Next proceeding to consider the revenue derived from opium, there is no branch of Indian revenue which has lately shown so large an increase. It appears from an official paper which was laid before Parliament as recently as December, 1878, that the revenue from opium during the current financial year is likely to exceed the estimate by no less a sum than 1,240,000l. It has been stated that a part of this large increase is due to the Government, pressed by the necessity of finding funds for the Afghan war, having brought an unusually large quantity of opium into the market. But, whether this be so or not, I think it cannot be denied that no inconsiderable part of this increase in the revenue from opium must be due to a rise in the price of opium produced by the depreciation in the value of silver. For some time after the fall in the price of silver took place there appeared to be no movement in general prices in India. Silver, in fact, had simply fallen in value in relation to gold. Now, however, there seems to be a depreciation in the general value of silver in India, and prices are beginning to rise; for in the same official return in which an estimate is given of the large increase of revenue expected to be derived from opium, it is stated that on account of a rise in the price of food, the army expenditure in India is estimated during the present financial year to exceed the estimate by 330,000l. As the Indian Government sells opium in the open market, the amount of the opium revenue will, in the absence of any counteracting cir-cumstances, increase with the rise in general prices.

Although, therefore, there is this favourable circumstance connected with the opium revenue, namely, that it is not prejudicially affected in the same way as the land revenue must be, by the depreciation in the value of silver, yet no prudent financier should ignore the fact that this revenue depends almost for its existence upon the action of the Chinese Government in admitting Indian opium to their ports, while they forbid the cultivation of opium in China. Much valuable information on the subject of the opium revenue is contained in the evidence given before the Parliamentary Committee on Indian Finance. Among the many witnesses who were examined on this question there is no one whose opinion is entitled to more consideration than Sir Rutherford Alcock, who had not only resided in China for twenty-five years, but who at the time was her Majesty's Minister in that country. In the evidence he gave before the Select Committee on Indian Finance (May 23, 1871), he expressed the opinion that the Chinese Government were seriously contemplating putting an end to the importation of opium, and allowing its cultivation without stint in China. I do not presume to express any opinion of my own on the extent to which the opium revenue is likely to be affected by any action that may be taken by the Government of China. My sole object in calling attention to the subject is to show that the most productive of all the sources of Indian revenue, next to land, may, in the opinion of some most competent judges, be seriously reduced in consequence of a falling off in the Chinese demand for Indian opium; and it therefore becomes the more essential that the finances of India should be administered with the utmost care and thrift.

Next proceeding to consider the prospect of an increased revenue being obtained from salt, it will, I think, be admitted that, although a small increase of revenue may be derived from an increase of population, yet nothing could justify an attempt to obtain an additional revenue from salt by raising the rate of the existing duties. The duty now imposed, amounting to no less than 2,000 per cent. on the prime cost of the article, cannot but be regarded as a most onerous impost, when it is remembered that salt is as much a necessary of life as the air we breathe or the water we drink. It seems, moreover, that taxation on salt has reached that point when it produces a most serious effect in checking consumption. This is particularly the case in the poorest parts of India, such as Madras. This was felt so strongly by the late Lord Hobart, the able Governor of that Presidency, that he declared that nothing would induce him to be a consenting party to an increase of the salt duty. At the time Lord Hobart made that declaration, the duty levied on salt in Madras was one rupee, thirteen annas per maund. Within the last twelvemonth, the salt duty has been raised in Madras and Bombay from one rupee, thirteen annas to two rupees, eight annas.

This increase of nearly 40 per cent. in the duty, has been defended as a part of a scheme for the equalisation of the salt duties throughout India. If, however, the equalisation of duties is an object of so much importance as to justify a large addition to the duty being imposed on the people of Madras and Bombay at the very moment when they were recovering from the ravages of a terrible famine, it at once becomes evident that the duties cannot be raised in India without departing from this policy of equalisation; for I believe it will be admitted that nothing could justify the raising of the salt duty in Madras and Bombay beyond the point to which it has recently been advanced.

With regard to the last three branches of revenue - excise, customs, and stamps - little need be said. The present aggregate net revenue obtained from customs and excise does not amount to more than 5,000,000l. a year; and the policy of the Government in recent years has been rather to diminish than to increase these duties. Moreover, one of the most important items in the receipt from customs, namely, that derived from the import duty now imposed on cotton goods, must be regarded as existing on a somewhat precarious tenure. The repeal of this duty has been earnestly demanded by the cotton-manufacturing interest in England; and the Government entered into an undertaking that the duty should be repealed as soon as the financial condition of India permitted. It is somewhat difficult to define the exact interpretation to be given to this promise; but it is evident that its fulfilment will be persistently, and possibly successfully, urged. For when it was recently affirmed on the authority of the Secretary of State that India possessed a balance from which the expenses of the Afghan war could be defrayed, it was immediately said by the manufacturing interest in Lancashire that if such a balance really existed its appropriation had been beforehand pledged to the repeal of the import duty on cotton goods.