Board has pushed up working expenses in all directions, the railways are more than paying the interest on their capital, and there is absolutely no need--I think it is wholly unjustifiable--to devote a part of revenue to the reduction of productive debt. The three-fourths of a million, which represents the capital portion of railway annuities, should clearly come out of loan funds raised for the purpose, and not out of current revenue which is needed for so many pressing current purposes. Even assuming that the Budget estimates are not framed too cautiously, and that the whole of the money proposed to be raised by the contemplated enhancements of duty under Tariff Bill is really required, the transfer of the amount provided for the redemption of railway capital from revenue to capital will enable the Government to dispense with the enhanced duties on silver and petroleum. My Lord, I have no objection to the proposed enhancement of tobacco and liquor duties if there must be extra taxation. In my opinion, however, spirits used in medicinal preparations should be exempted from duty. But I object most strongly to the proposed enhancements on silver and petroleum. The duty on petroleum will necessarily hit the poorest classes in the country. Burma oil may get some advantage under it, but I am afraid the price of even that oil will be raised, if not to the full extent of the new duty, at any rate by a large proportion of it. And as regards silver, I hope even the Finance Minister now sees that a great mistake has been committed in proposing the enhancement. It is bound to add seriously to the great difficulties through which the mill industry is at this time passing. My Lord, the country had a right to expect that the Government would not show such disregard of the interests of its greatest industry after agriculture. The action of the Government, while injuring Indian exporters of yarn, will benefit Chinese producers and thereby bring sensibly nearer the day when India will lose her yarn market in China altogether. It has been claimed for the proposal of Government that it will appreciate the silver trinkets of the mass of poor people throughout the country. The poor people will probably have no opportunity of testing that till a famine.

comes, when they might have to part with their trinkets. Meanwhile, in ordinary times they will find themselves adversely affected by the duty every day, as they will have now to pay a higher price for all fresh investments of their small saving in silver. My Lord, I strongly urge even at this last moment that the proposed enhancements of duty on petroleum and silver should be given up. If the Government insists on having the half million which they are expected to bring in, there are other ways far less objectionable of raising the amount. For instance, an enhanced import-duty on sugar will be greatly preferable to the enhanced duty on petroleum, and a small export duty on jute, of which we have a monopoly in the world, with a countervailing excise in India, if necessary, will bring in more revenue than the proposed duty on silver and will have much to recommend it. My Lord, I advocate an export-duty on jute on two grounds. In the first place, it is partly for meeting the increased cost of administration in Eastern Bengal that the new taxation is proposed. It is therefore only fair that Bengal, which already pays less than other provinces owing to her permanent settlement, should find the money by a tax on one of her great staples. Secondly, it is not just that, while the cotton industry of Bombay is already taxed, a further burden should again be laid on it, and the jute industry of Bengal should go altogether free. An export-duty on raw hides and skins which are being exported in enormous quantities may also bring a considerable revenue, and the same may be said of seeds. Or, if the Government prefer it, they may raise (and later lower) according to their needs the whole of the custom duties taken together, treating them in India as they treat the income-tax in England. I think, my Lord, that that would be preferable to selecting a few commodities like silver and petroleum for heavy enhancement.

SURPLUSES AND SANITATION.

[On 5th March 1910, the 1st stage of the discussion on the Financial Statement for 1910-11 was taken under the vules of the Reformed Councils, the Hon'ble Sir Harvey Adamson, Vice-President, being in the chair. At this meeting, Mr. Gokhale moved that "this Council recommends that the amount of loan to be raised during the year 1910-11 should be £1,245,900 instead of £1,000,000 and that the sum of £245,900, which is the estimated surplus for the current year, should be allotted to the several Provincial Governments to be expended by them in assisting local bodies to carry out projects of sanitary improvements;' and in submitting this resolution to the Council, Mr. Gokhale made the following speech :-]

