on the Thirty Years' War. Second Edition, revised and enlarged. 
 
 Fcap. 8vo. 4J. 
 PLUTARCH, HIS LIFE, HIS LIVES, AND HIS MORALS. 
 
 Five Lectures. Second Edition, enlarged. Fcap. 8vo. $s. 6d. 
 LECTURES ON MEDIEVAL CHURCH HISTORY. Being 
 
 the substance of Lectures delivered in Queen's College, London. 
 
 Second Edition, revised. 8vo. 12s. 
 
 Trench (Maria). THE LIFE OF ST. TERESA. By MARIA 
 
 TRENCH. With Portrait engraved by JEENS. Crown 8vo, cloth 
 extra. Ss. 6d. 
 "A book of rare interest"] BULL. 
 
HISTORY, BIOGRAPHY, TRAVELS, ETC. 27 
 Trench (Mrs. R.) REMAINS OF THE LATE MRS. 
 
 RICHARD TRENCH. Being Selections from her Journals, 
 Letters, and other Papers. Edited by ARCHBISHOP TRENCH. 
 New and Cheaper Issue, with Portrait. 8vo. 6s. 
 
 Trollope. A HISTORY OF THE COMMONWEALTH OF 
 
 FLORENCE FROM THE EARLIEST INDEPENDENCE 
 OF THE COMMUNE TO THE FALL OF THE REPUBLIC 
 IN 1831. By T. ADOLPHUS TROLLOPE. 4 Vols. 8vo. Half 
 morocco. 21 s. 
 
 Uppingham by the Sea. A NARRATIVE OF THE 
 
 YEAR AT BORTH. By J. H. S. Crown 8vo. 3j. 6d. 
 Victor Emmanuel II., First King of Italy HIS 
 
 LIFE. By G. S. GODKIN. 2 vols., crown 8vo. i6s. 
 "An extremely clear and interesting history of one of the most 
 important changes of later times.'" EXAMINER. 
 
 Wallace. THE MALAY ARCHIPELAGO: the Land of the 
 
 Orang Utan and the Bird of Paradise. By ALFRED RUSSEL 
 WALLACE. A Narrative of Travel with Studies of Man and 
 Nature. With Maps and numerous Illustrations. Sixth Edition. 
 Crown 8vo. Js. 6d. 
 
 " The result is a vivid picture of tropical life, 'which may be read with 
 unflagging interest, and a sufficient account of his scientific conclusions to 
 stimulate our appetite without wearying us by detail. In short, we may 
 safely say that we have never read a more agreeable book of its kind" 
 SATURDAY REVIEW. 
 
 Ward. A HISTORY OF ENGLISH DRAMATIC LITERA- 
 TURE TO THE DEATH OF QUEEN ANNE. By A. W. 
 WARD, M.A., Professor of History and English Literature in 
 Owens College, Manchester. Two Vols. 8vo. 32j. 
 " As full of interest as of information. To students of dramatic 
 
 literature invaluable, and may be eqitally recommended to readers for 
 
 mere pastime." PALL MALL GAZETTE. 
 
 Ward (J.) EXPERIENCES OF A DIPLOMATIST. Being 
 recollections of Germany founded on Diaries kept during the years 
 1840 1870. By JOHN WARD, C.B., late H.M. Minister- 
 Resident to the Hanse Towns. 8vo. IGJ. 6d. 
 
 Waterton (C.) WANDERINGS IN SOUTH AMERICA, 
 THE NORTH-WEST OF THE UNITED STATES, AND 
 THE ANTILLES IN 1812, 1816, 1820, and 1824. With* 
 Original Instructions for the perfect Preservation of Birds, etc., 
 for Cabinets of Natural History. By CHARLES WATERTON. 
 New Edition, edited with Biographical Introduction and Explana- 
 tory Index by the Rev. J. G. WOOD, M.A. With 100 Illustrations. 
 8vo. Cloth elegant. 2is. 
 
28 MACMILLAWS CATALOGUE OF WORKS IN 
 
 WedgWOOd. JOHN WESLEY AND THE EVANGELICAL 
 REACTION of the Eighteenth Century. By JULIA WEDGWOOD. 
 Crown 8vo. Ss. 6d. 
 
 Whe well. WILLIAM WHEWELL, D.D., late Master of 
 Trinity College, Cambridge. An Account of his Writings, with 
 Selections from his Literary and Scientific Correspondence. By 
 I. TODHUNTER, M.A., F.R.S. Two Vols. 8vo. 25-r. 
 
