(3)

Die Lunæ, 3° Maii 1852.

THE LORD PRIVY SEAL in the Chair.

JAMES COSMO MELVILL, Esquire, is called in, and examined as follows:

1. YOU are now Secretary to the East India Company? I am.

2. At the expiration of the last Charter what situation did you fill? I was Auditor of Indian Accounts.

3. Can you state to the Committee what amount was realized from the commercial property which, by the Act of 1834, was made over to the government of India?

Under the Act of 1834, the East India Company surrendered their trade, their claims, territorial and financial, and all their commercial property to the government of India, and they were thenceforward to hold that property as trustees for the Crown; so much as was tangible was sold, and it realized the sum of 15,223,480 l.

4. To what account was that sum of money carried?

£.2,000,000 of the amount was appropriated, under the authority of the Act, to the formation of a guarantee fund to secure the dividend, and ultimately the capital stock of the Company; 561,600 l. was applied in the payment of compensations to shipowners and other persons; 8,191,3667. was applied to the redemption of Indian debt.

5. At what rate of interest?

Principally at six per cent. ; but some of it at five, and some of it being Carnatic stock, at lower rates. Of the commercial assets, 1,788,525/. was applied in the discharge of home bond debt, and 2,218,831/. was applied in the payment of territorial demands in this country, thus obviating the necessity pro tanto of remittances from India; 463,135l. remained, and was retained as the available cash balance in this country, for the purposes of the government of India.

6. Were there not some other assets?

That was all that was realized in cash. There was the East India House and one warehouse retained for the military store department, also house property in India, the value of which, altogether, was estimated at 635,4457., which remains in the hands of the Company, and is used for the purposes of the government of

India.

7. Are you able to state the amount of the interest of the debt that was due and paid off by the Indian Government?

Such an account can be rendered, if called for.

8. Could you make out an account showing the balance as between the new charge thrown upon the revenues of India on the one hand, and the charge from which they were released on the other side?

That could be done. But I must be allowed to state, that the East India Company gave up large claims not included in the account of commercial assets realized, and these should be allowed for, in order to see fairly what has been the financial result of the arrangement of 1834.

Evidence on the East India Company's Charter.

J. C. Melvill, Esq.

3d May 1852.

J. C. Melvill, Esq.

3d May 1852.

9. Are you able to state the amount of those claims?

Not in money; the amount never having been ascertained or adjudged.

10. Of what nature were the claims?

The claims were upon portions of the territory of India derived from peculiar grants; also for the balance of the account between territory and commerce, and all claims which were disputed at the time of the last investigation, and which were never finally settled.

11. Claims for balances of unsettled accounts?

Yes.

12. Was any estimate ever formed of the amount of those claims?

I think not; excepting as respects the account between territory and commerce.

13. That arrangement was come to for the purpose of avoiding the necessity of going into that investigation?

One of the effects of that arrangement was, that it disposed of these claims.

14. Are you of opinion that the amount of those claims was not ascertainable? The amount between territory and commerce, in my view of the question, was ascertained. The amount in money of the other claims it would have been difficult to fix, and no attempt was ever made to ascertain it.

15. Was there any reference of those accounts to a professional accountant? No. By former Acts of Parliament, the territorial claims of the East India Company were distinctly and specifically reserved; in the last Act of Parliament, those claims were so far recognized, that they were surrendered by the Company.

16. Under the last Act of Parliament, that which is now about to expire, the Company hold the revenues of India solely for the service of the government of India; is it not so?

Clearly so.

17. What sum has been remitted annually from India for the home payments, including the dividends to the proprietors?

The annual amount o the remittances of Indian revenue to this country since 1834-35, has averaged about 3,300,000 l. per annum.

18. What amount of that sum is for the dividends of the proprietors?
The dividend is 630,000 l. a-year; it is fixed by the Act of Parliament.

19. Is not there a bond debt, consisting of Indian bonds?

Yes.

20. What is the interest upon that?

In the last year it was 144,970 l.

21. What was it in the first year?

It was 92,850 l. in 1834-35.

22. When you were obliged to raise money in this country by the issue of more India bonds, did you find it necessary at the same time to raise the rate of interest?

No, not in order to enable us to borrow money. The interest had been previously raised, in consequence of the state of the money-market, affecting the value both of bonds and Exchequer bills.

23. What is the interest at the present time?

Three per cent. per annum.

24. Generally speaking, has the interest upon your bonds borne a definite proportion to the interest upon the floating debt of this country, which circulates in the market?

It has so.

25. How much higher has the interest upon your bonds usually been than the interest upon Exchequer bills?

It has fluctuated between a quarter and a half per cent., and is now higher.

26. You

26. You have not altered the interest upon the India bonds on every occasion J. C. Melvill, Esq. on which the Government has lowered or raised the interest upon Exchequer bills?

Not invariably; but we very generally do so.

27. In one case, did you not rather anticipate the movement of the Govern ment, in respect to raising the rate of interest?

