tries resulting from the remarkable dis- I would lead to permanent results. As to coveries on the West Coast of America. Germany, we knew approximately the Already a new trade was springing up amount of silver there. The action of between China and the West Coast of the Latin Union and of those States America, and when such developments which still had a silver currency in occurred this country, through its great Europe was an open question; but commercial ascendancy, always managed should silver rise, or should things not to secure a part of the new trade. While, grow worse, there seemed to be no distherefore, our manufacturers and mer- position on the part of those Governchants now had to encounter serious ments to substitute a gold for a silver drawbacks, compensation might be in currency. In the French Chambers, store for them through an increase of where the subject had been repeatedly trade, not, indeed, commensurate with debated, the Minister of Finance was in that brought about by the discoveries of favour of an expectant attitute, but on gold, but commensurate with the causes the whole argued for the maintenance which were bringing about a fall in the of the double standard; and there did price of silver. The question which not seem to be even a strong probanaturally arose was whether this fall bility of the substitution of gold for had reached its lowest point and whether silver entirely. The French Minister of a rise might be expected? Now, his Finance made a pregnant observation Colleagues on the Committee would con- upon the difference between the fluctuafirm him in the statement that, after all tion in silver and the depreciation of their deliberations, they had failed to silver, pointing out that the mere fall in arrive at any conclusion upon that point. value was no argument against mainThe fact was that the causes were so taining the system of a double currency complicated and it was so impossible to which they were attached in France, to measure the extent to which they though it might require a re-consideramight operate that he would be a bold tion of the legal relation between gold man who ventured upon any prophecy. and silver. He (Mr. Goschen) offered no The noble Lord (Lord George Hamilton) opinion upon the value of this argument. was hopeful, and looked forward to a He simply pointed to it as an indication rise in the price of silver in the course of that there did not seem to be any immethis year. The noble Lord spoke some-diate fear that the French Government what too strongly of the panic which would take steps to demonetize silver. had occurred, because he (Mr. Goschen) The supplies were very large, but the was inclined to agree that the causes removals to the purchasing countries now at work justified the apprehensions had been very considerable. These were which were felt as to the fall in silver. causes strongly operating on this quesOn the other hand, his hon. Friend (Mr. tion and amply accounting for and justiFawcett) seemed to draw the picture fying the alarm and the fall that had in very dark colours. For himself, he occurred. They must turn to the consiwished to be excused from giving any derations which were on the other side opinion as to whether silver was likely namely, the circumstances which to fall or rise; but he should like to add might be expected to influence the price one or two considerations to those enu- of silver in the other direction; but there merated in the Report of the Committee. they had this difficulty-they knew but As regarded the causes which were hos- little. They knew there were a number tile to the value of silver, it might be of indefinite causes which might produce assumed that, except as to the extent to a rise in the price of silver, but they which the silver mines in America might were less able to measure them. Before yield increased amounts, we now knew he dealt specially with the case of India the worst. We knew the worst also as he would point to the enormous area regarded the drafts of the Indian Go- over which the silver currency existed, vernment upon India, and the policy and which might have a capacity for abwhich had been announced secured this sorbing silver which they were unable advantage from the disturbed relations to gauge. He thought there could be between gold and silver in India- no better illustration of the chances of namely, that the Government had been recovery in silver than what had, as obliged to face the question of Indian he was informed, recently occurred in expenditure in a bold manner which China. There, quite an unexpected de mand for silver had arisen within the last few days. Great speculation in silver which no one had foreseen had arisen, and he was told that while here there had been such a glut of silver that everybody was alarmed, in China there was a panic with regard to the inability of procuring sufficient silver to purchase the silk at enhanced prices. The hon. Member for Hackney spoke-and it was one of the most interesting parts of his speech-of the effect which the fall in the value of silver would have on the export trade of India, and he traced very clearly how a fall in silver encouraged export, and how that would greatly tend to increase the price of commodities in India, and that then the cause would cease to operate and the finances of India would be left in a deplorable condition. But the hon. Gentleman did not complete his argument, for he should have