W e 1 And the decentralization commencing from 1882 is the decentralization of Provincial Finance resulting in (III) the separation of Local from Provincial Finance. Obviously then, "Decentralization of Finance' far from being indicative of Provincial Finance, is a general name for this variegated and multifarious process of decentralization described above, and it cannot but be confusing to use as a title to the study of one line of decentralization a phrase which can be generically applied to all the three lines of decentralization distinguished above. In order, therefore, that this study may not be taken to pertain to a line of decentralization other than the one it purports to investigate, it has been thought proper to designate it "The Evolution of Provincial Finance in British India" with a sub-title, "A Study in the Provincial Decentralization of Imperial Finance," where the words Provincial and Imperial must be read with the emphasis due to them. How careless the phraseology often is may be instanced by the fact that Justice Ranade's pamphlet referred to above is styled "Decentralization of Provincial Finance." Although it deals with the development of Provincial Finance, it is likely to be passed over by the student, for its title implies that its subject-matter must be the growth of Local Finance. If Justice Ranade had been conscious of the varieties of decentralization, he would have probably realized that the title of his pamphlet was false to its contents. PART I PROVINCIAL FINANCE: ITS ORIGIN CHAPTER I THE IMPERIAL SYSTEM ITS GROWTH AND ITS BREAKDOWN THE Imperial system of Government in India dates from the year 1833. 2 3 Of the two chief motives which led Parliament to establish it, one was to replace the existing multiplicity in the systems of justice and police by a uniform system of the same, common as far as possible to the whole of India with its varieties classified and systematized. Under the existing system then prevailing such multiplicity was inevitable, for not only the civil and military government and the ordering and management of the revenues of each of the three Presidencies, Bengal,1 Madras, and Bombay, were vested in their respective Governors in Council, but each Governor in Council was also empowered to make and issue such rules, ordinances and regulations for the good order and civil government of the territories he individually commanded, provided that they were just and reasonable and not repugnant to the laws of the British realm. To the codes of law promulgated by these authorities must be added the whole body of English Statute law introduced in India so far as it was applicable, by the charter of George I 1 13 Geo. III, c. 63, s. 36 39 and 40 Geo. III, c. 79, s. 11. in 1726 and such other English Acts subsequent to that date as were expressly extended to particular parts of the country. The work of administering such a diverse body of laws proved so embarrassing that it was the view of the supreme Court of Calcutta that no one person can pronounce an opinion or form a judgment upon any disputed right of persons, respecting which doubt and confusion may not be raised by those who may choose to call it in question; for very few of the public or persons in office at home, not even the Law Officers, can be expected to have so comprehensive and clear a view of the Indian system of law, as to know readily and familiarly the bearings of each part of it on the rest.” 1 The other motive was to create a strong central government to deal effectively with the European settlers in the country. It is to be noted that if the native population suffered under the uncertainties of law, the British population lived under the most galling restrictions. The revelations of oppressions by Englishmen practised, in the early days of British rule, contained in the report of the Secret Committee of the House of Commons appointed in 1771 to inquire into the affairs of the East India Company, were followed by very stringent laws governing the entry and residence of private British subjects in India. No British subject of European birth was allowed to reside in India beyond 10 miles from any one of the principal settlements without having previously obtained a special license from the Company or the Governor-General of India or the Governor of the principal settlement in question." The Court of Directors of the Company, subject to revision of the Board of Control, were empowered to refuse such licenses and the Governments in India were strictly enjoined not to sanction the residence of British subjects on their own authorities except under special circumstances 5 1 Quoted in Herbert Cowell's The History of the Constitution of Courts and Legislative Authorities in India, Calcutta. 53 Geo. III, c. 155, s. 38. Ibid., s. 37. 2 33 Geo. III, c. 52, s. 98. Ibid., s. 33. 8 and were authorized, in cases they deemed proper, to declare licenses otherwise valid as void.1 Counterfeiting licenses 2 and unlicensed residence 3 were made crimes punishable with fine or imprisonment; and persons who were dismissed from, and who had resigned service, were declared guilty of illicit trade if they lingered beyond the 10-mile limit after their time had expired. Unlicensed British subjects were made liable to be deported, and such as were licensed were required to register themselves in the court of the district in which they resided. Subjected as they were to the regulations of the Local Government' they were made amenable to justice in India as well as in Great Britain for all illegal acts done in British India, or in Native States. To render them impotent to cause complications, they were not allowed to lend money to or be concerned in raising any for native princes 10 or foreign companies or foreign European merchants. Similarly to protect the natives from their oppression they were forbidden to lend money to the latter at a rate of interest exceeding 12 per cent. per annum on penalty of forfeiting for every offence treble the value,11 and they were placed under the jurisdiction of the Justices of the Peace in all cases involving assault or trespass 12 on, and small debts13 due to, the natives of India. Moreover, every British subject of European birth was required to register in the office of his district the name, etc., of his native stewards, agents, and partners, 14 on penalty of being disentitled to recover or receive any sum or sums of money by reason of the joint concern or to compel an account thereof by any suit in law or equity in any court within the provinces. 15 The ruling race had long chafed at these restrictions, |