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.

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.

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.

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

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.] 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

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

INDIAN FINANCE.

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

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

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

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

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

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

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.

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.

LONDON :

II. CLAY, SONS, AND TAYLOR, PRINTERS,
BREAD STREET HILL, E.G.

WORKS BY HENRY FAWCETT, M.P.,

PROFESSOR OF POLITICAL ECONOMY AT CAMBRIDGE.

MANUAL OF POLITICAL ECONOMY. Fifth

Edition, revised and enlarged, with New Chapters on the Deprecia-
tion of Silver. Crown 8vo. 12s.

SPEECHES ON SOME CURRENT POLITICAL

QUESTIONS. 8vo. 10s. 6d.

CONTENTS : Indian Finance The Birmingham League Nine Hours
Bill Election Expenses Women's Suffrage Household Suffrage
in Counties Irish University Education, &c.

FREE TRADE AND PROTECTION: An Enquiry

into the Causes which have retarded the general adoption of Free
Trade since its Introduction into England. Third Edition. 8vo.
7s. Qd.

THE ECONOMIC POSITION OF THE BRITISH

LABOUKEE. Extra fcap. 8vo. 5s.

BY MRS. FAWCETT.

POLITICAL ECONOMY FOR BEGINNERS, with

QUESTIONS. Fourth Edition. 18mo. 2s. 6<i

TALES IN POLITICAL ECONOMY. Crown Svo.

3s.

BY PROFESSOR FAWCETT AND MRS. FAWCETT.

ESSAYS AND LECTURES ON POLITICAL AND

SOCIAL SUBJECTS. Svo. 10s. 6d.

MACMILLAN AND CO., LONDON

MESSRS, MACMILLAN AND CO.'S PUBLICATIONS,

BY PROFESSOR CAIRNES.

ESSAYS IN POLITICAL ECONOMY, THEORETI-
CAL. AND APPLIED. 8vo. 10s. 6d.

POLITICAL ESSAYS. 8vo. 10s. 6d

SOME LEADING PRINCIPLES OF POLITICAL

ECONOMY NEWLY EXPOUNDED. 8vo. 14s.

THE CHARACTER AND LOGICAL METHOD

OF POLITICAL ECONOMY. New Edition. 8vo. 7s. M.

BY PROFESSOR WALKER.
THE WAGES QUESTION : a Treatise on Wages

and the "Wages Class. 8vo. 14s.

MONEY. 8vo. 165.

MONEY IN ITS RELATIONS TO TRADE AND

INDUSTRY. Crown 8vo. 7s. Qd.

RECIPROCITY, BI - METALLISM, AND LAND

TENURE REFORM. By A. J. WILSON. 8vo. 7s. Qd.

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. 12s.

" The subject is here dealt with in a luminous style, and by presenting it from a new
point of view in connection with the nature and functions of money, a genuine service has
been rendered to commercial science." British Quarterly Review.

THE ECONOMICS OF INDUSTRY. By A.

MARSHALL, M.A., Principal of University College, Bristol, and
MARY PALEY MARSHALL, late Lecturer at Newnham Hall, Cam-
bridge. Extra fcap. 8vo. 2s. 6d.

" This book is of sterling value, and will be of great use to teachers and students of
political economy." Athenaeum.

" Based on a masterly knowledge of economic history and statistics." Examiner.

" Mr. Marshall's knowledge of the actual business of industrial operations is, as we happen
to know, large, and the chapters on the ' Supply of Business Power,' ' Earnings of Manage-
ment,' Monopolies, Trades Unions and their Influence on Wages, Co-operation, and other
matters connected with the practical affairs of capitalists and labourers, are most excel-
lent. "Statist.

MESSRS. MACMILLAN AND CO.'S PUBLICATIONS.

PRACTICAL POLITICS :

(Issued by the National Liberal Federation.)

No. L THE TENANT FARMEK ; LAND

LAWS, AND LANDLORDS. By JAMES HOWARD. 8vo. Is.

No. II. FOREIGN POLICY. By M. E.

GRANT DUFF, M.P. 8vo. Is.

No. III. FREEDOM OF LAND. By G.

SHAW LEFEVRE, M.P. 8vo. 2s. Qd.
Others to follow.

BY PROFESSOR JEVONS, F.R.S.

THE THEORY OF POLITICAL ECONOMY.

New Edition, revised with new Preface, &c. 8vo. 10s. Qd.

