But more permanent alterations were effected under the administration of Lord Mayo in the Indian financial system. In the first place, the principle was clearly recognised and carried into practice, that Reproductive Works should be undertaken by loans, so that the annual revenue might be devoted entirely to current expenditure. This policy led to large and unjustifiable expenditure on railways, as we shall see in a subsequent chapter; and no adequate sinking fund was provided to reduce the increasing Debt.

The second change was what is known as Lord Mayo's Decentralisation Scheme. Previous to his time, there were no fixed allotments for the different Provinces of India, and Provincial Governors sought to obtain as much as they could for their own Provinces. He who clamoured most, got most; and Sir John Lawrence had found the utmost difficulty in restraining Sir Bartle Frere from undertaking vast and expensive works for Bombay. By the Constitution of December 14, 1870, Lord Mayo made fixed grants to Provincial Governments for the period of five years, and Provincial Governors administered their own Provinces, as best they could, within the allotments made. There was still a scramble for larger grants once in five years when the allotments are made, but a scramble once in five years was better than a yearly competition among the Governors.1

1 The grants at first fixed in 1870 by Lord Mayo for the different Provinces were these

But in a few years it was found necessary to modify this scheme, and to give each Province a fixed share in the Land Revenue and other sources of revenue, instead of a fixed grant.

The third and the most unfortunate financial change introduced under Lord Mayo's administration was a large increase in Provincial taxes, as distinguished from Imperial revenues. As far back as 1861 the Finance Minister of Lord Canning had referred to the necessity of relieving the Imperial revenues of India by empowering each Province to levy Local Rates within its limits. In 1865 the Finance Minister of Sir John Lawrence had pointed out in his Budget Speech, that the actual proceeds from Local Rates in the year 1864-65 was 2 millions sterling. Lord Mayo's Decentralisation Scheme led to large additions to these Local Rates.

When allotments were made for the different Provinces under the Decentralisation Scheme, each Province was allowed less than its requirements, with the express desire that the deficit should be made good by increased Local taxation. The Imperial Exchequer was relieved by multiplying the centres of taxation, as well as by adding to the volume of the taxes. The old sources of the revenues continued; while each Province now imposed new cesses, mostly on land, to add to its own Provincial revenues. This scheme, which will be more fully explained in a subsequent chapter, had been considered and rejected by Lord Lawrence. Its unfortunate adoption by Lord Mayo largely added to the State-demand from the soil, and thus unsettled the rule, which had been adopted in 1855 and 1864, of limiting assessment to one-half the rental.

In the midst of these manifold labours the life of the indefatigable worker was cut short by the knife of an assassin. Lord Mayo went on a visit to the Andaman Islands, a penal settlement; and on February 8, 1872, he was stabbed to death by a convict, in the prime of his life, and in the fulness of his vigour and manhood.

Happily, he was succeeded by another statesman equally eminent, and equally true to the policy of peace. Lord Northbrook was born in 1826, in a family distin

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guished in Europe for careful and successful commercial transactions. He had acquired a knowledge of India as Under Secretary of State for that dependency. He had adopted the sound views of Lawrence and Mayo on the Indian frontier question. And in his financial administration he had the help and advice of his cousin, Sir Evelyn Baring, who, as Lord Cromer, has since earned a reputation second to none in the British Empire.

Lord Northbrook's administration, like those of his two predecessors, was a reign of peace. But the administration of a country like India is never unattended with difficulties; and in the second year of his rule Lord Northbrook had to announce to the Secretary of State his serious apprehensions of an impending famine in Bengal.1

The terrible mortality caused by the Orissa famine of 1866, and by the famine of Northern India in 1869, was still fresh in the minds of the people; and Lord Northbrook was determined to prevent a repetition of such fatal results in 1874. Ample and timely measures of relief were undertaken; and for once in the history of India, the measures adopted were completely successful. Bengal, with its Permanent Settlement and low rental, was more resourceful than any other Province in India; the people were able to help themselves to a greater extent than elsewhere; and the measures of relief were, therefore, more efficacious in preventing deaths. The inquiries, made after the famine, showed that no mortality whatever was due to the famine.

