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204 an excess expenditure of five and a half millions was enhanced by the consideration that twenty millions were urgently needed for the construction of a railway system, which all parties agreed to be a first essential to the future prosperity of the country. The expedient of military economies might have seemed to be exhausted, for the reduction had been enormous. The cost of the army in India and England, which in the year before the Mutiny, had been about thirteen and a half millions, had risen in 1858 to nearly twenty-five millions. In 1859 this enormous total had been reduced by four and a quarter, and in 1860 by two and a half millions.

Mr. Laing then approached the year 1861 with a dangerously reduced cash- balance, with expenditure five and a half millions in excess of income, and with new taxes producing only one and a half millions, while twenty millions were urgently needed for railway construction.

The great reduction was to be in army expenditure. Much had already been done; but, despite the stringent measures of the two preceding years, room might still, the Finance Minister considered, be found for retrenchments which the financial position showed to be indispensable. It was essential to curtail expenditure by another three and a half millions. The ultimate effect on the numerical strength of the army was as follows. Just before the outbreak of the Mutiny in May, 1857, the army consisted of 45,000 Europeans and 260,000 natives, in all 311,000 men.