A- ^ ^Hm ,s U %. ^ o = < ^lOSANC O wL. MtUNIVERVA ^\WEUNIVER% ^lOSANCElf/^ •^J'iiJONvsoi^^ "^AaaAiNn-jwv^ ^^JIIVDJO-^ ^;;0FCAIIF0% , ^\\E UNIVERS/a 2? 55; o ^^^ " %a3AiNn-3WV ^^WEUNIVER% ^lOSANCElfj> <'^130NVS01^ %a3AINn-3WV ^lUBRARYO^ ^>^IUBRARYQ^ ^ <":]]0NVS01^ %a3AINIl-3WV >j,OFCAllF0% ^OFCAilFO/?^ ^^ILIBBARY^/r ^^illBRARYQ^ %03I1V3JO>^ ^30'^ :4cOFCALIF0/?^^ .-a^OFCAIIFO/?^. ^ AWEUNIVER^. ^lOSANCElfj> .^WEUNIVERV// '^/5a3AINn3UV .vV:lOSANCEl£r> ENGLAND'S DEBT TO INDIA OTHER BOOKS BY LAJPAT RAI YOUNG INDIA An Interpretation and a History of the Nationalist Movement from Within Price $1.50 net AN OPEN LETTER TO LLOYD GEORGE Price 25 cents net THE ARYA SAMAJ An account of its Origins, Doctrines and Activities Price $1.75 net OBTAINABLE FROM ALL BOOKSEXLERS England's Debt to India A Historical Narrative of Britain's Fiscal Policy in India By LAJPAT RAI Author of "Young India." " The food beneath the harrow knows Exactly where each tooth-point goes. The butterfly upon the road Preaches contentment to the toad." %^ NEW YORK B. W. HUEBSCH 1917 L^ COPYRIGHT, 1917, BY B. W. HUEBSCH PRINTED IN THE UNITED STATES OF AMERICA L AS A MARK OF THE AUTHOR'S DEEP RESPECT AND INDIA'S GRATITUDE, THIS BOOK IS DEDICATED TO THOSE BRAVE, HIGHMINDED. AND HONEST ENG- LISHMEN AND ENGLISHWOMEN WHO HAVE NOT HESITATED TO SPEAK THE TRUTH ABOUT THE EFFECTS OF BRITISH RULE IN INDIA THOUGH BY DOING SO THEY EARNED THE DISLIKE OF THEIR COUNTRYMEN, AND ON WHOSE TESTIMONY, PRINCIPALLY, THIS BOOK IS BASED. Lajpat Rai. C>' " India will not remain, and ought not to remain content to be a hewer of wood and a drawer of water for the rest of the Empire." — J. Austen Chamberlain, Secretary of State for India, in the London Times, March 30, 1917. PREFACE This book is a kind of companion volume to my other book, " Young India." In " Young India," I have discussed British rule in India, from the political standpoint. In this volume, I have discussed its eco - nomic effects. Thexe is not a-gingle statenient injthis volume which is not supported by the best^ available BritisTi testfmony, official and non-official. My own opinrons and personal knowledge have Ijeeh mentioned only incidentally if at all. Similarly the opinions of other Indian publicists have been kept in the back- ground. It is a sad commentary on the prevailing moral code of the world that those who succeed in imposing their rule upon less powerful nations should also brand the latter as unworthy of credit. Thus every Britisher believes that an Indian critic of British rule is necessarily affected by the " inevitable racial and political bias " of his position, while he in his turn is entirely free from it! In the ordinary course of nature, the man whom the shoe pinches is the best person to know about it but in politics the laws of nature are reversed. In judg- ing of governments and rulers, it is they whose word is to be accepted and not that of the governed and the ruled. Consequently^o_avoi^ that charge I have chosen to speak from the mouths of tJhe EnglishT themselves. ' '" 1 " PREFACE Looked at from that point of view the volume lays no claim to originality. It is more or less a compila- tion from British publications, government and private. The case for India has before this been most elo- quently put forth by Mr. Digby in his monumental work ironically called " Prosperous British India." Particular phases have been dealt with by Messrs. Hyndman, Wilson and others from whom I have pro- fusely quoted. My own countrymen, Messrs. R. C. Dutt and Naoroji, have done valuable work in this line. The works of the former, — " Early History of British Rule," " India in the Victorian Age," " Famines in India," and " England and India," published by Messrs. Kegan Paul, Trench, Trubner and Co., of London, are monuments of his industry, research and moderation. Mr. Naoroji's " Poverty of India " is a collection of the economic writings of that veteran Indian nationalist during half a century of his active political life. These works of Messrs. Digby, Dutt and Naoroji must for a long time continue to be the classics of Indian economics and no student of the latter can afford to neglect them. My obligations to them are unlimited. I have made free use of the books of Messrs. Digby and Dutt, though I have refrained from quoting Mr. Dutt's own language. At one time I thought of tak- ing up the subject, from where they had left it in 1901 ; but in developing my ideas I decided that a change of arrangement also was needed to bring the matter within the grasp of the lay reader. Mr. Dutt has arranged his books chronologically, dealing with the same matter in several chapters, scattered all over ii PREFACE the two volumes of his " Economic History of British Rule." I have tried to include everything relating to one subject in one place, thus avoiding repetitions otherwise unavoidable. For example, I have given a complete history of the cotton industry from the earliest times to date in one chapter and so also with shipping and shipbuilding. Similarly everything re- lating to drain has been included in one chapter and so on. The book is thus, in my judgment, an improve- ment on those referred to above. It brings the whole subject up to date and makes it easily understandable by the ordinary lay reader. I would like to have added chapters dealing with finance and currency, famine insurance, banking, railway rates, etc., but the size which I fixed for this volume having already been exceeded, I must reserve these subjects for another volume, if needed. There is talk of great adjustments being made in the British Empire, after the war. India also is on the tiptoe of expectations. The Jingo Imperialists in England and India are already making proposals which if accepted, are sure to cause further economic loss to India. Some want India to take over a part of the British war debt ; others are looking with jealous eyes at India's " hoarded wealth " — the existence of which is known only to them. What will happen no one can foretell; but one of the reas ons which have impelled the writer^o publish this volume at this juncture is to remin3 ~the Anglo-Saxon public"~trow India has &6 far f are deconomically under British rule^ Any Iresh burden niight tendto break the proverbial camel's back. We know that the English will do what iii PREFACE they please ; yet we have dared to say : perchance it may fall on fruitful ground. The book is not written in a spirit of hostility to British rule. It is not my object to irritate or to excite. What I aim at is to give matter for thought and reflectionand to siipply 3 reason for~the exercise ot r estraint in th'e~(3etermm a- tioiTlxf the fiscal poHcy which British statesmen may decide lo^ToTTow fowards' ind i a af ter the w ar". G ie at- Britain has suffered Jbuge^ losses in the war. As~soOn as war is ended, there will be a cry to make them up. N^ O other par t of the Empire offers such_a__field as India^! She has the largest area and the largest popu- lation. She has no voice in her government and is helpless To make herself heard. She can neither check nor retaliate. What can be easier than to make her pay for the war ?_ What this is likely to mean to India may be gathered from this volume. What feel- ing it will create in India may be imagined. ''The world is anxious to know how Great Britain is going to reward India's loyalty and devotion. If the de- cision rests with men of the type of Lord Sydenham it is already given. He recommends the immediate and final rejection of all the demands made by India for post-war reforms as embodied in the memoran- dum of the elected members of the Viceroy's council. These demands are extremely moderate. They fall far short of even home rule. Their rejection will be very distressing to India. We hope that wiser coun- sels will prevail and the statesmanship of T^ngland will prove that India did not pin her faith to British justice in vain. India has stood by England mag- nificently and some of the nationalist leaders have had iv PREFACE a hard time in resisting the advances made by the enemies of Great Britain. Let us hope that they were not labouring under vain illusions and that Great Britain was sincere when she professed to stand for right and justice in international dealings. In the meantime British statesmen are very assiduously en- gaged in impressing on the neutral world that India is happy, prosperous, and the most lightly taxed country on earth. For the benefit of the reader I reproduce the follow- ing interview which the Finance Minister of India is said to have given to a correspondent of the Associated Press : " FINANCE MINISTER DENIES THAT INDIA GROANS UNDER TAX. TOTAL REVENUE, DISTRIBUTED AMONG 244,000,000 PEOPLE, SEVEN SHILLINGS PER CAPITA "Simla, India, Dec. 20. (Mail correspondence to the Associated Press.) — So far from the people of India groaning under an enormous burden of taxation, India is one of the most lightly taxed countries on the face of the earth, according to Sir William Meyer, minister of finance for India, in response to the charges of over-taxation preferred by so-called extremists. " The total revenues, imperial and provincial, for the current year, during which some additional taxation was imposed, amounted to £86,500,000, Sir William said, and this sum distributed among the 244,000,000 people of British India gave a resultant contribution per capita of only seven shillings. He pointed out that in three other Asiatic countries, Japan, Siam, and the Dutch Indies, the rate per head was much higher, be- ing 27, shillings in Japan, 13 shillings 4 pence in Siam and II shillings 3 pence in the Dutch Indies. " The finance minister said the land revenue has been PREFACE one of the points upon which opponents of the govern- ment have been most bitter, it being claimed that the farmer was kept in poverty by taxation. Sir William stated that of the total revenue of £86,500,000 for this year, about £22,000,000 was derived from the land, India being mainly an agricultural country. STATE TAKES UNEARNED INCREMENT " According to immemorial traditions in India the state has always claimed a share in the produce of the soil, he continued. At the close of the eighteenth century the state share was commuted for a fixed money payment in various tracts, mostly in Bengal, but over the greater part of India we revise the money value of that share every 30 years or so with reference to the increase, or possible decrease, if that should occur, in the value of the agricultural produce. The state thus takes to itself a share of what is known to economists as the unearned increment, a policy that ought to find favour with enlightened socialists. Theo- retically, after making liberal allowance for cultivation expenses, the state share is one-half of the resultant net profit, but as a matter of fact our recent settlements have been in practice much more lenient than this, and the amount we take is much less than was exacted by previous native rulers. Liberal remissions are also given when crops suffer from drought, flood or other calamities." Let the reader study this pronouncement in the light of the facts disclosed in this volume. We will not forestall his judgment nor point out to him the mis- statements with which the interview bristles. Let him only, judge of a statesman, giving the incidence of taxation without stating the figure of income. The burden of taxation always goes with the capacity to pay. If a man earning $10 a year pays about $2 (7s.) vi PREFACE in taxes can he be said to be the most lightly taxed person in the world? Yet it was only last year that this finance minister added to the burden of taxation and raised the tax on one of the great necessities of life — salt. This he did in spite of the universal opposition of the country and the results as reported by the press are most disheartening. The price of salt has risen considerably beyond the means of the people to pay, and there is a general cry of pain. Will the p eople of England, w ith^wjigjmjheji^^ responsibility for the gav£rmnent.M "up and compel their statesmen to put into practice the_ principles for which they say they hjA^^been fighting this war? We will wait and see. T~fender' fri'y 'acl........ 116 Malacca 116 The China Consular Representatives 117 Aden , 117 The Zanzibar and Mauritius Cable ii7 The Red Sea Telegraph ...... a . . .117 PART III V. The Cotton Industry of India 121 Historical Survey 121 Early Mention 121 Excellence of Indian Cotton Fabrics 123 Extent of the Cotton Industry in Olden Times . . 124 Decline of the Indian Industry 128 Testimony of G. G. deH. Larpent, and Other Britishers 135 Cotton Goods 135 Silk Goods 135 Testimony of Montgomery Martin 138 Cotton Goods 138 The History of Import Duties and the Present state of the Industry 141 Legislative Acts 141 New Factors in the Situation . . 152 Cotton Duties — 1917 Developments 159 VI. Shipbuilding, Shipping, and Minor Occupations . 162 Conditions in Former Times 162 The Decline of the Industry 167 VII. Miscellaneous Industrial, Agricultural, and Mining Operations 173 Indigo . . , 173 CONTENTS CHAPTER PAGE Jute 174 Woollen Mills 174 Paper Mills 175 Breweries 175 Rice Mills and Saw Mills 175 Iron 175 Copper 177 Manganese 177 Coal 178 Other Minerals 178 Tea and Coffee 179 VIII. Agriculture 181 India's Greatest Industry 181 Land Tax 188 Revenue Assessments and Incidence 189 Bengal 193 Madras 199 Northern India 216 Bombay 225 Village Communities 225 Changes Under British Rule 228 The Punjab 235 Central Provinces 239 The Present Policy as to Land Tax 240 PART IV IX. Economic Conditions of the People 245 _^The Poverty of the Masses 245 Some Results of Indian Administration .... 245 Testimony of English Public Men 248 Average Income of the People 250 PART V X. Famines and Their Causes 263 Famines in the Past 263 Mr. Digby's Table of Famines . . . ;,: . . . 264 CONTENTS CHAPTER PAGE Famines in the Twentieth Century 267 ^.^^amines During the British Period 268 ^J^uses of Famines 269 -^^hortage of Rainfall 270 Are the Famines of India Due to Over-Population? . 271 Are Famines Due to Scarcity of Food? .... 274 Are Famines Due to Extravagances? 275 -a — The True Cause 276 Famine Relief 277 The Building of Railways 278 The Building of Canals and Irrigation Works . . . 280 Pressure on Land 281 The Opening of Agricultural Banks 281 Special Agrarian Legislation 282 XL Railways and Irrigation 283 The Government Policy 283 The Beginning of Railway Policy 285 Benefits of Capital Investment 297 Irrigation 298 XII. Education and Literacy ...,:,... 299 Early Conditions 299 Facts and Figures About Education 300 Law 301 Medicine 301 Engineering 302 Agriculture 302 Technical and Industrial Education 303 Commercial Schools 305 Art Schools 305 Education of Europeans 305 Education of Girls 306 ^.JS^I. Certain Fallacies About the " Prosperity of In- dia " Examined . 308 XIV. Taxes and Expenditure 314 Abstract of Revenue and Expenditure 314 CONTENTS CHAPTER PAGE Ingenious Way of Calculating the Burden of Taxa- tion 315 The Growth of Army Expenditure 316 The Growth of Expenditure on Education . . . .317 ,^V. Summary and Conclusion 319 APPENDICES Appendix A Extracts from an Article by Mr. Yusaf Ali, Nine- teenth Century and the After for February, 1917 341 Appendix B Extracts from an Article from the Indian Journal of Economics for July, 1916 342 Appendix C 343 Studies in Village Economy in Madras 343 Appendix D Wages in India 346 Appendix E Comparative Statement of Salaries in India and the United States 35i Appendix F Further Notes 357 Index 359 PART ONE " We are accustomed to think of the British Empire as consisting mainly of men of Anglo-Saxon blood, and as being on the whole, well-governed, highly civilised and wealthy. As a matter of fact, the Empire con- sists of Asiatics, it is more cursed by poverty than any other great state, and the great majority of its adult population are unable to read or write. The first and the greatest of all the problems of Empire is the prob- lem of India. Among the prominent facts with re- gard to India which are confessed in statistical ab- stracts, is that the average death-rate for the ten years ending in 1908, was between 34 and 35 per thousand; which represents an excess of unnecessary deaths, judging by the standards of a country like Japan, of some four millions per annum. "Poverty and ignorance are the obvious causes of this appalling death-rate. The fundamental duty of the Government is to protect the people against de- vastating plagues and famines ; and the obvious means of doing so is to train the most gifted of the Native population to lead the people in the fight against the evil that besets them. How little the British Govern- ment in India realises this duty may be judged by the statistics of graduates turned out in the year 1909-10, in the different professions. In Medicine there were but thirty, — in Engineering only seventeen, — in Agri- culture not a single one; but in Arts there were 21 16 and in Law, 576." " The Making of Modern Eng- land," by Gilbert Slater, 191 5, page 276.* 1 Italics are ours. ENGLAND'S DEBT TO INDIA A HISTORICAL NARRATIVE OF BRITAIN'S FISCAL POLICY IN INDIA CHAPTER I A HISTORICAL RETROSPECT India Once Was Rich. It is almost universally ac- knowledged that India is a poor country, in the sense that the economic condition of the Tn^an people is not good, — their average income being (according to offi- cial calculation made in 1904, during the viceroy alty of Lord Curzon) only £2, or $10.00 a year. But such was not always their condition. There was a tirne when India was rich^ — immensely rich, rich jn every- thing which makes a country great, glorious and noble. Her soris and daughters were distinguished in every walk of life. She produced scholars, thinkers, divines, poets, and scientists, whose achievements in their re- spective spheres were unique in their own times. Some of them remain unique even to-day. Among her children were sculptors, architects, and painters whose work compels admiration and exacts the praise of the most exacting art-critics of the modern world. Her law-makers, jurists, and sociologists have left be- hind them codes and ideas of justice inferior to none produced under similar conditions., -Under their own 3 4 ENGLAND'S DEBT TO INDIA codes, the people of India were prosperous and happy. Thornton's " Description of Ancient India." " Ere yet the Pyramids looked down upon the valley of the Nile, — when Greece and Italy, those cradles of European civilisation, nursed only the tenants of a wilderness, — India was the seat of wealth and gran- deur. A busy population had covered the land with the marks of its industry; rich crops of the most coveted productions of Nature annually rewarded the toil of husbandmen; skilful artisans converted the rude produce of the soil into fabrics of unrivalled delicacy and beauty ; and architects and sculptors joined in constructing works, the solidity of which has not, in some instances, been overcome by the evolution of thousands of years. . . . The ancient state of India must have been one of extraordinary magnificence," Such is the picture of ancient India drawn by a Brit- ish historian, by no means partial to India, in the opening paragraphs of his " History of British India." Sufficiency with Security and Independence — the Golden Age. This estimate of the magnificence of ancient India is not merely rhetorical. That the India of ancient times was wealthy and prosperous is amply borne out by incontestable testimony. Whether the " Golden Age " of India is a historical fact or a myth depends upon our individvial conception of a \J golden age, — but we do know thatv^he part of India in- cluded in the Empire of Darius (Afghanistan and the Northwestern Punjab) was the/' richest " province of — , all his dominions,^ We know also, that certain cities /^ in Northern India, described in the Hindu Epics, and confirmed by accounts of the Greeks, were of great 1 " Early History of India " by V. R. Smith, 3d ed. p. 33, ; A HISTORICAL RETROSPECT 5 size and architectural magnificence. Lastly, as far back as the middle of the seventh century b. c, the vil- lagers of India had " sufficiency for their simple needs." " There was security ; there was independence, — there were no landlords and no paupers." ^ The mass of the people " held it degradation to which only dire misfor- tune would drive them, to work for hire." ^ Add to these facts, that " there was little, if any crime," jand a — \ picture of the Golden Age is completed. So far_ as the conHitinn<; gj international t rade are concerned, we find that^exceptjimder British rule, In- ^ ^j dia has always had more to sell andTess to purchase; A in manufactured goods,— that the balance of trade' ^ / was always in her faY-oIu:-; that the Rorriahs "Kave"teft on record bitter complaints of the constant drain of gold and silver from their country into India, — a com- plaint repeated by Englishmen as late as the eighteenth century; and that, for more than a century and a half (1603-1757) the profits of the East India Company were made by the importation of Indian manufactures into England. During that time, England was the purchaser and India the vendor of manufactured goods, largely for cash. - — r General Condition of the People Under Hindu and ^ Mohammedan Rule. As to the general condition of the people under Hindu and Mohammedan govern- ments during the twenty-two centuries for which we have authentic historical data, beginning with the in- vasion of Alexander the Great, and ending with the British occupation of Indian provinces at different 2 " Buddhist India " by Rhys Davids, London, 1903, p. 49. » Ibid., ■p. 51. 