this treaty question. I put a man in possession of a house belonging to me, and next door to my own. I covenant with him for quiet possession conditionally on the regular payment of rent. He does pay the rent, but keeps several hundredweight of gunpowder in his cellar. Was not the only excuse of Prussia in declaring war against Austria that Austria was increasing her army? And is it not, even among independent states, one of the best admitted causes for war, that one state keeps a gigantic army, a standing nuisance to all neighbours? How much more, then, may not a suzerain state insist on the reduction of the private army of a subsidiary prince! There is no person that Scindia could possibly employ his army against except against his own subjects or the Imperial Government. Surely this fact is a sufficient reason in itself that there should be no such army. It may be urged that some of these treaties directly involve permission to the subsidiary prince to keep a private army. I should hold that the covenanting this was beyond the power of the British Government sixty years ago. But if that knot appears a serious entanglement, I should recommend that it be cut by an immediate declaration of war against the subsidiary prince. While we have our hands free as now, such a declaration need not cost a drop of blood any more than did the annexation of Nagpore.

an

the greater part of Southern Asia, the revenue of the State was ciently derived almost wholly from land. The ideal was that the monarch was to take a little more than half the Ricardian rent of the land, and leave the remainder to fructify in the pockets of the people. This was the principle of Bird's celebrated North-West settlement. Oppressive princes squeezed more, up very nearly to the Ricardian rent; but that limit, of course, no oppression could pass.

I now come to a branch of the question which has always appeared to me sufficiently simple, but which has been written about more interminably than any other, viz. the question, What is rent and what is revenue in India? One cause of the prolixity and cloudiness of the arguments is that hardly any one of the arguers could give a definition of rent that would carry a single mark in an examination in political economy.

Not only in India, but throughout

Modern political economists are pretty well agreed that this is the best form of national taxation. Ricardo has demonstrated that a Government land tax, when once on, is no tax on the labourer, on the farmer, or on the landlord: neither does it raise the price of provisions. It only operates in this way: that instead of the whole Ricardian rent being spent in sustentation of landlords, one half is spent in sustaining landlords, the other half in providing State revenue. In either case the whole Ricardian rent (as measured in necessaries of life) is consumed within the year; but the important difference to the country is, whether it is spent productively or unproductively. We may suppose that the landlords spend the main portion of their incomes in fireworks at feasts, in maintaining religious paupers, in keeping retainers and servants, in personal luxury and extravagance, while the Government spends a large portion of its revenue in railways, irrigation, education, &c. Or we may suppose that the landlords spend a large portion of their incomes in improving their estates or invest it in profitable speculations, while the Government spends a large portion of its income in making big guns and thick plates by turns: as soon as the thickest plate is pierced by a gun, then a thicker may be made; and when that withstands the biggest gun, a bigger gun may be made, and so on ad infinitum.

Whatever argument may be held on this question of fact in Europe, there can be no dispute, looking at the habits of landlords, that the best of all taxes in India is the land-tax. It is an almost inconceivable thing that the public mind in England should be so trammelled by local circumstances as ever to have held that land-tax was not revenue, but the private property of landlords. Merely because the land-tax in India was, say, 128. in the pound originally, instead of 48., as the English land-tax originally, it was believed that it was of a radically different nature. This extraordinary delusion has led to strange dealings on the part of the Imperial Government with its own subjects, but to still more outrageous public policy in dealing with subsidiary princes. The favourite English view, to this hour, is that because the revenues of subsidiary princes are mainly derived from land, therefore they are private property, and that any interference of the Imperial Government in the disposal of this revenue is really like a confiscation by Parliament of the rents of the Duke of Athol. It is argued that the revenue of the Nizam is the rent of his private estate; and as there is a series of princes in India by degrees smaller and smaller, until we have many rajahs poorer and more insignificant than the larger landlords, it is declared that rent is revenue in India, and revenue is rent; that no line can be drawn, and the subject is involved in inextricable confusion. One delightful corollary to this blunder is the doctrine of adoption. If the Hindu subsidiary prince's revenue is private property, then the prince must have the same right of disposing of it as a zemindar landlord has of his estate. This doctrine has, amidst the universal acclamation of the Liberal party in England, been sanctioned in a recent case. Where are the principles of the Liberal party? How

is it they see the prince and not the people? Do they really hold still the Divine right of princes, and that their principality is their absolute private property? If not, let them go right-about with their votes and influence at once.

