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Passing from these particulars we may note and approve a most important statement made on this head by the Rapporteur Général in the document above quoted (No. 537, p. 12) that "it is manifest that if all Frenchmen paid what they ought to pay, we should have a marvellous situation and the charges would be much lighter for all. It is fiscal evasion and dissimulation which oblige us to ask for so much."

The practical conclusions on the whole problem are as follows: (1) The primary need of French public finance is the provision of proper accounts. At present the chaos is indescribable. The veil of secrecy which admits of so much extra-budgetary expenditure should be torn aside. Let the secrets be known. This must be the basis of all other reforms.

(2) The chaos in the accounts is only equalled by the chaos of authorities. The Finance Minister produces the budget for 1926 in an exhaustive document of 543 pages. This is referred to the Finance Commission of the Chamber, whose Rapporteur composes a brilliant attack upon it, occupying 376 pages, and enforced by 33 other essays of criticism on each branch of the budget. The budget thus torn up is sent back to the Chamber. The Chamber creates another budget, and sends it on to the Senate. In the Senate all the machinery of criticism is again put to work, and another budget sent back to the Chamber; then for many weary months the torn and tattered budget floats backwards and forwards between the two Chambers. At all costs this must be stopped. Napoleon himself, with all his energies, could never have coped with such distractions. There must be one responsible authority, as in the British Parliament.

(3) The vast expenditure on the Devastated Departments should be cut down to the bone. Up to the end of 1925 (Document No. 1990, 1925, p. 14) 145 milliards had been spent on this purpose, of which about 76.5 milliards had gone to reconstruction proper, and 68.5 milliards to pensions and interest. France apparently intends to spend 20 milliards more on reconstruction, though she has spent on this purpose already as much in milliards as the whole cost of the war! Yet an official report of the British Government dated July, 1925, states: "At the present time (July, 1925), for all practical purposes from an economic point of view, the purely industrial reconstruction can be regarded as all but terminated." While the State could continue to pay the necessary pensions and the necessary interest on loans already

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raised, it might surely place the responsibility for any further reconstruction upon the very prosperous Departments themselves. In fact, might it not go much further and oblige authors of the lamentable profiteering which has gone on to be mulcted of some of their gains?

(4) Even in this hour of crisis let France put forward her plan for settling her indebtedness to the United States and to ourselves. For, in default of such a settlement, she cannot know how to balance, or even to frame, her budget; or, by consequence, how to stabilise her exchange. The Dawes receipts afford her this opportunity.

(5) Next, let her essential aim be to balance her budget by the better collection of her revenues, particularly those derived from the profits of agriculture and the interest on securities.

(6) Simultaneously, she must utilise her great hoard of gold, as Mr. Keynes has urged, for the stabilisation of her exchange.

(7) The time will then have come to reduce by a funding operation the high ratio which her short-term and floating debt bears to her perpetual and long-term debt. This would be made much easier as her credit rises with the adoption of the previous proposals.

(8) France should also consider the leasing, or the sale, of her monopolies and industrial State enterprises to private persons on commercial and most likely profitable terms.

(9) But such technical reforms as these, however excellent in themselves, are not adequate to the whole situation. Sooner or later the domestic problem of France, unless it can be tackled here and now, will become an international one; and, even if it can be tackled here and now, it will remain of international concern. For the task of international finance, so long neglected and ignored, will have to do with Europe as a whole. The chaos of currencies, the waste of gold, the universal erection of tariffs, the faulty distribution of credit, the misdirection of popular savings stupendous follies which find their happy huntingground in the multitudinous budgets of Europe-combined with the evils of mutual indebtedness between the nations arising out of the war: all these problems will have to be tackled to-morrow by that "high" finance which, hitherto, has aimed too low. Let us hope that France will not be another patient in the hospital, but that, having cured herself, she will set her energies to the task of helping to restore financial health to Europe.

GEORGE PEEL

LORD READING'S INDIAN VICEROYALTY

ORD READING assumed the Viceroyalty of India on the day on which Mohandas Gandhi-Gujerati bunnia by birth, barrister by training and Mahatma by the election of a peasantry which never understood his doctrine of soul-force-commenced his campaign for the collection of ten million rupees. A month previously the Duke of Connaught had returned to England after inaugurating the new parliamentary régime at Delhi in a moving appeal for racial reconciliation, in which he had alluded to "the shadow of Amritsar moving across the face of this fair land."

A little earlier there had occurred at the shrine of Nankhana Sahib, the great centre of Sikh religious worship in the Punjab, one of the most terrible religious massacres of all time. A still undetermined number of Reformist Sikhs-not fewer than seventy, but possibly as many as two hundred-were there admitted to the interior of the shrine, the great doors were closed behind them, and every man, woman and child of the company was first murdered, and the body was then boiled in a cauldron by the agents, or assumed agents, of the hereditary incumbent abbot.