6 ENGLAND'S DEBT TO INDIA times from 1757 to 1858, ample testimony shows that the mass of the population had sufficient to satisfy their simple wants, except in j.criods of famine ; that the country had prosperous bankers, who loaned money to prince and peasant, negotiated commercial paper, and held all kinds of securities ; and that an extensive home and foreign trade was carried on continuously. It has become the fashion for English publicists and historians to stress what they deem the superiority of British to native rule in India. Doubtless the former has its peculiar merits, but to assert that the country has never before known such " economic prosperity," or experienced the administration of such even-handed justice as under British rule, is to disclose unjustifiable mental bias or ignorance. A number of just and fair- ' — minded Englishmen have deplored such utterances, and a service may be rendered to both England and In- dia by transcribing a few opinions on that point : India Reform Pamphlet. In a pamphlet on " India Reform" (No. IX), pubHshed in 1853 by the India Reform Society of London, which had thirty-seven members of Parliament on its committee, the subject was examined in the light of historical evidence. — " We found the people of India, it is said, abject, degraded, false to the very core. . . . The most in- dolent and selfish of our own governors have been models of benevolence and beneficence when compared with the greatest of the native sovereigns. The luxuri- ous selfishness of the Moghul Emperors depressed and enfeebled the people. Their predecessors were either unscrupulous tyrants or indolent debauchees. . . . Having the command of the public press in this coun- try and the sympathy of the public mind with us, it is A HISTORICAL RETROSPECT 7 an easy task thus to exalt ourselves at the expense of our predecessors. We tell our own story and our testimony is unimpeachable ; but if we find anything favourable related of those who have preceded us, the accounts we pronounce to be suspicious. We con- trast the Moghul conquest of the fourteenth century with the * victorious, mild and merciful progress of the British arms in the East in the nineteenth.' But if our object was a fair one, we should contrast the Mus- salman invasion of Hindusthan with the contemporane- ous Norman invasion of England — the characters of the Mussalman sovereigns with their contemporaries in the West — their Indian wars of the fourteenth cen- tury with our French wars or with the Crusades — the effect of the Mohammedan conquest upon the character of the Hindu with the effect of the Norman conquest upon the Anglo-Saxon when * to be called an English- man was considered as a reproach — when those who were appointed to administer justice were the fountain of all iniquity — when magistrates whose duty it was to pronounce righteous judgments were the most cruel tyrants and greater plunderers than common thieves and robbers ' ; when the great men were inflamed with such a rage of money that they cared not by what means it was acquired — when the licentiousness was so great that a princess of Scotland found * it necessary to wear a religious habit in order to pre- serve her person from violation!' (Henry of Hunt- ington, Anglo-Saxon Chronicle, and Eadmon.) " The history of Mohammedan dynasty in India is full, it is said, of lamentable instances of cruelty and rapacity of the early conquerors, not without precedent in the contemporary Christian history ; for; when Jeru- salem was taken by the first Crusaders, at the end of the eleventh century, the garrison, consisting of 40,000 men, * was put to the sword without distinction ; arms protected not the brave, nor submission the timid; no age or sex received mercy ; infants perished by the same sword that pierced their mothers. The streets o 8 ENGLAND'S DEBT TO INDIA of Jerusalem were covered with heaps of slain, and the shrieks of agony and despair resounded from every house.' When Louis the Seventh of France, in the twelfth century, ' made himself master of the town of Vitri, he ordered it to be set on fire.' In England, at the same time, under our Stephen, war * was carried on with so much fury, that the land was left uncul- tivated, and the instruments of husbandry were left or abandoned,' — and the result of our French wars in the fourteenth century, was a state of things ' more horrible and destructive than was ever experienced in any age or country.' The insatiable cruelty of the Mohammedan conquerors, it is said, stands recorded upon more undeniable authority than the insatiable benevolence of the Mohammedan conquerors. We have abundant testimony of cruelty of contemporary Christian conquerors, — have we any evidence of their benevolence ? " " As attempts are thus systematically made, in bulky volumes, to run down the character of Native govern- ments and sovereigns, in order that we may have a fair pretext for seizing upon their possessions, it be- comes necessary to show that we have a Christian Roland for every native Oliver; that if the Moham- medan conquerors of India were cruel and rapacious, they were matched by their Christian contemporaries. It is much our fashion to compare India in the fifteenth and sixteenth centuries with England in the nineteenth, and to pique ourselves upon the result. * When we compare other countries with England,' said a saga- cious observer,* ' we usually speak of England as she now is, — we scarcely ever think of going back beyond the Reformation, and we are apt to regard every for- eign country as ignorant and uncivilised, whose state of improvement does not in some degree approximate to our own, even though it should be higher than our own was at no distant period.' It would be almost as * Sir Thomas Munro. A HISTORICAL RETROSPECT 9 fair to compare India in the sixteenth with England in the nineteenth century, as it would be to compare the two countries in the first centuries of the Christian era, when India was at the top of civilisation, and Eng- land at the bottom." The Observations of Mr. Torrens, M. P., comparing India with Europe. The matter has been discussed lucidly, forcibly and fairly by Mr. Torrens, M.P., who points out that "There never was an error more groundless than that which represented the ancient systems of Indian rule as decrepit or degrading despotisms, untempered by public opinion. It accords too well with the arro- gance of national self-love and seems too easily to lull the conscience of aggression to pretend that those whom it has wronged were superstitious slaves, and that they must have so remained but for the disin- terested violence of foreign civilisation introduced by it, sword in hand. This pretentious theory is con- futed by the admissions of men whose knowledge can- not be disputed and whose authority cannot be denied." ^ As to the so-called usurpations, infamies and fan- aticism of Indian monarchs, he asks the reader to com- pare them with the deeds and practices of the Borgias, Louis XL, Philip IL, Richard III., Mary Tudor and the last of the Stuarts, and to " look back at the family picture of misrule " in Europe, from Catherine de Medici to Louis le Grand, — from Philip the Cruel to Ferdinand the Fool, — from John the Faithless to Charles the False, — not forgetting the parricide Peter of Muscovy and the Neapolitan Bourbons ! *' It is no more true," he concludes, " of Southern Asia than ^ Torrens, " Empire in Asia," London, p. 100. 10 ENGLAND'S DEBT TO INDIA of Western Europe to say that the everyday habits of supreme or subordinate rule were semi-barbarous, venal, sanguinary or rapacious." ^ It is generally assumed that Indian civilisation and prosperity attained its flood-mark during the period which intervenes between the invasion of Alexander (327 B.C.) and that of Mahmud of Ghazni (1000 A. D.). When Mahmud invaded India, the country ^ — . was overflowing with wealth. To quote the language of Reform Pamphlet No. 9 : " Writers, both Hindu and Mussulman, unite in bearing testimony to the state of prosperity in which India was found at the time of the first Mohammedan conquest. They dwell with admiration on the extent and magnificence of the cap- ital of the Kingdom of Canauj, and of the inexhaust- ible riches of the Temple of Somnath." The wealth that Mahmud carried away from India was insignifi- cant compared to what remained there. His raids were confined chiefly to the northwestern provinces ; only for two brief periods did he penetrate into the Doab between Ganga and Jamna, and only once in Gujrat, Kattiawar. The whole of Central India, which had for so long remained the centre of great political activities under the Nandas, the Mauryas and the Guptas; the whole of Eastern India, covering the rich and fertile tracts which comprise the modern provinces of Bengal and Assam ; the whole of the south had remained untouched. India Under the Mohammedans. The first Moham- medan dynasty began its rule at Delhi in 1206 a. d., and from that time on, the Mohammedan rulers of India spent whatever they acquired from India within the A HISTORICAL RETROSPECT ii country itself. From 1206 a. d. to the middle of the eigki-eenth century, when the British began to acquire rights of sovereignty in India, only twice was the country raided with any degree of success. Raid of Tamerlane. The first of these two raiders was Tamerlane, who sacked Delhi in 1398 a. d., and is said to have carried off " very great " booty. Tamer- lane's expedition also covered only a small part of the country invaded by him — he never went beyond Delhi, In 1526 A. D. came the Mogul invasion by Baber. Baber, however, came to stay and die in India. From 1206 to 1526 A. D. During the centuries from 1206 to 1526 A. D. the country was, no doubt, in a state of constant unrest on account of the frequent wars between the indigenous Hindu population and the " foreign Mohammedan rulers." Sometimes even the latter fought among themselves out of rivalry, as was not infrequently the case in the England of the same centuries. There was, however, no drain of wealth out of India, and the frequent wars did not materially interfere with the processes of production and the amassing of wealth. From the account of travellers who visited the country during these cen- turies, as well as from the histories of the period, we have enough material to j:udge of the general economic prosperity of the people.: Elphinstone says : " The condition of the people in ordinary times does not appear to have borne the marks of oppression. The historian of Feroz Shah (a. d. 1351-1394) expati- ates on the happy state of the ryots, the goodness of their houses and furniture, and the general use of gold and silver ornaments by their women." Elphinstone adds that " although this writer is a panegyrist whose 12 ENGLAND'S DEBT TO INDIA writings are not much to be trusted, still the mere ' mention of such details as that every ryot has a good bedstead and a neat garden shows a more minute at- tention to the comforts of the people than would be met with in a modern author." Elphinstone on the General State of the Country. The general state of the country must no doubt have been flourishing. Nicolo de Conti, who trav- elled about 1420 A. D. speaks highly of what he saw in Guzerat, and found the banks of the Ganges covered with towns amidst beautiful gardens and orchards, and passed four famous cities before he reached Maarazia, which he describes as a powerful city filled with gold, silver and precious stones. His accounts are corroborated by those of Barbora and Bartema, who travelled in the early part of the six- teenth century.® Ccesar Frederic and Jbn Batuta. Csesar Frederic gives a similar account of Guzerat, and Ibn Batuta, who travelled during the anarchy and oppression of Mohammed Tuglak's reign, in the middle of the fifteenth century, when insurrections were rag- ing in most parts of the country, enumerates the large and populous towns and cities, and gives a high im- pression of the state the country must have been in before it fell into disorder.^ Abdnrizag. " Abdurizag, an ambassador from the grandson of Tamerlane, visited the South of India in 1442, and concurs with other observers in giving the impression of a prosperous country. The Kingdom of Kandeish was at this time in a high state of prosperity under its own kings ; the numerous stone embankments by which « Elphinstone, Vol. II, p. 203. ^ Ibid., p. 206. A HISTORICAL RETROSPECT 13 the streams were rendered applicable to irrigation are equal to anything in India as works of industry and ability." » Baber. " Baber, the first sovereign of the Moghul dynasty, although he regards Hindusthan with the same dislike that Europeans still feel, speaks of it as a rich and noble country, and expresses his astonishment at the swarming population and the innumerable workmen of every kind and description. Besides the ordinary business of his kingdom, he was constantly occupied with making aqueducts, reservoirs and other improve- ments, as well as introducing new fruits, and other productions of remote countries." ^ Sher Shah. Baber's son, " Humayun, whose character was free from vices and violent passions, was defeated, and obliged to flee from Hindusthan, by Sher Shah, who is described as a prince of consummate prudence and ability, ' whose measures were as wise as benevolent,' and who, notwithstanding his constant activity in the field, during a short reign had brought his territories in the highest order, and introduced many improve- ments into his civil government. " He made a high road extending for four months' journey from Bengal to the Western Rhotas near the Indus, with caravanserais at every stage, and wells at every mile and a half. There was an Imam and Muezzin at every mosque, and provisions for the poor at every caravanserai, with attendants of proper caste for Hindus as well as for Mussulmen. The road was planted with rows of trees for shade, and in many places was in the state described when the author saw it, after it had stood for eighty-two years." ^° 8 Elphinstone, Reform Pamphlet No. g, p. 10. s Ibid. i** Elphinstone, Vol. II, p. 151. Reform Pamphlet No. 9, pp. 10 and II. V 14 ENGLAND'S DEBT TO INDIA Akbar. " It is almost superfluous to dwell upon the char- acter of the celebrated Akbar, who was equally great in the cabinet and in the field, and renowned for his learning, toleration, liberality, clemency, courage, tem- perance, industry and largeness of mind. But it is to his internal policy that Akbar owes his place in that highest order of princes whose reigns have been a blessing to mankind. He forbade trials by ordeal, and marriages before the age of puberty, and the slaughter of animals for sacrifice. He employed his Hindu sub- jects equally with Mohammedans, abolished the capita- tion tax on infidels as well as all the taxes on pilgrims, and positively prohibited the making slaves of persons taken in war. He perfected the financial reforms which had been commenced in those provinces by Sher Shah. He remeasured all the lands capable of cul- tivation within the Empire; ascertained the produce of each bigah; determined the proportion to be paid to the public; and commuted it for a fixed money rent, giving the cultivator the option of paying in kind if he thought the money rate too high. He abolished, at the same time, a vast number of vexatious taxes and fees to officers. The result of these wise measures was to reduce the amount of public demand consider- ably."" Pietro del Valle. The Italian traveller, Pietro del Valle, wrote in 1623, " generally all live much after a genteel way and they do it securely ; as well because the king does not per- secute his subjects with false accusations, nor deprive them of anything when he sees them live splendidly and with the appearance of riches ! " ^- Shah Jehan. " But the reign of Shah Jehan, the grandson of 11 Reform Pamphlet No. 9, p. n on the authority of El- phinstone, Vol. II. 12 Quoted by Reform Pamphlet, p. 12. A HISTORICAL RETROSPECT 15 Akbar, was the most glorious ever known in India. His own dominions enjoyed almost uninterrupted tran- quillity and good government ; and although Sir Thomas Roe was struck with astonishment at the profusion of wealth which was displayed when he visited the Emperor in his camp in 161 5, in which at least two acres were covered with silk, gold carpets and hang- ings, as rich as velvet, embossed with gold and pre- cious stones could make them, yet we have the testimony of Tavernier that he who caused this celebrated pea- cock throne to be constructed, who, at the festival of his accession, scattered amongst the bystanders money and precious things equal to his own weight, * reigned not so much as a king over his subjects, but rather as a father over his family.' " After defraying the expenses of his great expedi- tion to Candahar and wars in Balk, Shah Jehan left a treasure of about £24,000,000, in coins and vast ac- cumulations of wrought gold, silver and jewels." ^^ Aurangzeh and His Successors. Notwithstanding the misgovernment of Aurangzeb and the reign of a series of weak and wicked princes, together with the invasion of Nadir Shah, who car- ried away enormous wealth when he quitted Delhi in 1739, the country was still in a comparatively pros- perous condition.