 White. THE NATURAL HISTORY AND ANTIQUITIES 
 OF SELBORNE. By GILBERT WHITE. Edited, with Memoir 
 and Notes, by FRANK BUCKLAND, A Chapter on Antiquities by 
 LORD SELBORNE, Map, &c., and numerous Illustrations by 
 P. H. DELAMOTTE. Royal 8vo. Cloth, extra gilt. Cheaper 
 Issue. 2U. 
 
 Also a Large Paper Edition, containing, in addition to the above, 
 upwards of Thirty Woodburytype Illustrations from Drawings 
 by Prof. DELAMOTTE. Two Vols. 4to. Half morocco, elegant. 
 4/.4$. 
 
 " Mr. DelamottJs charming illustrations are a worthy decoration of so 
 dainty a book. They bring Selborne before us, and really help us to 
 understand why White's love for his native place never grew cold" 
 TIMES. 
 
 Wilson. A MEMOIR OF GEORGE WILSON, M. D., 
 F.R.S.E., Regius Professor of Technology in the University of 
 Edinburgh. By his SISTER. New Edition. Crown 8vo. 6s. 
 
 Wilson (Daniel, LLr.D.) Works by DANIEL WILSON, 
 LL.D., Professor of History and English Literature in University 
 College, Toronto : 
 
 PREHISTORIC ANNALS OF SCOTLAND. New Edition, 
 with numerous Illustrations. Two Vols. demy 8vo. 36^. 
 
 " One of the most interesting, learned, and elegant works we have 
 seen for a long time.'" WESTMINSTER REVIEW. 
 
 PREHISTORIC MAN : Researches into the Origin of Civilization 
 in the Old and New World. New Edition, revised and enlarged 
 throughout, with numerous Illustrations and two Coloured Plates. 
 Two Vols. 8vo. 36j. 
 
 * "A valuable work pleasantly written and well worthy of attention 
 both by students and general readers." ACADEMY. 
 
 CHATTERTON : A Biographical Study. By DANIEL WILSON, 
 LL.D., Professor of History and English Literature in University 
 College, Toronto. Crown 8vo. 6s. 6d. 
 
HISTORY, BIOGRAPHY, TRAVELS, ETC. 29 
 Wyatt (Sir M. Digby). FINE ART : a Sketch of its 
 
 History, Theory, Practice, and application to Industry. A Course 
 of Lectures delivered before the University of Cambridge. By 
 Sir M. DIGBY WYATT, M.A. Slade Professor of Fine Art. 
 Cheaper Issue. 8vo. 5-r. 
 
 " An excellent handbook for the student of art." GRAPHIC. " The 
 book abounds in valuable matter, and will therefore be read -with 
 pleasure and profit by lovers of art." DAILY NEWS. 
 
 Yonge (Charlotte M.) Works by CHARLOTTE M. YONGE, 
 
 Author of "The Heir of Redclyffe," &c., &c. : 
 A PARALLEL HISTORY OF FRANCE AND ENGLAND : 
 consisting of Outlines and Dates. Oblong 4*0. 3^. 6d. 
 
 CAMEOS FROM ENGLISH HISTORY. From Rollo to Edward 
 II. Extra fcap. 8vo. Third Edition. $s. 
 
 SECOND SERIES, THE WARS IN FRANCE. Extra fcap. 
 8vo. Third Edition. $s. 
 
 THIRD SERIES, THE WARS OF THE ROSES. Extra 
 fcap. 8vo. 5-r. 
 
 "Instead of dry details" says the NONCONFORMIST, " we have living 
 pictures ; faithful, vivid, and striking." 
 
 FOURTH SERIES. [Nearly ready. 
 
 HISTORY OF FRANCE. Maps. i8mo. 3*. 6d. 
 
 {.Historical Course for Schools. 
 
30 MACMILLAWS CATALOGUE OF 
 
 POLITICS, POLITICAL, AND SOCIAL 
 ECONOMY, LAW, AND KINDRED 
 SUBJECTS. 
 
 Anglo-Saxon Law. ESSAYS IN. Contents : Law Courts 
 Land and Family Laws and Legal Procedure generally. With 
 Select cases. Medium 8vo. iSs. 
 
