When the nature of the new taxation which was imposed upon the people of India is considered, a most ready assent must be given to the opinion thus expressed by the Viceroy, that the "sole justification" for the taxation was to be found in the purpose to which it was to be applied. The trades licence tax is an income tax in its most aggravated form, for it is an income tax from which every official and professional income is exempted. 1 doubt if the English people would consider the gravest emergency to justify the imposition of an income tax which would fall upon almost every artisan, and would leave untouched the entire official class, all the officers in the army, and all professional men. The salt duty had, before its recent increase, been one of the heaviest imposts ever levied on a first necessary of life. And yet the starving millions of Madras and Bombay, when they were scarcely able to raise their heads from the terrible affliction that had visited them, were told that the salt duty was to be increased by 40 per cent.

Under these circumstances it can be readily understood how necessary it was deemed by the Viceroy to endeavour to allay discontent, by giving the most distinct promises language could convey, that not "one rupee" of the money which was thus collected from the poorest of the Indian people should be devoted to any other purpose than providing a fund which might relieve their future necessities. The new taxes have been collected, and not a shilling of the money which they yield has been devoted to the purposes to which they were pledged. A few months after the famine fund was called into nominal existence, the invasion of Afghanistan was undertaken, and the fund was absorbed in defraying the expenses of this military expedition. It will perhaps be said that the whole of the famine fund has not been devoted to this purpose, and that a portion of it is to be devoted to the partial remission of the cotton duties; for if these famine taxes had not been imposed, the Indian Government would not have thought that they could possibly spare the 200,000l. which the reduction of these duties will cost the revenue of India. But whatever conclusion may be adopted as to the precise manner in which the money which was intended to create a famine fund has been spent, there can be no question that not a fraction of the new taxation which was imposed for famine purposes has been devoted to this object.

The pledge which was made to the Indian people has been alike broken, whether the money which they have been called upon to contribute has been expended for military purposes, or has been spent in enabling the Government in part to satisfy the demands which have been so persistently pressed upon them by the cotton-manufacturing interest in England.

It may not improbably happen that, in discussions on Indian finance, the famine fund will be referred to as if it still had an existence. Financial complexity has apparently for some people a strange fascination; and there are those who always seem to cling to the belief, that a considerable improvement can be effected in the finances both of a nation and of an individual by a dexterous arrangement of figures. Nothing can be more precise than the declarations which were made when the famine fund was established, that a part of the additional revenue yielded by the new taxation should be devoted to the reduction of debt: The reductions in the debt which would thus be effected in the years when there were no famines would, it was supposed, be equivalent to the addition that had to be made to the debt when famines had to be relieved; and consequently, over a series of years, the relief of famine would involve no increase in the indebtedness of India. It is obvious that the whole of this arrangement at once falls to the ground when, as is the case during the present year, although there is no famine, the necessities of the Indian Government are such that, instead of the debt of India being diminished, it is proposed to make to that debt an unprecedentedly large addition.

It may be urged that India, in the present state of her finances, cannot possibly do without the additional revenue which is obtained from the taxes imposed for the creation of a famine fund. But if this be so, then it is far better at once to recognise the fact that these new taxes have not been applied to the creation of a famine fund, but that they are required for the general purposes of the Indian Government; and amongst these purposes it is particularly to be noted that the one which is considered of most pressing urgency is to reduce the import duties on cotton goods.

Although the amount of revenue which will be lost through the reduction of the cotton duties is comparatively small, yet it is almost impossible to overestimate the importance of the principles involved in this particular financial measure. It at once suggests the inquiry, To what extent ought the interests of England to control the finances of India? Not only, as has been already shown, have the most positive promises which the Viceroy made to the Indian people been disregarded, but I think it will scarcely be denied that a resolution which, at the instance of the Government, was unanimously passed by the House of Commons, has been entirely set aside. On the 10th of July, 1877, a motion was brought forward demanding the immediate repeal of the cotton duties.

The Government resisted it, on the ground that India could not at that time afford such a sacrifice of revenue; and the truth of this was so generally recognised that, without one dissentient voice, it was affirmed that the repeal of these duties should be postponed until the financial condition of India became more satisfactory. Is it possible to point to one single circumstance, which would justify the conclusion that the finances of India are in a more satisfactory state now than they were two years since, and that India can now afford a sacrifice of revenue which she could not afford then? It is repeatedly said that the loss by exchange has done far more than anything else to cause embarrassment to Indian finance. In 1877 the loss by exchange was estimated at about 1,676,482l.; during the present year it is calculated that India will lose by exchange 3,900,000l. In 1877 the amount added to the debt of India was 6,380,000l.; during the present year the Indian Government desires to borrow, or take authority to borrow, no less than 15,500,000l. It is, however, needless to multiply examples to show that if in 1877 India could not afford to sacrifice any existing source of revenue, she is in a far worse position to afford such a sacrifice at the present time.