affords to them a sufficiency of funds, so long they will, I apprehend, adhere to J. C. Melvill, Esq. it as their only mode of remittance. 3d May 1852. 54. Was there not great objection entertained from time to time to the appearance in the market, of the government of India, unexpectedly disturbing the ordinary mercantile operations of the country? Complaints of that nature have been made by official reports from the govern ment of India to the Court of Directors. 55. Is the justice of that complaint at all admitted? I think not. 56. You think that the disturbing effects caused by the appearance of parties, with funds which they are under the necessity of remitting at certain unexpected periods, is not seriously felt as an inconvenience in the money markets of India? I do not think the objection is admitted to be well-founded; but the Court of Directors always desire in these remittances to take the merchants along with them, and, therefore, although the objection may not be well-founded, they yield to it whenever the interest and convenience of the public service permit. 57. Did not the government of India at one time, in 1843 or 1844, feel the objection to the system of remittances of money by hypothecation of goods so strongly, and did not they feel so satisfied that the Government here would approve of those objections, that they issued a general notice to the merchants, stating that they had represented this objection, and that after a certain period no such remittances would take place? They did so; the Government issued such a notification, and the Court of Directors found fault with them for having so done. 58. Have the Court of Directors an apprehension of being left too much at the mercy of the merchants, if they depend solely upon bills from England? I have occasionally heard an apprehension expressed that the merchants might combine; but I doubt whether it is well-founded. 59. Is care taken here, in drawing those bills upon the different governments in India, not to draw in very large sums at the same period, but so to diffuse the drafts, as to enable the Treasury there to meet the drafts without difficulty The only limitation put upon the demand for bills in this country is by raising the exchange; and whenever the supply comes in too abundantly, either more than is wanted here, or more than the government of India can conveniently meet, the rate of exchange is raised. 60. Have you any recollection of bills, to the amount of more than a million, being drawn in a month upon the government of Bengal? Yes, I believe that to have been the case upon one occasion. 61. When the rate of exchange has varied, what steps are taken? It is never varied without the concurrence of the Board of Commissioners. 62. Are the Committee to understand, therefore, that the alterations of the rate of exchange are made upon political principles, and that the rate of exchange is not left to the natural operation of the amount of bills at different times in the market, as compared with the demand for those bills? The rate of exchange is regulated entirely by the necessities of the Home treasury, and the convenience of the Indian treasury. 63. The rate of exchange with regard to India is not left, like the rate in other countries, to depend simply upon mercantile transactions? The Government fix their rate of exchange. 64. Does not the rate of exchange for commercial transactions follow the rate of exchange in the Government transactions? The Government transactions are so large, that I think they must have an influence on the mercantile rate; the mercantile rate of exchange for bills on India is generally lower than ours. 65. Must not some amount of disturbance in commercial transactions necessarily arise from the necessity of annually remitting a tribute of 3,000,000 l. from India? J. C. Melvill, Esq. 3d May 1852. I have always considered it impossible for the Government to effect such an amount of remittance without, in some degree, interfering with trade. 66. Is the rate of exchange regulated by the amount of your bills, and the amount of commercial bills in circulation, as compared with the demand for them; or is it in addition or collaterally to that, regulated by any arbitrium on the part of the Government or the Indian Department in conjunction with the Chancellor of the Exchequer ? I think it must be regulated in a great measure by the knowledge which the merchants possess of the amount of the East India Company's demand; once in every year that demand is notified to the merchants; the merchants, therefore, know how much in the whole year we are going to draw, and I think they must regulate the demand for bills accordingly, and the rate of exchange is affected by that demand. 67. It is a pretty constant quantity ? Yes; though there have been occasional variations of considerable amount. 68. Have you any means of naturally regulating the rate of exchange, except by limiting or increasing the quantity of bills that you put into the market? None. 69. Then, are your rates of exchange regulated by the ordinary principles which regulate commercial exchanges, or are they regulated by the interposition of any arbitrium on the part of the Government? By no arbitrium of the Government. 70. What is the nature of the communication to which you have referred, which takes place between the authorities of the East India Company and the Chancellor of the Exchequer, as bearing upon the question of exchange? When the demand for our bills becomes excessive, the necessity is apparent of raising the exchange to check it, and then we go to the Board, and represent the circumstances to them, and obtain their concurrence. 