 Arnold. THE ROMAN SYSTEM OF PROVINCIAL ADMIN- 
 ISTRATION TO THE ACCESSION OF CONSTANTINE 
 THE GREAT. Being the Arnold Prize Essay for 1879. -By 
 W. T. Arnold, B.A. Crown 8vo. 6s. 
 
 Ball. THE STUDENT'S GUIDE TO THE BAR. By 
 WALTER W. BALL, M.A., of the Inner Temple, Barrister-at- 
 Law. Crown 8vo. 2s. 6d. 
 " The student will here find a clear statement of the several steps by 
 
 which the degree of barrister is obtained, and also useful advice about 
 
 the advantages of a prolonged course of ' reading in Chambers. ' " 
 
 ACADEMY. 
 
 Bernard. FOUR LECTURES ON SUBJECTS CONNECTED 
 WITH DIPLOMACY. BY MONTAGUE BERNARD, M.A., 
 Chichele Professor of International Law and Diplomacy, Oxford. 
 8vo. 9-r. 
 
 "Singularly interesting lectures, so able, clear, and attractive." SPEC- 
 TATOR. 
 
 Bright (John, M.P.) Works by the Right Hon. JOHN BRIGHT, 
 
 M.P. 
 
 SPEECHES ON QUESTIONS OF PUBLIC POLICY. 
 Edited by Professor THOROLD ROGERS. Author's Popular Edition. 
 Globe 8vo. 3*. 6d. 
 
 "Mr. Bright* s speeches will always deserve to be studied, as an. 
 apprenticeship to popular and parliamentarv oratory ; they will form 
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 ture of England" DAILY NEWS. 
 
 LIBRARY EDITION. Two Vols. 8vo. With Portrait. 25*. 
 PUBLIC ADDRESSES. Edited by J. THOROLD ROGERS. 8vo. 
 14*. 
 
 Bucknill. HABITUAL DRUNKENNESS AND INSANE 
 DRUNKARDS. By J. C. BUCKNILL, M.D., F.R.S., late 
 Lord Chancellor's Visitor of Lunatics. Crown 8vo. 2s. 6d. 
 
WORKS IN POLITICS, ETC. 31 
 
 Cairnes. Works by J. E. CAIRNES, M.A., Emeritus Professor ot 
 
 Political Economy in University College, London. 
 ESSAYS IN POLITICAL ECONOMY, THEORETICAL 
 and APPLIED. By J. E. CAIRNES, M.A., Professor of Political 
 Economy in University College, London. 8vo. lor. (*d. 
 
 POLITICAL ESSAYS. 8vo. ior. 6d. 
 
 SOME LEADING PRINCIPLES OF POLITICAL ECONOMY 
 NEWLY EXPOUNDED. 8vo. 14*. 
 
 CONTENTS : Part I. Value. Part II. Labour and Capital. Part 
 III. International Trade. 
 
 "A work which is perhaps the most valuable contribution to the science 
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 THE CHARACTER AND LOGICAL METHOD OF POLL 
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 " These lectures are admirably fitted to correct the slipshod generaliza- 
 tions which pass current as the science of Political Economy" TIMES. 
 
 Clarke. EARLY ROMAN LAW. THE REGAL PERIOD. 
 By E. C. CLARKE, M.A., of Lincoln's Inn, Barrister- at- Law, 
 Lecturer in Law and Regius Professor of Civil Law at Cam- 
 bridge. Crown 8vo. $s. 
 
 Cobden (Richard). SPEECHES ON QUESTIONS OF 
 PUBLIC POLICY. By RICHARD COBDEN. Edited by the 
 Right Hon. John Bright, M.P., and J. E. Thorold Rogers. 
 Popular Edition. 8vo. 3^. 6d. 
 
 Fawcett. Works by HENRY FAWCETT, M.A., M.P., Fellow of 
 Trinity Hall, and Professor of Political Economy in the University 
 of Cambridge : 
 THE ECONOMIC POSITION OF THE BRITISH 
 
 LABOURER. Extra fcap. 8vo. 5^. 
 
 MANUAL OF POLITICAL ECONOMY. Fifth Edition, with 
 New Chapters on the Depreciation of Silver, etc. Crown 8vo. 
 
 I2J. 
 
 The DAILY NEWS says: "It forms one of the best introductions to the 
 principles of the science, and to its practical applications in the problems 
 of modern, and especially of English, government and society" 
 
 PAUPERISM : ITS CAUSES AND REMEDIES. Crown 8vo. 
 5j. 6d. 
 
