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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 Government. 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

India. And instead of suggesting a reduction of the Home Charges, they proposed to artificially raise the value of the rupee, which meant a real and universal increase of taxation in India.

The fall of the rupee during the first eight years after 1870 came to be 3}d., as shown in the following figures :

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In 1876, the Calcutta Chamber of Commerce strongly urged the Government of India to suspend the coinage of silver in order to stop the fall in the rupee; but the Government of India declared that the circumstances did not justify any action in relation to the Indian currency.

In November 1878, when Lord Lytton was on the eve of a war with Afghanistan, he addressed the Secretary of State again on the subject, and proposed some steps for raising the value of the rupee by limiting its coinage.? He submitted a Draft Bill, and proposed that the Coinage Act should be modified.

The Despatch was forwarded by Lord Cranbrook, Secretary of State for India, to Sir Stafford Northcote, Chancellor of the Exchequer. And it was ultimately referred to a Committee consisting of Sir Louis Mallet, Mr. Stanhope, M.P., Sir Thomas Seccombe, Mr. Farrer, Mr. Welby, Mr. Griffin, and Mr. Arthur Balfour, M.P. These gentlemen reported on April 30, 1879, that, “having examined the proposals contained in the Despatch, they are unanimously of opinion that they

1 Financial Despatch to the Secretary of State for India, dated October 13, 1876.

? Despatch, dated November 9, 1878.

Mallet, could not recommend them for the sanction of her Majesty's Government."

Subsequently, on November 24, 1879, the Lords of the Treasury replied in detail to the proposals of Lord Lytton. Some portions of this able and exhaustive reply should be quoted :

“It has not yet been established whether the variation in the relation between gold and silver may not have been caused by appreciation of the former metal as well as by depreciation of the latter, or by a combination of both."

“It appears to my Lords that the Government of India, in making the present proposal, lay themselves open to the same criticisms as are made upon Governments which have depreciated their currencies. In general, the object of such Governments has been to diminish the amount they have to pay their creditors. In the present case the object of the Indian Government appears to be to increase the amount they have to receive from their taxpayers. My Lords fail to see any real difference in the character of the two transactions."

“If, on the other hand, it is the case that the value of the rupee has fallen in India, and that it will be raised in India by the operation of the proposed plan, that plan is open to the objection that it alters every contract and every fixed payment in India.”

“If the present state of exchange be due to the depreciation of silver, the Government scheme, if it succeeds, may relieve :

“(1) The Indian Government from the inconvenience of a nominal readjustment of taxation in order to meet the loss by exchange on the home remittances;

“(2) Civil servants and other Englishmen who are serving or working in India, and who desire to remit money to England;

“(3) Englishmen who have money placed or invested in India, which they wish to remit to England.”

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