^* The Raid by Nadir Shah. The raid by Nadir Shah was the second one which took place between 1206 a. d. and 1757 A. D. He carried off " enormous wealth," but how enormous could it have been when one considers that even he did not go beyond Delhi, leaving the rest of the north, the greater part of the west, and the en- 13 Reform Pamphlet on the authority of Elphinstone, Vol. II, pp. 293-299. 1* Reform Pamphlet No. 9, p. 16. i6 ENGLAND'S DEBT TO INDIA tire east and south of India unaffected and untouched? Throughout the Mohammedan dominance, large parts of India remained under Hindu rule, and the historians are agreed that in the territories of the Hindu princes general prosperity prevailed. Some of them are said to have attained to a pitch of power and splendour which had not been surpassed by their ancestors. Pre-British Period. We are, however, more di- rectly concerned with the economic condition of India in the period immediately preceding the establishment of British power. We have some vivid glimpses pre- served for us in the accounts of the contemporary Eu- ropean travellers and Anglo-Indian administrators, — writers of the type of Malcolm, Elphinstone, Monroe, Orme, and Todd. Principal Political Divisions of the Country. The country was then divided into several political divi- sions. The rulers were practically independent mas- ters of their respective territories, though some ac-' knowledged a nominal suzerainty of the Grand Mogul. In the north, Bengal, Behar, and Orissa were ruled by the Nawab of Bengal, with his seat in Murshidabad. Oude was administered by the Nawab Vizir who had several feudatories, including the Rajah of Benares. The Mahrattas were practically supreme in Delhi where the Grand Mogul still maintained the shadow of his glory, — also in Rajputana, Central India and the Western Ghauts. The South was divided between the Nawab of Hyderabad, with the Nawab of Arcot and the Rajah of Tanjore under him, and the prin- cipality of Mysore, with a Hindu prince as sovereign and a Mohammedan minister as ruler. The North- A HISTORICAL RETROSPECT 17 west, comprising the land of the Five Rivers and the territory between the Sutlej and the Jamna, were still nominally under the Mogul. By the time, however, that the British established themselves at Delhi, it had completely passed into the hands of the Sikhs, and it was from them that the British finally took it. Scindh was under the Amirs. We will now briefly narrate the means whereby Brit- ain acquired these territories, with a statement of their economic condition before and after British occupa- tion. Tanjore and Arcot. Let us begin with the South. The small Hindu principality of Tanjore, off the coast of Coromandel, was the first victim of British aggres- sion. For several centuries this state had enjoyed the rights of sovereignty; and in 1741, Pratap Singh suc- ceeded to the throne as a result of a domestic revolu- tion with which the EngHsh had nothing to do. The latter acknowledged him unhesitatingly as ruler, and established a kind of friendship with him against their rivals, the French. The brother of Pratap Singh, one Sahujee, subsequently approached the British with an offer of the fort and jagir of Devikotah as the price of their help to put him on the throne. The British " despatched an army to dethrone " Pratap Singh.^^ The expedition failed, and a second was resolved on. Devikotah was taken, and they " entered into negotia- tions with Pratap Singh — agreed to desist from fur- ther hostilities — to abandon him for whom they pre- tended to have fought, but engaged to secure his person and to receive a fixed sum for his maintenance, on con- is Torrens, pp. 20-21; Mill, Bk. IV, p. 91. i8 ENGLAND'S DEBT TO INDIA dition of being suffered to remain undisputed masters of Devikotah and the circumjacent territory." This was the beginning of the conquest of Hindustan. The principahty of Tan j ore was included in the dominions of the Nawab of Carnatic, who in his turn, was considered to be under the Subah of Deccan. The desire for the possession of Devikotah on the part of the British had its origin in their rivalry with the French. When, in 1754, the English and the French made peace, and signed a treaty, mutually re- nouncing any further designs of territorial aggres- sion in India, and agreeing to interfere no more in the affairs of the local governments, it might have been ex- pected that the troubles of the people of Carnatic were over. Muhammad Ali, the friend of the English, had been acknowledged the Nawab of Carnatic. The ink on this compact was scarcely dry when the British entered into negotiations to reduce certain other Hindu prin- cipalities included in the Nawab's dominions which the latter asserted owed large sums of tribute-money to him. The French authorities at Pondicherry pro- tested without result. Eventually they were drawn into hostilities and worsted. The first treaty with the Nawab of Carnatic was made in 1763, in which he acknowledged his liability to the East India Company for all the expenses they had incurred in the war with the French, and undertook to pay them off by annual instalments of 28 lacs of rupees, i.e., £280,000. In the course of time, the Nawab was asked to bestow a grant of lands, the rents and revenues of which should be credited to the debt. This had, of course, to be con- A HISTORICAL RETROSPECT 19 ceded. The Jagirdar, however, was soon to become the master. Before the century was over, the Nawab of Carnatic, the first patron of the British, when they landed friendless and '' shelterless " on the coast of Coroman- del," later their ally in the war with the French, became reduced to the position of the mere creature of the hon- ourable company, and wholly at the mercy of its serv- ants. By the time Lord Wellesley came to make a fresh treaty with the Nawab, " The Carnatic had been inmeshed in the net of our friendship and the noose of our protection." ^^ By the treaty made by Lord Wel- lesley, it was declared that four-fifths of the revenue of the principality, the management of which had already passed into the hands of the company, was forever vested in the company, and the remaining one- fifth appropriated for the support of the Nawab. These emoluments, along with the dignity and prestige of the nawabship, were enjoyed by the last scion of the family till 1853, when " Lord Dalhousie thought the time had arrived to let the curtain fall upon the farce of gratitude to Arcot. The cabinet of Lord Aberdeen, the Court of Directors assenting, he forbade Azimshah, the successor of the last nawab, to assume the title, and refused to pay him the stipulated fifth of the revenues, which he claimed as undisputed heir, " upon the ground that when treaties are made ' forever,' the suzerain is not bound longer than the sense of expe- diency lasts." " In commenting upon what took place in 1792, at the time of the death of the Nawab who 1^ Arnold, Dalhousie's "Administration of British India," London. Vol. II, p. 171. I'Torrens, pp. 378-79. 20 ENGLAND'S DEBT TO INDIA first entered into relations with the British, James Mill in his " History of British India " says : " A fact is here forcibly urged upon our attention, of which it is important to find the true explanation. Un- der their dependence upon the British Government, it has been seen that the people of Oude and Karnatic, two of the noblest provinces of India, were, by mis- government, plunged into a state of wretchedness with which no other part of India, — hardly any part of earth, had anything to compare. In what manner did the dependence of the native states upon the English, tend to produce these horrid effects ? " " This question may best be answered in the words of the Duke of Wellington, who as an historian of the administration of his brother, the Marquis of Wellesley, says, speaking of the treaty made with the Nawab in 1792: " One of the great evils in this alliance, or in all those of this description formed in India, was that it provided that the Company should not interfere in the internal concerns of the Nawab's government. At the same time the interference of the Company in every possible case was absolutely necessary for the support of the Native Government, and ivas practiced on every occasion/' Another evil which affected this, as well as every alliance of the same description, was . . . that the Nawab zuas obliged to borrozv money at large interest in order to make his payment at the stipulated periods and . . . the laws were made by the Company's civil and military and the European inhabitants of Fort St. George and its dependencies. In this view of the evil, it was of enormous magni- tude." ^« 18 Book VI, pp. 51-52. 19 Muir, "The Making of British India," p. 217. A HISTORICAL RETROSPECT 21 From the time the operation of the treaty of 1792 was observed, every governor had endeavoured to pre- vail upon the Nawab to consent to an alteration of it whereby the Company's resources should be secured and the evils above described be prevented. The en- deavours, however, failed to prevail upon the Nawab to hear to any modification of the treaty ; when the war with Tipu broke out, the country was labouring under all the disadvantages of the system, its resources were depleted, and its inhabitants, from long oppres- sion, disaffected. In these conditions the Marquis of Wellesley decided upon annexation. He found a pre- tence ready to hand in the correspondence which the Nawab and his son had been carrying on with the neighbouring Prince Tipu. The Marquis decided that " in consequence of this breach of treaty, the company had a right to act in the manner best suited to their own interest." That arrangement has been recorded above. The method whereby the signature of the Nawab was obtained is however most significant. " When the orders from the Marquis of Wellesley reached Madras, the Nawab, Omdat 'ul Omra, was in such a state of health as to be incapable of attend- ing to business, and soon afterwards he died. His supposed son was then apprised of the discoveries (i.e., the correspondence) and the sentiments of the British Government in consequence, together with the measures about to be adopted in Carnatic. He refused to ac- cept the situation offered him under the new arrange- ment." ^° It was resolved to set aside the young Na- wab and set up another man, the brother to the de- 20Muir, "The Making of British India," p. 219. 22 ENGLAND'S DEBT TO INDIA ceased, on the throne, on condition he agreed to the proposed terms. This was accordingly done. Mysore. Hyder AH of Mysore was a person of humble origin. By dint of his courage, ability, enter- prise and resourcefulness, he rose to a position which enabled him to usurp the powers of state, setting aside the rightful Hindu prince, and reducing him to the position of pensioner. The British Government en- tered into treaty relations with him, recognising him as the ruler. His first quarrel with the British was due to their seizure of Baramahal, a port of the Kingdom of Mysore. Hyder retaliated, and " under the walls of Madras, dictated a new treaty with the company, which was to furnish him with seven battalions of sepoys in case any foreign enemy attacked his domin- ions." When, in 1778, the British, at war with the French, took possession of Pondicherry, they attacked Mahe, a small town in one of the provinces of Mysore. Hyder protested, and upon being disregarded, invaded the English possessions in Carnatic and exacted retri- bution. The great historian of Anglo-India, Mill, re- marks : " Hyder was less detested as a destroyer than hailed as a deliverer . . . and the English commander himself testifies in an official letter that " There is no doubt that Hyder has greatly attached the inhabitants to him." Torrens remarks that later, when Pettah and Arcot were taken by Hyder, he treated the inhabitants " with humanity ; no plundering or license was al- lowed; every one was continued in the enjoyment of his fortune, and all who held places under the Nawab retained them; to the English officers, Hyder gave money to provide for their necessities " — conduct A HISTORICAL RETROSPECT 23 which places his " barbarity " in favourable contrast with the " civilisation " of the English, when later they sacked his capital. In the winter of 1782, before the war with the Eng- lish had terminated, Hyder died, and his adversaries made a new treaty of peace with his son Tipu. The fidelity of Hyder's Brahmin minister has been handed down in history — he it was who concealed the death of his prince until Tipu reached the camp and claimed his inheritance. Colonel Fullarton's " View of the Interests of India " contains an estimate of the character of Hyder and conditions during his reign. The writer of the Re- form Pamphlet remarks : " Although most constantly engaged in war, the im- provement of his country and the strictest executive administration formed his constant care. Manufac- turer and merchant prospered . . . cultivation in- creased, new manufactures were established, wealth flowed into the kingdom . . . the slightest defalcation by the officers of revenue was summarily punished. He had his eye upon every corner of his own domin- ions and every court in India. . . . Though unable to write himself, he dictated in few words the substance of his correspondence to secretaries ... he united minuteness of detail with the utmost latitude of thought and enterprise. . . . He bequeathed to his son, Tipu Sultan, an overflowing treasury, a powerful empire, an army of 300,000 men . . . and great territories." The following is the substance of Moore's estimate of Tipu's administration. " When a person, travelling through a strange coun- try, finds it well cultivated, populous with industrious habitants, cities newly founded, commerce extending, 24 ENGLAND'S DEBT TO INDIA towns increasing, and everything flourishing so as to indicate happiness, he naturally concludes the form of government congenial to the people. This is a picture of Tipu's government . . . we have reason to suppose his subjects to be happy as those of any other sovereign ... no murmurings or complaints were heard against him, though the enemies of Tipu were in power, and would have been gratified by any aspersions of his character . . . but the inhabitants of the conquered countries ... so soon as an opportunity offered, scouted their new master, and gladly returned to their loyalty again." ^^ Dirom, another writer pays an equally high tribute to the prosperity of Tipu's country.^^ All this prosperity was not created entirely by Hyder or his son, whose sway did not last half a century. For the foundation of these flourishing conditions we must look to the ancient Hindu dynasty — they were the constructors of those magnificent canals which in- tersect Mysore and insure the people prodigal returns from the fertile soil. In 1789 occurred the third war with Mysore, result- ing in a peace in 1792 whereby Tipu was forced to pay a heavy indemnity and cede half his territories. It was reserved for the Marquis of Wellesley to wipe out the House of Hyder completely, by annexing a large part of his remaining lands, and restoring the super- seded Hindu dynasty to a fraction of its former do- main under the title of the Raja of the state of Mysore. Northern India. From the south, we may now turn to the north to examine conditions preceding British 21 Moore's " Narrative of tlie War with Tipu Sultan," p. 201, quoted in the Reform Pamphlet. 22 Dirom's " Narrative," p. 249, A HISTORICAL RETROSPECT 25 occupation. To avoid all suspicion of political or racial bias, we will let the English writers of the Re- form Pamphlet speak. (^ Bengal. In the year that Hyder established his sway over Mysore, Bengal, — the brightest jewel in the Imperial Crown of the Moguls, came into British posses- sion. ( Clive described the new acquisition as " a coun- try of inexhaustible riches " and one that could not fail to make its new masters the richest corporation in the world. Bengal was known to the East as the Garden of Eden, the rich kingdom. Says Mr. Hol- well : " Here the property, as well as the liberty, of the people, are inviolate. The traveller, with or without merchandise, becomes the immediate care of the Government, which allots him guards, without any expense, to conduct him from stage to stage. . . . If ... a bag of money or valuables is lost in this district, the person who finds it hangs it on a tree and gives notice to the nearest guard. . . ." ^^ The rich province of Dacca was cultivated in every part . . . justice was administered impartially . . . Jeswunt Roy .. . . had been educated in purity, in- tegrity and indefatigable attention to business, and studied to render the government of his province con- ducive to the general ease and happiness of his people — he abolished all monopolies and the imposts upon grain.2* Such was the state of Bengal when Alivardy Khan . . . assumed its government. Under his rule . . . the country was improved ; merit and good conduct were the only passports to his favour. He placed Hindus on an equality with Mussalmen, in choosing 28 Howells' " Tracts upon India," Reform Pamphlet No. g, p. 21. 2* Stewart's " History of Bengal," p. 430, quoted in the pamphlet No. 9, p. 22. 26 ENGLAND'S DEBT TO INDIA Ministers, and nominating them to high miHtary and civil command. The revenues, instead of being drawn to the distant treasury of Delhi were spent on the spot.^^ But in less than ten years after Bengal had become subject to British rule, a great and sudden change came over the land. Every ship, Mr. Macaulay tells us, for some time, had brought alarming tidings from Bengal. The internal misgovernment of the province had reached such a pitch that it could go no further. "What indeed, was to be expected from a body of public servants exposed to temptation such as Clive once said, flesh and blood could not bear it, armed with irresistible power, and responsible only to the corrupt, turbulent, distracted, ill-informed Company, situated at such a distance that the average interval between the sending of a despatch and the receipt of an answer was above a year and a half. Accordingly the five years which followed the departure of Clive from Bengal saw the misgovernment of the English car- ried to such a point as seemed incompatible with the existence of society. The Roman proconsul, who, in a year or two, squeezed out of a prov- ince the means of rearing marble palaces and baths on the shores of Campania, of drinking from amber and feasting on singing birds, of exhibit- ing armies of gladiators and flocks of camelopards ; the Spanish viceroy, who, leaving behind him the curses of Mexico or Lima, entered Madrid with a long train of gilded coaches, and sumpter horses trapped and shod with silver, were now outdone. . . . The servants of the Company obtained for themselves a monopoly of almost the whole internal trade. They forced the natives to buy dear and sell cheap. They insulted with impunity the tribunals, the police and fiscal "^ Stewart's " History of Bengal," quoted in the Reform Pamphlet No. 9, p. 22. A HISTORICAL RETROSPECT 27 authorities . . . every servant of a British factor was armed with all the power of the Company. . . . Enormous fortunes were thus rapidly accumulated at Calcutta, while thirty miUions of human beings were reduced to an extremity of wretchedness. . . . Under their old masters, . . . when evil became insupport- able, the people rose and pulled down the government. But the English Government was not to be shaken off. That Government, oppressive as the most oppressive form of barbarian despotism, was strong with all the strength of civilisation." -" The Kingdom of Oude. The same testimony re- garding the East India Company's destructive and ra- pacious misrule applies to Oude. While Mr. Warren Hastings was still vested with supreme rule over India, he describes a condition which he himself was instru- mental in producing. " I fear that our encroaching spirit, and the insolence with which it has been exerted, has caused our al- liance to be as much dreaded by all the powers of Hindustan as our arms. Our encroaching spirit, and the uncontrolled and even protected licentiousness of individuals, has done injury to our national reputa- tion. . . . Every person in India dreads a connec- tion with us." 2'^ Before dealings with the English commenced, Oude was in a high state of prosperity, yielding, without pressure on the people, an income of three millions, clear. By quartering upon the Nawab an army of soldiers, as well as a host of civilians, he was soon re- duced to a state of bitterest distress and his country to poverty, his income being reduced in a few years 26 Macaulay's " Essay on Lord Clive." 