 The ATHEN^UM calls the work " a repertory of interesting and well 
 digested information" 
 
 SPEECHES ON SOME CURRENT POLITICAL QUES- 
 TIONS. 8vo. ioj. 6d. 
 
 " They will help to educate, not perhaps, parties ; but the educators of 
 parties." DAILY NEWS. 
 
32 MACMILLAWS CATALOGUE OF 
 
 FawCC tt . continued. 
 
 ESSAYS ON POLITICAL AND SOCIAL SUBJECTS. By 
 PROFESSOR FAWCETT, M.P., and MILLICENT GARRETT 
 FAWCETT. 8vo. los. 6d. 
 
 " They will all repay the perusal of the thinking reader." DAILY 
 NEWS. 
 
 FREE TRADE AND PROTECTION: an Inquiry into the 
 Causes which have retarded the general adoption of Free Trade 
 since its introduction into England. Third Edition. 8vo. JS. 6d. 
 "No greater service can be rendered to the cause of Free Trade than a 
 clear explanation of the principles on which Free Trade rests. Pro- 
 fessor Fawcett has done this in the -volume before us with all his habitual 
 clearness of thought and expression" ECONOMIST. 
 
 Fawcett (Mrs.) Works by MILLICENT GARRETT FAWCETT. 
 
 POLITICAL ECONOMY FOR BEGINNERS. WITH QUES- 
 TIONS. New Edition. i8mo. 2s. 6J. 
 
 The DAILY NEWS calls it "clear, compact, and comprehensive;" and 
 the SPECTATOR says, "Mrs. Fawcett' s treatise is perfectly suited to its 
 purpose" 
 
 TALES IN POLITICAL ECONOMY. Crown 8vo. 3*. 
 
 " The idea is a good one, and it is quite wonderful what a mass oj 
 economic teaching the author manages to compress into a small space. . . The 
 true doctrines of International 7^rade, Currency, and the ratio between 
 Production and Population, are set before us and illustrated in a masterly 
 manner" ATHENAEUM . 
 
 Freeman (E. A.), M.A., D.C.L. COMPARATIVE 
 
 POLITICS. Lectures at the Royal Institution, to which is 
 added " The Unity of History," being the Rede Lecture delivered 
 at Cambridge in 1872. 8vo. 14*. 
 
 " We find in Mr. Freeman's new volume the same sound, careful, 
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 amongst historical writers. For historical discipline, then, as well as 
 historical information^ Mr. Freeman's book is full of value." PALL 
 MALL GAZETTE. 
 
 Goschen. REPORTS AND SPEECHES ON LOCAL TAXA- 
 
 TION. By GEORGE J. GOSCHEN, M. P. Royal 8vo. 5-r. 
 " The volume contains a vast massof information of the highest value" 
 
 ATHENAEUM. 
 
 Guide to the Unprotected, in Every Day Matters Re- 
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 Fourth Edition, Revised. Extra fcap. 8vo. 3-y. 6d. 
 "Many an unprotected female will bless the head which planned and 
 
 the hand which compiled this admirable little manual. ... 1 his book 
 
 was very much wanted, and it could not have been betttr done" 
 
 MORNING STAR. 
 
WORKS IN POLITICS, ETC. 33 
 
 Hamilton. MONEY AND VALUE: an Inquiry into the 
 Means and Ends of Economic Production, with an Appendix 
 on the Depreciation of Silver and Indian Currency. By ROWLAND 
 HAMILTON. 8vo. i2s. 
 
 " The subject is here dealt with in a luminous style, and by presenting 
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 BRITISH QUARTERLY REVIEW. 
 
 Harwood. DISESTABLISHMENT : a Defence of the Principle 
 
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 INTERNATIONAL LAW. Reprinted from the Times, with 
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 LETTERS. 8vo. 2s. 6d. 
 
 Holland. THE TREATY RELATIONS OF RUSSIA AND 
 TURKEY FROM 1774 TO 1853. A Lecture delivered at Oxford, 
 April 1877. By T. E. HOLLAND, D.C.L., Professor of Inter- 
 national Law and Diplomacy, Oxford. Crown 8vo. 2s. 
 
 Hughes (Thos.) THE OLD CHURCH : WHAT SHALL 
 
 WE DO WITH IT? By THOMAS HUGHES, Q.C. Crown 
 8vo. 6s. 
 