71. That is only obtaining the concurrence of the Government for an operation, in relation to the exchange, which would be the natural effect of the state of things at the time, if you were a great commercial house dealing in exchanges? Exactly so. 72. What is, at the present time, the balance at the Bank in the name of the East India Company? I think, at this moment, the cash balance is about 700,000 7. 73. Is not that much lower than it used to be formerly? It has varied; but independently of the cash balance, the Court have larger available means in this country, and they lend a portion of the cash balance so as to make it productive. 74. What are your available resources here? I think, in addition to the cash balance, we have a sum of nearly 585,000 l. out on loan; we have 1,000,000 l. of Exchequer bills, and I think we have an investment in stock to the extent of 1,000,000 l.; it has been thought only prudent, with such large demands as are continually made upon the home treasury, and with the liability to expensive operations in India, that the Company should possess a large available fund in this country. 75. You have about a year's expenditure in hand? Not quite. 76. What description of loan is it upon which that money is lent? 77. Loans at call? Yes. 78. Although the low rate of interest for money in the London market may diminish any possible profit which you may derive from those available assets here, it is not on that account the less necessary, as a matter of prudence, to maintain maintain this reserve always, in the manner you have described, so as to have J. C. Melvill, Esq. it available? Certainly not. 79. Is not the present reserve considerably larger than it has been in former times? It is; when the Government of India has been straitened in their means, then the Company has remitted a portion of the home demand, and made use of its available means, and thus, of course, the amount available was reduced; upon India being again able to make remittances, the reserved fund has been gradually replaced. 80. Were not the financial difficulties of the Indian Government such, about the month of January 1842, as to induce the Government of India to make a suggestion to the Court of Directors, that no bills should be drawn upon India for a considerable period, and that the Company should raise all the money that it wanted by the issue of India Bonds here? I am not aware of any such suggestion having been officially made to the Court of Directors; but at that period the demand upon India by the Court of Directors was very much reduced. 81. In point of fact, at the end of the month of February 1842, was it not very difficult to raise any money at 5 per cent. in India? I believe it was. 82. Do you know the amount of assets at that time in India, when that suggestion was made? I do not; but it can be returned. 83. Are there not some remittances in the Queen's Government bills from India? Yes; those will all be included in the return which has been ordered. 84. At what rate have the hypothecation remittances been made? The average rate of remittances by hypothecation from India has been 1 s. 11 d.; that from China, so long as it lasted, was rather more than 2 s. 0 d. ; the metallic value of the rupee, at the present price of silver, 5 s. an ounce, is 1 s. 10 4 d. 85. Is not the silver in the rupee as fine as the coinage of this country? There is a certain proportion of fine silver, and a certain proportion of alloy; 165 grains of fine silver, and 15 grains of alloy. 86. What comparison does that bear to the British coinage? I do not think it is comparable with the British coinage; the silver currency here is a mere token, gold being the standard. 87. In converting the Company's rupee, do you convert it at the rate of 18. 10 d.? No; we adopt 2 s. the sicca rupee, equal to 1 s. 10 d. the Company's rupee, in our statements of the revenues and charges of India; but I am now comparing the metallic value of the coin with its worth in exchange. 88. The silver coinage of this country, being depreciated as compared with the real value of silver, you compare the rupee with bar silver? Yes; it is, of course, impossible to establish a fixed par between a standard currency which is silver, as in India, and a standard currency which is gold, as in England; you can only take the average value of silver in this country, and then apply that to the rupee, so as to make an approximate par for it. 89. So far as you have a relative value fixed by comparing the Mint prices of gold and silver in this country with the price of bar silver, you do get a means of comparison? Yes. 90. The comparison suggested is a comparison between bar silver and the Mint price of gold? Yes, clearly. 91. If you took rupees to the Mint in this country, in what proportion should you obtain English silver in exchange for them? 3d May 1852. J. C. Melvill, Esq. 3d May 1852. The Mint buy gold, but not silver, at fixed prices. Reverting to the statement of remittances, I find that the rate of bills on India has been 1 s. 10 d. on an average of the whole period; the bullion remittances have averaged as nearly as possible 1 s. 10 d.; the average rate of the whole of the remittances by all modes during the present period has been 1 s. 10 d., which is about four per cent. gain over the metallic value of the rupee. 92. Do you take into consideration the interest? No, there is no allowance of interest in any of these rates. 93. But, in point of fact, you are entitled to take credit for the interest when you get the money, before you pay it: We are entitled to take credit in the case in which we receive the money before we pay it, and vice versú to charge it. 94. When you say "during the present period," do you mean since 1834-35? Yes. 95. What period does it come down to? One thousand eight hundred and fifty-fifty-one. 96. In abandoning the hypothecation in China, you sustained a considerable loss? We ceased to derive a considerable profit. 