27 Gleig's " Life of Hastings," Vol. II, quoted in the Reform Pamphlet No. 9, p. 25. 28 ENGLAND'S DEBT TO INDIA to half its former amount. " In nine years," Mill says, " unjustifiable extortions, to the amount of thirty-four lacs of rupees (£340,000) per annum, had been prac- tised on that dependent province." '^ The extent of the salaries, pensions and encroachments of the com- pany's service, civil and military, upon the Nawab's revenues and authority, says Warren Hastings " have become an intolerable burden and exposed us to the enmity, and resentment of the whole country, by excluding the native servants and ad- herents of the Vizier from the rewards of their service and attachments. I am afraid few men would understand me were I to ask by what right or policy we levied a tax on the Nawab Vizier for the benefit of patronised individuals, and fewer still, if I questioned the right or policy of imposing upon him an army for his protection, which he could not pay, which he does not want; with what expression could I tell him to his face, ' You do not want it, but you shall pay for it ! ' . . . Every Englishman in Oude was possessed of an independent and sovereign authority. They learned ... to claim the revenue of lacs "° as their right, though they could gamble away more than two lacs (I allude to a known fact) at a sitting.^*' The demands of the English increased from £250,- 000 to £700,000 per annum, under Lord Cornwallis, with a further increase under Lord Teignmouth. In 1801, Lord Wellesley, under threat of seizing the whole, extorted from the Nawab one-half his do- minions, valued at £1,300,000 per annum. From 181 5 28 Mill, "History of India," Vol. V, p. 316. 28 A lac is equal to a hundred thousand rupees. 30" Life of W. Hastings," Vol. H, p. 458. Reform Pam- phlet No. 9, p. 26. A HISTORICAL RETROSPECT 29 to 1825 more than four million pounds were extracted from the Nawab under the name of loans, for which he received the title of King, and a territory little bet- ter than a wilderness. Says the Reform Pamphlet, commenting upon the dealings in Oude : " This is a brief history . . . not penned by those who have suffered, but by the doers themselves. It is based upon facts that are upon our records, and indis- putable. If Oude then, is misgoverned, — if its people are impoverished and oppressed who is to blame — the native sovereigns, or those who have thus trampled upon the Native Sovereigns ? " At the time Lord Cornwallis, then Governor-Gen- eral, was pronouncing Bengal to be in process of decay under British mismanagement, the Kingdom of My- sore, under the rule of Poorneah, was in a state of high prosperity, so much so, that the Duke of Welling- ton pronounced its government worthy of applause, and as a mark of his approbation, presented the Dewan Poorneah with his picture. British publicists are fond of drawing the blackest possible picture of India under the administration of the Mahrattas. Sevaji, the great founder of the Mah- ratta Empire, has been termed a " robber " by them, but all classes of modern India hold him in memory as a hero worthy of universal respect. The following estimate of his character is based on Grant Duff's His- tory of the Mahrattas, vol. 11.^^ " The * robber,' Sevajee, who entered upon the scene in the latter part of the sixteenth century, and who shook the Mogul Empire to its foundation during the 31 Vide the Reform Pamphlet, No. 9, pp. 14 and 15. 30 ENGLAND'S DEBT TO INDIA reign of Aurungzebe, was an able as well as skilful general. His civil government was regular, and he was vigorous in exacting from his provincial and vil- lage officers obedience to the rules he laid down for the protection of his people. His enemies bear witness to his anxiety to mitigate the evils of war by humane regulations, which were strictly enforced. Altogether, this robber hero has left a character which has never since been equalled or ever approached by any of his countrymen. None of his military successes raise so high an idea of his talents as his domestic adminis- tration, and the effect of this appears to have been permanent for eighty years after his death." Anquetil du Perron, in his " Brief Account of a Voyage to India," published in the Gentleman's Maga- zine of 1762, gives an interesting glimpse of the state of the Mahratta Territory: " From Surat, I passed the Ghats, . . . about ten in the morning, and when I entered the country of the Mahrattas, I thought myself in the midst of the simplicity and happiness of the golden age, where nature was yet unchanged, and war and misery were unknown. The people were cheerful, vigorous and in high health and unbounded hospitality was an uni- versal virtue ; every door was open, and friends, neighbours and strangers were alike welcome to what- ever they found." The successors of Sevaji were also rulers of sagacity and ability. Bajee Rao Bullal is said to have united the enterprise, vigour and hardihood of a Mahratta chief with the polished manners, wisdom and address which distinguished the Brahmins of Concan. He possessed eloquence, penetration and vigour, was sim- ple in his habits, a successful military leader, who at A HISTORICAL RETROSPECT 31 all times partook of the privations of his soldiers. Ballajee Rao, who succeeded him, was characterised by the same political ability, devoting, amid the distrac- tions of war, much time to the civil administration of his territory ; in his reign the condition of the popula- tion was improved, the system of farming the revenues was abolished, and the tribunals of justice were ren- dered accessible to all. Following him came Mahdoo Rao, whose character as a sovereign was as con- spicuous as were his military talents. " He is deservedly celebrated for his firm support of the weak against the oppressive, of the poor against the rich, and , . . for his equity to all." At that time, the Mahratta territory was more thriv- ing than any other part of India. The celebrated Ram Shastree was the pure and upright minister who served Mahdoo Rao. The weight and soundness of his judg- ments have made them to this day precedents in Hindu law. By his unwearied zeal, he improved the condi- tion of the people of all ranks. His integrity was never corrupted. It was the custom of this man of simple habits, never to keep in his house more food than sufficed for one day's consumption.^^ The territory of the Peishwah was administered, for a quarter of a century, by Nana Furnawese, during the minority of Bajee Rao. He has been described as a minister of unequalled ability, who held together, by force and energy of mind, and the versatility of his genius, the incongruous interests of his empire. The wisdom, firmness and moderation of his government 32 Grant Duff's " History of the Mahrattas," Vol. II, p. 208. 32 ENGLAND'S DEBT TO INDIA are testified to by Sir John Malcolm, who thus de- scribes the condition of the country: " It has not happened to me ever to see countries better cultivated, and more abounding in all the pro- duce of the soil as well as in commercial wealth, than the southern Mahratta districts. . . . Poonah, the capital of the Peishwah, was a very wealthy and thriv- ing commercial town and there was as much culti- vation in the Deccan, as it was possible an arid and unfruitful country could admit." About another large part of the Mahratta territory under the sover- eignty of Holkar we have the testimony of the same distinguished writers: " With respect to Malwa, I saw it in a state of ruin, caused by the occupancy ... of the predatory hordes of India. Yet, even at that period, I was surprised ... to find that dealings in money to large amounts had continually taken place between cities, where bank- ers were in a flourishing state, and goods to a great extent continually passed through the province, . . . the insurance offices which exist through all parts of India . . . had never stopped their operations. ... I do not believe that in Malwa the introduction of our direct rule could have contributed more, nor indeed so much, to the prosperity of the commercial and agri- cultural interests, as the re-establishment of the effi- cient rule of its former princes and chiefs. With re- spect to the southern Mahratta districts, of whose pros- perity I have before spoken, ... I do not think either their commercial or agricultural interests likely to be improved under our rule. . . . Their system of admin- istration is, on the whole, mild and paternal. I refer their prosperity to be due ... to the knowledge and almost devotion of the Hindus to agricultural pursuit ; to their better understanding, or better practice than us ... in raising towns and villages to prosperity, from the encouragement given to moneyed men, and the in- A HISTORICAL RETROSPECT 33 troduction of capital . . . but above all causes which promote prosperity, is the invariable support given to the village and other native institutions, and to the employment, far beyond what our system permits, of all classes of population."^* The isame writer praises the administration of the Mahratta Queen, Ahalya Bai, the internal tranquillity of whose territory was as remarkable as her freedom from foreign attack. The object of her rule was to promote the prosperity of all her subjects; she was said to rejoice when she saw bankers, farmers, mer- chants and cultivators rise to affluence; she was re- garded as the model of good government in Malwa. She built several forts, and constructed a road over the almost perpendicular Vindhya range. Among the princes of her own nation, all would have held it sacri- lege to become her enemy, or to fail to defend her from hostile attack.^* The dominions of the Rajah of Berar, another mem- ber of the great Mahratta Confederacy, were equally flourishing. European travellers comment on the thriving districts, the industrious people, the fertile soil, the magnificent temples and the greatness of pub- lic works.®^ From the Mahratta, let us pass to other States. The Reform Pamphlet quotes from a report from Commis- sions upon the Northwest Provinces, which it might be well to cite: " In passing through the Rampore territory, we 33 Reform Pamphlet No. 9, pp. 28, 29. 34 Malcolm's "History of Central India," Vol. I, pp. 176, 195, 35 See the authorities quoted in the Reform Pamphlet, pp. 32 and 32. 34 ENGLAND'S DEBT JO INDIA could not fail to notice the high state of cultivation to which it has attained when compared with the sur- rounding country; scarcely a spot of land is neg- lected and although the season was by no means favourably the whole district seemed covered with an abundant harvest. . . . The management of the Nawab Fyz-oolah Kahn is celebrated throughout the country. It was the administration of an enlightened and liberal landlord, who devoted his time and atten- tion, and employed his own capital, in promoting the prosperity of the country. When works of magnitude were required . . . the means of undertaking them were supplied from his bounty. Watercourses were constructed, the rivulets made to overflow and fer- tilise the adjacent districts, and the paternal care of a popular chief was constantly exerted to afford pro- tection to his subjects, to stimulate their exertions, to direct their labours to useful objects and to pro- mote by every means the success of their under- taking." " If the comparison for the same territory be made between the management of the Rohillas and that of our own government, it is painful to think that the balance of advantage is clearly in favour of the former. After seven years' possession of the country, it ap- pears by the report that the revenue has increased only by two lacs of rupees, or 20,000 pounds. The papers laid before Parliament show that in the twenty years which have since elapsed, the collective revenues of Rohilcund and the districts forming the ceded prov- ince of Oude, actually declined 200,000 pounds per annum ! * * * " While the surrounding country seemed to have been visited by a desolating calamity, the lands of the Rajahs Diaram and Bugwaut Singh under every dis- advantage of season were covered with crops pro- duced by better husbandry or greater labour." These A HISTORICAL RETROSPECT 35 neighbouring lands consisted "■ of British territory, al- ready jive years in our occupation." ^^ Bishop Heber, in his " Journal," Vol. II, pages yy-f^ bears testimony to the enlightenment and prosperity of Oude at this period under Saadat Ali, whom he rates as a man of talents and acquirements, fond of business, with a penchant for science. He is described by Lord Hastings as a sovereign admirable for uprightness, humanity and mild elevation. The prosperous condi- tion of the state of Bhurtpore under native rulers is likewise testified to.^^ " This country ... is one of the best cultivated and watered tracts which I have seen in India. The crops of corn on the ground were really beautiful; that of cotton ... a very good one. What is a sure proof of wealth, I saw several sugar-mills, and large pieces of ground where the cane had just been cleared. . . . The population did not seem great, but the vil- lages were in good condition and repair, and the whole afforded so pleasing a picture of industry, and was so much superior to anything I had been led to expect in Rajputana, which I had seen in the Com- pany's territories . . . that I was led to suppose that either the Rajah of Bhurtpore was an extreme ex- emplary and parental governor, or that the system of management adopted in the British provinces was less favourable to the improvement and happiness of the country than some of the native states." The British Government itself emphatically testifies to the high character of Pertaub Singh, the first Rajah of Sattara, and the prosperity of his kingdom. The government Records show a letter from the Court of Directors (1843, No. 569, page 1268). 36 Bishop Heber's " Journal," Vol. II, quoted by the Reform Pamphlet. 36 ENGLAND'S DEBT TO INDIA " We have been highly gratified by the information from time to time transmitted to us from our Govern- ment, of your Highness's exemplary fulfilment of the duties of that elevated situation in which it has pleased Providence to place you. " A course of conduct so suitable to your Highness's exalted station, and so well calculated to promote the prosperity of your dominions and the happiness of your people, as that which you have wisely and uni- formly pursued, while it reflects the highest honour on your own character, has imparted to our minds un- qualified pleasure and satisfaction. The liberality which you displayed in executing at your own cost, various public works of great utility . . . gives addi- tional claim to our approbation, respect, and ap- plause." While the British Government was thus congratu- lating the Rajah on the prosperity of his dominions, the wretched state of some thirty millions of natives under British rule is described by Dr. Marshman, in The Friend of India, April i, 1852 : " No one has ever contradicted the fact that the condition of the Bengal peasantry is almost as wretched and degraded as it is possible to conceive ; living in the most miserable hovels, scarcely fit for a dog kennel, covered with tattered rags, and unable in many instances, to procure more than a single meal a day for himself and family, the Bengal ryot knows nothing of the most ordinary comforts of life. We speak without exaggeration when we say that if the real condition of those who raise the harvest, which yields between three and four millions a year, were fully known, it would make the ears of one who heard thereof tingle." This, described by an unimpeachable eye-witness, A HISTORICAL RETROSPECT 37 was the condition of Bengal, the " Garden of Eden " after almost a century of British rule! If this appal- ling state had been normal before the English came, what had the Government been doing for a century not to extricate the people from it? But the words of Clive are still upon record — " Bengal, the country of inexhaustible riches, capable of making its masters the richest corporation in the world." What can the Government say for itself in the face of such a result? Lord Cornwallis said, in his time, that the people " were advancing hastily to a state of poverty and wretchedness." By multiplied exac- tions and heavy assessments, from 1765 to 1790 the British revenue system enriched itself and left the country exhausted and impoverished. Governor Gen- eral Lord Hastings declared in 1827 (Pari. Papers, page 157) : " A new progeny has grown up under our hand ; and the principal features of a generation thus formed beneath the shade of our regulation, are a spirit of litigation which our judicial establishments cannot meet, and a morality certainly deteriorated." As with the judicial system, so with regard to per- son and property. Protection was so inadequate, that as stated in an article in The Friend of India (Aug. 28, 1 851) "no man of property . . . can retire to rest with the certainty that he shall not be robbed of it before morning." Small wonder that Governor-Gen- eral Lord Bentinck admitted that " Our administration had, in all its branches, revenue, judicial and police, been a failure." This was uttered in the first half of the nineteenth century. 