PRIMER OF POLITICAL ECONOMY. 18mo. Is.

BY W. T. THORNTON, C.B.
ON LABOUR: its Wrongful Claims and Rightful

Dues : Actual Present and Possible Future. Second Edition. 8vo. 14s.

A PLEA FOE PEASANT PEOPEIETOES : with

the Outlines of a Plan for their Establishment in Ireland. New Edition.
Crown 8vo. 7s. Qd.

INDIAN PUBLIC WORKS AND OTHER COG-
NATE INDIAN TOPICS. Crown 8vo. 8s. Qd.

BY THE RIGHT HON. JOHN BRIGHT, M.P.
PUBLIC ADDRESSES. Edited by J. E. THOROLD

ROGERS. 8vo. 14s.

SPEECHES ON QUESTIONS OF PUBLIC

POLICY. Edited by J. E. THOROLD ROGERS. Author's Popular
Edition. Crown 8vo. 3s. Qd.

Library Edition. 2 vols. 8vo. with Portrait, 25s.

RICHARD COBDEN'S SPEECHES ON QUES-

TIONS OF PUBLIC POLICY. Edited by the Right Hon. JOHN
BRIGHT, M.P., and J. E. THOROLD ROGERS. Cheaper Edition.
Crown 8vo. 3s. Qd,

COBDEN AND POLITICAL OPINION. By J. E.

THOROLD ROGERS. 8vo. 10s. Qd.

MESSRS, MACMILLAN AND CO.'S PUBLICATIONS.

BY M. E. GRANT DUFF, M.P.
MISCELLANIES, POLITICAL AND LITERAEY.

8vo. 105. 6d.

NOTES OF AN INDIAN JOURNEY. 8vo. 10s. 6d.

BY SIR JOHN LUBBOCK, M.P., F.R.S., &c.
POLITICAL AND EDUCATIONAL ADDRESSES.

PRIMITIVE PROPERTY. By M. DE LAVELEYE.

Translated by G. R. MARRIOTT, LL.B. With an Introduction by
T. E. CLIFFE-LESLIE, LL.B. 8vo. 125.

" It is almost impossible to over-estimate the value oi the well-digested knowledge which
it contains ; it is one of the most learned books that have been contributed to the historical
department of the literature of economic science." Athenceum.

VILLAGE POLITICS: Addresses and Sermons on

the Labour Question. By C. W. STUBBS, M.A., Vicar of Granborough,
Bucks. Extra fcap. 8vo. 85. 6d.

" It is dedicated to the farm labourers of England .... and if it is read as it deserves to
be, will do more to put their case before the country than any previous publication we know
of." Academy.

THE HOUSE OF COMMONS : Illustrations of its

History and Practice. By R. F. D. PALGRAVE, Clerk Assistant of
the House of Commons. New Edition. Crown 8vo. 2s. Qd.

CYPRUS AS I SAW IT IN 1879. ' By SIR

SAMUEL W. BAKER, F.R.S., &c., Author of " Ismailia," " The Albert
Nyanza," &c. 8vo., with Frontispiece, 12s. 6d.

"We strongly advise all politicians to try and read at once the book." Spec tator. '

"This work may be viewed under two distinct aspects its importance as a contribution

to scientific and political knowledge, and its interest as a book of travel and adventure. It

is equally good from both points .... The book is a charming one, and the greatest praise

that can be bestowed on it is to say that it is in every way worthy of its author." Morning

"[The book may safely be pronounced to be by far the most valuable contribution that
has yet appeared towards enabling us to form an impartial estimate of the present condition
and future prospects of our new acquisition." Academy.

CYPRUS ; its History, its Present Resources, and

Future Prospects. By R. HAMILTON LANG, late H.M.'s Consul for
tke Island of Cyprus. With Four Maps and Two Illustrations. 8vo. 145.
" 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.

MACMILLAN AND CO., LONDON,

BEDFORD STREET, STRAND, LONDON, W.C.
August, 1879.

MACMILLAN & Coss CATALOGUE of Works
in the Departments of History, Biography \
Travels, Critical and Literary Essays,
Politics, Political and Social Economy,
Law, etc.; and Works connected with Lan-
guage.

HISTORY, BIOGRAPHY, TRAVELS, &c.

Albemarle. FIFTY YEARS OF MY LIFE. By GEORGE
THOMAS, Earl of Albemarle. With Steel Portrait of the first Earl
of Albemarle, engraved by JEENS. Third and Cheaper Edition.
Crown 8vo. "js. 6d.