97. The system of hypothecation was a source of gain to the Company? Yes. 98. Was the system of remittance by bills also a source of gain? There was a gain upon remittance by hypothecation, as compared with that by bills on India. 99. Were the losses considerable by hypothecation ? Very trifling, considering the magnitude of the transactions. 100. Were there any establishment expenses which you got rid of by abandoning the system of hypothecation? Not in England. 101. In China there were? Yes, the China agency was abolished. 102. In which direction is the current of bullion now moving; into India or out of India? For some time past it has been flowing into India. 103. Is it not the fact, that there is a net import into India of bullion, almost every year, to the amount of about 1,000,000 l.? That is the case. 104. Where does that import principally come from? I think principally from China; occasionally, when the exchange is very high, bullion goes from this country; large sums have so gone during the last year, and the present. 105. Both gold and silver? Both gold and silver, but principally silver, the price of which has, however, been very high. 106. Can you give the Committee the general results of Indian finance since 1835? I hold in my hand an account of the gross and net produce of the revenues of Bengal, the North-western Provinces, Madras and Bombay combined, and of the gross and net charges defrayed out of those revenues, from the year 1834-35 to 1849-50, and as estimated for 1850-51, with an Appendix, containing, for one year, the details of those receipts and charges, from which the Committee may see of what they consist; this statement has been ordered by the House of Lords, and will be presented either to-day or to-morrow; I am quite ready, if the Committee desire it, now to give them the general results of this statement. 107. Are the Punjaub and Scinde included in this statement? They are. 108. Will 108. Will you state the results? This statement comprehends a period of 16 years of actual account, from 1834-35 to 1849-50, inclusive, and also the estimate for 1850-51; from this statement I have prepared some results, which I will now give: in four of the 16 years, there was a surplus of revenue over expenditure, and in the other 12 years there was a deficiency; the aggregate of the whole 16 years is a deficiency of 11,800,000. I have thought it might probably be useful to the Committee to show the progress of these results; with this view, I have divided the 16 years into four periods, each of four years, taken consecutively, and I have made an annual average of each: in 1834-35 to 1837-38, being the first period, there was an annual surplus of 818,894 l.; in 1838-39 to 1841-42, there was a deficit of 1,511,732 l. per annum; in 1842-43 to 1845-46, there was a deficit of 1,256,757 l. per annum; in 1846-47 to 1849-50, there was a deficit of 1,000,586 l. per annum; and the estimate for 1850-51 shows a deficiency of 678,381 /. I have also prepared averages in a similar mode of the principal items of receipt and charge. The first head of receipt is the great source of income, the land revenue, including subsidies and abkarree; the amount from this was 10,049,550/. annually, in the first period; in the second period, 10,116,112 l.; in the third, 10,739,4687.; in the fourth, 11,773,10€ l.; and the estimate for 1850-51, is 12,638,147 l. 109. Would it not be advisable, for the purpose of comparison, to separate from those gross sums, the receipts from territory added during that period? A return of that kind has been called for, and I shall be able to give that afterwards. The next item of receipt is the customs, which has been 1,312,568l. annually, for the first period. 110. By "Customs," you mean both land and sea duties? Yes. In the second period, the amount was 1,127,969 l. per annum; in the third, 1,218,703 l.; in the fourth, 1,083,524 l.; and the estimate for 1850-51, is 1,331,179. The next item is salt. 111. Under which of those heads is the duty on salt imported? The duty on salt imported, is stated in the account under the head of customs. 112. Is it not important that that should be stated, in order to show how far the introduction, by sea, of so large a quantity of salt affects the proceeds of sales of salt in Bengal? I can deliver in a statement of the salt revenue, combining the customs receipt for salt with the proceeds of sales of salt; the receipt under the head of salt, exclusive of customs duty on imports, was 1,359,692 l. for the first period; for the second period, 2,053,224 l.; for the third, 2,035,020 l.; for the fourth, 2,093,454 .; and the estimate for 1850-51 is, 1,533,192. There have been two reductions of duty, and some apprehension is felt that the duty has gone so low as to affect the revenue. 113. Could you state at what price the 100 maunds (of 80 lbs. weight) are now sold? The cost price in Bengal, including the duty, is about a penny a pound, as nearly as possible. 114. Can you state it on the hundred maunds? If the Committee will call for such a statement it shall be rendered. 115. Could you state what is the estimate of the customs duty on salt for the next year ? The customs duty from salt for 1851-52 is estimated at 60 lacs of rupees, that is, 600,000l. 116. Is not that almost altogether a new receipt? It is, in a great measure, a new receipt, and is gradually increasing. 117. That is included in the Customs Return? Yes. 118. Are you able to state whence that salt comes? A great deal of it comes from Cheshire. J. C. Melvill, Esq. 3d May 1852. |