THE LEGISLATIVE BEWILDERMENT ABOUT SILVER.
OUR readers need not be afraid that we are about to bore them with another discussion about Silver. We doubt gravely whether a public discussion upon that subject is of more use than a public discussion on the precession of the equinoxes would be, and are quite certain that the more the electors read about silver, the more hope- lessly confused will their minds become. It is a, matter for experts, and for them alone. The Parliamentary debates of the week on the subject must not, however, be passed without notice, for we can remember none—at all events, of late years—which have had so odd a tone. We use the word " odd " advisedly, for there is a feature about the speeches which is altogether singular and very nearly comic. Everybody is more or less in a fog, and everybody says so. The usual thing when a Cabinet proposes a big measure—and this loan to India of £10,000,000 is a big measure, though nobody cares about it—is for the Ministers responsible to profess entire confidence in their views, and for the Opposition to profess entire want of confidence in the plans before them; and so the discussion gradually becomes more or less solid and effective. In this instance, however, neither Ministry or Opposition have the least certainty of conviction, nor do they assert any. Some of them, indeed, are so bothered that their very characters undergo a change. One can hardly think of that able counsel, Sir W. Harcourt, with a doubt in his mind as to whether his case is a good one ; bat he does doubt this time, and keeps asking the forbearance of the Court, instead of bullying the Court, in the funniest way. Still less can one imagine Mr. Courtney with a doubt in him on any point whatever ; but if he had not a doubt, why did he accept the loan as a necessity instead of pro- posing, as he seemed to wish, to sell bills on Calcutta at any price ? He condemned the loan, and the policy which bad made it necessary as "a •big speculation," but still he allowed it to pass with only some mordant criticisms. As for the Chancellor of the Exchequer, he was all in a quiver of rincertainty. He would not say whether the Government of India intended to put an import duty on silver or not, but plainly intimated that if t did, that would be part of an experiment which might succeed or fail. He was much too "modest," he said, to contravene an opinion of the Government of India, and his modesty, unusual as it was, was so clearly sincere that it created no hilarity. He palpably knew his brief, but had not an opinion about his case. "If," he sai;', "it turns out that a mistake has been made, of course measures must be taken to correct that mistake." "If," again, "the scheme which has been adopted is not successful, we may have to find some other." And he wound up with the statement that "it is admittedly an experimental course which Govern- ment has sanctioned, and he fancied few gentlemen would have the courage to speak ex cathedra as to the conse- quences that are to ensue." Remember who it is that is speaking, and just fancy how Sir W. Harcourt himself must have been amazed at his own attitude of mind. He must have felt as an Archbishop of Canterbury would if he suddenly experienced a strong disposition to steal his neighbour's watch. "Possession " is nothing to it. In the Lords, the Secretary for India, who is constitutionally re- sponsible for the Bill, was just as uncertain as his Treasury colleague. He must have his money, he said, but he did not know that it would do any good. The Government must persevere in its policy, but "if it should so happen that this policy of closing the mints should entirely fail, we shall be thrown back into our original situation, which is a very grave one, because at the present price of silver the exchange, if measured as it is usually measured, stands at no more than one shilling and one-eighth ; and, speak- ing in round numbers, at that rate of exchange the Government of India would be landed in a deficit of no less than Rx.6,000,000. That would be a deficit of a most serious and alarming character." He was not even sure at all why silver was going out to India. He was half-inclined to think with Sir David Barbour, late Finance Minister in India, and we may add with ourselves, that the cause is a very old one, namely the desire to buy a much- wished-for article while it is cheap ; but the cause might be speculation, or, indeed, anything else for what he knew. All he could say was that, "If the policy now adopted should fail entirely, the Government of India will have to meet their difficulties by economy or fresh taxation "—a doubt more naive and perfect than we ever remember in a Ministerial defence before. Even Lord Herschel', though, as in one sense the responsible author of the experiment of closing the mints, he was a little more sanguine, had no certainty to express, never getting beyond the statement that it was better to try the experiment than to let the exchange value of the rupee fall suddenly to a shilling.