The most monstrous example of the application of this doctrine (though not at present a very injurious one) is the case of the splendid province of Mysore. The subsidiary prince is a minor, and during his minority, which will last many years yet, Mysore is administered directly on his behalf by British officers; but it is actually administered on the same principle that the landed estate of a ward of Court is managed. It is worked as economically as possible, and the whole surplus revenue is set aside to accumulate as the private fortune of the young prince. Practically, as remarked above, the result is rendered endurable, because the British officers in charge do expend a much larger sum annually than any native rajah would for the benefit of the people of the country. What can be clearer than that in this case the prince should be given a reasonable Civil List, and that the balance of the revenue belongs to the people of Mysore, and should be spent in irrigation, tanks, roads, railways, education, &c. ? Is there any country in Europe (even under the most absolute government) where the ba lance of the revenue is the private property of the prince?

But, it will be replied, you are begging the question that it is revenue; and though in these large provinces it certainly does look a little like public revenue, how can you draw a line between revenue and rent?

I have a simple test to settle this much-debated difficulty. Wherever the receiver of rents has assumed the title of a prince, exercised sovereign rights, kept troops, or undertaken the administration of public justice, I should hold that as he

had taken the dignity, so had he taken on himself the responsibilities of a prince, and that the proceeds he received from land were public revenue, from which he had a reasonable claim for a Civil List. I need hardly say that while the Imperial Government asserted this principle strongly and clearly, they need not push it harshly, especially against the smaller rajahs; the smaller a principality the larger would be the percentage of the revenue applicable to the Civil List.

Closely connected with this question of rent, or revenue, is that of pensions. Nothing appears to have gratified the vanity of the great John Company more than the giving pensions to princes; and the English Government, at the present time, receives with extraordinary favour the applications of all princes for pension or territory. The indignation at this in India is burning hot: the English Government does not appear to see that what they give a pensioner is not their own to give, but the worst tax that presses on the people of India. Indians have no particular objection to the English Government pensioning decayed princes to any extent out of the Home Treasury; but owing to the haziness surrounding the question of rent, or revenue, all the pensions given to mediatised princes have been excessive in amount, even when those amounts have been suggested in India.

The King of Oude proved an infamous public servant, and for his gross malversation of office was finally dismissed the Government service. He was entitled, at most, to a compassionate allowance, certainly to no pension: if his salary as Civil List on the revenues of Oude had been calculated on a more liberal scale than that of the most absolute sovereigns in Europe, his private interest in the revenues of Oude might have amounted at most to 25,000l. a year, and 5,000l. a

year would have been a compassionate allowance of questionable morality. Government awarded him 120,000l. per annum, being more than fourfold the salary of the Governor-General. Such a sum could only have been given on the hypothesis that the whole revenues of Oude were his private property, subject to the expenses of collection. Let us look more closely how generosity of this kind to an abominable scoundrel works. With his 120,000l. a year, he, a Stateprisoner in Calcutta, keeps a private army there, the scum of Lucknow. He maintains about 350 wives, and keeps up a perpetual tom-toming and frequent fireworks; in short he manages to get heavily into debt; and it would have been a real kindness to him and would have prolonged his life if the Government had allowed him no more than a maintenance. But what might be done for the people of Oude had the Government this 115,000l. extra per annum disposable? What, indeed, might not be done? Every child in the land might be educated. Simple as the proposition is, it seems to want reiteration eternally in the ears of people in England, that what we give princes in India is not our own money to give: that if there is any justification of our rule of India, it is that we may hold the public revenue in trust for the people of India, and that we may spend it conscientiously for their benefit.

As regards the India pensioners, few of them, fortunately, are guaranteed their pensions for ever; and the best course, perhaps, open is, on every death of a pensioner, largely to diminish the pension to his representative. Pensions in England are rarely given for more than three lives.

The whole disadvantages of subsidiary government are well brought out by Lord Dalhousie in the papers regarding the annexation of Berar. The prince here occupied a country enclosed by British territory, he kept

nues.

a private army, he borrowed money on the public revenues, and he lived luxuriously himself and amassed considerable private treasure. He died without issue, and Lord Dalhousie annexed the province, to the horror of English Liberals. Lord Dalhousie pointed out that by annexation he got a large increase of land-revenue for the public, he got rid of a troublesome interior customs' line, and he was enabled to reduce the Imperial army after he had disbanded the private army of Berar. The alternative to these Imperial advantages was to allow one of the prince's wives to adopt some child and give him these public reveLord Dalhousie never hesitated for one moment. He held that the private treasure of the prince had been accumulated out of public funds- therefore Lord Dalhousie seized it, allowing the ladies of the family 12,000l. a year maintenance. On the other hand, Lord Dalhousie held that the prince had no authority to saddle the province with a public debt, and that the high interest which the advancers had taken was in contemplation that the British Government might step in and cut the subsidiary prince's career short; hence the Imperial Government never acknowledged or paid interest on the debt. These measures of Lord Dalhousie were undoubtedly of a thorough character: annexation was never carried out with more

unsparing severity; but was not this severity the path of duty and conscience for the Governor-General ? A man in such a position as Governor-General of India must feel that he has no right to allow private feelings of commiseration to induce him to swerve one line from the path of strict duty. He may be generous from his private purse, never from the public revenue.

