APPENDIX III. RESOLUTION REGARDING THE SUSPENSION OF TRANSFERRED SUBJECTS IN BENGAL. NOTIFICATION. PUBLIC. Dated the 13th June 1925. No. F.-453-24-1.-In exercise of the powers conferred by rule 6 of the Devolution Rules, the Governor-General in Council, with the previous sanction of the Secretary of State in Council, is pleased to direct that the transfer of all the transferred subjects in the province of Bengal shall be suspended, with effect from the 13th June 1925 to the 21st January 1927. RESOLUTION. Dated the 13th June 1925. No. F.-453-24-11.-The decision that the transfer of all transferred subjects in the province of Bengal shall be suspended from the 13th June 1925 until the 21st January 1927 has been announced in the Notification of the Government of India in the Home Department No. F.-453-24-1 (Public), dated the 13th June 1925, and the Governor-General in Council takes this opportunity of stating the reasons which have led the Government of India and the Secretary of State in Council to this decision. 2. The present Bengal Legislative Council met for the first time on the 21st January 1924. On the 24th March 1924 the Council rejected the demand for the salaries of Ministers by 1 vote. A motion, which was equivalent to a vote of censure, had, however, been moved in the same Council on the 20th February 1924 and had been rejected. The Ministers accordingly did not consider the vote of the 24th March as a vote of censure, and they were prepared to continue in office without salary. His Excellency the Governor of Bengal also accepted the view that the decision of the Council on the 24th March did not necessarily represent its considered opinion either in regard to the personnel of the existing Ministry or in regard to the question whether any Ministers should be appointed at all. It was, therefore, decided to resubmit the matter for the reconsideration of the Council at its next meeting and meanwhile the Ministers continued in office. A supplementary demand for the salaries of Ministers was placed before the Council on the 26th August 1924 and was rejected by 68 votes to 66. The Ministers then resigned and His Excellency the Governor assumed charge of the administration of the transferred subjects under the Transferred Subjects (Temporary Administration) Rules. 3. On the 17th February 1925, the Council by a majority of 75 to 51 votes carried a Resolution recommending that a provision be made for the salary of Ministers in the budget for the year 1925-26. Nawab Bahadur Saiyid Nawab Ali Chaudhuri, Khan Bahadur, and Raja Manmatha Nath Ray Chaudhury were appointed to be Ministers on the 14th March 1925 and at the same time an official announcement was issued to the Press, of which the following is an extract: "In order that there may be no misunderstanding, it is perhaps desirable to explain in advance what view the Government will take of the action of the Council in certain eventualities. (1) If the demand for Ministers' salaries is again rejected in toto the Government will regard this as an indication that the Council refuses to provide salaries for any Ministers. In that case His Excellency will apply to the Government of India to retransfer all the transferred subjects under Devolution Rule 6, and if this is done, Bengal would thereafter be governed by a Governor in Council. Any motion to reduce the salaries of Ministers to less than Rs. 3,000 a month will similarly be regarded by Government as a refusal on the part of the Council to provide adequate salaries for any Ministers, and, if carried, will have a similar result. (2) If a motion to reduce the amount payable to Ministers by any sum between Rs. 1,000 and Rs. 2,000 per month is carried this will be accepted by Government as the figure at which the Council desires to fix the remuneration of Ministers. (3) If a motion to reduce the amount payable to Ministers by a nominal sum between one rupee and Rs. 100 is carried this will be regarded by Government as indicating a vote of censure on the Ministers who will then resign and others will be appointed in their place. The opinion of the Council on their successors can be expressed either by a nominal reduction of Rs. 100 in one of the demands fer transferred subjects which has still to be voted or later when & supplementary demand is made in the next session for the nominal sum which has been reduced." On the 23rd March 1925, the Council by a majority of 69 to 63 again rejected the demand for the salaries of Ministers, though during the discussion of the motion for the demand the Hon'ble Sir Hugh Stephenson made it clear that the total rejection of the demand would be interpreted as indicating that the Council did not desire to have any Ministers at all. The Ministers then resigned and on the 25th March His Excellency the Governor again resumed charge of the administration of the transferred subjects under the Temporary Administration Rules. 4. The present Bengal Council has therefore on three occasions decided to provide no salaries for Ministers, though the issue was very definitely put before it on the last occasion. It is clear that the administration of transferred subjects by the Governor under the Temporary Administration Rules cannot continue indefinitely, as such an arrangement is neither suitable nor intended as a permanent form of administration. In these circumstances the Government of India and the Secretary of State have no alternative but to accept the thrice expressed desire of the existing Legislative Council that there shall be no transferred subjects in Bengal. For this reason the suspension of transfer has been directed for the life-time of the present Council, i.e., up to the 21st January 1927, which is three years from date upon which the Council first met. Though the transfer has been suspended up to the 21st January 1927, this does not of course mean that the suspension of transfer may not be terminated on an earlier date, should the existing Council indicate its desire to secure reconsideration of the position or should its term of office