Change after change is introduced into the organisation of our army, without a moment's thought being given to the effect which will be produced on Indian finance. A large part of the increase in the home military charges, to which reference has just been made, is no doubt to be attributed to the short-service system which has lately come into operation. As previouslv remarked, although short service may be an excellent arrangement for England, it was scarcely possible to have devised a more costly scheme of army organisation for India; and yet it appears from evidence given before a parliamentary committee by Sir Thomas Pears, late Secretary of the Military Department at the Indian Office, that there is no official record that the influence which would be exercised on the finances of India by the short-service system was ever considered by the English Government.1

Although it may be fairly contended that, whatever reforms in administration are introduced, a considerable time must elapse before such great items of charge as those just referred to can be materially reduced, yet an important saving might at once be effected if the work of retrenchment were vigorously taken in hand. An examination of the home charges will at once show that a year never elapses without various acts of extravagance being sanctioned. In some instances the amounts involved may be small, but it not unfrequently happens, that the want of due economy is most strikingly brought to light by some transaction in which the expenditure involved is not large. I might quote almost innumerable examples to show this. Looking over the latest accounts of the home charges, it will be found that India is charged 1,200l. for the "Passage and Outfit of a Member of the Council of the Governor-General." In the same year she is charged 2,450l. for the "Passage and Outfit of the Bishops of Calcutta and Bombay and Chaplains."1 But if any one requires to have brought home to him the lavishness with which the money of India is spent, it is only necessary to pay a visit to the India Office, and remember, as we pass along its spacious corridors, that that palatial building was erected by the Indian Government, and its costly establishment is maintained at the expense and for the use of one of the poorest countries in the world.

1 See Report of East India Finance Committee, 1874, p. 53.

In thus directing attention to the great importance of reducing the home charges, it must not be supposed that this policy of retrenchment ought alone to be carried out with regard to the expenditure of Indian revenues in England. I have, however, in the previous essay, referred to the general costliness of Indian administration, and I have thought it important to make here special reference to the home charges, because the chief object which the Government seem anxious to obtain is a diminution of the loss by exchange, and there is, I believe, no hope that the exchange wi]l become more favourable, unless the home charges are reduced. I trust it will not be thought that I underrate the difficulties which will have to be encountered, in carrying out a policy of rigid economy in the administration of Indian finance. Many who, until quite lately, always spoke of India as a country which could scarcely be administered on too liberal a scale, are now going to the opposite extreme, and express the most alarmist views as to her future financial position. In some of the leading English journals scarcely a week elapses without reference being made to the hopeless embarrassment of the finances of India, and her future insolvency is alluded to as if it could not be averted.

Although I do not share these desponding views, yet it must be evident that, unless something is promptly done, the financial condition of India will indeed soon become one of hopeless embarrassment. It is not more certain that a stone, if it is not checked in its fall, will gather increased mo-mentum, than it is that the system, which is now to receive its greatest development, of perpetually adding to the indebtedness of India, will, if it is not arrested, soon burden her with charges which she will be powerless to meet. The simple truth cannot be too persistently insisted upon, that India, throughout every department, has of late years been far too expensively governed. Although great economies may be effected, the smallest saving should not be neglected, and to those who are responsible for the management of Indian finance the fact should ever be present, that India is so poor that the waste of a shilling of her money may be of far more serious consequence than the waste of a pound of the money of England.

1 An attempt has been made to justify these charges, on the plea that they are "fixed by Act of Parliament." (See speech of Mr. E. Stanhope, House of Commons, 22nd of May, 1879.) It is, however, obvious that if such a plea is brought forward, the Indian Government must accept one of these two alternatives - either they must consider the charges are not justifiable, and then it is their duty at once to propose the repeal of the Acts by which they are enforced; or if they consider the charges are justifiable they then make themselves just as responsible for the continuance of the charges as if the Acts by which they are imposed had never been passed. It appears from the Finance accounts that India, in 1877-8, had to pay 158,039l. for ecclesiastical charges. It is unnecessary to remark that none of this money is devoted to the support of the religions of the people of India.

As I have now considered three of the four financial proposals of the Indian Government for the present year, namely, the reduction of the cotton duties, the raising of 3,500,000l. in India, and the borrowing of 10,000,000l. in England, it only remains to say a few words on the last of the four proposals - the advance of 2,000,000l. by England to India, free of interest, as a contribution towards the expenses of the Afghan war. This advance may be regarded from two entirely distinct points of view. In the first place, it may be considered as a gift or a charitable offering; and, secondly, it may be looked on as a discharge of an obligation legally and equitably imposed on England to bear some share of the cost of the Afghan war. If no such obligation really rests on England, then this advance of 2,000,000l., without interest, is a gratuitous sacrifice on the part of England on behalf of India. It is scarcely necessary to remark that the consequences involved in the grant of such a subvention are most serious. The financial relations between England and India are at once placed on an entirely new footing.