pointed out that the increased flow of silver from England to India would produce a rise in the price of silver in England. Therefore, while the export trade was being developed, so also in this country there would be a rise in the price of silver as a result. This would necessitate the employment of a larger amount of silver in this country, and the consequence was that cause and effect would re-act upon each other. Already, it seemed, natural causes were beginning to operate; and he warned the Government and the public that no measures were more detrimental in restoring the price of silver than any courses tending to operate against silver. Speaking of the rise of price in India, he would add that there were some points on which he hoped the Government would collect information during the Recess. That was one of the points on which the Report was weakest, for the Committee could not collect the necessary materials in the time at their disposal. It would be curious to observe what the effect of the results of the past four years had been in connection with the fall of the price of silver in India. He had seen statistics which seemed to indicate that prices had by no means risen anything like the proportion in which silver had fallen in this country. It was most unlikely that such should be the case. The fall was distributed over so wide an area that the rise could not be otherwise than very gradual. The question of the rise in prices in India would be one to which the Government must give special and peculiar attention. It had been argued that it would be impossible or difficult to impose any fresh taxes on India or to increase existing ones. But if prices rose the ryots and other producers would receive increased prices for their articles and be able to pay increased taxes in the same proportion. From every point of view, however, the question of the adjustment of prices in India was one which demanded the closest attention of the Government. That there was an emergency no one who had followed the course of events or listened to the speech of the noble Lord could doubt. The noble Lord had shown clearly its effect on the revenues of India, on the tribute paid to this country on salaries, &c. About the £15,000,000 paid annually by India to this country he wished to say a word. No part of the statement of the noble Lord was more interesting than that which analyzed the mode in which that heavy charge was raised and the effect it produced on the finances of the Government. He showed how great a portion of that charge had arisen from guaranteed railways and from advances made to the Government for public works. From this subject he (Mr. Goschen) believed a useful moral might be drawn for the guidance of Governments generally. The Indian Government believed it was embarking in a simple transaction of lending for which it would receive a good return. It raised money in this country, and expected a return for it in India. It did not foresee that the operation, which lay somewhat beyond the necessary functions of a Government, would entail in the end a vast loss upon the Indian Exchequer. That, however, was the result, a large debt which had been contracted in gold having to be paid by a country that produced only silver. The Government should resist the constant tendency that there was for them to step beyond their proper function, and to embark in undertakings of almost a commercial character; and, indeed, there was now a sort of undertaking that no further addition in this direction should be made beyond what was absolutely necessary for extraordinary works. Borrowing had been mentioned, but he did not think that they could overcome the difficulty into which they had got by borrowing even upon a larger scale. He would not criticize in any hostile spirit the raising of the loan | coined silver. But to limit the coinage of £4,000,000; but he could not allow of silver would practically be to dethat the raising of this loan had any- monetize silver as a metal; and then all thing more than a mere temporary effect, those in India who had debts to pay and that its natural tendency would be could only obtain coined rupees with to check the natural causes that were which to pay them by buying them at a now beginning to cause a fall in the constantly enhancing price from those price of silver. The noble Lord very who possessed them. They could not properly described it as an artificial discontinue the coining of rupees without means of keeping up the exchanges for providing some currency; and what the time being; but he used dangerous would that currency be? Could India be language when he said that the Govern- left without those means of legal tender ment wished to maintain the exchanges which every country required? In France in order to avoid a perturbation in com- and Holland there was a double standard, merce. The recovery, he believed, had so that if those who owed money were not occurred in consequence of that loan, unable to get their silver coined, they but in consequence of the great demand could not get their gold coined. But for silver which had sprung up in con- that would not be the position of India sequence of the cheapness of produce. -at all events, at present. There were The noble Lord had referred very briefly powerful advocates of the introduction to a remedy which appeared to be in of a gold currency into India; but he considerable favour in very influential had never