38 ENGLAND'S DEBT TO INDIA Because of the gross ignorance on the part of the civiHsed world, regarding the facts discussed at such length, we have quoted somewhat lengthily from sources whose testimony, coming as it does, from the British camp, cannot be questioned. British publi- cists continue in their efforts to mislea^ihe publn: mind by affirmm"g~tHat"EngIand rescued India f rom a state of widespread anarchy and confusion, and by conferring upon her, for the first time in he r his tory^ a settled government, saved her from herself^ During her many ceiitnrres of'potitical development, India_was undoubtedly as good, and as bad, as the oth er evolv ing nations on the face of Mother Earth. She prosfiered under her beneficent rulers, and suffered under her bad gnes^; She had her periods of progress, as well as of stagnation. She had times of peace as well as of war. Her rulers were by no means immaculate. Her people were not always happy. They faced tyr- anny and oppression as often as good government and orderly justice. Were a chart of Indian politics for the past three thousand years to be compiled, it might be found that her eras of peace and prosperity per- haps exceeded those of any other country in the world. It is futile to pass judgment upon the India of the six- teenth century, from the pinnacle of twentieth century standards. Even now there are native states in India which are admittedly better governed than British India. In sev- eral of them the rulers have introduced compulsory universal education, have established representative institutions and, last but not least, have started indus- tries of their own to give employment to their subjects. A HISTORICAL RETROSPECT 39 Dr. H. A. L. Fisher, the Minister of Education in the Lloyd George Cabinet says in his book " The Em- pire and the Future," " My impression is that the in- habitants of a well governed native "stafe~are on the whole happier and more contented than tfieTnFabitants of ' British India. They are moreJi'Qhfly taxed ;'~t^^ pace of the administration is less urgent and exacting ; their sentiment is gratified by the splendour of a native court and by the dominion of an Indian Government. They feel that they do things for themselves instead of having everything done for them by a cold and alien benevolence." [Italics mine. L. R.] We are sorry that consideration of space should have forced us to abridge many of the references given in this chapter. Independent enquirers are respectfully referred to the authorities quoted from. PART TWO CHAPTER II INDIA AND THE BRITISH INDUSTRIAL REVOLUTION Before Plassy. That India played a very definite part in the success of the British Industrial Revohition, is a fact almost universally acknowledged ; jft how great a part India play ed in making for the industria l and economi c prosp erity of Great Britain is kno vyn t o very few^_J[tJs_5jyLr.putpose tO--discuss..that p^»*^ this chapter. Let us consider first the respective economic posi- tions of India and England at the time when the In- dustrial Revolution was brought about by the invention of the steam engine and of mechanical contrivances for the spinning and weaving of cloth. We have already given the reader an idea, in the introductory chapter, of the economic prosperit y of India in pre-British days^Tn~tHe~seventeenth and eighteenth centuries, India had enormous weaitli4_.the treasuries of her rulers were full of money, bullion and precious stones of fabulous value ; her industries and manufactures flourished, and she exported large quantities of goods in return for payment in gold and silver. Her trade with Asia, Europe and Africa was extensive, and she made enormous profits, from the sale of her manufactured goods. Her cotton muslins, manufactured silks, woollen shawls, brass and bronzes 43 44 ENGLAND'S DEBT TO INDIA had made her famous, all through Asia and Europe. For centuries, the maritime nations of Europe had been trying to find a sea route to India in order to profit by trading with her and possibly with the motive of eventually conquering her. The discovery of America was only an accident. The goal which Columbus had in view was India. It is well known how, after Co- lumbus, the Dutch and the Portuguese navigators kept up their search for a sea route to India until the ef- forts of Vasco da Gama bore fruit when he discovered the route around the Cape of Good Hope. For a long time before the East India Company was founded the Portuguese and the Dutch shippers had been making enormous profits from the Indian trade. The East In- dia Company began its operations in 1603. In the first eighty years of its enterprise the company made a profit of 171 per cent, per annum on its investment. The details of its imports and exports show that while it took raw silk, fine calicoes, indigo, cloves and mace from India, it brought to India only bullion. It was in 1613 that the British East India traders first in- corporated themselves into a sort of joint stock con- cern. Writing of that time, J. Bruce says ^ that the continent of India was " the seat of the most extensive and splendid monarchies on the surface of the globe." In the four years following the incorporation, the character of the trade of the East India Company re- mained unchanged, though its profits were greatly re- duced, reaching the modest figure of 87J/2 per cent. Then came the embassy of Sir Thomas Roe in 1614 ^ " Annals of the East India Co.," by J. Bruce, Vol. I, p. 166; quoted by James Mill in his History, Vol. I, p. 30. INDUSTRIAL REVOLUTION 45 which resulted in the grant by the Mogul Emperor of Delhi, to the East India Company, of " the liberty of trading and establishing factories in any part of the Mogul dominions ; Surat, Bengal and Sindh being par- ticularly named." At that time the Dutch and the Portuguese claimed the monopoly of the Eastern trade. The English Com- pany had several naval encounters and military en- gagements with them in parts of Asia. In India, these Portuguese and Dutch traders maintained forts and garrisons by which they not only protected their fac- tories but established a certain prestige in the eyes of the native rulers, which helped them in their business. The English wanted to follow their example and plant forts and garrisons as well, but Sir Thomas Roe per- suaded them not to do so, on the ground that the ex- pense of doing so would reduce their profits. We are told that in 1617 " Cloths of India could best be obtained at Surat, though nothing could be disposed of, in return, except China goods, spices and money." ^ For more than a century and a half, the English trade in India consisted mainly of the export of cotton and silk goods, indigo and spices in return for bullion. During this period India imported practically nothing. Bruce says that " on the average of ten years, from 1747 to 1757, £562,423 bullion was exported to India, but after that year bullion was no longer exported there." ^ How the East India Company made enormous 2 Mill, Vol. I, p. 37. 3 " Plans for British India," by J. Bruce, p. 316. See also " Outlines of English Industry," by Cunningham and McAr- thur, Cambridge University Press, 1895, p. 128. 46 ENGLAND'S DEBT TO INDIA profits (perfectly legitimate) from this trade is told by all the historians of the time. Macaulay says : * " The company enjoyed during the greater part of the reign of Charles II, a prosperity to which the his- tory of trade scarcely furnished any parallel and which excited the wonder, the cupidity and the envious ani- mosity of the whole capital (London). . . . During the twenty-three years that followed the Restoration the value of the annual imports from that rich and popular district (the Delta of the Ganges) increased from £8000 to £300,000." And he adds that " the gains of the body (i.e., the company) were almost in- credible . . . the profits were such that in 1676 every proprietor received as a bonus a quantity of stock equal to that which he held. On the capital thus doubled were paid, during five years, dividends amounting to an average of 20 per cent, annually." In 1677 the price of the stock was 245 for every one hundred. In 1681 it rose to 300 and later to 360 and 500. The only limitations to the profits of the com- pany were the exactions of the English crown, the de- mands of the English Exchequer, and the dishonesty of its servants. At that time the balance of trade was entirely in favour of India. The British historian, Orme, in his " Historical Fragments " says that the manufacture of cotton goods was almost universal throughout India. The rupee, which now sells for is. 4d., was then worth 2s. 8d. Such was the economic condition of India. Let us now consider the economic condition of Eng- * Macaulay's " History of England," Vol. V, p. 2094. INDUSTRIAL REVOLUTION 47 land. " In the sixteenth century," says Robertsorij " England was a backward country, and capitaHsts seeking investments looked towards it from all the monetary centres." " Early in the seventeenth century," says Mill, " the English, whose country, oppressed by misgovernment or scourged by civil war, afforded little capital to ex- tend trade, or protect it, were unequal competitors of the Dutch." By the end of the seventeenth century, conditions had become alarmingly acute, not only in England, but throughout Europe, as has been shown by Brooks Adams. Adams says that towards the close of the seventeenth century Europe appeared to be on the brink of a contraction of money, due partly to the con- stant drain to Asia and the increasing demands of com- merce. From the reign of Augustus commerce be- tween Europe and Asia had usually favoured Asia. The lack of money led to a considerable depreciation of currency in England. Speaking of the time of the Revolution Ruding says : " At that time the diminution of the value of money and counterfeiting had been so excessive that what was good silver was worth scarcely one-half of the current value, and a great part of the coins was only iron, brass, or copper plated, and some no more than washed over." In the decade between 1710-1720 the actual export of bullion by the East India Company averaged £4,344,- 000. The story of how England supplied her needs at this time is one of the most dramatic pages of history. As 48 ENGLAND'S DEBT TO INDIA Jevons has observed, " Asia is the great reservoir and sink of the precious metals." From time immemorial the oriental custom has been to hoard, and from the Mogul blazing with the diamonds of Golconda, to the peasant starving on his wretched pittance, every Hindu had, in former days, a treasure stored away against a day of trouble. " These hoards, the savings of mil- lions of human beings for centuries, the Eyiglish seized and took to Londoti, as the Romans had taken the spoils of Greece and Pontus to Italy. What the value of the treasure was, no man can estimate hut it must have been many millions of pounds — a vast sum in proportion to the stock of the precious metals theft owned by European." ^ We have already pointed out on the authority of Bruce that the last export of bullion from England to India took place in 1757, the year in which the battle of Plassy was fought. After that, bullion was no longer exported to India. " From this period on, the export of bullion to China very considerably decreased and it was only sent occasionally after the supply from India failed. This circumstance was explained in every letter sent by the directors to their servants at Madras and Bengal, which contained instructions to them to collect as much bullion as they could, to be ready for ships which would come out from Madras and China, and by the answers to the letters specifying the quantity sent by the different vessels." ^ The circumstances in India at that time were very favourable to the collection of bullion by the servants ^Brooks Adams in "The Law of Civilisation and Decay," p. 305. ^J. Bruce, "Plans for British India," pp. 314-315. INDUSTRIAL REVOLUTION 49 of the East India Company. In the words of Ma- caulay, " Treasure flowed to England in oceans ; " and what was lacking in England to make the fullest pos- sible use of the mechanical inventions made by Watt and others, was supplied by India. The influx of Indian treasure added considerably to England's cash capital. Brooks Adams remarks that after Plassy the Bengal plunder began to arrive in London and, " the effect appears to have been instantaneous, for all authorities agree that the Industrial Revolution — the current which divided the nineteenth century from all antece- dent time — began with the year 1760." It is an historic fact that prior to that time the ma- chinery used for spinning cotton in Lancashire was as simple as it was in India. It was in 1760 that the flying-shuttle was invented. Hargreave invented the spinning jenny in 1764, Compton invented the mule in 1779, Cartwright in 1795 patented the power-loom, and Watt brought his steam engine to completion in 1768. Had these inventions been matured fifty years before the influx of Indian treasure and the expansion of credit which followed such masses of capital, they and their inventors would probably have perished for want of sufficient money to set them going, for it should be borne in mind that the factory system was not the father of the industrial revolution but the child thereof. In short, the accumulated masses of Indian treasure liberated the machines to furnish an outlet for the movement of the time. Adams points out how agriculture also was impelled by this new force. A credit system based on Indian metal sprang up in 50 ENGLAND'S DEBT TO INDIA England, and the agriculturists who could borrow, im- ported cattle and improved tillage. This movement resulted in increasing the value of land. The wastes were enclosed, thus making the position of the yeo- manry almost unbearable and provoking the far-reach- ing social revolution of the time. England, favoured as she was with coal and iron mines and with credit, the easy vehicle of energy, soon dominated the European and American market and even undersold Hindu labour at Calcutta. It is clear then that the " Industrial Revolutipn," the, foundation on which England^ econpnii^j^qsperity was built up,~ was made possi ble onlv bv the influx of Indian treasure._ and thatbut for this capital^ no t inanprf^ h^^t_^Jf^^ ripd ^^^^'m^ "o iutcrcst, the as- cendency of the steam engine and mec h^ical appli- ances for mass production, might have remain ed u n- utilised. Engj and''s'g ain w^f ^"A''?\ 1n5s,i:^;;_a Joss of trpgjiirp mnrp fhan pnnngVi tr> «;tafYq^hie r indus tries and retard the progress o f agriculture. No coun trv.~hbw- ever rich or resourceful, could bear such a dramun- harrned^ ~^ The wound inflicted by wholesale exportation of In- dia's wealth, was deepened by the way in which the treasure was collected. The wealth which England de- rived from India and invested in her industries at home, or otherwise used to her profit, may be classified thus: I. Tributes and gratuities obtained from Indian rulers and potentates, in the name of, and for the East India Company. INDUSTRIAL REVOLUTION 51 2. Taxes raised from the people in the name of, and for the East India Company. 3. The profits of internal trade carried on by the servants of the East India Company in their own interests. 4. Bribes and gratuities obtained from the Native rulers, their relatives and connections who had any dealings with the East India Company. Some of these emoluments were obtained openly, others surreptitiously and by extortion. Part of the money thus raised went to England in the shape of goods purchased from India for sale in England and elsewhere; the rest went in cash. For better understanding, the period may be considered under two divisions : 1. The economic effects of the battle of Plassy, 1757-60, under the governorship of Clive, and the revolutions and changes that took place in Bengal, 1760-65, during the absence of Clive in England. 2. Clive's second administration, 1765-67. I. Effects of Plassy. The victory of Plassy was followed by a treaty with Mir Jafifar by which the latter agreed to pay to the East India Company about one and three-quarters millions pounds sterling, in cash, be- sides large tracts of land in permanent ownership.'' In '' In addition to the sums defined in the treaty, Mir Jaffar after his enthronement made large gifts to the highest servants of the Company. The Select Committee of 1772 estimated the amount of these gifts at £1,250,000, of which Clive received £234,000 (Third Report, p. 311). But these were only "gifts proved and acknowledged." In 1759 Clive further received as a jaghir or estate, the right of receiving from the Com- pany the tribute due from it for the territories referred to in the treaty as " the 24 parganas " or districts. Mir Jaffar also bequeathed him five lacs of rupees, £50,000 which he made over to the Company as a fund for pensioning disabled soldiers. See Muir, " The Making of British India," p. 59. 52 ENGLAND'S DEBT TO INDIA his " Essay on Clive," Macaulay has left a graphic de- scription of the " shower of wealth " that began to fall after Plassy. Within less than three years from this treaty, Mir Jaffar was declared a failure; during his rule, the greed and rapacity of the servants of the Company found full play, and Bengal was in -a condition of an- archy. This state of things was the direct result of the conduct of the Company's servants. Muir says : " The only persons who profited by these conditions were the individual servants of the Company, who found no check or control exercised over their high- handed pursuit of private profit." ^ A change being necessary, Mir Jaffar was deposed, and his son-in-law, Mir Kassim, installed as Nabob. In return for this service, he ceded to the British three of the most prosperous districts of Bengal, — Burdwan, Midnapur and Chittagong, — in lieu of paying the army, which he was unable to do, his revenues being sadly depleted by the ravages and piratical demands of his masters, the servants of the Company. He also agreed to pay the balance of Mir Jafifar's unpaid ac- count, and gave an extra present of five lacs of rupees, £50,000 to help pay the expenses of the Company's wars in the south. The amount given in presents to the English officers on this occasion totalled £200,269, — of which the governor took £58,333. Mir Kas- sim met his engagements with the Company, and in less than two years, had faithfully discharged his ob- ligations. Mir Kassim proved an unexpected set back to the de- 8 " The Making of British India," p. 59. INDUSTRIAL REVOLUTION 53 signs of the British merchants. In place of being a mere tool in their hands, he turned out to be a far more efficient ruler than Mir Jaffar, and brought about a great improvement in conditions. But in the language of Professor Muir: " He was never given a fair chance. From the out- set he was an object of suspicion and hostility on the part of the majority of the Calcutta Council. They disliked the change from the nerveless rule of Mir Jaffar, because it interfered with their profits; and especially they resented the attempt to levy tolls on the trade carried on for their profit by the Indian gomastas." Governor Verelst has left it on record that : " A trade was carried on without payment of duties, in the prosecution of which infinite oppressions were committed. English agents or Gomastahs, not con- tented with injuring the people, trampled on the au- thority of government, binding and punishing the Nabob's officers whenever they presumed to interfere. This was the immediate cause of the war with Meer Cossim." * A corroboration of this is furnished by the letter of Warren Hastings to the Governor on April 25, 1762 : " I beg leave to lay before you a grievance which loudly calls for redress, and will, unless duly attended to, render ineffectual any endeavours to create a firm and lasting harmony between the Nabob and the Com- pany. I mean the oppression committed under the sanction of the English name. ... I have been sur- prised to meet with several English flags flying in places which I have passed, and on the river I do not 9 Quoted by Romesh Dutt, " India Under Early British Rule," p. 20. 