SIR A. MUDDIMAN ON CONSTITUTIONAL PROBLEMS. 83

a member earlier in the debate who said that in a government like the present Government of India ultimate responsibility rested on the executive which was likely to use the legislature as a shelter for its misdeeds. His remarks in this connection are so important that they deserve to be quoted in full:

66

Again, Sir, my Honourable friend.........said that the will of the Legislature has to be carried out by the Executive. But that proposition is one which is only true where the constitution is such that the Legislature and the Executive are in harmony; they are in harmony in ordinary Parliamentary institutions owing to the fact that under those constitutions if you turn out my Honourable friend Sir Charles Innes and myself, you have got to sit in our places; the King's government has got to go on..............

.....the real answer to the criticisms which are directed at this constitution, and rightly directed at it, namely, those concerned with the existence of residuary powers is justified by the fact that there must be some authority to bring the Executive and the Legislature into conformity. No constitution and no country can be run where the Legislature is in permanent conflict with the Executive; something has got to break somewhere, and that is the justification and the real justification for the existence of these residuary powers. And that brings me on to the further point which is that the more you force on a Government constituted as we are, the exercise of these residuary powers conferred on that Government, the more you weaken yourselves and the more you weaken us. You will come to regard that as a normal course in order to exercise your control over the Government; you will say Let us force the exercise of these residuary powers,'......

.....It is quite open to you to do so; but the whole point of that is that you make the exercise of residuary power a thing which you yourselves regard as a very small matter, and what is worse, you deprive the Government which exercises them. That is a most dangerous proposition. My Honourable friend, Colonel Crawford, put it very well. He indicated that in other constitutions progress is possible by the atrophy-I think that was the word he used and if he did not use it it would have been

a very good word to use-by the atrophy of the residuary power.'

The division on Mr. Jayakar's motion was taken at the conclusion of Sir Alexander's speech and resulted in a victory for the opposition by 9 votes.

There is no need to follow the later stages of the debates for the demands for grants in any detail. The demands under the heads of Customs, Post and Telegraphs, and Salt took up most of the remaining time devoted to grants, but the interest of the debates on these demands is not very great. The demand for expenditure on the Army Department led to a discussion of general military policy and expenditure, and of the administration of University Training Corps, this latter eliciting one or two interesting speeches. The great majority of the grants, however, came under the guillotine on the expiry of the time allotted and were passed without discussion. The majority of members undoubtedly felt that it was a mistake to devote two days to discussing the demand for the Posts and Telegraphs Department, and thus make it impossible to reach other demands of greater importance.

The final stage of the Budget debate is the consideration of the Finance Bill in which the budget proposals are given statutory form and sanction. Readers of past numbers of this report will remember the attitude of the Swaraj Party towards this annual bill. In 1924 they, with the help of the old Independent Party, refused to take the Bill into consideration. The next year, however, the Independents declined to join them in this action and ⚫ the Bill was duly passed. In 1926 the Swarajist members of the Assembly had already vacated their seats in the House when the Finance Bill was presented. Therefore, this year their attitude towards the Finance Bill was naturally the cause of a certain amount of speculation and interest. As the time for its presentation to the House drew near, confident rumours appeared that the Swarajists would neither oppose nor support the consideration of the Bill. But, strangely enough, the attitude of the Responsive Co-operators and the Nationalist Party generally became more and more doubtful. The Finance Bill was presented to the House on March 22nd, when Sir Basil Blackett moved "that the Bill to fix the duty on salt manufactured in, or imported by land into, certain parts of British India, to fix maximum rates of postage

and

under the Indian Post Office Act, 1898, further to amend the Indian Tariff Act, 1894, the Indian Stamp Act, 1899, and the Indian Paper Currency Act, 1923, and to fix rates of income-tax, be taken into consideration." The amendment made by a Swarajist Member to refer the Bill to a Select Committee was negatived without a division. Clause (2) of the Bill contained the provision for the taxation of salt to stand at the figure of Re. 1-4 per maund, and to this clause certain amendments were moved with the effect of reducing the tax to a lower figure. The effective amendment was moved by a Swarajist Member, who wanted to lower the salt tax to exactly half of its present figure, namely, 10 annas per maund. The importance of this amendment will be readily seen when it is realised that its acceptance would mean a loss of revenue to the Government of 312 lakhs of rupees, further that this loss of revenue would have to be adjusted by reducing the remission of provincial contributions by an equal amount. The acceptance of this amendment, therefore, would destroy at a stroke the greater part of the benefits to the provinces which the Government of India was now in a position to confer after years of skilful and devoted nursing of their finances. It can hardly be argued that the benefits of reducing the tax on salt by th of a penny per lb. are equivalent to those which will accrue to the provinces from the remission of provincial contributions, but, although this consideration was plainly present to the House, the amendment was declared carried in a thin Assembly by 50 votes to 48. The division partook rather of the character of a snap vote for the final division on the hotly contested Currency Bill was taken immediately before the debate on the Finance Bill began, and a number of Government supporters, particularly Mohammadan supporters, who were keeping the very exhausting Ramzan Fast in weather which had by this time become distinctly hot, had left the House. In spite, however, of the character of the division. and the very important issues involved, the Government of India did not intend to certify the tax, but to leave it to the Council of State to restore it or not as they thought fit. If the Council of State restored it, then the Legislative Assembly would, of course, have another opportunity to consider it. The Council of State disagreed with the Legislative Assembly over the respective values of the remission of provincial contributions and the somewhat shadowy relief which would be afforded by halving the salt tax,

