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Rh viewed the situation. The picture was sufficiently gloomy. The three years of the Mutiny had involved an aggregate deficit of more than thirty millions sterling, to which it was estimated that the current year would add another six and a half millions. The national debt had grown from fifty-nine and a half to nearly ninety-eight millions, and the burden on the taxpayer was thus enhanced by an addition of two millions to the annual charge for interest. These figures were the more alarming because a longer retrospect showed that the normal condition of the Indian Exchequer was one of constantly recurring deficit. Of the fifty-nine years of the century, forty-four had ended in indebtedness. Every period of war, from Lord Wellesley's splendid campaigns down to Lord Dalhousie's latest conquests, had involved formidable accretions to the debt. It was only, in fact, in the intervals of tranquillity, too rarely accorded to a military Empire, that the Government could pay its way. Its expenditure had now for four years exceeded its income by an average of nine millions per annum. The main remedial expedient — hastily adopted in 1859 — a great enhancement of custom duties — though it had added largely to the revenue, was beginning to work its own defeat in decreasing imports, and convinced the Finance Minister that a fundamental readjustment of the tariff was essential.

Mr. Wilson proposed to meet the emergency by the imposition of three taxes: — a license tax of one, four,