54 ENGLAND'S DEBT TO INDIA believe I passed a boat without one. By whatever title they have been assumed (for I could trust to the in- formation of my eyes without stopping to ask ques- tions), I am sure their frequency can bode no good to the Nabob's revenues, the quiet of the country, or the honour of our nation, but eventually tends to les- sen each of them. A party of Sepoys who were on the march before us afforded sufficient proofs of the rapacious and insolent spirit of those people where they are left to their own discretion. Many com- plaints against them were made me on the road, and most of the petty towns and Serais were deserted at our approach and the shops shut up from the appre- hensions of the same treatment from us. You are sensible, sir, that it is from such little irregularities, too trivial perhaps for public complaint and continually repeated, that the country people are habituated to entertain the most unfavourable notions of our govern- ment." ^'^ From the protests of the Nabob of Bengal we quote only one extract, viz., the one contained in his letter written in May, 1762: " In every Perganah, every village, and every fac- tory, they (the Company's Gomastahs) buy and sell salt, betel-nut, ghee, rice, straw, bamboos, fish, gun- nies, ginger, sugar, tobacco, opium, and many other things, more than I can write, and which I think it needless to mention. They forcibly take away the goods and commodities of the Reiats, merchants, etc., for a fourth part of their value ; and by ways of vio- lence and oppressions they oblige the Reiats, etc., to give five rupees for goods which are worth but one rupee. . . . The officers of every district have desisted from the exercise of their functions ; so that by means 1" Quoted by Romesh Dutt, " India Under Early British Rule," p. 21. INDUSTRIAL REVOLUTION 55 of these oppressions, and my being deprived of my duties, I suffer a yearly loss of nearly twenty-five lakhs of Rupees. ... By the grace of God, I neither have transgressed, nor do, nor will transgress the treaty and agreement which I have made; why then do the chiefs of the Englishmen render my government contemptible and employ themselves in bringing a loss upon me ? " ^^ But a more graphic description is to be found in a letter from Sergeant Brago : " A gentleman sends a Gomastah here to buy or sell ; he immediately looks upon himself as sufficient to force every inhabitant either to buy his goods or sell him theirs; and on refusal (in case of non-capacity) a flogging or confinement immediately ensues. This is not sufficient even when willing, but a second force is made use of, which is to engross the different branches of trade to themselves, and not to suffer any person to buy or sell the articles they trade in ; and if the country people do it, then a repetition of their authority is put in practise; and again, what things they purchase, they think the least they can do is to take them for a considerable deal less than another merchant, and oftentimes refuse paying that; and my interfering occasions an immediate complaint. These, and many other oppressions more than can be related, which are daily used by the Bengal Gomastahs, is the reason that this place ( Backer] unj, a prosperous Ben- gal district) is growing destitute of inhabitants; every day numbers leave the town to seek a residence more safe, and the very markets, which before afforded plenty, do hardly now produce anything of use, their peons being allowed to force poor people ; and if the Zemindar offers to prevent it, he is threatened to be "Quoted by Romesh Dutt, "India Under Early British Rule," p. 23. 56 ENGLAND'S DEBT TO INDIA used in the same manner. Before, justice was given in the pubhc Catcheree, but now every Gomastah is become a judge, and every one's house a Catcheree; they even pass sentences on the Zemindars themselves, and draw money from them by pretended injuries, such as a quarrel with some of the peons, or their having, as they assert, stole something, which is more likely to have been taken by their own people." ^^ One more quotation from William Bolts, an Eng- lish merchant, and we have done with this part of this sad story: " It may with truth be now said that the whole in- land trade of the country, as at present conducted, and that of the Company's investment for Europe in a more peculiar degree, has been one continued scene of op- pression; the baneful efifects of which are severely felt by every weaver and manufacturer in the country, every article produced being made a monopoly ; in which the English, with their Banyans and black Go- mastahs, arbitrarily decide what quantities of goods each manufacturer shall deliver, and the prices he shall receive for them. . . . Upon the Gomastah's arrival at the Aurung, or manufacturing town, he fixes upon a habitation which he calls his Catcherry ; to which, by his peons and hircarahs, he summons the brokers, called dallals and pykars, together with the weavers, whom, after receipt of the money despatched by his masters, he makes to sign a bond for the delivery of a certain quantity of goods, at a certain time and price, and pays them a certain part of the money in advance. The assent of the poor weaver is in general not deemed 12 Quoted by Romesh Dutt, " India Under Early British Rule," pp. 23, 24. INDUSTRIAL REVOLUTION 57 necessary; for the Gomastahs, when employed on the Company's investment, frequently make them sign what they please ; and upon the weavers refusing to take the money offered, it has been known they have had it tied in their girdles, and they have been sent away with a flogging. ... A number of these weavers are generally also registered in the books of the Com- pany's Gomastahs, and not permitted to work for any others, being transferred from one to another as so many slaves, subject to the tyranny and roguery of each succeeding Gomastah. . . . The roguery practised in this department is beyond imagination; but all ter- minates in the defrauding of the poor weaver ; for the prices which the Company's Gomastahs, and in con- federacy with them the Jachendars (examiners of fa- brics) fix upon the goods, are in all places at least 15 per cent., and some even 40 per cent, less than the goods so manufactured would sell in the public bazaar or market upon free sale. . . . Weavers, also, upon their inability to perform such agreements as have been forced upon them by the Company's agents, universally known in Bengal by the name of Mutchulcahs, have had their goods seized and sold on the spot to make good the deficiency ; and the winders of raw silk, called Negoads, have been treated also with such injustice, that instances have been known of their cutting off their thumbs to prevent their being forced to wind silk." But agriculture also declined in Bengal under this system. " For the ryots, who are generally both land-holders and manufacturers, by the oppressions of Gomastahs 58 ENGLAND'S DEBT TO INDIA in harassing them for goods are frequently rendered incapable of improving their lands, and even of pay- ing their rents ; for which, on the other hand, they are again chastised by the officers of the revenue, and not infrequently have by those harpies been necessi- tated to sell their children in order to pay their rents, or otherwise obliged to fly the country." ^^ In fairness to Warren Hastings and the Governor Vansittart, it may be said that they recognised the force of the Nabob's complaints and tried to persuade their colleagues in Bengal to put matters right. But self- interest and greed prevented the latter from seeing the justice of the Nabob's complaints and the soundness of the proposals submitted by Warren Hastings and Van- sittart in consultation with the Nabob to put an ef- fective check on the company's servants. The Coun- cil rejected these proposals and when the Nabob heard of the rejection, he in a moment of " noble indignation and under an impulse of high-minded patriotism " re- solved to sacrifice his revenues by abolishing all inland duties so that his subjects might have a chance of carry- ing on inland trade on equal terms with the servants of the East India Company. What the English mer- chants wanted, however, was monopoly and not equal opportunity. They accordingly protested against this action of the Nabob and made his protest the basis of a quarrel with him which eventually led to war. " The conduct of the Company's servants upon this occasion," says James Mill in his " History of British India," " furnishes one of the most remarkable instances upon ^3 Quoted by Romesh Dutt, " India Under Early British Rule," pp. 25, 26, 27. INDUSTRIAL REVOLUTION 59 record of the power of interest to extinguish all sense of justice and even of shame." The move resulted in the defeat of Mir Kassim, who in a fit of fury caused the English prisoners at Patna to be massacred and then left his dominions for good. Mir Jaffar, the old puppet who had a few years before been declared a failure, was again set up as Nabob, but he died shortly after, and his illegitimate son Najm-uddaula was hastily created Nabob in 1765. On these occasions the presents which the English officers received from Mir Jaffar and his illegitimate son amounted to £500,165 and £230,356 respectively. Besides these amounts received in presents (amounting within eight years to £2,169,665) other sums amount- ing to £3,770,833 were claimed and obtained as " resti- tution " within this period.^* This amount was in ad- dition to the income which the Company derived from the territories made over to them by the Nabobs, as well as the amounts agreed to be given under the dif- ferent treaties as subsidies, gratuities and expenses of maintaining the army. 2. The Second Administration of Lord Clive. When the reports of the misdoings of their servants in India reached the directors of the East India Company in London they prevailed upon Lord Clive to return to India and set matters right. They seem to have been sincerely shocked at the turn things had taken and 1* " House of Commons third report, 1773," p. 311, quoted by Romesh Dutt in his " India Under Early British Rule." See also the remarks of Lecky in his " History of England in the Eighteenth Century," Vol. HI (1883), p. 76: "At every turn of the wheel, at every change in the system or personality of the Government vast sums of money were drawn from the national treasury," and so on. 6o ENGLAND'S DEBT TO INDIA condemned both the inland private trade carried on by their servants in defiance of old treaties, and the new treaty which had been " exacted by violence." Clive's views on the condition of Bengal at the time, may be gathered from the letters he wrote to the di- rectors after his return to Bengal. In one of the letters he said: " I shall only say that such a scene of anarchy, con- fusion, bribery, corruption, and extortion was never seen or heard of, in any country but Bengal ; nor such and so many fortunes acquired in so unjust and ra- pacious a manner. The three provinces of Bengal, Behar, and Orissa, producing a clear revenue of £3,- 000,000 sterling, have been under the absolute man- agement of the Company's servants, ever since Mir Jaffar's restoration to the subaship; and they have, both civil and military, exacted and levied contributions from every man of power and consequence, from the Nabob down to the lowest zemindar. " The trade has been carried on by free merchants, acting as gomastas to the Company's servants, who under the sanction of their names, have committed ac- tions which make the name of the English stink in the nostrils of a Hindu or a Mussulman; and the Com- pany's servants themselves have interfered with the revenues of the Nabab, turned out and put in the offi- cers of the government at pleasure, and made every one pay for their preferment." ^^ These views were re- peated, and proposals to remedy the evils were offered in another letter, which is an epoch making document and deserves extensive quotation, in any discussion "Malcolm, "Life of Clive," II, p. 379. INDUSTRIAL REVOLUTION 6i of the events of these times. We give a few para- graphs below: " Upon my arrival, I am sorry to say, I found your affairs in a condition so nearly desperate as would have alarmed any set of men whose sense of honour and duty to their employers had not been estranged by the too eager pursuit of their own advantage. The sudden, and, among many, the unwarrantable acquisi- tion of riches, had introduced luxury in every shape and in the most pernicious excess. These two enorm- ous evils went hand in hand together through the whole Presidency, infecting almost every member of each Department ; every inferior seemed to have grasped at wealth that he might be able to assume that spirit of profusion which was now the only distinction between him and his superior. ... It is no wonder that the lust of riches should readily embrace the proffered means of its gratification, or that the instruments of your power should avail themselves of their authority, and proceed even to extortion in those cases where simple corruption could not keep pace with their rapac- ity. Examples of this sort, set by superiors, could not fail of being followed in proportional degree by inferiors ; the evil was contagious, and spread among the civil and military, down to the writer, the ensign, and the free merchant. . . .^^ " The sources of tyranny and oppression, which have been opened by the European agents acting under the authority of the Company's servants, and the num- berless black agents and sub-agents acting also under them, will, I fear, be a lasting reproach to the English name in this country. ... I have at last, however, the happiness to see the completion of an event, which, in this respect as well as in many others, must be pro- ductive of advantages hitherto unknown, and at the 16 Quoted by Dutt, " India Under Early British Rule," pp. 35, 36. 62 ENGLAND'S DEBT TO INDIA same time prevent abuses that have hitherto had no remedy : I mean the Devvanee, which is the superin- tendency of all the lands and the collection of all the revenues of the Provinces of Bengal, Behar, and Orissa. The assistance which the Great Moghul had received from our arms and treasury made him readily bestow this grant upon the Company ; and it is done in the most effectual manner you can desire. The al- lowance for the support of the Nabob's dignity and power, and the tribute to His Majesty (the Great Moghul) must be regularly paid; the remainder be- longs to the Company. , . . " 13. Your revenues, by means of this acquisition, will, as near as I can judge, not fall far short for the ensuing year of 250 lacs of Sicca Rupees, including your former possessions of Burdwan, etc. Hereafter they will at least amount to twenty or thirty lacs more. Your civil and military expenses in time of peace can never exceed sixty lacs of Rupees ; the Nabob's al- lowances are already reduced to forty-two lacs, and the tribute to the King (The Great Moghul) at twenty-six ; so that there will be remaining a clear gain to the Company of 122 lacs of Sicca Ruppees, or £1,650,900 sterling. . . ." " He also submitted proposals to increase the salaries of the servants of the Company though he could not make up his mind to recommend a prohibition of pri- vate inland trade by them. In fact, such was his moral code, that on September 18, 1865, while he was probably drafting the letter of September 30, embodying his proposals about the Dewanee, he exe- cuted an indenture creating a partnership of him- self and some of the other servants of the Company, to carry on joint inland trade in salt, betel-nut and to- bacco for their personal profit, and so resolved was he 17 Quoted by Dutt, " India Under Early British Rule," p. 37. INDUSTRIAL REVOLUTION 63 to carry on the trade even in defiance of the order of the directors that a clause was inserted in the indenture whereby he, as president of the Bengal Council, guar- anteed the continuance of this trade even if the Court of Directors in England ordered its dissolution and dis- continuance. Later on when Lord Clive was charged with having allowed his private interests to get the better of his judgment in encouraging this evil, he tried to excuse himself on the ground that it was done to benefit friends whom he had induced to accompany him to Bengal on the understanding of being allowed to make money by such trade, yet he never denied that his own personal share in the profits of the transaction was the largest.^* The directors, however, condemned the practice in the strongest terms and reiterated their dis- approval of the practice which had in the past led to the acquisition of " vast fortunes " by " a scene of the most tyrannic and oppressive conduct that was ever known in any age or country." So in their letter of May 17, 1766, they refused to sanction Clive's scheme for continuing the private inland trade under the regu- lations framed by him. The trade, nevertheless, was continued for two years more under one pretence or another. After Clive. Lord Clive left India for the last time in 1769. In the words of Professor Muir, " Clive had no sense of responsibility for the good government of Bengal. His sole desire was to preserve the Com- pany's political ascendency by playing upon the weak- 18 Mill, the historian of British India, holds that this plea does not in anyway lessen the shamelessness of the transac- tion, a view from which Wilson differs. 64 ENGLAND'S DEBT TO INDIA nesses of the Nabob and his subjects." ^^ In all his writings there is no hint of a belief that the Company ought to insure good government to the people of Bengal. But in the language of Brooks Adams, " the takings of Clive either for himself or for the Govern- ment were nothing compared to the wholesale spolia- tion which followed his departure, when Bengal was surrendered a helpless prey to a myriad of greedy offi- cials who ' were irresponsible and rapacious and who emptied the private hoards.' " Speaking of the gains of Clive, Macaulay says : " As to Clive, there was no limit to his acquisition but his own moderation. The treasury of Bengal was thrown open to him. There were, well piled up, after the usage of Indian princes, immense masses of coin, among which might not seldom be detected the florins and byzants with which before any European ship had turned the Cape of Good Hope, the Venetians pur- chased the stuffs and spices of the East. Clive walked between heaps of gold and silver, crowned with rubies and diamonds and was at liberty to help himself." What followed his departure is thus summed up by the same authority: " Enormous fortunes were thus rapidly accumulated at Calcutta, while thirty millions of human beings were reduced to the extremity of wretchedness. The mis- government of the English was carried to such a point as seems hardly compatible with the very existence of society." During the five years following Lord Clive's retire- ment from the service of the East India Company the servants of the latter left nothing undone to wring out 1" " The Making of British India," Manchester (1915), p. 82. INDUSTRIAL REVOLUTION 65 as much money as they could, by every means, from the rulers and natives of Bengal. The " trade oppres- sion " practised during this period may better be de- scribed in the words of William Bolts, a servant of the Company, from his " Considerations on Indian Af- fairs," published in 1772, a description v^hich Profes- sor Muir pronounces " substantially true." ^^ Says Mr. Bolts on page 73 of his book: " Inconceivable oppressions and hardships have been practised towards the poor manufacturers and work- men of the Country, who are, in fact, monopolised by the Company as so many slaves. . . . Various and in- numerable are the methods of oppressing the poor weavers, which are duly practised by the Company's agents and gomastas in the country; such as by fines, imprisonments, floggings, forcing bonds from them, etc., by which the number of weavers in the country has been greatly decreased. The natural consequences whereof have been, the scarcity, dearness, and debase- ment of the manufactures as well as a great diminution of the revenues: and the provision of the Company's investment has thereby now become a monopoly, to the almost entire exclusion of all others, excepting the servants of the Company highest in station, who hav- ing the management of the investment, provide as much as their consciences will let them for the Company, themselves and their favourites; excepting also the foreign Companies who are permitted to make some small investments, to prevent clamours in Europe. . . ." In this way, the servants of the Company ruined the trade of the country, and by coercion and oppression established their monopoly. Mr. Bolts has dealt with the situation in Bengal at great length in his book where the interested reader may pursue his investigations further. 