and restored the latter to its original figure. The Bill as amended by the Council of State was then returned to the Assembly and passed by 52 votes to 41.

Another amendment had the object of reducing the cost of post cards but this was rejected. The proposal contained in the Finance Bill to abolish the export duties on hides led to an unexpectedly keen debate, some of the members taking the line that its abolition would endanger the tanning industry of this country. When the division was taken on the proposal, it was found that the Ayes and the Noes had each registered 53 votes, whereupon the President, following the practice adopted in the House of Commons in such cases, gave his casting vote in order to maintain the status quo and give the Legislative Assembly another opportunity of considering the matter.

The reduction of the salt tax and the rejection of the proposal to abolish the duty on hides were the only changes made by the Assembly in the Finance Bill, but when the motion was put to the House that the Bill as amended be passed, it encountered somewhat unexpected opposition from a member of the SwarajCongress Party who announced that he opposed the motion on the well-known principle of the "No Taxation Without Representation." It is quite certain that he was not acting in this matter as the spokesman of the Swaraj-Congress Party, for none of his party leaders took any share in the debate, nor did any other of their followers. Pandit Madan Mohan Malaviya, one of the leaders of the Nationalist Party, spoke in favour of the motion to reject the Bill, but other members of the Assembly, among them Maulvi Mohammad Yakub, the Deputy President, and Sir Purshotamdas Thakurdas, opposed it and in the end it was passed by the very large majority of 58 in a House of 95.

The Budget was presented to the Legislature on February 28th and the Finance Bill was finally passed on March 28th, the last day of the session, when it returned from the Council of State with the salt tax restored to the original figure of Rs. 1-4 per maund. In between these two dates, however, the Indian Currency Bill had been discussed and passed by both the Legislative Assembly and the Council of State after the former had made one or two trifling changes. On March 7th Sir Basil Blackett moved that "the Bill further to amend the Indian Coinage Act of 1906

and the Indian Paper Currency Act, 1923, for certain purposes, and to lay upon the Governor General in Council certain obligations in regard to the purchase of gold and the sale of gold exchange, be taken into consideration." The Finance Member explained the principle of the Bill, which was that the time had come to stabilise the rupee at a fixed gold value and for that purpose to impose, for the first time in Indian financial history, a statutory liability on the Currency Authority to maintain the rupee at this fixed ratio to gold. Before the Great War there had been no statutory provisions to prevent the rupee from falling below a fixed ratio of gold so that the link between the rupee and gold was imperfect. The present Bill, the Finance Member was careful to explain, was no more than a transitional measure intended to be operative only during the period between its passing and the time when the gold standard and Reserve Bank Act, which will be described in Chapter V, should come into operation. The Indian Government proposed in the Currency Bill to stabilise the rupee at a ratio equivalent to 8.47512 grains of gold, that is, the ratio corresponding to a value of 1s. 6d. gold per rupee. It was over this proposal that one of the fiercest controversies in recent Indian history had been raging for some months and on it was concentrated the attention not only of every member of the Legislature-whether Government or nonofficial-but also of a great part of the Indian public. In fact, making an allowance for the differences between the general level of education of the people of the two countries, the great ratio dispute was to India, during the latter half of 1926 and the first three months of 1927, what the great bimetallism controversy was to America in the nineties of last century with Sir Purshotamdas Thakurdas taking Mr. Bryan's part as the wholehearted antagonist of the Government's Currency Policy. Just as Mr. Bryan talked picturesquely of mankind's being crucified on a cross of gold, whilst his followers demanded "the dollar of our daddies so Sir Purshotamdas Thakurdas, or, at any rate, his chief economic advisers, talked of disease and death to millions from the adoption of the ratio proposed by the Indian Government, and their supporters claimed the "natural" ratio of sixteen pence gold. The speech in which Sir Basil Blackett put his motion to the House had little of the picturesque but was a master-piece of lucid exposition and close reasoning. He showed that any reversion to the ratio proposed by the opponents of the Bill could only be effected by violent