" The book is one of the most amusing of its class. . . . These remi-
niscences have the charm and flavour of personal experience, and they
bring us into direct contact with the persons they describe :" EDINBURGH
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."
ANDERSON, F.R.S.E., Medical and Scientific Officer to the Ex-
peditions. With numerous Maps and Illustrations. 8vo. 2I/.
"A harfdsome, well-timed, entertaining, and instructive volume"
ACADEMY.

"A pleasant, useful, carefully-written, and important work"
ATHENAEUM.

Appleton. Works by T. G. APPLETON :
A NILE JOURNAL. Illustrated by EUGENE BENSON. Crown

8vo. 6s.
SYRIAN SUNSHINE. Crown 8vo. 6s.

Arnold. ESSAYS IN CRITICISM. By MATTHEW ARNOLD.
New Edition, Revised and Enlarged. Crown 8vo. QJ.

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

Abo, Helsingfors, Wiborg, St. Petersburg, Moscow, and Kief.
ByJ. BEAVINGTON ATKINSON. 8vo. i2s.

"Although the main pur-tose of the book is strictly kept in view, and we
never forget for long that we are travelling with a student and connoisseur,
Mr. Atkinson gives variety to his narrative by glimpses of scenery and
brief allusions to history and manners which are always welcome when
they occur, and are never wordy or overdone. We have seldom met with
a book in which what is principal and what is accessory have been kept in
better proportion to each other." SATURDAY REVIEW.

Bailey. THE SUCCESSION TO THE ENGLISH CROWN.
A Historical Sketch. By A. BAILEY, M.A., Barrister-at-Law.
Crown 8vo. Js. 6d.

Baker (Sir Samuel W.) Works by Sir SAMUEL BAKER,
Pacha, M.A., F.R.G.S. :

ISMAILIA : A Narrative of the Expedition to Central Africa for
the Suppression of the Slave Trade, organised by Ismail, Khedive
of Egypt. With Portraits, Map, and fifty full-page Illustrations
by ZWECKER and DURAND. New and Chaaper Edition. With
New Preface. Crown 8vo. 6s.

*\A book which will be read with very great interest." TIMES. " Well
written and full of remarkable adventures" PALL MALL GAZETTE.
"Adds another thrilling chapter to the history of African adventure."
DAILY NEWS. "Reads more like a romance . . . . incomparably more
entertaining than books of African travel usually are." MORNING POST.

THE ALBERT N'YANZA Great Basin of the Nile, and Explora-
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
facts which is the drawback to almost all books of African travel.' 1 ' 1

THE NILE TRIBUTARIES OF ABYSSINIA, and the Sword
Hunters of the Hamran Arabs. With Maps and Illustrations.
Sixth Edition. Crown 8vo. 6s.

7%e TIMES says : "It adds much to our information respecting Egyptian
Abyssinia and the different races that spread over it. It contains, more-
over, some notable instances of English daring and enterprising skill ;
it abounds in animated tales of exploits dear to the heart of the British
sportsman ; and it will attract even the least studious reader, as the author
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-
TINENT. By GEORGE BANCROFT. New and thoroughly Re-
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
leave without alluding to the ineffably droll illustrations which ad\l so very
much to the enjoyment of her clear and sparkling descriptions. " MORNING
POST.

Beesly. STORIES FROM THE HISTORY OF ROME. By

Mrs. BEESLY. Extra fcap. 8vo. 2s. 6d.

"A little book for which every cultivated and intelligent mother will be
grateful for. " EXAMINER.

Bismarck IN THE FRANCO-GERMAN WAR. An Authorized
Translation from the German of Dr. MORITZ BUSCH, Two Vols. '
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*
men, at least, will not be disposed to quarrel with Dr. Busch for giving a
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
ABYSSINIA. By W. T. BLANFORD. 8vo. 2U.

Bronte. CHARLOTTE BRONTE. A Monograph. By T.

WEMYSS REID. With Illustrations. Third Edition. Crown
8vo. 6s.