seen any practical mode sugquarters-namely, the limitation of the gested for carrying it out. The interestcoining of rupees. When Parliament ing process which had been going on in separated it was very possible that the Germany since 1871 in connection with demand for that remedy might be re- a change of currency might afford them vived, for it had been advocated in a very instructive lesson on that subject. several Chambers of Commerce. The The difficulties of that operation had object of limiting the manufacture of been enormous in Germany, and must rupees was clearly to maintain the ex-be far greater in a country like India. change-that was to say, to give those who already possessed or had a claim to coined rupees a monopoly which the holders of other silver had not. What would be the result of that? He could fancy that the Indian Council might say -he trusted they would not-" We are in this position. We have claims on India to the extent of £15,000,000 sterling in coined rupees. India owes us this money, and must pay it, not in silver, but in coined rupees. If, therefore, no further rupees are coined, we shall keep up the price of the article of which we have this monopoly." The Indian Government, or the Home Government, or the holders of the debt, might, therefore, appear to have a momentary advantage in maintaining the rupee at that price. A large number of Manchester or other manufacturers might be in precisely the same position; they might have large sums owing to them in India for the goods they had sold, and the amount due to them would have to be paid in coined rupees. Consequently, if by any means the value of the coined rupee must be maintained, they would receive in return that to which an artificial value had been given-namely, a piece of But, Germany was close to all the gold mar- tions a silver currency was always most acceptable. He could conceive no policy more unsound or inexpedient than that a change of currency should be forced upon a country which did not desire it. There was scarcely a country in the East in which the people were not accustomed to a silver currency and in which it would be a dangerous experiment to force a change from silver to gold. The financial difficulties attending such a change would be enormous. Germany began by amassing, through the power which the payment of an enormous indemnity gave her, an immense stock of gold. Then came the question at what rate the exchange took place from silver to gold, so that in the transaction no injustice would be done to debtor and creditor. The exchange was finally settled at 153--that was, the value of silver relatively to gold was taken at 15, and contracts that were made in the one standard were made legal in the other. By the fall in the value of silver the German Government had sustained a great loss in the operation. Although the exchange of silver was now 17, they were now obliged to give gold at the exchange of 15. At what rate, he asked, would the gold standard be introduced in India? Was the rupee to be taken at 18. 10d. or 2s., for this would make an enormous difference on a circulation of £100,000,000, and the loss would be still greater by the fall in price which the operation would occasion in India as it did in Germany? The proportions of the question were gigantic, and it deserved the grave consideration of Her Majesty's Government before any decision was finally arrived at. There was one other point to which he wished to call attention. There was at the present moment a great plethora of gold in the Banks of England and France, but that had not always been the case, and he would be a bold man who would withdraw silver from that partnership with gold, by means of which a sufficient supply was furnished to do the currency for the whole globe. The Germans had the great advantages which the depression of trade gave them at a moment when they were making their conversion. We had seen, he might add, the results of a great increase in the supply of gold, but we had not seen what the results would be of the withdrawal of a large mass of money from the currency of the world. There appeared to him to be considerations which disposed of the expediency of such an immense operation as the adoption of a gold currency in India; and he trusted the Government would speak with no uncertain sound on the matter, as any illusion with regard to it would only tend further to disturb a market which was already so agitated. Both in this country and in India it was better to bear fluctuations than to take a step which it would be difficult to retrace and which might produce evils the result of which it was impossible to foresee. He was quite satisfied with the declarations of the noble Lord, made, he hoped, on the part of the Government, on the subject, and was glad of the opportunity which had been afforded of discussing the matter, so that during the Recess no misconception could exist. MR. GRANT DUFF congratulated the noble Lord opposite on having made, under painful and exceptional circumstances, a statement about Indian finance, as satisfactory as the language in which it was expressed was clear and graceful. He must also congratulate him on the discussion which a few days ago occurred in "another place," which proved clearly that if a distinguished public man who had lately returned from serving his country in India had been in a position to hold once a-week a conversation with the Secretary of