We did, some years since.

28. In what mode has the remainder of the money which has been remitted. home been appropriated?

The purchase of stores for India is one item.

29. Can you state what has been the average amount of that charge?

1.

The average of the last four (4) years has been 490,000 l. per annum.

30. Is there not a further charge for stores very frequently in India, in consequence of indents not being complied with in sufficient time, or to a sufficient

extent?

Purchases of stores are occasionally made in India.

31. To a large extent?

To a considerable extent.

32. At a price very far beyond that at which they would have been furnished from hence?

I am not aware of that.

33. What are the other payments which are made at home?

There is furlough and retired pay to officers, amounting to upwards of 600,000 l. per annum, and there are payments to the Queen's Government, on account of Her Majesty's trocps serving in India, which may average 400,000 l.

34. Of what items is that sum of 400,000 l. composed; does it include the 60,000 l. for half-pay?

No; the 60,000 7. for half-pay is a fixed sum not included in that which I have mentioned; it is payable, under a specific Act of Parliament, in quarterly payments; the sum which I have mentioned, of 400,000 l., includes all that portion of the expense of the Queen's troops serving in India which is defrayed by Her Majesty's Government in England, the depôt charges, the recruiting charges, in fact every charge which is incurred and paid in England for the troops serving in India?

35. Does it include clothing?

It includes the off-reckonings.

36. Are there any other charges which are paid at home?

Another item of home expenditure consists of annuities and pensions, including compensation annuities, which were granted under the Act of 1834; the total amount is 198,000 l.

37. Could you give the Committee a return of the value of those compensation annuities, as calculated by an actuary?

No calculation of that kind has been made, I believe; it could be done, as in most cases we have the ages of the parties; it is a rapidly decreasing charge.

38. Will you have that done?

I will inquire if it can be done.

39. Are there any other charges?

There are a variety of charges, if the Committee wish to have them in detail; there is the expense of Haileybury, of Addiscombe, of the Home Establishment; they will all be included in the return which the House of Lords has called for. 40. Of that sum of 198,000 l., what proportion will represent the compensation annuities?

I am not now prepared to state the proportion, but I should think it large.

3d May 1852.

J. C. Melvill, Esq.

3d May 1852.

42. Now, with respect to the mode of remittance, was not one of the points with respect to which much was said at the time of granting the new charter, a considerable fear on the part of the East India Company that they would not be able to procure the necessary remittances from India?

Apprehensions of that kind were expressed, and I must confess by no one more than by myself.

43. Have those apprehensions been realized?

I am happy to say that they have not.

44. Will you explain the mode in which those remittances have been made? They have been made principally by bills on India; by bills remitted from India on the system of hypothecation, and also from China on the same system, in the earlier periods since 1834, and occasionally by bullion; remittances by way of China have ceased to be made by the Company.

45. Why has that mode of getting the money through China ceased? The Court found that they could do without it, and an agency in China was not a desirable arrangement; neither was it acceptable to the trade.

46. Are you aware that a very large portion of the American trade is carried on by means of English bills?

Yes; the merchants complained bitterly of the interference of the East India Company in China, and the remittance by that channel was suspended, and has never since been restored.

47. Will you explain the hypothecation system?

It is a system of Government advances in India to merchants who wish to purchase goods for export to England; the Government advances the funds, and the person to whom the advance is made gives a bill upon his agent, and delivers over to the Government the bill of lading of the cargo, as collateral security.

48. Has not that been very much complained of by English merchants? It has occasionally, but by no means uniformly, been complained of; at the commencement of the new system, the India merchants desired that the Company should make advances; there was then very little capital in India, and the merchants were not prepared to enter, as they could wish, into the trade upon their own resources; afterwards the merchants, when the system was in operation, complained of it, and were ready, as soon as there was disappointment in the sales in this country, to ascribe this disappointment and loss to the interference of the Government in the market of India by hypothecation; but when money again became scarce, the merchants indicated their wish that the Government would resume their advances, and advances were made accordingly.

49. Is that within the last two years?

Within the last three or four years.

50. Is not that system complained of very much, as furnishing artificial capital to parties who have not sufficient of their own to carry on business, and thereby interfering with the operations of real capitalists?

That is one ground of complaint; we have reason to believe that there is as much hypothecation going forward now as there was when the Government hypothecated, but it is by capital sent out by private individuals from this country.

51. That system is now suspended?

The policy of the Court of Directors has been to depend, as far as possible, upon supplies by means of bills upon India, as being the most simple course, and that which apparently interferes less with trade than any other; they have gradually reduced the amount to be hypothecated, and during the last two years they have completely discontinued it.

52. Has any inconvenience arisen from that suspension of the hypothecation system in the way of remittance?

None.

53. Have the Court of Directors discontinued it from an objection to the principle of hypothecation, or from finding a more expedient and better course of obtaining remittances?

They have found the remittance by bills the simpler course, and so long as it affords