Mr. Reid's little volume, which is based largely on letters, hitherto
unpublished, from Charlotte Bronte to her school-fellow and lift-long
friend, Miss Ellen Nussey, is meant to be a companion, and not a rival,
to Mrs. GaskelFs well-known "Life" To speak of the advantage of
making biography autobiographical by the liberal use of correspondence has
she was by nature (as Mr. Reid puts it) "a habpy and high-spirited girl,
and that even to the very last she had the faculty of overcoming her
sorrows by means of that steadfast courage which was her most precious
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
Views of Haworth and its neighbourhood, and a facsimile of one of the
most characteristic of Charlotte's letters.

A 2

4 MACMILLAN'S CATALOGUE OF WORKS IN

Brooke. THE RAJA OF SARAWAK : an Account of Sir
James Brooke, K.C.B,, LL.D. Given chiefly through Letters
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
the authoress can scarcely stop to give sufficient distinctness to her
wonderjul narrative" ACADEMY.

Brooke. RECOLLECTIONS OF THE IRISH CHURCH.
By RICHARD S. BROOKE, D.D., late Rector of Wyton, Hunts.
Crown 8vo. qs. 6d.

Bryce. Works by JAMES BRYCE, D.C.L., Regius Professor of
Civil Law, Oxford :

THE HOLY ROMAN EMPIRE. Sixth Edition, Revised and
Enlarged. Crown 8vo. Js. 6d.

"It exactly supplies a want : it affords a key to much which men
read of in their books as isolated facts, but of which they have hitherto
had no connected exposition set before them." SATURDAY REVIEW.

TRANSCAUCASIA AND ARARAT: being Notes of a Vacation
Tour in the Autumn of 1876. With an Illustration and Map.
Third Edition. Crown 8vo. 9^.

"Mr. Bryce has written a lively and at the same time an instructive
description of the tour he made last year in and about the Caucasus. When

well-informed a jurist travels into regions seldom visited, and even
walks up a mountain so rarely scaled as Ararat, he is justified in think"
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
Army, and M.P. for Preston. By E. B. DE FoNBLANQUE. With
Portrait, Heliotype Plate, and Maps. 8vo. i6s.

Burke. EDMUND BURKE, a Historical Study. By JOHN

MORLEY, B. A., Oxon. Crown 8vo. 7^. 6d.

" The style is terse and incisive, and brilliant with epigram and
joint. Its sustained power of reasoning, its wide sweep of observation
and reflection, its elevated ethical and social tone, stamp it as a work of
high excellence" SATURDAY REVIEW.

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
generally delightful, as thtse log-letters has not appeared among books of
travel for a long time"' EXAMINER.

' ' 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
ARTHUR THURLOW CUNYNGHAME, G.C.B., then Lieutenant-
Governor and Commander of the Forces in South Africa. Third
Edition. 8vo. 12s. 6d.

The TIMES says : "// is a volume of great interest, .... full of
incidents which -vividly illustrate the condition of the Colonies and the
character and habits of the natives // contains valuable illus-
trations of Cape warfare, and at the present moment it cannot fail to
command 'wide-spread attention"

"Daily News." THE DAILY NEWS' CORRESPOND.
ENCE of the War between Germany and France, 18701. Edited
with Notes and Comments. New Edition. Complete in One
Volume. With Maps and Plans. Crown 8vo. 6s.

THE DAILY NEWS' CORRESPONDENCE of the War between
Russia and Turkey, to the fall of Kars. Including the letters of
Mr. Archibald Forbes, Mr. J. E. McGahan, and other Special
Correspondents in Europe and Asia. Second Edition, enlarged.
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,
" are of the widest interest, and such as no man who cares for the future
of his race and of the world can afford to treat with indifference"

Doyle. HISTORY OF AMERICA. By J. A. DOYLE. With

Maps. i8mo. 4^. 6d.

" 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.

8vO. I2J.

"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.

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
materials for the history of our time, and many brilliant passages,
verhaps some entire speeches, will really become a part of the living litera-
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
made since the publication, a quarter of a century since, of Mr. MilVs
( Principles of Political Economy.'' " DAILY NEWS.

THE CHARACTER AND LOGICAL METHOD OF POLL
TICAL ECONOMY. New Edition, enlarged. 8vo. 1*. 6d,

" 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,
comprehensive qualities which have long ago raised him to so high a place
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-
lating to Property and Income. By a BANKER'S DAUGHTER.
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
it from a new point of view in connection with the nature and functions
of money, a genuine service has been rendered to commercial science"
BRITISH QUARTERLY REVIEW.