Can any reader recall such an instance of hesitation in a Government? And yet the Ministry are not a bit to blame. Their ablest critics are nearly as hesitating as themselves—the only exception being Mr. Chaplin, who, as he can by no possibility get Bimetallism, is cock-sure that Bimetallism would be the radical cure of the disease. We have already quoted Mr. Courtney, and Sir J. Lubbock, who is not only a great financial authority, but who has made a special study of the silver question, admitted that his own preferred recipe —the taxation of silver imports—is only preferred by him as the best of many doubtful courses, and would be altogether an "anomalous" plan. Mr. Goschen accepted the Loan Bill as a necessity, but "parted from it with misgivings ; " while in the Lords the Leader of the Opposition was so doubtful that he felt himself driven to a scientific illustration. "They were trying," said Lord Salisbury, "to create a rupee vacuum in India ; " but everybody familiar with physics knew that "there was nothing more difficult than to create a vacuum- chamber which should be proof against the incursion of outside gases "—a perfect illustration at once of the facts, and of the hopeless uncertainty in which statesmen of both sides remain as to the way in which the facts will, in the geologist's sense of the word, ultimately "lie." Nobody, in fact, knows anything about the result of a policy so big that a loan of ten millions sterling borrowed on the security of an already overburdened revenue is a. mere incident in its progress. The thing must have occurred in history before, but the visible helplessness of the statesmen is, we fancy, without a parallel. We promised not to bore our readers with silver, but we cannot conclude without one word of warning to Lord Kimberley. It is quite on the cards that the price of the Indian Gold Loans, which is of the last importance to his plans, may fall suddenly and heavily. Those loans are now kept up almost exclusively by trustees and investors of that class, and it is simply impossible that discussions like those of the present week can go on without shaking their confidence. It is clearly quite possible that the rupee may sink to a shilling, and in that case the Indian Government on Lord Kimberley's own showing, in order to remit the £17,000,000 now annually required by the India Office—we gave it as £15,000,000 last week, but that, as is explained in the debate, is the average, and not the present demand—must collect in India 340,000,000 rupees, or in other words, sacrifice 170,000,000 rupees a year merely in paying the agio on gold. No State ever had to endure such a. burden before, and no State not managed by Englishmen or Americans would go on en- during it. Nor is this all. Expenditure is increasing in India at a preposterous rate. What the rate actually is, is a matter of vehement contention, but here are the figures as given by the Chancellor of the Exchequer, and cut by us from the Times —
"The financial difficulties of India are not mainly due to the course of exchange ; they are due to the cause which has brought financial difficulties u i pon all nations at all times, and that s the i enormous increase of expenditure n relation to the resources of a country. That is the real cause of the financial difficulty of India. The right hon. Member for Sleaford was good enough to send me a pamphlet upon India currency dangers by a gentlem In named Herman Schmidt, which contains an acute
criticism upon the policy now being adopted by the Indian Government, The writer is adverse to the closing of the mints, and there is a great deal worth considering in what he has written. The most striking part of the pamphlet is that in which he says that the loss by exchange is not the only item of Government expenditure. He takes the total expenditure of the Government of India in 1879-80 at 61 millions of tens of rupees ; he finds that the loss on exchange was 34 millions ; and thus you get 57 millions as the expenditure of the Govern- ment of India. In 1892-93, the total expenditure was 88 millions, and the loss by exchange was 8 millions ; and thus you get 80 millions for the present expenditure of India, or an increase of 224 millions, totally apart from the loss of exchange. The writer remarked that it was difficult to believe that the Indian Government should say so little about the 22 crores of additional general expenditure, and so much about the 8 crores due to the lbss by exchange. There is much that is worthy of consideration in these remarks," It is ridiculous to deny that a statement of that kind made in his place in Parliament by a Chancellor of the Exchequer will gradually have a severe effect on the con- fidence of investors, and we fear equally ridiculous to question that it is in great part true. Other authorities put the figures lower ; but the broad facts remain that the Indian Government has been overspending itself on a great scale, and that it may shortly have to collect twenty rupees for every pound of the £17,000,000 to be spent in England. The whole question ought to be looked at earnestly, and from a local as well as from a London point. of view, before any catastrophe arrives; and we would earnestly recommend the Secretary of State either to go himself to India for six weeks, and see the actual position of affairs, or to send an expert whom he thinks he can trust, to report privately, or for the benefit of Parliament, upon the whole situation. There is, unfortunately, no James Wilson alive now, who is known to the public ; but England, as the late Lord Derby once said, is "a reservoir of capacities," and the cost of such• an undertaking does not signify one straw. The statesmen muse get out of the bewilderment shown in• these debates, or we shall have an Indian bank- ruptcy, with its consequence—an Indian insurrection—to overcome.
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