The misrule of the Gaekwar of Baroda was another

source of trouble. He was charged also with having instigated an attempt to poison the British Resident. Lord Northbrook gave him a fair trial. Three Englishmen and three Indian Princes formed the tribunal, and Sergeant Ballantyne went out from England to defend the Gaekwar. The tribunal was not unanimous in its verdict, and Sergeant Ballantyne believed to the end of his life

1 Letter of the Viceroy in Council, dated October 30, 1873.

that the Gaekwar was guiltless of the alleged attempt. But he had proved himself unfit to rule, and Lord Northbrook, faithful to the Queen's Proclamation against further annexations, placed a young boy of the ruling house on the throne of Baroda. The experience of a generation has vindicated the wisdom of the measure. Baroda, under its own Government, is one of the best administered States of India. The young prince has lived to prove himself one of the most enlightened rulers in the country.

The Prince of Wales, now his Majesty Edward VII., visited India in the winter of 1875-76, as his brother, the Duke of Edinburgh, had done five years before. And the people of India showed their affection to the royal house by demonstrations of loyalty as sincere as they were universal.

But the fair sky of India was slowly darkened by a little cloud which had arisen in the West. The arduous endeavours of Canning and Lawrence, Mayo and Northbrook, to maintain the peace of India among strong and friendly powers, and to adjust the finances of a poor and resourceless country, were little appreciated in England. Once again the idea rose in the minds of British Imperialists that Russia must be checked in the East. Once again the thought came to them that India should be made to pay for this Imperial game.

Sir Bartle Frere, as Governor of Bombay, had vainly urged a Forward Policy in 1864; his attack on Lawrence's frontier policy had fallen into Lawrence's hands, and had been effectively answered. Sir Henry Rawlinson had once again raised the question in 1868, Lord Lawrence had once again replied. But now, when an Imperial reaction had set in in England, Sir Bartle Frere saw his chance; and his famous memorandum of 1874 revived the question. This third endeavour succeeded, because the times were propitious.

Sir Bartle Frere urged in June 1874 that British agents

should be placed at Herat, Kandahar, and Kabul; and that instead of maintaining a strong and friendly Afghanistan, a preponderating British influence should be established in that country. The veteran Lord Lawrence replied in November 1874 that the policy advocated by Sir Bartle Frere would be likely to facilitate rather than stop the advance of Russia; that it would turn the Afghan races against the British; that British officers stationed in Afghanistan would be assassinated; that the assassination would be followed by fresh wars. With almost prophetic vision the old seer sketched out in 1874 the very events which actually happened five years after. But his warnings were disregarded; and his unequalled experience and knowledge of the Afghans and the Punjab frontier were ignored. Sir Bartle Frere replied to Lord Lawrence in January 1875; and Lord Salisbury, who had once scoffed the alarms of the forward school with the keenest sarcasm, now accepted the views of Sir Bartle Frere. Lord Salisbury had succeeded the Duke of Argyll as Secretary of State for India when the Conservatives came into power in 1874. And he wrote to Lord Northbrook, suggesting the establishment of a British Agency at Herat, then at Kandahar, and eventually at Kabul.1

Lord Northbrook was faithful to Lord Lawrence's views. He had read Lord Lawrence's reply to Sir Bartle Frere. And he had written to Lord Lawrence to express his complete agreement.2

When, therefore, Lord Northbrook received Lord Salisbury's Secret Despatch in February 1875, he replied by telegraph that the time and circumstances were unsuitable for taking the steps proposed. And in June 1875 he sent a formal reply to Lord Salisbury's despatch showing that the policy which had been pursued since the days of Lord Canning, and pursued successfully, was to create a strong

1 Despatch dated January 22, 1875.

2 Letter dated December 18, 1874, quoted in Bosworth Smith's Life of Lord Lawrence (1885), vol. ii. p. 479.