reasonable sum for public works, in order to make up a certain surplus, while Bombay has been permitted to get rid of all objectionable taxes, to make ducks and drakes of the land revenue, and to exhibit a deficit without any limit whatever. A fair percentage on revenue ought to be allowed to Madras for civil expenses. A study of the accounts has brought me to the conclusion that the complaints from that presidency are in a great degree well founded.

The military expenses of the subordinate presidencies should be regulated separately from their civil charges, for, if a fixed sum be allotted to them, the result seems generally to be, that the military charges increase, and complaints are made of the want of money for civil purposes. It has been so at Madras.

The Bombay and Madras armies each furnish some troops for service beyond their own domestic limits; a portion of the Bombay army serves in Scinde, and a portion of the Madras army in Central India and the Southern Mahratta country; but the numbers of troops thus employed are not more than fair quotas to the general military duties of the empire. I am sorry to say that the present financial result of the Punjab is not nearly so favourable as formerly stated. Singularly enough, the first year has turned out far more profitable than those which have succeeded it. And this is not from any shortcoming in the revenue-it has prospered and increased but from the increased charges of increased establishments.

Finance of the
Punjab.

In Modern India' I stated the local charges of the Punjab beyond the Beas for 1849-50 at about 380,000l. I did so on extremely good authority, but it now appears that I am about 60,000l. in error, the true amount expended in that year (including cost of collection) being

440,000. I am, however, not responsible for the subsequent increase to more than double that amount. The local charges have, in fact, increased from 440,000l. to 962,000%. (including local corps and military police), and there is still an extraordinary charge of 232,0007. The revenue is stated at 1,300,000l., but this is exclusive of the acquisitions prior to 1849; and to weigh the financial result, we must undoubtedly include the acquisitions of the first war, since the first war brought on the second, and to go back to the status of 1837-8 we must have given up the whole. The whole revenue of new territory under the Punjab Board of Administration is thus fully 1,850,000l., and probably rather

more.

I was, perhaps, wrong in supposing it possible that the expenses could have remained at the very low figure at which they appear in the first year, but the present charges do seem very high. I suspect that part of the increase is caused by compensations for resumed jagheers and political privileges, and doubt whether it is politic to pay largely in money when a much smaller deduction from the revenue, in a more acceptable form, would better please the recipients. I believe that our management is not such as to render necessary very large establishments; and as the charges are certainly high, we may expect that when the revenue settlements and police arrangements are a little more advanced they will be reduced. We must not omit financial considerations in seeking efficiency; but at the same time we must not suppose that material saving is really effected merely by cutting the salaries of the most prominent servants. I think that the territories under the Punjab Board, after allowing for civil establishments and civil expenses, ordinary and extraordinary, on the most liberal scale,

must certainly give upwards of a million sterling as clear surplus. Say the account stands thus:

Of the 100,000 men whom it may be prudent to keep ready in Northern India, I have supposed 50,000 to be drawn from our older provinces for the defence of the common frontier, and I would charge 50,000 to the Punjab, thus:

Compared to the times immediately previous to the Sikh war, the whole revenue of the new territory is net gain; but compared to the quiet times of 1835-6, we may well be quite content if we do not lose by our new acquisition, and have the full benefit of the improvement of our older revenues.

Altered form of accounts.

I think that the form of the Indian accounts should be considerably altered. There is no separate account of the Imperial Government and Imperial charges, and many things are included in Bengal which in no way appertain to that government. It only creates confusion to charge the whole Supreme Government, political expenses, and Bengal army, to

* The surplus last reported is but

But deducting-of extraordinary expenses, say

local corps

210,000

200,000

400,000

We shall again have a surplus on civil expenses of

. £1,087,000

reduced establishments on completion
of settlements, &c. .

And adding-net revenue of new territory cis-Beas

Bengal Proper. I would have it, that the expenses of the Supreme Government should be kept altogether separate; that the opium, the political receipts, and perhaps the sea-customs, as imperial resources depending on imperial policy more than on local management, should be credited to the Supreme Government; that the whole debt should be charged to the Supreme Government; that each local government should then render a separate account, in a prescribed form, of its receipts from the ordinary local sources of revenue,* of its local charges, and of its contribution to the general government and to the home expenses. If the armies remain separate, they must be separately charged; but the Bengal army will be rateably charged on the revenues of Bengal, Hindostan, and the Indus territories. If the sea-customs are taken as an imperial resource, then the naval establishments may also be charged against the Supreme Government; but if this revenue is credited to the local governments, the maritime expenses must be charged to the maritime presidencies. When the returns are made in this form, we shall see at a glance the real comparative condition of the finance of each government.

I would carry this farther. I would ascertain and compare the financial results of each division of each government, and, in fact, of each district. It is quite necessary to send the financial schoolmaster Necessity of abroad. There has been too great a sepa- local financial ration of the departments of receipt, dis- responsibility. bursement, and account, and a great want of financial generalisation. I do not believe that one official in twenty understands the financial position either of his own district, his own government, or of the whole of India. There is a total absence of the wholesome obli

* Land, excise, salt, stamps, miscellaneous.

gation to make two ends meet, in every one, from the highest to the lowest, except the Governor-General and the financial secretary. Every charge is considered intrinsically on its own merits, and without reference to the wherewithal; and the Supreme Government, unable to reconcile many contending claims, may often reject the good with the bad. It was formerly considered good service to Government to collect as much as possible, but I think that there is now rather a disposition to go the other way, to laud liberal principles both in regard to receipts and disbursements. "Oh," a man says, when he makes an assessment, "great government does not want to screw the ryots, can afford to be liberal." And again, when he proposes an establishment, he says,

66

Niggardly policy is a bad policy, great government must put things on a handsome and efficient footing." Now this would be all very well, and these would be very excellent sentiments, if the same men were responsible for, or knew or cared anything about, the financial result; but when every one, from the local governor downwards, goes on these principles, and the Supreme Government alone is responsible for finance, it becomes a very difficult task for the latter. I would therefore, as I have said, send the financial schoolmaster abroad, and would insist that every officer should understand and make clear to his superiors the financial result of his charge.

Proposed system

financial dis

tribution.

I would then have a general system of local budgets, and would put the finance of each government, of budgets and district, and department, on a normal and intelligible footing, and would establish standards by which the financial arrangements of each year or of each new proposition should be measured. Every departmental and divisional officer should submit to the local government a budget of proposed arrange