Whether or not a particular outlay can be justified depends upon the amount of income out of which it has to be made. Nothing, for instance, may be more appropriate than for a man with 4,000l. a year to live in a house the rent of which is 400l. But if his income is only 1,000l., to live in such a house would be an act of reckless folly. It is no use to dilate upon the advantages which a man would derive from keeping a carriage. If he cannot afford a carriage, he must submit to the discomfort of a cab. Without an hour's delay the fact should be recognised that India is not in a position to pay for various services which she receives at their present rate of remuneration. A most important saving might be effected by more largely employing natives in positions which are now filled by highly paid Europeans, and from such a change political as well as financial advantages would result. A single example will show the great economy which might thus be effected. Mr. Rendel, Consulting Engineer of the East Indian Railway Company and of the Government Railways, stated in his evidence before the Public Works Committee in 1878 that three years ago not a single native engine-driver was employed in India; that on one railway, the East Indian, 150 are now employed, and that the saving thus effected is 15,000l. a year.

Mr. Rendel added that the European is paid at least ten times as much as the native driver, and "the native does a lot more work - he works longer hours and gives less trouble. We are entirely satisfied with the native drivers."

It is, however, scarcely necessary to remark, after what has been said about the present and prospective cost of the Indian army, that excessive military expenditure has done more than anything else to create the present financial embarrassment. It is particularly to be borne in mind that the great increase in this branch of expenditure has not been brought about by its being necessary for India to maintain a larger army. A few years after the abolition of the East India Company, what is known as the army amalgamation scheme was carried out in direct opposition to the advice of the most experienced Indian statesmen. India was thus, as it were, bound hand and foot to our own costly system of army administration, without any regard apparently being had to the fact that various schemes of military organisation, which may be perfectly suited to a country so wealthy as England, may be altogether unsuited to a country so poor as India. A single example will show to what an extent the pecuniary interests of India may, under the present system, be sacrificed.

When, a few years since, the plan of short service was introduced, it was solely considered as an English question, and not a thought was apparently given to the effect it would have upon India. It need scarcely be said that a more costly scheme for India could hardly have been devised. The shorter the term of service the greater must be the charge for transport; and the men, after they have completed a short term of service, are a reserve ready at hand for England, but many thousands of miles away from India. I cannot do more on this occasion than thus incidentally allude to the question of army organisation, with the view of showing that, in order to reduce the military expenditure of India, it is not necessary to diminish the numerical strength of the Indian army. It is, however, not to be forgotten that most distinguished Indian statesmen have declared that it would be far better to incur whatever risks may be involved in the reduction of the Indian army, than to face the danger which is certain to arise from an increase of taxation in India. No man could be less likely than Lord Canning inconsiderately to recommend a reduction in the Indian army, for he was Viceroy during the troublous days of the Mutiny; and yet Lord Canning unhesitatingly affirmed, and the opinion has subsequently been endorsed by Lord Northbrook, that if it were a question between imposing new and irritating taxes in India, such as the income-tax, "danger for danger, he (Lord Canning) would prefer to reduce the army." It is well known that an equally strong opinion as to the peril of adding to the taxation of India was expressed by Lord Mayo, a Viceroy who was alike distinguished for prudence, courage, and common sense, He had the sagacity to see that taxation in India could not be regarded as simply a financial question, but that it involved political consequences of the gravest moment.

In a passage which has been often quoted, he said that it was almost impossible to exaggerate the discontent which was produced among all classes in India, both European and native, by the "constant increase of taxation which had for years been going on." Deaf to these warnings, instead of anything effectual having been done to arrest the growth of taxation, the financial position of India now is far more unsatisfactory than it was in Lord Mayo's time. Not only has there been an increase of Imperial taxation - new and irritating taxes, such as the licence tax, have been imposed-but in recent years the country has been enveloped in a network of local taxation. Lord Northbrook, in August, 1878, in presenting an important petition from India in the House of Lords, endorsed the statement that "within the last seven years, in Bengal alone, there has been an increase of about a million, and for the whole of India more than three millions, per annum by provincial taxation."

When such opinions as these have been expressed by those who must be regarded as the very highest authorities on all questions affecting the government of India, it is not too much to say that the very existence of our rule in India may be gravely imperilled unless the finances of that country are placed in a more satisfactory position. The English people should awaken to the fact that the question is one which vitally concerns themselves as well as the people of India. There is scarcely any event which would bring greater discredit and greater misfortune on England than for the Indian Government to be forced to say: "Our financial exigencies are such that it is impossible to pay our way without coming to England for pecuniary aid." A burden might thus be cast upon English taxpayers which they would find hard to bear, and the consequences to India would be still more disastrous; for from the hour in which she was obliged to seek subventions from England, her virtual insolvency would be proclaimed. Before it is too late, England should resolve that such a contingency should be averted. Hitherto, it has unfortunately too frequently happened that the influence of England has been exerted not to save, but to spend, the money of the Indian people.