20 Muir, " The Making of British India," p. 89. 66 ENGLAND'S DEBT TO INDIA This disposes of the first two items of what C. H. Peries in his " Industrial History of Modern Eng- land," p. lo, calls " the plunder of India." The third item, the income derived from districts in possession of the Company, may be stated in the words of Mr. Verelst, one-time Governor of Bengal : " In the provinces of Burdwan and Midnapur, of which both the property and jurisdiction were ceded to the Company by Mir Kasim in the year 1760, those evils which necessarily flowed from the bad policy of the Moorish Government had in no sort decreased. On the contrary, a plan was adopted in 1762 produc- tive of certain ruin to the province. The lands were let by public auction for the short term of three years. Men without fortune or character became bidders at the sale ; and while some of the former farmers, un- willing to relinquish their habitations, exceeded per- haps the real value in their offers, those who had noth- ing to lose advanced yet further, wishing at all events to obtain an immediate possession. Thus numberless harpies were let loose to plunder, whom the spoil of a miserable people enabled to complete their first year's payment." ^^ The net amount remitted to England by the repre- sentatives of the East India Company on account of revenues, after defraying all the civil and military charges from 1765 to 1771 amounted to a little over four million pounds sterling. The total amounts raised totalled a little over thirteen million pounds. Most of what constituted civil and military charges also went to England in one shape or another. 21 " View of the Rise of the English Government in Bengal," by Harry Verelst, Esq., late Governor of Bengal; London, 1772; p. 70. INDUSTRIAL REVOLUTION 67 The whole matter was clearly put by Burke in the re- port of the select committee of the House of Com- mons appointed later to enquire into the affairs of the East India Company. " This new system of trade, carried on through the medium of power and public revenue, very soon pro- duced its natural effects. The loudest complaints arose among the natives, and among all the foreigners who traded in Bengal. It must have unquestionably thrown the whole mercantile system of the country into the greatest confusion. With regard to the na- tives, no expedient was proposed for their relief. The case was serious with respect to European powers. The Presidency plainly represented to the Directors that some agreement should be made with foreign na- tions for providing their investment to a certain amount, or that the deficiencies then subsisting must terminate in an open rupture with France." ^- " Notwithstanding the famine in 1770, which wasted Bengal in a manner dreadful beyond all example, the investment, by a variety of successive expedients, many of them of the most dangerous nature and tendency, was forcibly kept up ; and even in that forced and un- natural state it gathered strength almost every year. The debts contracted in the infancy of the system were gradually reduced, and the advances to contractors and manufacturers were regularly made ; so that the goods from Bengal, purchased from the territorial revenues, from the sale of European goods, and from the pro- duce of the monopolies, for the iour years which ended with 1780, when the investment from the sur- plus revenues finally closed, were never less than a million sterling, and commonly nearer twelve hundred thousand pounds. This million is the lowest value of the goods sent to Europe for which no satisfaction is 22 Ninth Report, p. 47; Burke, "Collected Works," Vol. Ill, quoted by Digby, p. 28. 68 ENGLAND'S DEBT TO INDIA made." ^^ [The sale, to the amount of one hundred thousand pounds annually, of the export from Great Britain ought to be deducted from this million.] " In all other countries, the revenue, following the natural course and order of things, arises out of their commerce. Here, by a mischievous inversion of that order, the whole foreign maritime trade, whether Eng- lish, French, Dutch, or Danish, arises from the reven- ues ; these are carried out of the country without pro- ducing anything to compensate so heavy a loss." ^* 23 Ibid., pp. 47-48. 2* I bid. J p. 50. CHAPTER III TRIBUTE " OR " DRAIN General Observations. The question whether India pays tribute to England, or ever has paid it, has been and is the subject of bitter controversy among Enghsh pubHcists. ^g^.J?^!:tl_?..?j-p''t.'7 th?^t T"dia h as been pav - ing an enormo us tribute to England and still pays it ; that there has been g oing on a regula r " dra in '* of India's w ealth to E nglaD.d ever since B ritish con necti on with India began ; that under the direct ad - mi'ni'cfr^ti'np r>f Ind^ ^Y ^"^^ Prnwr. SITI^? iSpS. tha drain not only hasn ot cea.sed but has actuajlY , creased ;~ and that thisdrain has impoverished India beyond description, 'l he other party holds that India has never paid any tribute to England ; that there is no drain from India to England ; that what has been paid by India has been received by England in lieu of serv- ices rendered or capital loaned for her improvement ; and that under British rule India has attained a pros- perity which she had never known before in her his- tory. We intend to state the case of both parties, with as much fairness as we are capable of, considering that together with all Indian publicists we agree with the former and ha ve no doubt of India's having bee n Y exploited and economically injured by British policy . 'IrTflTFpfecedmg chapler we have shown how Eng- 69 70 ENGLAND'S DEBT TO INDIA land stood, economically, for more than two centuries, immediately preceding the battle of Plassy and there- about; also how Indian treasure flowed to England and chan ged the whole economic outlook there . We do not know of a single publicist English or Indian who denies or questions the facts upon w^hich the theory of drain is based. All parties are agreed that at least for thirty years, from 1757 to 1787, Bengal was " plundered " by the servants of the East India Com- pany. What happened afterwards will be stated partly in the chapter relating to industries and com- pleted in other chapters. Drain: the Case Against England. In a letter of July 2, 1 90 1, published in the Morning Post, London, Mr. H. M. Hyndman, the great Socialist leader, said: " More than twenty years ago the late Sir Louis Mallet (I presume with the knowledge and consent of Lord Cranbrook, then Secretary of State for India, and of my friend the late Edward Stanhope, then Un- der-Secretary) put at my disposal the confidential documents in the India office, from Indian finance min- isters and others, bearing on this question of the drain from India to England and its effects. The situation is, to my mind, so desperate that I consider I am en- titled to call on Lord George Hamilton to submit the confidential memoranda on this subject, up to and after the year 1880, for the consideration of the House of Commons. I venture to assert that the public will be astonished to read the names of those who (pri- vately) are at one with me on this matter. As to remedy, there is but one, and it is almost too late for that: the stanching of the drain and the steady sub- " TRIBUTE " OR " DRAIN " 71 stitution of native rule, under light English supervis- ion, for our present ruinous system." On page 208 of his book Mr. W. Digby gives the photographic reproduction of two pages from an In- dian Blue Book containing admissions about the drain. " Great Britain, in addition to the tribute she makes India pay her through the customs, derives benefit from the savings of the service at the three presiden- cies being spent in England instead of in India ; and in addition to these savings, which probably amount to near a million, she derives benefit from the fortunes realised by the European mercantile community, which are all remitted to England." Pari. Paper, 1853 (445- II.), page 580. The following extracts are made from the " Reports of the Committees of the House of Commons" (Vol. V, 1781-82, printed 1804). Comparing Indian rule with the rule of the East India Company, Mr. Philip Francis, once a member of the Bengal Council, wrote : " It must give pain to an Englishman to have rea- son to think that, since the accession of the Company to the Dewanee, the condition of the people of this country has been worse than it was before; and yet I am afraid the fact is undoubted ; and I believe has proceeded from the following causes : the mode of providing the Company's Investment; the exportation of specie, instead of importing large sums annually; the strictness that has been observed in the collections ; the endeavours of all concerned to gain credit by an increase of revenue during the time of their being in station, without sufficiently attending to what future consequences might be expected from such a measure ; ^2 ENGLAND'S DEBT TO INDIA the errors that subsist in the manner of making col- lections, particularly by the employment of Aumils: These appear to me the principal causes why this fine country, which flourished under the most despotic and arbitrary Government, is verging towards its ruin while the English have really so great a share in the Administration." Ten years later, says Mr. Digby *' Prosperous Brit- ish India," p. 215. Charles Grant, of the Indian House, the greatest panegyrist of British rule in India — and, at the same time, himself the worst disparager of the Indian people known in British-Indian literature — was constrained to admit : " We apply a large portion of their annual produce to the use of Great Britain." The Honourable F. J. Shore, a retired Bengal ad- ministrator, says in his " Notes on Indian Affairs " (London, 1837, Vol. II, page 516) : " More than seventeen years have elapsed since I first landed in this country ; but on my arrival, and during my residence of about a year in Calcutta, I well recollect the quiet, comfortable, and settled conviction, which in those days existed in the minds of the English population, of the blessings conferred on the natives of India by the establishment of the English rule. . . . " I was thus gradually led to an inquiry into the principles and practice of British-Indian administra- tion. Proceeding in this, I soon found myself at no loss to understand the feelings of the people both to- wards the Government and to ourselves. It would have been astonishing indeed had it been otherwise. The fundamental principle of the English had been to make the whole Indian nation subservient, in every possible way, to the interests and benefits of them- selves. They have been taxed to the utmost limit; " TRIBUTE " OR " DRAIN " 73 every succ essive Province, as it has falle n 'i^fo <^^^y p^'^- sesJTUnjnias been made a field for Jugher_exaction ; and it has always been our boast how greatly we have raised the revenue above that which the native rulers were able to extort. The Indians ha ve been exclud ed from every honour, dignity^ or office'^ which the low- est Englis%man'TouIT~Be' prevdUe'd uJbWTo~ci:ucept'' [Italics ours.] And elsewhere he writes: " The halcyon days of India are over ; she has been drained of a large proportion of the wealth she once possessed; and her energies have been cramped by a sordid system of misrule to which the interests of mil- lions have been sacrificed for the benefit of the few." ^ John Sullivan, also an eminent English administra- tor, who served in India from 1804 to 1841 and was examined by the Select Committee of the House of Commons when the question of the renewal of the charter of the East India Company came up in 1853, said: " Do you suppose that they (the people of India) have traditions among them which tell them that the economic condition of the population was better in former times under their native rulers than it is now ? "I think, generally speaking, history tehs us that it_ was ;*tKey~ Rave been in a state of the greatest^ros- perity from the earliest times as far as history tells, us. -..- " How do you account for the superior economic state of the people, and for their ability to lay out the money which they did in canals and irrigation and tanks, if they were wasting more wealth, and sacrificing more lives in war, than we do now, especially seeing that the wars were carried on very much upon their 1 Ibid., p. 28. 74 ENGLAND'S DEBT TO INDIA own territories, instead of being beyond their limits? " We have an expensive element which they were free from, which is the European element, civil and military, which swallows up so much of the revenue ; from that cause our administration is so much more expensive ; that, I think, is the great reason." John Sullivan did not shrink from the logical con- clusion of his opinions, when he was asked if he would restore British territory to native rule, keeping the military control of the Empire in British hands. " 4890. You would restore a great deal of territory to native rulers upon principles of justice?" " Yes." " Because we have become possessed of them by violence or by other means without any just right or title?" " I would do so upon principles of justice and upon principles of financial economy." ^ He also said : " As to the complaints which the people of India have to make of the present fiscal system, I do not conceive that it is the amount altogether that they have to complain of. I think they have rather to complain of the application of that amount. Under their own dynasties, all the revenue that was collected in the country was spent in the country ; but under our rule, a large proportion of the revenue is annually drained away, and without any return being made for it ; this drain has been going on now for sixty or seventy years, and it is rather increasing than the reverse. . . . Our system acts very much like a 2 Third Report of the Select Committee, 1853, pp. 19 and 20. " TRIBUTE " OR " DRAIN " 75 sponge, drawing up all the good things from the banks of the Ganges, and squeezing them down on the banks of the Thames. . . ." [Italics ours.] Sir John Malcolm, Governor of Bombay in 1827 (one of the makers of British Empire in India) was examined before the select committee of the House of Commons in 1832. " In your opinion, was the substitution of our gov- ernment for the misrule of the native princes the cause of greater prosperity of the agricultural and commercial part of the population? " I cannot answer this in every province of India, but I shall as far as my experience enables me. I do not think the change has benefited, or could benefit either the commercial, the monied, or the agricultural classes of many of the native States, though it may be of others. It has not happened to me ever to see countries better cultivated, and so abounding in all produce of the soil, as well as commercial wealth, than the southern Mahratta districts, when I accompanied the present Duke of Wellington to that country in the year 1803. . . . " With respect to Malwa. . . . And I do not believe that the introduction of our direct rule could have con- tributed more, nor indeed so much, to the prosperity of the commercial and agricultural interests as the establishment of the efficient rule of its former princes and chiefs. . . . " With respect to the southern Mahratta districts, of whose prosperity I have before spoken ... I must unhesitatingly state that the provinces belonging to the family of Putwarden and some other chiefs on the 76 ENGLAND'S DEBT TO INDIA banks of the Krishna present a greater agricultural and commercial prosperity than almost any I know in India. . . . Above all causes which promote prosperity is the invariable support given to the village and other native institutions, and to the employment, far be- yond what our system admits, of all classes of the population." ^ Sir George Wingate, who had held high posts in the government of Bombay, recorded the following ob- servations for the consideration of his countrymen when the administration of the Empire passed to the Crown in 1858: " If, then, we have governed India not merely for the natives of India but for ourselves, we are clearly blamable in the sight of God and man for having con- tributed nothing towards defraying the cost of that government. . . . " With reference to its economic effects upon the condition of India, the tribute paid to Great Britain is by far the most objectionable feature in our exist- ing policy. Taxes spent in the country from which they are raised are totally different in their effects from taxes raised in one country and spent in an- other. . . . " The Indian tribute, whether weighed in the scales of justice or viewed in the light of our true interest, will be found to be at variance with humanity, with common sense, and with the received maxims of eco- nomical science." Again, " Were India to be relieved of this cruel burden of 3 " Minutes of Evidence taken before the Select Committee, &c., 1832," Vol. VI, pp. 30 and 31. " TRIBUTE " OR " DRAIN " ^^ tribute and the whole of the taxes raised in India to be spent in India, the revenue of that country would soon acquire a degree of elasticity of which we have at present no expectation." " Our Financial Relations with India," by Major Wingate, London, 1859, pp. 56-64, quoted by Dutt " Early British Rule," pp. 618- 20. [ItaHcs ours.] On page 126 of his book " India in the Victorian Age," Dutt quotes the opinion of Colonel Sykes, a distinguished director of the East India Company, who " spoke of the economic drain from India of £3,300,- 000 to £3,700,000 a year " and remarked that " It is only by the excess of exports over imports that India can bear this tribute." Henry St. John Tucker, the chairman of the East India Company, (quoted by Dutt), said that this eco- nomic drain was an increasing quantity, " because our home charge is perpetually increasing," a prophecy which has been more than amply fulfilled. Similarly another East Indian merchant quoted in the Parliamentary report of 1853, said : " I may say generally that up to 1847, the imports (of India) were about £6,000,000 and the exports about £9,500,000. The difference is the tribute which the company re- ceived from the country, which amounts to about £4,000,000." * Mr. Montgomery Martin, a historian of the British colonies and dependencies, wrote in 1838: " So constant and accumulating a drain, even on England, would soon impoverish her; how severe, then, must be the effect on India, where the wages of * First Report, 1853. 