Harwood. DISESTABLISHMENT : a Defence of the Principle

of a National Church. By GEORGE HARWOOD, M. A. 8vo. I2s.
Hill. Works by OCTAVIA HILL :

HOMES OF THE LONDON POOR. Extra fcap. 8vo. 3^. 6</.
" She is clear, practical, and definite" GLOBE.

OUR COMMON LAND ; and other Short Essays. Extra fcap.
8vo. 3-r. 6d.

CONTENTS: Our Common Land. District Visiting. A More
Excellent Way of Charity. A Word on Good Citizenship. Open Spaces.
Effectual Charity. The Future of our Commons.

Historicus. LETTERS ON SOME QUESTIONS OF
INTERNATIONAL LAW. Reprinted from the Times, with
considerable Additions. 8vo. 7*. ~ 6d. Also, ADDITIONAL
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
Political Economy in University College, London. (For other
Works by the same Author, see EDUCATIONAL and PHILO-
SOPHICAL CATALOGUES.)

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

LAVELEYE. Translated by G. R. L. MARRIOTT, LL. B., with an
Introduction by T. E. CLIFFE LESLIE, LL.B. Svo. 121-.

" It is almost impossible to over-estimate the value of the "well-digested
knowledge which it contains ; it is one of the most learned books that
have been contributed to the historical department of the literature of
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
this charming little book will find enjoyment in the varied metre and
graphic language in which the several tales are told, no less than in the
accurate and pithy rendering of some of our most Jamiliar ' Leading
Cases" " SATURDAY REVIEW.

Lubbock. ADDRESSES, POLITICAL AND EDUCA-
TIONAL. By Sir JOHN LUBBOCK, Bart., M.P., &c., &c.
Svo, pp. 209. 8.5- . 6d.

The ten speeches given are (i) on the Imperial^Policy of Great
Britain, (2) on the Bank Act of 1844, (3) on the Present System
of Public School Education, 1876, (4) on the Present System of
Elementary Education, (5) on the Income Tax, (6) on the National
Debt, (7) on the Declaration of Paris, (8) on Marine Insurances,
(9) on the Preservation of Ancient Monuments, and (10) on Egypt.

Macdonell. THE LAND QUESTION, WITH SPECIAL

REFERENCE TO ENGLAND AND SCOTLAND. By
JOHN MACDONELL, Barrister-at-Law. Svo. IQJ. dd.

Martin. THE STATESMAN'S YEAR-BOOK: A statistical

and Historical Annual of the States of the Civilized World,
for the year 1879. By FREDERICK MARTIN. Sixteenth Annual
Publication. Revised after Official Returns. Crown Svo. los. ()d.

The Statesman's Year-Book is the only work in the English language
which furnishes a clear and concise account of the actual condition of all
the States of Europe, the civilized countries of America, Asia, and

WORKS IN POLITICS, ETC. 35

Africa, and the British Colonies and Dependencies in all parts of the
world. The new issue of the work has been revised and corrected, on tht
basis of official reports received direct from the heads of the leading Govern-
ments of the world, in reply to letters sent to them by the Editor. Through
the valuable assistance thus given, it has been possible to collect an amount
of information, political, statistical, and commercial, of the latest date, and
of unimpeachable trustworthiness, such as no publication of the same
kind has ever been able to furnish. "As indispensable as Bradshaw."
TIMES.

Monahan. THE METHOD OF LAW: an Essay on the

Statement and Arrangement of the Legal Standard of Conduct.

By J. H. MONAHAN, Q. C. Crown 8vo. 6s.

" Will be found valuable by careful law students who have felt the
importance of gaining clear ideas regarding the relations between the parts
of the complex organism they have to study." BRITISH QUARTERLY
REVIEW.

Paterson. THE LIBERTY OF THE SUBJECT AND THE

LAWS OF ENGLAND RELATING TO THE SECURITY
OF THE PERSON. Commentaries on. By JAMES PATERSON,
M. A. , Barrister at Law, sometime Commissioner for English and
Irish Fisheries, etc. Cheaper issue. Two Vols. Crown 8vo. 2is.
" Two or three hours' dipping into these volumes, not 1 to say reading them
through, will give legislators and stump orators a knowledge of the liberty
of a citizen of their country, in its principles, its fulness, and its modi-
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
sort of handbook to Cobden's teaching." ATHENAEUM.

