there seemed, therefore, every reason to hope that, face to face with an agitation which the Moderates could not deny to be largely revolutionary, the 'politicallyminded' classes would not be deterred by their old antagonism to a bureaucracy, no longer by any means dominant and, for the most part, genuinely anxious to work with them, from rallying whole-heartedly to the side of Government. Such hopes, it must, however, be admitted, were only partially fulfilled. The large Indian majority in the new popular Assemblies were ready to acknowledge that law and order must be maintained or restored. But they began to haver over the methods to be employed for that purpose. They jibbed at the old word 'repression,' though they did not deny that NonCooperators were in many cases actual, as well as potential, law-breakers, and that, if the law is to be maintained, law-breakers must be repressed. They deprecated rather than opposed. They were swayed by sentiment rather than by reason. Some, doubtless, were frightened by popular clamour and dreaded unpopularity. Many more remembered what had been done three years ago in the Punjab under the plea of repression, and the shadow of Amritsar, which moved the Duke of Connaught to make last year so touching an appeal for mutual forgetting and forgiving, still broods heavily over India. Sound and courageous judgment is, after all, the fruit of long political training; and whilst our schools and colleges and many other agencies imported by us into India have created the Western educated classes that compose the bulk of the new Councils, we have only recently ceased to grudge them the one effective form of political education, which is real responsibility for the exercise of real power. Perhaps the attitude of Government itself, which for a long time inclined towards a laissez-faire policy, and, so far as the Caliphate agitation was concerned, towards one of benevolent toleration, was not calculated to give the Councils a strong lead. Nor must one forget the reaction upon Indians of the lamentable trend of events in Ireland, closely watched by all parties in India, and, in quite an opposite direction, of Mr Churchill's attitude towards British Indians in the Colonies, which Indians of all classes, and also the Government of India, resent

8

as in direct conflict with the Resolution passed at the last Imperial Conference. For the British Government cannot shelter themselves in regard to Kenya, a colony under the direct authority of the Crown, as they have done in regard to South Africa, behind the impossibility of interfering with the legislative independence of a self-governing Dominion.

These may seem to be mainly sentimental considerations, but there are grievances of a more material order which help to account for the growth of discontent and distrust. India, no doubt, had her fat years during the war when her exports prospered exceedingly; but they have been followed by desperately lean years, which have not only resulted in widespread economic depression but also in grave financial embarrassments for both the Central and the Provincial Governments. Nothing could have been more unfortunate for the reforms. The departments transferred to Indian Ministers in the Provinces, instead of being in a position, as was contemplated, to deal more liberally with such 'transferred' subjects as education, sanitation, public works, etc., which are the things that India really wants, have on the contrary been starved as never before, and popular expectations have been all the more grievously disappointed. This disappointment not unnaturally finds vent in vehement complaints in all the provinces that the contributions to be made by the Provincial exchequers to the Government of India Exchequer are excessive, and the Government of India itself is in far too deep financial waters to reduce them at present, though bound in principle to reduce them as soon as possible.

The figures of the last two All-India budgets are sufficiently eloquent. The first Indian Legislative Assembly elected under the new constitution has been confronted at Delhi in two successive years with the worst budgets on record, one showing a deficit of 18,000,000l. and another a deficit of 22,000,000l., and both involving heavy increases of taxation. If this were merely bad State finance, Indians might not have more reason to grumble than other people whose public finances are not always wisely administered. But what the Indians see and resent is that both the deficits put together represent less than the loss inflicted upon India by a disastrous currency

and exchange policy for which Government must bear
the blame, even if it originated in Whitehall rather
than in Delhi. Worse still, that policy was adopted on
the recommendations of a special commission of inquiry
against the whole weight of Indian evidence and the
protests of the one Indian member who recorded his
objections in a prophetic minute of dissent from the
unanimous views of his eminent European colleagues.
It was an attempt to take advantage of the artificial
rise in the price of silver during the war in order to
'stabilise' the rupee at the exchange rate of 2s. After
a temporary boom which sent the rupee up to 2s. 10d.,
the rupee proceeded to fall continuously, and it is now
slightly below the old level of 1s. 4d. Not only did the
Indian Exchequer suffer enormous losses on its own
exchange operations, but the whole trade of India was
paralysed, and when Indian merchants, threatened in
many cases with ruin, appealed to Government for
compensation or help, and were told that Government
disclaimed all responsibility, the shock was scarcely
more disastrous to our reputation for business capacity
than to our credit for good faith. All this was, of
course, grist to the Non-Cooperation mill, and con-
servative Indian merchants-Bunnias of Bombay and
Marwaris of Calcutta-were easily persuaded to believe
in the bitterness of their hearts that India's loss had
filled the pockets of European financiers. Government
has so far shown few signs of penitence, and last year
the Finance Member still persisted in budgeting on
the basis of a 1s. 8d. rupee-an illusory halfway house
which he has had to abandon this year. Trade, no
doubt, gradually readjusts itself to conditions, however
wantonly dislocated, and a bumper harvest, such as this
year promises, is a wonderful panacea. But the moral
harm done has been even more grievous than the
material havoc.

