India is not represented by salaries only. There are besides heavy pension and furlough charges, more than three and a half millions sterling being paid to Europeans in England for the purpose in 1890. The excessive costliness of the foreign agency is not, however, its only evil. There is a moral evil which, if anything, is even greater, A kind of dwarfing or stunting of the Indian race is going on under the present system. We must live all the days of our life in an atmosphere of inferiority, and the tallest of us must bend in order that the exigencies of the existing system may be satisfied.

MR. G. SUBRAMANIA IYER ON CONTROL OVER FINANCE. Perhaps you would run through them,

18,767. would you?

Yes. Before proceeding to express my views on the subject of the system of provincial finance, which is an important wheel in our financial machinery, I shall point out my remedies thus far.

There can be no doubt that one way of strengthening the financial position of India would be, as Sir Auckland Colvin says: "In some way, without undue interference with the authority of the Government of India, to establish a control emanating from what theoretically is at present the last Court of Appeal, Parliament. A Committee of the Members of Parliament, such as Sir William Wedderburn has suggested, to scrutinise the financial statement every year and to submit a report to the House of Commons before the financial statement is brought up for discussion, would in some measure secure this end. The Committee would of course pay due attention to the opinions of the non-official Members expressed in the Legislative Council of the Viceroy." It came out fully in the evidence before the Commission that the present system, by which disputes regarding the apportionment

of certain charges between the two Governments are kept up for years and finally decided to the satisfaction of neither party, should be put an end to. It has been suggested that the principles which should be the general basis of apportionment should be laid down in a Treasury Minute, and that the application of these principles to instances where the two Governments might not agree, should be left to an arbitrator, or a body of arbitrators, chosen by both the Governments. This suggestion commended itself to the Marquis of Ripon and the Marquis of Lansdowne. It would be a better system I think to rest the power of final decision in the Judicial Committee of the Privy Council. The Privy Council is a tribunal well known in India, and would command from the people greater confidence than any arbitrators chosen from time to time. I have already pointed out the importance of the Members of the Secretary of State's Council being men in touch with the actual financial conditions of the day in India. To secure this end the present system of appointing them for ten years, and keeping them on for a further period if the Secretary of State chooses, should be abolished. Their term of office should extend only to five years like the Members of the Government of India and the Provincial Governors, and they should not be eligible for re-appointment. Among the Members of the Council there should always be several Indians possessing necessary qualifications and not necessarily official. They should be appointed on the recommendation of the elected Members of the Legislative Councils. They would take care to put before the Secretary of State the Indian view, which he has no means of knowing under the existing system. Coming to the constitution of the Government of India in India, I have already pointed out the desirability of the Governor-General being divested of control over any particular department, so that he may have more time than he has at present to attend to internal affairs of the country, which unfortunately do not receive

the same attention that they used to receive in years previous to 1885. The Members of the GovernorGeneral's Legislative Council should be empowered to vote on the Budget, although any decision adverse to the Government of India may be overruled by the President. There should be given greater scope for interpellation, and whenever any measure of legislation affecting finance is in contemplation, the views of the public bodies should be obtained beforehand as far as possible.

MR. SURENDRA NATH BANERJEA ON THE WIDER
EMPLOYMENT OF INDIANS.

19,320. You are going to proceed to give us your opinion on the growth of expenditure?

Yes. The question of the wider employment of the people of India in the public service of their own country is more or less a financial problem. The expenditure has gone on increasing, especially in the military department; and the Indian public opinion regards the growth of military expenditure as utterly beyond what the country can bear, and as seriously interfering with legitimate expenditure on the most necessary domestic improvements. The people of India who are capable of forming a judgment on the subject are at one with Sir H. Brackenbury in the opinion that the cost of the portion of the Indian Army, in excess of what is necessary for maintaining the internal peace of the country, should be met from the British Exchequer, and the expenses of the salaries of the European portion of the Army ought to be fairly apportioned between England and India. Until this is

done, the resources of India will not be found equal for the purposes of good and progressive government, and no improvement is possible in the condition of the masses. By the wider employment of the people of India in the public service, economy would be introduced, and an impetus imparted to the intellectual and moral elevation

of the people. Ten years ago the Public Service Commission, presided over by the late Sir Charles Atchison, at that time Lieutenant-Governor of the Punjab, and consisting of some of the most distinguished officials and non-official representatives of the day, reported upon the question of public employment in India. The gist of their recommendations may be summarised as follows: That indigenous agency should be more largely employed in the public service; that the recruitment of the official staff in England should be curtailed, and advantage taken of qualified agency obtainable in India. In other words, the provincial service, recruited in India, should be the backbone of the administrative agency, subject to European supervision and control. "Considerations of policy and economy alike require," observed the Commission in their Report," that so far as is consistent with the ends of good government, the recruitment of the official staff in England should be curtailed, and advantage taken of qualified agency obtainable in India." As a matter of fact, however, the higher appointments in almost all branches of the public service are held by Europeans, although more than ten years have elapsed since the Commission submitted their Report.

CHAPTER XII

INDIAN CURRENCY COMMITTEE

THE continuous fall in the value of silver after 1870 was a matter of concern to the Indian Governinent. The fall was no loss to the people of India. The prices of the produce of the country, estimated in rupees, rose as the value of the rupee fell; and the export trade of India rather benefited than suffered by the depreciation of silver. The revenues of the Government also increased automatically in rupees as the rupee fell in value. The Settlement Officer raised the Land Revenue demand when he found rice and wheat selling at a higher price, estimated in rupees; the Local Cesses, assessed on the Rental or the Land Revenue, rose with the rise of rents and the revenue; and the Income Tax Assessor increased his assessments when he estimated the incomes of traders and merchants at a larger number of rupees. Officials could demand some increase in their salaries in rupees as the rupee fell; European Officials in India did eventually obtain a compensation in an invidious and objectionable shape; Indian Officials failed to get an adequate increase to their humble salaries. So far as the financial administration and the monetary transactions of India were concerned, the fall in the value of silver, as compared with gold, created no difficulties, and caused no inconvenience.

But the Government of India had to remit large sums of money annually to England in gold for the Home Charges, and this remittance in gold meant an increasing amount in silver as the silver fell in value. This the Government of India considered an additional tax on