Stephen (C. E.) THE SERVICE OF THE POOR ;

Being an Inquiry into the Reasons for and against the Establish-
ment of Religious Sisterhoods for Charitable Purposes. By
CAROLINE EMILIA STEPHEN. Crown 8vo. 6s. 6d.
' ' The ablest advocate of a better line of work in this direction that wt
have ever seen" EXAMINER.

Stephen. Works by Sir" JAMES" F. STEPHEN, K.C.S.I., O.C.

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.

* ' We feel sure that any person of ordinary intelligence -who had never
looked into a law-book in his life might, by a few days' careful study of
this volume, obtain a more accurate understanding of the criminal law,
a more perfect conception of its different bearings a more thorough
and intelligent insight into its snares and pitfalls, than an ordinary
practitioner can boast of after years of study of the ordinary text-
books and practical experience of the Courts unassisted by any competent
guide." SATURDAY REVIEW.

A GENERAL VIEW OF THE CRIMINAL LAW OF ENG-
LAND. Two Vols. Crown 8vo. [New edition in the press.
Stubbs. VILLAGE POLITICS. Addresses and Sermons on
the Labour Question. By C. W. STUBBS, M.A., Vicar of
Granborough, Bucks. Extra fcap. 8vo. 3^. (id.

Thornton. Works by W. T. THORNTON, C.B., Secretary for

Public Works in the India Office :
ON LABOUR : Its Wrongful Claims and Rightful Dues ; Its

Actual Present and Possible Future. Second Edition, revised,

8vo. 145-.
A PLEA FOR PEASANT PROPRIETORS : With the Outlines

of a Plan for their Establishment in Ireland. New Edition,

revised. Crown 8vo. Js. 6ct.
INDIAN PUBLIC WORKS AND COGNATE INDIAN

TOPICS. "With Map of Indian Railways. Crown 8vo. 8s. 6d.

Walker. Works by F. A. WALKER, M.A., Ph.D., Professor of

Political Economy and History, Yale College :
THE WAGES QUESTION. A Treatise on Wages and the

Wages Class. 8vo. 14^.
MONEY. 8vo. i dr.

" It is painstaking, laborious, and states the question in a clear and
very intelligible form. . . . The volume possesses a great value as a sort
of encyclopedia of knowledge on the subject" ECONOMIST.

Work about the Five Dials. With an Introductory

Note by THOMAS CARLYLE. Crown 8vo. 6s.
"A book which abounds with wise and practical suggestions" PALL
MALL GAZETTE.

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,

but as tending to familiarize the reader with Elizabethan English in

general. " ATHEN^UM.

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.

" We dismiss the work with every feeling of satisfaction. It cannot
fail to be taken into use by all schools which endeavour to make the study
of French a means towards the higher culture" EDUCATIONAL TIMES.

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
Greek in Yale College, &c. 8vo. i6s.

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
School. Fourth Edition. Crown 8vo. Half-bound. 6s.
"A book which any student, -whatever may be the degree of his ad-
vancement in the language, would do well to have on the table close at
hand while he is reading."-- SATURDAY REVIEW.

Mayor. A BIBLIOGRAPHICAL CLUE TO LATIN LITE-
RATURE. Edited after Dr. E. HUBNER. With large Additions
by JOHN E. B. MAYOR, M.A., Professor of Latin in the Univer-
sity of Cambridge. Crown 8vo. 6s. 6d.
"An extremely useful volume that should be in the hands of all

scholars. " ATHEN^UM.

Morris. Works by the Rev. RICHARD MORRIS, LL.D., Member
of the Council of the Philol. Soc., Lecturer on English Language
and Literature in King's College School, Editor of " Specimens
of Early English," etc., etc. :

HISTORICAL OUTLINES OF ENGLISH ACCIDENCE,
comprising Chapters on the History and Development of
the Language, and on Word-formation. Sixth Edition. Fcap.
8vo. 6s.

ELEMENTARY LESSONS IN HISTORICAL ENGLISH
GRAMMAR, containing Accidence and Word-formation. Third
Edition. i8mo. 2s. 6ct.

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*.

' ' Mr. Oliphant' s book is, to our mind, one of the ablest and most
scholarly contributions to our standard English we have-seen for many
years." SCHOOL, BOARD CHRONICLE. "The book comes nearer to a
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.

"The book may be accepted as a very valuable contribution to the
science of language." SATURDAY REVIEW.

Philology. THE JOURNAL OF SACRED AND CLAS-
SICAL PHILOLOGY. Four Vols. 8vo. I2s. 6d. each.

