point of view of the railways for capital expenditure to be met by raising loans at home or in India, the decision was not based so much on the intrinsic merits of such an operation as on the immediate effect it was likely to have on the British or Indian money market in respect of other financial operations with which the Secretary of State was saddled.  The result has been that before the war the Indian railways were kept on the shortest possible commons, and that having been inevitably starved during the war, without any reserves to fall back upon, they are clamouring to-day for financial assistance for the mere upkeep of open lines and the renewal of rolling-stock, without which they are threatened with complete paralysis, whilst the Government of India, confronted on the one hand with the categorical imperative of the Esher Committee and the fantastic extravagance of the Army Department since the Afghan war, and on the other with the appalling losses already incurred in consequence of Whitehall’s currency and exchange policy, has never been in a worse position to give such assistance.

The keen searchlight of the war has been turned effectively on many weak points in the government and administration of India besides railway policy, and the Indian currency and exchange policy stands out now as one of the most disturbing factors in the economic situation.

India played her part in the war, and played it well, but she was never called upon to bear any crushing share in its financial burdens.  The Indian Legislature unanimously and spontaneously granted L100,000,000 in 1917 towards Imperial war expenditure, and another L140,000,000 of Indian money went into the two Indian war loans and issues of Treasury notes.  But the increase in India’s actual military expenditure during the war was small, as the Imperial Exchequer continued to bear all the extra cost of the Indian forces employed outside India, and the last Indian war budget, 1918-19, showed an excess of only about L23,000,000 over the last pre-war budget, 1913-14—­an increase easily met by relatively small additional taxation.  Moreover, the Indian export trade, after a temporary set-back on the first outbreak of hostilities, received a tremendous impetus from the pressing demand for Indian produce at rapidly increasing prices, and the lucrative development of many new as well as old industries and of natural resources too long neglected.  The balance of trade which before the war had generally been slightly against India then shifted rapidly, and the scale turned heavily in her favour till the end of the war.  The total value of the supplies of all sorts, foodstuffs, raw materials, and manufactured products, sent out from India to other parts of the British Empire and to Allied countries has been estimated at some L250,000,000.