Slightly farther back in point of time, but still vividly present to the memory of every Moslem in India, when Lord Reading arrived at Bombay, was the abortive Treaty of Sèvres between the victorious Allies and a quasi-defeated Turkey. Behind the memory of that treaty lay war and post-war recollections of intensive recruitment campaigns, which in the Punjab alone had given 400,000 men to the colours; of Afghan and frontier wars which, following immediately on the Great War, had cost India many millions of money and swept the northern parts of the country clean of transport; recollections of alternating gluts and shortages of rice, wheat and cotton; of lost markets, high prices, and dilapidated railways; of a much-loved silver currency almost displaced by sharply fluctuating paper; and, finally, of necessary restrictions on personal freedom in a country which, with all its bureaucratic traditions, in 1914 scarcely knew the meaning of administrative discipline.

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In estimating the quality of Lord Reading's work in India, it will be readily admitted that no Viceroy ever embraced so difficult a task as fell to him in 1921. A new and highly theoretical constitution had been drafted for India in 1919 and inaugurated by the Duke of Connaught a few weeks before Lord Reading's arrival. The power of the central and provinical executives alike had been affected, but to an extent unknown until the functioning of the new institutions had begun. The prestige and influence of the initiating and directing element in the public services had been likewise modified to an extent unknown. Moreover, in the ranks of the superior services something approaching incipient demoralisation had set in long before, as a result of failure to adapt to war and post-war conditions emoluments which, even in 1914, had admittedly demanded revision.

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In each of India's chief religious communities a deep-seated agitation was in progress. Almost for the first time in the history of modern India this agitation was gravely disturbing the rank and file of the peasantry. "Mahatma Gandhi, travelling in motor-cars or in special trains on railway lines owned by the government which he condemned as "satanic," had for long enjoyed complete immunity from administrative interference as he toured the length and breadth of the land. Theoretically he preached a passive revolt against all Western influences and a return to an idyllic condition in which India knew neither suffering nor disease, poverty nor hunger. In practice the outcome of his preaching was active and organized persecution of all users and distributors of Western goods, a boycott of government agents and of Europeans and their employees and servants, resistance to the collection of taxation, and, in numerous instances, murderous attacks on police officers or others who attempted to prevent or mitigate the resultant mob tyranny.

Gandhi's appeal was mainly to the Hindu population of the lower orders. The Ali brothers, with whom Gandhi was for long associated, made the alleged ill-treatment of the Turks by Great Britain the pretext for an identical or slightly more inflammatory campaign directed towards the undermining of the loyalty of the Moslem element among the peasantry. Lastly, the effervescence among the Sikhs, dating from the enforced return of certain of their number from Canada in 1914, and reinforced by the Sikhs' war-time experiences, was resulting in VOL. 243. NO. 496.

a movement of politico-religious reform which had already produced the terrible consequences above described at Nankhana Sahib. Before Lord Reading's Viceroyalty was half expired this same effervescence among the Sikhs was gravely to affect the population of a large tract in the province which constitutes the sword-arm" of British India.

In addition to these social and religious disturbances there was the grave financial fact that the equilibrium of the budget had been rudely disturbed by the military expenditure on the Afghan and Frontier Wars of 1919-21 (all borne on revenue), and by the increased pay excusably demanded by and conceded to the lower ranks of India's State employees on the ground of the cost of living, then not much below its peak of approximately 200 per cent. above pre-war cost. The fourth realised budget deficit in successive years had just been recorded. Additional taxation amounting to 19 crores had been imposed in what proved the fruitless effort to prevent a repetition of the deficit. Moreover the new, untried and hastily imposed scheme associated with the name of Lord Meston for the redistribution of revenue as between the Government of India and the provincial governments was complicating all estimates of receipts, more especially as the State-owned railways, for the first time in their recent history, were showing a loss.

In brief, the inevitable discontent resulting from war strain was being accentuated by campaigns of virulent abuse directed against every British agency; the executive arm was temporarily weakened by uncertainty due to the reforms and to the discontent of the services; high costs of living and trade depression were accentuating pre-existing difficulties. It was to an India thus afflicted that Lord Reading came in April, 1921. It was in a medium thus prepared that he had to work.

Lord Reading inherited from his predecessor an attempt to distinguish between forms of agitation which were merely unconstitutional and those which manifestly tended to violence. To those who throughout 1920 had observed the development of the coalition between Gandhi's group of agitators and the Moslem group headed by the Ali brothers, Lord Chelmsford's distinction was clearly both unsound and unpractical. Even had the passivity of the one group been realisable per se, the other group, which had organized uniformed volunteers, was always prepared

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