THE JOURNAL OF PHILOLOGY. New Series. Edited by
JOHN E. B. MAYOR, M.A., and W. ALDIS WRIGHT, M.A.
4^. 6d. (Half-yearly.)

Roby (H. J.) A GRAMMAR OF THE LATIN LANGUAGE,
FROM PLAUTUS TO SUETONIUS, By HENRY JOHN
ROBY, M.A., late Fellow of St. John's College, Cambridge.
In Two Parts. Second Edition. Part I. containing : Book I.
Sounds. Book II. Inflexions. Book III. Word Formation. Ap-
pendices. Crown 8vo. 8s. 6d. Part II. Syntax, Prepositions,
&c. Crown 8vo. los. 6d.

"The book is marked by the clear and practical insight of a master in
his art. It is a book which would do honour to any country"
ATHEN^UM. "Brings before the student in a methodical form the best
results of modern philology bearing on the Latin language. " SCOTSMAN.

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
Dr. J. H. SCHMIDT. Translated from the German by J. W.
WHITE, D.D. 8vo. los. 6d.

Taylor. Works by the Rev. ISAAC TAYLOR, M.A. :
ETRUSCAN RESEARCHES. With Woodcuts. 8vo. 14*.
The TIMES says : " The learning and industry displayed in this
volume deserve the most cordial recognition. The ultimate verdict of
science we shall not attempt to anticipate / but we can safely say this, that
it is a learned book which the unlearned can enjoy, and that in the de-
scriptions of the tomb'builderSi as well as in the maniellous coincidences
and unexpected analogies brought together by the author, readers of every
grade may take delight as well as philosophers and scholars."

WORDS AND PLACES ; or, Etymological Illustrations of
History, Ethnology, and Geography. By the Rev. ISAAC TAYLOR.
Third Edition, revised and compressed. With Maps. Globe
8vo. 6s.

GREEKS AND GOTHS : a Study on the Runes. 8vo. gs.

40 MA CMILLAWS CA TALOGUE, &c.

Trench. Works by R. CHENEVIX TRENCH, D.D., Archbishop of
Dublin. (For other Works by the same Author, see THEOLOGICAL
CATALOGUE.)

SYNONYMS OF THE NEW TESTAMENT. Eighth Edition,

enlarged. 8vo, cloth. 12s.

"He is," the ATHENAEUM says, "a guide in this department of
knowledge to whom his readers may entrust themselves with confidence."

ON THE STUDY OF WORDS. Lectures Addressed (originally)
to the Pupils at the Diocesan Training School, Winchester.
Seventeenth Edition, enlarged. Fcap. 8vo. 55-.

ENGLISH PAST AND PRESENT. Tenth Edition, revised
and improved. Fcap. 8vo. $s.

A SELECT GLOSSARY OF ENGLISH WORDS USED
FORMERLY IN SENSES DIFFERENT FROM THEIR
PRESENT. Fourth Edition, enlarged. Fcap. Svo. 4*.

Whitney. A COMPENDIOUS GERMAN GRAMMAR. By
W. D. WHITNEY, Professor of Sanskrit and Instructor in Modern
Languages in Yale College. Crown Svo. 6s.
"After careful examination we are inclined to pronounce it the best

grammar of modern language we have ever seen" SCOTSMAN.

Whitney and Edgren. A COMPENDIOUS GERMAN
AND ENGLISH DICTIONARY, with Notation of Correspon-
dences and Brief Etymologies. By Professor W. D. WHITNEY,
assisted by A. H. EDGREN. Crown Svo. 'js. 6d.

The GERMAN-ENGLISH Part may be had separately. Price 5-r.

Yonge. HISTORY OF CHRISTIAN NAMES. By CHAR-
LOTTE M. 'YoNGE, Author of "The Heir of Redclyffe."
Cheaper Edition. Two Vols. Crown Svo. I2x.

CLAY, SONS, AND TAYLOR, PRINTERS, LONDON.

UNIVERSITY OF CALIFORNIA LIBRARY,
BERKELEY

THIS BOOK IS DUE ON THE LAST DATE
STAMPED BELOW

Books not returned on time are subject to a fine of
50c per volume after the third day overdue, increasing
to $1.00 per volume after the sixth day. Books not in
demand may be renewed if application is made before
expiration of loan period.

AU8 16 1!

60m.7,'29

HJ I-

UNIVERSITY OF CALIFORNIA LIBRARY