be brought to a close before that date. APPENDIX IV. LORD BIRKENHEAD'S SPEECH ON INDIAN AFFAIRS, DATED 7TH JULY 1925. The Secretary of State for India (The Earl of Birkenhead): My Lords, my first duty is beyond question to express gratitude for the great patience which both here and in another place has enabled me to hold the important office that I have filled for a period of eight months without making any considerable Parliamentary statement. For this unusual indulgence I ain indebted both to my noble friend Lord Olivier, who has repeatedly postponed a question put down in his name, to the general body of your Lordships, and not less to those in the House of Commons who have exhibited a similar degree of patience. If I may venture to express an opinion upon the point, I think that both Houses of Parliament, in this matter, have exhibited a wise constraint. The responsibility for the Government of India is so vast, the problems are so novel and so complex, that no mind, however quickly acquisitive of new facts, or however industrious in its application to their mastery, can hope to make any useful contribution without months of unremitting industry. I hope I have not altogether misspent the time which the indulgence of the House has made available to me. I propose to-day to make the best attempt I can to discharge the task which will naturally be expected from me; that is, to review the general situation in India. Such a consideration involves financial, commercial and political considerations. I shall attempt to deal with each. I must, however, make it plain at the outset that upon one, and not the least important, of the subjects to which I must address myself, there has been a considerable measure of misunderstanding. Both in this country and in India there has been much speculation as to the decisions reached by agreement between the Governor-General and myself. No decisions whatever have been reached; nor could any have been reached. Indeed, not even the Cabinet, which has naturally been kept closely aware of the discussions between myself and Lord Reading, has reached any decision. The Government is far too conscious of the implications of the Montagu-Chelmsford constitution to find it possible even to think of conclusions until certain indispensable antecedent steps have been taken. My noble Friend, Lord Lytton, who is at present the head of the Government of India, has naturally been kept very carefully informed of the discussions between myself and Lord Reading. Week by week, as those discussions have proceeded, he has been made aware, both in general and in particular, of their scope and tendency. Such a knowledge could not properly be withheld from him, though, as I have made it plain, neither he nor his Government is affected by any responsibility thereby. But before any decisions of ( 350 ) any kind are taken, it is obvious that the consideration and advice of the Government of India must be formally invoked; and it is at least equally obvious that the opinions of the Legislative Assembly must be elicited. For reasons which are apparent, we should not dream of announcing or even of forming decisions without the contribution of that very important Legislative body which we have so recently called into existence. I am not, therefore, to-day either announcing or purporting to announce, decisions or conclusions. I cannot any longer resist the legitimate desire of Parliament to be informed of the result of the discussions which have taken place between the Governor-General and myself. The truest description which I can give of the spirit in which I address Parliament is that, having held this responsible office for eight months, I am attempting a survey of the impressions which its tenure up to the present moment has stamped upon my mind. I address myself, in the first place, to the financial position of India. I am happy to say that on a general survey, this position must be pronounced satisfactory. The period of heavy deficits which in the five years ending 1922-23 amounted to about Rs. 100 crores, may, in my belief, be regarded as definitely closed. This happy result is to be explained by the continued exercise of strict economy in every department of administration and by the imposition of additional taxation, particularly in the years 1921-22 and 192223. I need not trouble your Lordships with an examination of the Budget results, unexpectedly fortunate as they were, of the year 1923-24. But I ought to say a word upon the revised estimate for 1924-25, which shows a surplus of nearly Rs. 400 lakhs with an improvement of Rs. 473 lakhs in revenue and an increased expenditure of only Rs. 92 lakhs. The improvement is mainly attributable to substantial savings in military expenditure, savings in exchange, improved gross Customs' receipts, increase in the contribution of railways to general revenues, and a considerable windfall on account of enemy ships. The Budget for 1925-26, which is based on an average rate of exchange of 18. 6d., assumed an excess of revenue over expenditure of Rs. 324 lakhs, of which Rs. 268 lakhs was estimated to be a true recurring surplus. The Government of India had repeatedly announced that their financial policy would be directed to the reduction and eventual extinction of the Provincial contributions at the earliest possible date; and it was therefore decided to utilise Rs. 250 lakhs of the true recurring surplus in the remission of contributions. Under the scheme laid down in the devolution rules, Madras will obtain a remission of Rs. 126 lakhs; the United Provinces, Rs. 56 lakhs; the Punjab, Rs. 61 lakhs, and Burma, Rs. 7 lakhs. The Government of India had already taken into account in its estimates the further remission for three years of Bengal's contribution of Rs. 63 lakhs, which has since been accepted by the Legislature. These proposals, which have been the subject of deep consideration, were not received with any articulate enthusiasm in India. Those Provinces which obtained no relief out of the Rs. 250 lakhs, were dissatisfied, |