No less unfortunate is the fact that in this year's and last year's budgets it is military expenditure which swallows up nearly half the revenue and is mainly responsible for the increasing burden of taxation; and it is not only Indians who ask why this expenditure should be heavier now than before the war, although the old menace of Russian invasion and the more recent

menace of German aggression can no longer be pleaded to justify it. No amount of official assurances can explain away the Esher Reports, and if, as it implied, the Indian army is to be maintained, not merely for the purposes of Indian defence, but to meet Imperial requirements outside of India, even when Indian interests are not primarily involved, Indians ask not altogether unreasonably why, at the very moment when the goal of Dominion Self-Government has been set before them, India should be expected to bear for Imperial rather than Indian purposes a far heavier burden of military expenditure than any other actual Self-Governing Dominion bears or can even be expected to bear. Then again, there is the largely increased cost of the British army in India, which, as it has to be borne by the Indian taxpayer, raises the question of the numerical proportion to be maintained between the very expensive British garrison and the less expensive Indian army. A British battalion in India now costs the Indian Exchequer about six times as much as an Indian battalion, whilst the quality of British regiments, now made up largely of young boys, has visibly fallen off since pre-war days. Add to these financial considerations the growing demand for the Indianisation of the Indian army, hitherto essentially a British fighting machine for which the Indians only furnish the raw material whilst executive command and administrative control remain entirely in British hands. This demand is partly the outcome of racial feeling, partly the expression of revived national consciousness. Many Indians realise that they cannot aspire to dominion self-government until they can protect as well as govern themselves. How, they ask, can they protect themselves until their army has been Indianised in the same measure as the Government and administration are already being rapidly Indianised?

Easier probably to surmount than these bedrock difficulties—for instance, the proportion of British regiments to be maintained in India affects the whole of our military organisation, based since Lord Cardwell's time on a system of linked battalions-are the difficulties involved in the adjustment of military policy on the North-West frontier to the financial necessities of the Indian exchequer. Without attempting to explore

the wide field of frontier policy, one can perceive quite clearly that, until that policy has been definitely revised in the light of the new conditions of frontier warfare, as well as of our changed relations with Afghanistan and of altered conditions in Central Asia and the Middle East in general, there can be no finality to the constant drain of frontier expeditions, which in Waziristan alone have cost 4,000,000l. within the last year.

Some stress has to be laid on the question of Indian military expenditure, not only on account of the larger issues lying behind it, but because it has from the very beginning dominated the proceedings in the Legislative Assembly, upon whose attitude must chiefly depend the success or failure of the new Indian Constitution. Military expenditure is, it is true, a 'reserved' subject upon which, according to the latest opinion of the Law Officers of the Crown, the Viceroy himself has no authority to allow the Indian Legislature to vote in the present stage of constitutional evolution. But the powers which the Legislative Assembly already enjoys in regard to the granting or refusal of supplies when they involve increased taxation, as they have last year and this, are wide enough to enable it to bring very great pressure to bear indirectly upon Government. Not only are the Viceroy and the civilian members of the Government of India fully aware of this, but the present Commanderin-Chief, Lord Rawlinson, has himself recognised the importance of securing the good will of the Assembly by taking it as far as possible into his confidence, and to a quite unprecedented extent. But the Assembly knows that on the fundamental questions of policy the decision does not rest with the Commander-in-Chief, or even with the Government of India; and it is to the Imperial Government, even more perhaps than to the Government of India, that it addressed itself when it proceeded to exercise such powers of resistance as it possesses. Last year it contented itself with an unmistakable warning that, if it acquiesced then in the onerous budget presented to it, it did so only in order to avert the danger of a constitutional conflict at the very beginning of the new dispensation, and that it expected Government to mend its ways. When this year's budget showed the warning to have gone unheeded, it went much further.