State, the divergence of view between those two eminent men would be found to have been very small indeed, and that there was no desire to establish between the Government at home and that in India relations which must sooner or later end in national calamity. Passing to another subject, he agreed to a great extent with the general conclusions to which some of the Lancashire Representatives who had addressed the House had come; but he thought they would have shown more of the wisdom of the serpent if they had argued their case from the Indian and not from the English side. He objected to drawing a sharp line, as had been done by one speaker, between the interests of England and of India. These interests were far indeed from being necessarily antagonistic, or anything like it. He could not pretend to have more interest in Lancashire than in any other county of the United Kingdom, but he had a very strong interest in In dia; and, looking at the matter from the Indian side, he wished to see the gradual disappearance not only of the cotton duties, but of all Indian import and export duties whatever. Of course, in the present state of affairs, the Indian Exchequer could not be asked to part with any source of revenue whatever, good or bad; but when better times came, he trusted that Indian financiers would steadily keep in view two objects of paramount importance, the equalization of the salt tax, and the gradual abolition of Customs duties. He deeply regretted the agitation which had led to the giving up of the income tax. He should have liked to have seen the income tax kept at 2 per cent, and used for the attainment of that end. It was very unfortunate that we had allowed our Colonies to wander so far as they had done from the paths of free trade. He knew, of course, that circumstances had been very adverse when we had allowed our Colonies to do so; but our relations to India were not the same as our relations to our Colonies, and it would be truly deplorable if, because a little temporary inconvenience might be caused, we were not steadily to keep in view the freeing of Indian trade from all shackles. That was a goal to which we should continually tend, if without haste, yet without rest. LORD GEORGE HAMILTON said, the tone of the debate being so much in favour of the policy of the Government, he should not detain the House by any lengthened speech in reply to the suggestions and criticisms that had been offered. He assured the right hon. Gentleman (Mr. Goschen) that his suggestions would receive the most careful consideration of the Government. With respect to his noble Friend's (Lord Salisbury's) action in reference to the Indian tariff he could assure the House that it was not any imperious dictation to the Indian Government, but was necessitated by the fact that his despatch disapproving of the principles of that tariff did not arrive in India until after the tariff had been adopted by the Governor General's Council, and had the .Secretary of State sanctioned it he would have been in the position of supporting a measure of which he did not approve. He hoped the hon. Member for Staleybridge (Mr. Sidebottom) would not press his Resolution, for it was impossible, under the present circumstances, to dispense with duties that produced a revenue of £800,000 a-year. He agreed with many of the views expressed by the hon. Member for Hackney (Mr. Fawcett), who was justified in suggesting the curtailment of public works which were to be constructed by means of loans, and he fully agreed with the hon. Member in his condemnation of borrowing for the construction of such works in this country. The Amendment of the hon. Member was an abstract Resolution, and although he thought it went in the right direction, the danger was that circumstances might arise which could not be foreseen, and the abstract Resolution, if adopted, might seriously embarrass the action of the Government. He therefore hoped it would not be pressed to a division. MR. SIDEBOTTOM said, after the appeal of the noble Lord he would not move his Resolution. COLONEL JERVIS, who had on the Paper an Amendment on the hon. Gentleman's (Mr. Fawcett's) Amendment, said, he would not move it at that late hour, but hoped the noble Lord would consider the subject with which it dealt during the Recess. MR. FAWCETT said, after the appeal which had been made to him by the Under Secretary for India he should withdraw his Amendment. Amendment, by leave, withdrawn. Main Question, "That Mr. Speaker do now leave the Chair," put, and agreed to. MATTER considered in Committee. (In the Committee.) Resolved, That it appears by the Accounts laid before this House that the total Revenue of India for the year ending the 31st day of March 1875 was £50,570,171; the charges in India, including the collection of the Revenue, Interest on Debt, and Public Works ordinary, were £40,760,583; the charges in England (including £1,595,878, the value of Stores supplied to India) were £8,245,829; the Guaranteed Intepanies, in India and in England, deducting net rest on the Capital of Railway and other ComTraffic Receipts, was £1,244,562, making a total charge for the same year of £50,250,974; and there was an excess of Income over Expenditure in that year amounting to £319,197; that the charge for Public Works extraordinary was £2,249,571, and that, including that charge, the excess of Expenditure over Income was £3,930,374. Resolution to be reported To-morrow. |