The idea that the land-tax of a province can be private property is a thoroughly English one. Among Hindus the idea that land-revenue can be anything but public property

seems inconceivable. The Bengalee zemindar to this day never speaks of my tenants,' but of my subjects: he does not transact his rentcollection in a business office, but in acutcherry,' i.e. a building standing out as a public court of justice, and supposed to be homologous with the collector's cutcherry in the station. He does not collect rent by mere land-stewards, but by his 'officers,' as he calls them; and though to English eyes he is a mere landlord, in the eyes of his ryots he is a Government High Officer, a collector of revenue. Very curious deductions from these premisses can be seen in Bengal Act X., the ultimate principle of which is that the British Government shall in the last resort decide what is the fair and equitable' rent for every piece of land in Bengal.

We have in India alienated an estimated 11,000,000l. land-revenue (but probably much more) to subsidiary princes, who spend this money in such a way as to entail on us extra heavy military expenditure. We spend an enormous sum in the Public Works Department, and the cry is still more railways, more irrigation. Now it appears that India cannot afford such a system, and there is a deficit, said by some to be 4,000,000l., by others 2,000,000l.

The popular folly in India is exhibited by raising an outcry against 'Dustoorie Dick' (Sir R. Temple) and the Bounding Brothers (Strachey) for their manipulation of the figures in the Financial Department. But the real cause of a deficit is the system. People in England still lie in such a slough of ignorance regarding the subsidiary princes that the Government in India feels it hopeless to propose any reform in that system. The Indian Government, therefore, applies itself to meet the deficiency-first, by an increase of taxation; second, by retrenchment in all departments; thirdly, by attempting to shift some of the charges now incident upon

the Imperial Treasury on to the Provincial Governments.

I will say a few words on these measures, assuming that the 'system is not to be changed. I will then explain what a change of system might possibly do.

First. The increase of taxation is an increase in the Income Tax. There is one grand objection to the Income Tax in India, viz. that owing to our inability to carry out the assessment and collection faithfully, it is wretchedly unproductive. A property tax on all real fixed property could be more justly assessed, and would prove more productive-simply a national rate. The only other feasible increase of taxation that has been suggested by anyone is that of the Lieutenant-Governor of Bengal, viz. to increase the excise on salt in Bengal. The population of the Lieutenant-Governorship of Bengal is now nearly 60,000,000, and if we could, by an increase of the salt monopoly, raise but a shilling per head per annum it would give us 3,000,000l. The objection to the increase of the salt tax is that it lays a tax on the wrong people, and that a poll-tax (which is what the salt excise amounts to) is the most unequal of all taxes. In reply it is said that a very small poll-tax is not an unjust tax. Moreover, as Ricardo shows, nearly every tax falls on the lowest class ultimately. And in Bengal our income tax falls directly on the ryots, for when the ryots are satisfied that Government has increased the charge on their zemindar they are prepared, without murmur, to pay an extra percentage of rent; and the efforts, nay, violent plunges, of the philanthropic Government of Bengal to prevent this are little better than ludicrous. It is just one of those things that, with all our power, we are powerless to check.

It was proposed, fifteen years ago, to commute the fixed money landtax of Bengal into rice, exactly on the principle of the commutation tithe in England. Had this then

been done the Government landrevenue from Bengal would have been now much larger in rupees than it is. At present the Government land-revenue in Bengal is rapidly diminishing in value owing to the fall in the value of money. The landlords are assuredly not entitled to any advantage thence. Even now a commutation is worth consideration, for the value of money has yet probably a good deal to fall; but it would give no immediate relief to the Imperial Financer, and no man high in office in India cares for more than the next five years.

Secondly. We have retrenchment in all departments. This, perhaps, has rather a healthy odour about it in England; retrenchment, like reform, connotes an idea of improvement. But it really means in India the repression of all enterprise for years. It must be recollected that in India there is hardly any private enterprise new speculations of every kind have to be supported, at least at first, by Government. In India a strict repression of Governmentexpenditure involves somewhat the same unhealthy stagnation that 10 per cent. discount at the Bank of England implies at home.

Thirdly. We have the persistent endeavour of the Imperial Government to throw the cost of roads, education, &c., on the Provincial Governments, and compel these Provincial Governments to invent local taxes to pay this cost. This is a measure which clearly gives no real relief whatever to the people; however extensively carried out, it only sets up two classes of taxation instead of one, like the Federal and State taxes in America. The principle of small separate taxes is a very dangerous one in India, where the percentage cost of assessment and collection is so enormous, and where the people are already more harassed by the variety of our taxes than by their amount.

In short, I believe the LieutenantGovernor of Bengal is wholly in the