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Twenty years after, during the troubles of the Indian Mutiny, it was considered necessary to warn one English newspaper, for articles likely to inflame the minds of the people; and three Indian newspapers were prosecuted. The publishers of two of them were discharged on their expressing their regret and entering into recognizances. The publisher of the third 8 was found not guilty and acquitted. Some restraints which were then placed on · the Press were subsequently withdrawn. i The Friend of India.

2 Durbeen and the Sultan-ul-Akhbar. 3 Samachar Sudha Barshan.

CHAPTER XIII

INDIAN FINANCE. GENESIS OF THE INDIAN DEBT

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The evidence recorded by the Parliamentary Committees, . from which we have made large extracts in the preCeding chapter, was placed before the public in 1852 and 1853. The inquiry into the administration of Indian affairs by the East India Company was thorough and complete. There was a strong opinion, specially among the merchants and manufacturers of Great Britain, that the Crown should assume the direct administration of India. Ministers of the Crown, who had so often made war and peace in India without consulting the Directors, were nothing loth to assume direct management of Indian affairs. Nevertheless, the nation felt some hesitation in setting aside a Company which had built up the Indian Empire for them. Accordingly a compromise was effected.

The Company's Charter was once more renewed; but the Act of 1853 did not fix any definite term for the renewed Charter. It declared, simply, that the Indian territories should remain under the Company in trust for the Crown until the Parliament should otherwise direct. The number of Directors was reduced from twenty-four to eighteen, and the Crown assumed the power of appointing six out of these eighteen Directors. And the Board of Control retained its power of control.

Other changes were made by the new Charter Aci. It authorised the appointment of a Governor or a Lieutenant-Governor for Bengal. That Province, which had so long been ruled by the Governor-General himself, had its first Lieutenant-Governor in 1854. The Act

also authorised the formation of another Presidency or Lieutenant-Governorship. Accordingly the Punjab was placed under a Lieutenant-Governor in 1859. Among the other important changes, effected by this Act, we may mention that the Council of the Governor-General was enlarged for legislative purposes by the addition of Legislative Members. And the right of patronage to Indian appointments was taken away from the Court of Directors. It was henceforth to be exercised according to regulations framed by the Board of Control, and these regulations threw open the Civil Service of India to general competition.

With these changes, some of which curtailed the powers of the Company and added to the influence of the Crown, the Double Government which had been so strongly supported by John Stuart Mill was continued. It lasted for a few years longer, until the Indian Mutiny gave the British nation and the British Parliament a suitable occasion and an ostensible reason for setting aside the Company altogether. In closing our account of the Company's rule in India, we shall, in the present chapter, briefly review their financial administration.

The figures showing the revenues and expenditure of India, during the twenty-one years which elapsed from the accession of Queen Victoria to the abolition of the East India Company, are an interesting study, as they faithfully reflect the political history of the period. The following statement has been compiled front official records. They will show the proportion of the total revenues which was derived from the Land Tax, and the proportion of the total expenditure which was incurred in England as'Home Charges.

1 The figures for the first two years have been obtained from a Return to an Order of the House of Commons, ordered to be printed June 22, 1855, and from the Commons' Committee's Report of 1852, Appendix 12. The figures for the other years have been taken from the Statistical Abstract relating to British India, 1840 to 1865, presented to both Houses of Parliament.

Year.

Land
Revenue.

Gross
Revenue.

Expenditure Gross | in England. Expenditure.

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11,853,975?| 20,858,820
12,303,200 | 21,158,099
12,273,982 20,124,038
12,313,840 20,851,073
12,154,587 21,837,823
13,322,880 22,616,487
13,228,850 23,586,573
13.224,054 23,666,246
13,386,517 24,270,608
13,995,717 26,084,681
14,437,254 24,908,302
14,274,270 25,396,386
15,248,694 27,522,344
15,382,442 27,625,360
15,391,664 27,832,237
15,365,250 28,609,109
15,838,649 28,277,530
16,419,031 29,133,050
17,109,971 30,817,528
17,722,170 31,691,015
15,317,911 31,706,776

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19,857,970 21,306,232 22,228,011 22,546,430 23,534, 446 23,888,526 24,925,371 24,293,647 25,662,738 26,916,188 26,746,474 26,766,848 26,960,988 27,000,624 27,098,462 27,976,735 30, 240,435 30,753,456 31,637,530 31,608,875 41,240,571

It will be seen from these figures that in the first year of Queen Victoria's reign India showed a surplus, even after paying over two millions as Home Charges. This was due to the careful administration of Lord William Bentinck, and to the reforms and retrenchment effected by him and his successor, Sir Charles Metcalfe. But Lord Auckland arrived in India in 1838, and initiated the ambitious policy dictated by Lord Palmerston. And from that year India lost her surplus and showed a deficit, which continued under the administration of his successor, Lord Ellenborough.

The Sikh wars of the two next Governors-General, Hardinge and Dalhousie, made , matters worse; and it was not until the conclusion of the last Sikh War, and

1 Adding to this sum the revenues from Excise, Sayer, and Mutarpha, the total comes to £12,671,743, as shown in The Economic History of British India (1757-1837), p. 405.

2 Deducting from this sum the expenditure incurred in England, the gross expenditure in India comes to £17,553,525, as shown in The Economic History of British India (1757-1837), p. 405.

the annexation of the rich province of the Punjab, that India once more showed a surplus in 1849-50. But the young Imperialist who ruled the destinies of India soon lost the surplus. Before the close of Dalhousie's administration the gross expenditure of India went up by leaps and bounds to over thirty millions in 1853–54; and in spite of Dalhousie's annexations of Nagpur and other rich states, India continued to show a deficit up to the year of his departure, 1855-56.

Lord Canning showed a surplus in the first year of his administration, owing mainly to the annexation of Oudh, which had been effected immediately before his arrival. But the surplus was changed into a heavy deficit of ten millions in 1857-58, the year of the Indian Mutiny.

Another interesting but melancholy fact which we learn from the foregoing table is the steady increase of the expenditure in England—the Home Charges. Great Britain and India were equally gainers by the establishment and maintenance of the British Empire in India, and the cost of the Empire should have been shared by the two countries. And it would have been an act of strict justice if India had been charged nine-tenths of that cost incurred in India, and England had paid the remaining one-tenth, which was then incurred in England. But the sword of the conqueror is thrown into the scale to-day as it was in the days of Brennus; and financial arrangements are never dictated by strict justice between a subject and a ruling race. To India the annual Economic Drain was a pure loss; the money flowed out of the country never to return again; it went from a poor country to fructify the trades and industries of a rich country.

“With reference to its economical effects upon the condition of India," wrote a distinguished officer whose meritorious work in India we have reviewed in Chapter V. of this book, " the tribute paid to Great Britain is by

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