 Jevons. Works by W. STANLEY JEVONS, M.A., Professor of 
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 Works by the same Author, see EDUCATIONAL and PHILO- 
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 THE COAL QUESTION : An Inquiry Concerning the Progress 
 of the Nation, and the Probable Exhaustion of our Coal Mines. 
 Second Edition, revised. 8vo. -ios. 6d. 
 
34 MACMILLAN'S CATALOGUE OF 
 
 Jevons. continued. 
 
 THE THEORY OF POLITICAL ECONOMY. Second Edition, 
 revised, with new Preface and Appendices. 8vo. IQS. 6d. 
 
 "Professor Jevons has done invaluable service by courageously claiming 
 political economy to be strictly a branch of Applied Mathematics." 
 WESTMINSTER REVIEW. 
 
 PRIMER OF POLITICAL ECONOMY. i8mo. is. 
 
 Laveleye. PRIMITIVE PROPERTY. By EMILE DE 
 
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 Introduction by T. E. CLIFFE LESLIE, LL.B. Svo. 121-. 
 
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 economic science. " ATHEN^UM. 
 
 Leading Cases done into English. By an APPRENTICE 
 OF LINCOLN'S INN. Third Edition. Crown Svo. 2s. 6d. 
 
 "Here is a rare treat for the lovers of quaint conceits, who in reading 
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 TIONAL. By Sir JOHN LUBBOCK, Bart., M.P., &c., &c. 
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WORKS IN POLITICS, ETC. 35 
 
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 TIMES. 
 
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 " Will be found valuable by careful law students who have felt the 
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 REVIEW. 
 
 Paterson. THE LIBERTY OF THE SUBJECT AND THE 
 
 LAWS OF ENGLAND RELATING TO THE SECURITY 
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 Irish Fisheries, etc. Cheaper issue. Two Vols. Crown 8vo. 2is. 
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 fication, such as they probably in nine cases out of ten never had before.'" 
 SCOTSMAN. 
 
 Phillimore. PRIVATE LAW AMONG THE ROMANS, 
 
 from the Pandects. By JOHN GEORGE PHILLIMORE, Q.C. 8vo. 
 i6j. 
 
 Rogers. COBDEN AND POLITICAL OPINION. ByJ. E. 
 
 THOROLD ROGERS. 8vo. IGJ-. 6d. 
 
 " Will be found most itsepd by politicians of every school, as it forms a 
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 Stephen (C. E.) THE SERVICE OF THE POOR ; 
 
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 A DIGEST OF THE LAW OF EVIDENCE. Third Edition 
 with New Preface. Crown 8vo. 6s. 
 
36 MACMILLAWS CATALOGUE OF 
 
 Stephen . continued. 
 
 A DIGEST OF THE CRIMINAL LAW. (Crimes and 
 
 Punishments. ) 8 vo. 1 6s. 
 
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 A GENERAL VIEW OF THE CRIMINAL LAW OF ENG- 
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 Stubbs. VILLAGE POLITICS. Addresses and Sermons on 
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 ON LABOUR : Its Wrongful Claims and Rightful Dues ; Its 
 
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 MONEY. 8vo. i dr. 
 
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 "A book which abounds with wise and practical suggestions" PALL 
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WORKS ON LANGUAGE. 37 
 
 WORKSCONNECTED WITH THE SCIENCE 
 OR THE HISTORY OF LANGUAGE. 
 
 Abbott. A SHAKESPERIAN GRAMMAR : An Attempt to 
 illustrate some of the Differences between Elizabethan and Modern 
 English. By the Rev. E. A. ABBOTT, D.D., Head Master of the 
 City of London School. New and Enlarged Edition. Extra 
 fcap. 8vo. 6s. 
 " Valuable not only as an aid to the critical study of Shakespeart, 
 
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 Besant. STUDIES IN EARLY FRENCH POETRY. By 
 WALTER BESANT, M.A. Crown 8vo. 8s. 6d. 
 
 Breymann. A FRENCH GRAMMAR BASED ON PHILO- 
 LOGICAL PRINCIPLES. By HERMANN BREYMANN, Ph.D., 
 Professor of Philology in the University of Munich late Lecturer 
 on French Language and Literature at Owens College, Man- 
 chester. Extra fcap. 8vo. 4^. 6d. 
 
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 Ellis PRACTICAL HINTS ON THE QUANTITATIVE 
 
 PRONUNCIATION OF LATIN, FOR THE USE OF 
 CLASSICAL TEACHERS AND LINGUISTS. By A. J. 
 ELLIS, B.A., F.R.S., &c. Extra fcap. 8vo. 4*. 6d. 
 