He said:-I must first explain to the Council what my object is in moving this resolution. It is true that the resolution comes before the Council in the shape of a proposal to raise the amount of the loan that the Government want for next year. As a matter of fact, however, it is not an essential part of my proposal at all that the loan should be raised from 1 to 14 millions. Whether the loan for next year is 1 or 2 millions or half a million is a matter of indifference to me; but I have had to put my motion in this form, because I do not

to disturb the provision made in the budget for capital expenditure and I do not want to disturb the cash balances that the Government expect to have for next year, after making this provision for capital expenditure. My real object is to secure the surplus of the year for expenditure in the promotion of sanitation throughout the country. What usually happens under the procedure adopted in connection with a surplus is this. The surplus forms part of the cash balances, and out of the cash balances a certain amount is devoted to capital expenditure, whenever this is practicable, and thus the surplus ultimately finds its way into capital expenditure. I want to withdraw the surplus for next year from being expended

as capital expenditure, and I would like to have it placed at the disposal of Local Governments, in order that they might use it in assisting local bodies, especially in municipalities, in carrying out projects of sanitary improvement. The whole of my resolution comes to this, that I want this Council to recommend that all surpluses that are annually realised, whenever they are realised, should, instead of going into the cash balances, and from there going into the construction of railways and indirectly to the redemption of unproductive debt, should be placed at the disposal of Provincial Governments and be ear-marked to assist municipalities in the promotion of sanitation. I have urged this question again and again on the attention of the Council for the past six years. I first raised it in 1904, and I have continued to press it year by year.__Two years ago the then Finance Member, Sir Edward Baker, gave us about 30 lakhs to be expended on sanitation by municipalities. That was a small response to the appeal that I made year after year, but, with that exception, my appeals have had no effect. Starting with the year 18981899, we find that we have had, during the ten years, ten consecutive surpluses amounting to 25 millions sterling or 37 crores. And the bulk of them have, under this system of accounts, gone first to Railway construction and from there to the reduction of our unproductive debt. Now, railway construction is a most desirable object, and so is also the reduction of the unproductive debt. Ordinarily, there would be nothing to be said against it, but at present, when there are objects, far more pressing and far more important, which require money, I do not think the Government is justified in devoting such a large sum out of surplus revenues in the way they have done. If this sum of £25 millions sterling, or 37 crores of rupees, or at any rate the bulk of it, had been devoted to sanitary projects throughout the country, what a difference it would have made in every direction! I do not think I need say much about the needs of sanitation; the avages of plague, malaria and other diseases in all directions and a death-rate already high and yet steadily rising -for 1907-08 it was 37 per thousand as against 35 per thousand in the three previous years-all that show that

one of the greatest needs of the country to-day is improved sanitation. How is the need to be satisfied? Our municipalities are admittedly very poor, their resources are small and they are already insufficient for their ordinary work. Sanitary projects are very costly; expenditure on them has to be on a Western scale, whereas it has to be carried out in Eastern cities, which, as I have already said, are very poor. If municipalities are left to themselves to undertake sanitary works, the case is a hopeless one; therefore Government must come to the rescue of the municipalities. The only way in which Government can do so is either by voting a large permanent annual grant, or by placing their surplus at the disposal of Provincial Governments for assistance to local bodies in carrying out these necessary works. As regards a large permanent grant, I should be very glad to see it, but I foresee obvious difficulties in the way, especially in a year like this, when the Finance Minister has just carried through Bills imposing extra taxation; it is therefore hopeless to expect that Government will make a permanent addition to its recurring expenditure for the purpose of assisting municipalities in regard to sanitation. But there is an easier way of helping them, and it is a way that will meet the requirements of the situation. What I propose is this. Whenever a surplus is realised, instead of its being devoted to Railway construction or some such object, it should be placed automatically at the disposal of Local Governments. A surplus is so much excess revenue taken from the people by the Government over and above its requirements. Even the Finance Department, that knows so much more than its critics, cannot calculate to a nicety how much money is required and how much will be raised in a given year. But when a surplus is realised, it is clear that the financial authorities have taken from the people more money than was required. Let this excess therefore go back to the people in the form of expenditure on improved sanitation. I think this is an eminently just plea, and I think that it is also a plea whose force should be recognised in the interests of the masses of the people. I know what was often urged by the late Finance Member, Sir Edward Baker, that it is the practice in other coun