 Fleay. A SHAKESPEARE MANUAL. By the Rev. F. G. 
 
 FLEAY, M. A., Head Master of Skipton Grammar School. Extra 
 fcap. 8vo. 45-. 6d, 
 
 Goodwin. SYNTAX OF THE GREEK MOODS AND 
 TENSES. By W. W. GOODWIN, Professor of Greek Literature 
 in Harvard University. New Edition. Crown 8vo. 6s. 6d. 
 
 Hadley. ESSAYS PHILOLOGICAL AND CRITICAL. 
 
 Selected from the Papers of JAMES P!ADLEY, LL.D., Professor of 
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 Hales. LONGER ENGLISH POEMS. With Notes, Philo- 
 logical and Explanatory, and an Introduction on the Teaching of 
 English. Chiefly for use in Schools. Edited by J. W. HALES, 
 M.A., Professor of English Literature at King's College, London, 
 &c. &c. Fifth Edition. Extra fcap. 8vo. 4^. 6d. 
 
38 MACMILLAN'S CATALOGUE OF 
 
 Helfenstein (James). A COMPARATIVE GRAMMAR 
 
 OF THE TEUTONIC LANGUAGES : Being at the same 
 time a Historical Grammar of the English Language, and com- 
 prising Gothic, Anglo-Saxon, Early English, Modern English, 
 Icelandic (Old Norse), Danish, Swedish, Old High German, 
 Middle High German, Modern German, Old Saxon, Old Frisian, 
 and Dutch. By JAMES HELFENSTEIN, Ph.D. 8vo. i8.r. 
 
 Masson (Gustave). A COMPENDIOUS DICTIONARY 
 
 OF THE FRENCH LANGUAGE (French-English and English- 
 French). Followed by a List of the Principal Diverging Deriva- 
 tions, and preceded by Chronological and Historical Tables. By 
 GUSTAVE MASSON, Assistant-Master and Librarian, Harrow 
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 hand while he is reading."-- SATURDAY REVIEW. 
 
 Mayor. A BIBLIOGRAPHICAL CLUE TO LATIN LITE- 
 RATURE. Edited after Dr. E. HUBNER. With large Additions 
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 sity of Cambridge. Crown 8vo. 6s. 6d. 
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 scholars. " ATHEN^UM. 
 
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 and Literature in King's College School, Editor of " Specimens 
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 HISTORICAL OUTLINES OF ENGLISH ACCIDENCE, 
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 ELEMENTARY LESSONS IN HISTORICAL ENGLISH 
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 Oliphant. THE OLD AND MIDDLE ENGLISH. By 
 
 T. L. KINGTON OLIPHANT, M.A., of Balliol College, Oxford. 
 A New Edition, revised and greatly enlarged, of " The Sources 
 of Standard English." Extra fcap. 8vo. . 9*. 
 
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 history of the Rngush language than anything we have seen since such a 
 history could be written, without confusion and contradictions" 
 SATURDAY REVIEW. 
 
WORKS ON LANGUAGE. 39 
 
 Peile (John, M.A.) AN INTRODUCTION TO GREEK 
 
 AND LATIN ETYMOLOGY. By JOHN PEILE, M.A., 
 Fellow and Tutor of Christ's College, Cambridge. Third 
 and revised Edition. Crown 8vo. los. 6d. 
 
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 science of language." SATURDAY REVIEW. 
 
 Philology. THE JOURNAL OF SACRED AND CLAS- 
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 Roby (H. J.) A GRAMMAR OF THE LATIN LANGUAGE, 
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 Schmidt. THE RYTHMIC AND METRIC OF THE 
 CLASSICAL LANGUAGES. To which are added, the Lyric 
 Parts of the "Medea" of Euripides and the "Antigone" of 
 Sophocles ; with Rhythmical Scheme and Commentary. By 
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 WHITE, D.D. 8vo. los. 6d. 
 
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 WORDS AND PLACES ; or, Etymological Illustrations of 
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 GREEKS AND GOTHS : a Study on the Runes. 8vo. gs. 
 
40 MA CMILLAWS CA TALOGUE, &c. 
 
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 SYNONYMS OF THE NEW TESTAMENT. Eighth Edition, 
 
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 ENGLISH PAST AND PRESENT. Tenth Edition, revised 
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