78 ENGLAND'S DEBT TO INDIA a labourer is from two pence to three pence a day." ^ Prof. H. H. Wilson, historian of India, says of the annual drain of wealth : " Its transference to England is an abstraction of Indian capital for which no equivalent is given ; it is an exhausting drain upon the country, the issue of which is replaced by no reflux ; it is an extraction of the life-blood from the veins of national industry which no subsequent introduction of nourishment is furnished to restore." Mr. A. J. Wilson, in an article in the Fortnightly Reviezv, of March, 1884, wrote: " In one form or another we draw fully £30,000,000 a year from that unhappy country (India), and there the average wages of the natives is about £5 per an- num, less rather than more in many parts. Our In- dian tribute, therefore, represents the entire earnings of upwards of six millions heads of families — say of 30,000,000 of the people. It means the abstraction of more than one tenth of the entire sustenance of India every year." Lord Salisbury, the great English statesman, spoke in 1875 of India as a country from which " much of the revenue " was " exported without a direct equivalent." Dr. J. T, Sunderland, a Unitarian minister of the United States, in his pamphlet " The Causes of Fam- ine in India" (page 22), refers to the heavy drain of wealth that is going on as " the greatest of all the causes of the impoverishment of the Indian people." s " History, etc., of Eastern India," Vol. II, p. 12. See also Dutt, " Early British Rule," p. 609. " TRIBUTE " OR " DRAIN " 79 This synopsis of opinions about the " tribute " which India pays and has been paying for more than a century and a half to England, or about the " drain " of India's wealth to England, is by no means ex- haustive. In fact one could fill a volume with such extracts. Besides we have scrupulously kept back the opinions of those British statesmen (several of them very eminent Anglo-Indian administrators like Sir Henry Cotton — late Chief Commissioner of Assam, and once an M. P. ; Sir William Wedderburn, retired member of the Bombay Council and once an M. P. ; Mr. W. S. Caine, late M. P. ; Mr. A. O. Hume, once a secretary to the Government of India ; and many others), who have openly and actively identified them- selves in one way or another, with the cause of Indian nationalism. Similarly we have made no mention of the opinions of Indians themselves. Some further opinions we hope to cite when we come to discuss the extent of the drain. Drain: the Case for England. Now we give below a summary of the opinions on the other side. It should be noted, however, that this school which holds that India pays no tribute to England and that there is no drain of India's wealth to England is of compara- tively recent growth. So long as the administration of India was vested in the East India Company, the pres- ence of this tribute and the existence of this drain was admitted. It was hardly ever questioned. In fact that was the test by which James Mill judged the benefit to England of her occupation of India. It is more or less within the last thirty years that the fact of this drain has begun to be denied. We give below the 8o ENGLAND'S DEBT TO INDIA explanation of the so-called drain, that is embodied in the new edition of the Imperial Gaaeteer of India (an official publication), Vol. IV. Discussing the "Home Charges" (which properly speaking should be called " Foreign Charges " met by Indian revenues), the compiler of the chapter says: " These Home Charges have sometimes been er- roneously described as a tribute which India pays to England in consequence of her subordination to that Country . . . figures will show that nearly ii out of iy)4 million pounds consist of payments on account of Capital and materials supplied by England and belong to a Commercial rather than an administrative class of transaction. Of the balance 43/2 millions represent furlough and pension payments and are a necessary concomitant of the British Administration, to which India owes her prosperity." ^ [Italics ours.] We also make the following long quotation from a leaflet called " The Truth About ' The Drain,' " pub- lished and distributed free by the East India Associa- tion of London (April, 1909) : " What are the facts about the drain of India's wealth into Great Britain? It has been assumed that there is a drain, but the nature and extent of this drain has been highly exaggerated, and sometimes grossly misrepresented. The official * drain ' is in- cluded in what are known as the ' home charges,* and these * Home charges ' for the three years from 1904 to 1907 amount on the average to £19,000,000 a year, reduced to about ii8,ooo,ooo by deducting sundry re- ceipts. These i 18,000,000 can be roughly summarised and grouped under the following heads : ^"Imperial Gazctccr of India," Oxford, 1907, Vol. IV, p. 194. " TRIBUTE " OR " DRAIN " 8l (i) Interest on money due or bor- rowed (chiefly for railways, etc.) about . .; £10,000,000 (2) Purchase of stores £2,500,000 (3) MiHtary charges (including pen- sions) £4,000,000 (4) Civil charges (including pensions) £2,500,000 " As will be seen (4) civil and (3) miUtary charges, including pensions, amount to £6,500,000. This is no doubt a heavy charge, but it might well be regarded as a not unreasonable premium payable for insurance ■fi/f'^' against foreign aggression and internal disturbance^^^x^ The peace and security enjoyed in India may be taken as an adequate return for this outlay. " It is not intended to justify every charge in the debt account, but (i) payment of interest on sums borrowed for the construction of railways, etc., or (2) disbursements on account of the purchase of stores, cannot fairly be described as a ' drain,' because in re- turn for this money India has received adequate com- mercial equivalent in the shape of metals, machinery, railway plant, and miscellaneous stores. Such receipts have always been justly regarded as amongst the most valuable and permanent of commercial returns. " It has, however, been urged that, in addition to these known payments, there is an unknown drain on India's resources in the shape of private remittances, and the extent of this drain has been estimated at be- tween £10,000,000 and £12,000,000 a year. This is, of course, a mere guess, and the probabilities are against the accuracy of this guess. The sum mentioned is more than double the annual pay of all the European officials in India, civil and military, and it seems idle to contend that the comparatively few European mer- chants in India earn more than all the civil and military European officials put together. It is well known that European officials in India cannot remit a moiety of their pay to England. Many of them spend their pay 82 ENGLAND'S DEBT TO INDIA (and even more) in India. It must surely be the same with some European merchants." We give yet another quotation from a writer who may aptly be called the father of this school of Anglo- Indian economists. Sir John Strachey, who was Fi- nance Minister of India in the administration of Lord Lytton, observes in his book, " India, Its Administra- tion and Progress " : " During the last ten years the average value of the imports into India fell short of the value of the exports by about i 16,000,000 a year. In this calculation are included imports and exports both of merchandise and treasure, on Government as well as on private account. For the excess India receives no direct commercial equivalent, but she receives the equivalent in another form. " English capital to a very large amount has been, and is still being, invested in India by the State and by private individuals in railways, irrigation works, and industrial enterprises, and interest on these invest- ments has to be remitted to England. In addition to this, large sums are required in England for what are really investments for India of another kind. It is an inevitable consequence of the subjection of India that a portion of the cost of her government should be paid in England. The maintenance of our dominion is essential in the interests of India herself, and, pro- vided that she is not compelled to pay more than is really necessary to give her a thoroughly efficient Gov- ernment, and in return for services actually rendered to her, she has no reason for complaint. The charges to be met in England are numerous : interest has to be paid on sterling debt incurred for India in England; there are, among others, charges for civil and military administration, interest and annuities on account of state railways, and interest on the ordinary public debt, " TRIBUTE " OR " DRAIN " 83 furlough allowances, pensions, payments to the Gov- ernment in England for British troops employed in India, stores of every kind, railway material for use in India, and the Secretary of State's administration at the India Office. The ordinary annual charge under the last-named head is about £200,000. The charges to be met in England necessarily vary from year to year; in 1909-10 they amounted to about £18,500,000.'^ A pupil of Sir John Strachey, Sir Theodore Mori- son, a member of the India Council, discusses the question at some length in his book called " The Eco- nomic Transition in India " and concludes thus : " When viewed in this way I do not believe it is pos- sible to resist the conclusion that India derives a pecuni- ary advantage from her connection with the British Empire [ ! ! !] The answer, then, which I give to the question * What economic equivalent does India get for foreign payments ' is this : — India gets the equip- ment of modern industry, and she gets an administra- tion favourable to economic evolution cheaper than she could provide herself." ® We have italicised the word " cheaper " : the argu- ments and figures we will notice later on. Drain: Weighing the Evidence. The reader is now ''igii Edition revised by Sir Thomas W. Holderness, K. C. S. I., Permanent Under Secretary of State for India. 8 In this connection it will be of interest to compare the re- marks of Sir John Strachey and Sir Theodore Morison with the following observations of Mr. Richard Jebb in his " Stud- ies in Colonial Nationalism" (London, 1905), p. 322: "If it be objected that orderly Government is sufficient compensa- tion to India for commercial exploitation, the ready reply is forthcoming that the administration is paid for separately in hard Indian cash ; and so far from being a philanthropic serv- ice provides congenial and remunerative employment for a large number of Englishmen who could not have found the same opportunity elsewhere." 84 ENGLAND'S DEBT TO INDIA in possession of the views of both sides on the ques- tion of "tribute" or "drain." In forming his judg- ment he should consider that according to all sound systems of weighing evidence admissions by a party in his own favour are of little value. The question in essence is, whether Great Britain gets anything from India by virtue of her political domination of it and if so, what? One set of Britishers says she gets enor- mous sums for which India gets no " direct equiva- lent." This they call India's tribute or drain. An- other set says she gets nothing as tribute, that what she gets is in lieu of " services " she renders. That she gets large sums is thus undisputed. The only question that remains to be considered is the value of the services rendered. Every superior po- litical authority, which exacts a tribute from an in- ferior, can justify the tribute on the same grounds on which the British do. So this quarrel seems to be nothing but a play on words. We do not intend, how- ever, to leave the subject here and shall examine it more closely on the lines laid down by Messrs. Strachey and Morison. In order to be absolutely clear on the point it is necessary to know (i) of what the drain consists, (2) the extent of that drain from 1757, when the political connection commenced, up to the pres- ent. Speaking in general terms, whatever India has paid and still pays to England in money or in goods, with- out receiving an equivalent in money or in goods is the " drain." That is practically what Lord Salisbury " TRIBUTE " OR " DRAIN " 85 said. This includes (i) the treasure which the East India Company and their servants accumulated from India in the early years of their reign from 1757 up to 1849, the year of the annexation of the Punjab, or for very nearly a century. I do not know if what is known as the " loot " of India from 1757 to 1772 and then afterwards up to 1815 is denied by the school of politicians to which Sir John Strachey and Sir Theodore Morison belong. The period stands by itself. The extent of the treas- ure removed to England during this period is not to be estimated by the excess of exports over imports. This treasure consisted of gold, silver, precious stones and merchandise. The period of 1772 to 1785 is represented by the administration of Warren Hastings. During this pe- riod very large amounts of money and very large quantities of merchandise were obtained from the princes and people of India, for which the only return made was in the shape of " services rendered." These " services " resulted in wars in the then Northwest Province, Oudh and Deccan. These exactions were of two kinds, (i ) those made in the name of the company, (2) those made by the servants of the company and of which from the very nature of things there is not and could not be a record anywhere. Then again dur- ing the administration of Wellesley large sums of money were obtained from the princes of India, dur- ing the war carried on by that pro-consul. This state of things continued more or less actively right up to the end of Dalhousie's administration. There is no 86 ENGLAND'S DEBT TO INDIA record extant of the diamonds, rubies and other pre- cious stones, worth miUions, which were removed from India during this time. The Koh-i-noor, of al- most fabulous value, which was last in the possession of Ranjit Singh, the ruler of independent Punjab, was only one of these. The system of international trade had not developed then and ways were open for the transference of wealth from one country to another otherwise than by means of trade. In fact it cannot be disputed that throughout India's connection with England quantities of Indian treasure were transferred to England, which are not shown in any account. In the days of the East India Company, this treasure consisted of " loot " during wars and of presents by princes and nobility either voluntary or under com- pulsion.^ Since the assumption of the administration by the Crown this has consisted of presents given by, or obtained from, the native princes and nobility in the shape of jewels or valuable goods. That these presents are given and received is a matter of public knowledge in India and cannot be altogether unknown to the Anglo-Indian brotherhood of the East India Association. What the total value of these presents is, there is no means of ascertaining. But in no case can it be a trifling amount, and if we were to add com- pound interest, the amount would swell to a very large figure. One finds references to these presents scat- tered in histories, accounts of travellers, private let- ters published, and in other documents in the British Museum. That the recipients of these presents must » Observes Mr. J. S. Cotton in " Colonies and Dependencies," Macmillan & Co., 1883 : " The first generation of English rulers helped to drain the country of its inherited riches." " TRIBUTE " OR " DRAIN " 87 have rendered " services " to the givers thereof, there can be no doubt. But that India has been drained to that extent remains an indisputable fact. Then it must be borne in mind that throughout the British domination of India a large portion of that part of the revenue of India which was spent in India has gone into the pockets of Europeans employed in the civil and military departments of the company, and after them, of the Crown. For a long time the natives were employed only in the very lowest possible offices, as menials or clerks or sepoys. There were very few, if any, natives, in the subordinate ranks of civil and military offices during the first 80 years of the East India Company's rule. Even now a large portion of~ Indian revenues spent in India falls under that head. But in the days of the East India Company, especially from 1757 to 1833, when the services were at least in theory thrown open to educated natives the major por- tions of civil and military expenses went into the pockets of Europeans and with the exception of the sums spent in India were transferred to England. It is clear that the amount of the treasure trans- ferred from India to England during the century from 1757 to 1857 or to the present is not correctly repre- sented by the excess of exports over imports ; for to this excess should be added the amount of public debt that the East India Company contracted during this period. The beauty of th e English conquest of India lies in the fact that from the first to the last not one single penny was 'spent By tFe British on the conguest In- dia was conquered by the British^ with. Indian. jnoney X 88 ENGLAND'S DEBT TO INDIA and_Jndiaa-We©d. Further, almost all kinds of ex- penses incurred by the British in Asia, for the con- quest of territories, for the expansion of trade, for research and inquiry, were borne by the Indian ex- chequer. The profits almost always went into the pockets of Britishers. The expenses and losses were debited to India. R. C. Dutt points out how the total revenues of In- dia have always been in excess of total expenditures incurred in India. " The whole of the public debt of India, built up in a century of the company's rule, was created by deb- iting India with the expenses incurred in England." The total Indian debt, bearing interest, was a little over seven millions in 1792. It had risen to ten mil- lions in 1799. Then came Lord Wellesley's wars and the Indian debt rose to twenty-one millions in 1805. In 1807 it was twenty-seven millions. By 1829 it had risen to thirty millions. The total debt of India (reg- istered debt + treasury notes and deposits + home bond debt) on April 30, 1836, was ^33.355.536." By 1844-45 the total debt of India had reached the figure of forty-three and one-half million pounds. This in- /^cluded the enormous expense of the Afghan war to which England contributed only a small part of the fifteen millions expended, although in the words of John Bright, the whole of this expenditure " ought to have been thrown on the taxation of the people of England, because it was a war commanded by the Eng- lish cabinet, for objects supposed to be English." 10 R. C. Dutt, " India in the Victorian Age," pp. 215-6 and footnote. " TRIBUTE " OR " DRAIN " 89 The annexation of Sindh, and the Punjab wars un- dertaken by Hardinge and Dalhousie, raised the debt to fifty-five million pounds by 1850-51. Then came the great mutiny in 1857 and the public debt was in- creased by ten millions sterling. On April 30, 1858, the public debt of India stood at sixty-nine and one- half million pounds sterling. About the expenses incurred in putting down the mutiny, it is interesting to note the following opinions of Englishmen. " If ever there was a case of justifiable rebellion in the world," says an impartial historian,^^ " it was the rebellion of Hindu and Mussulman soldiers in India against the abomination of cartridges greased with the fat of the cow and the pig. The blunder was made by British Administrators, but India paid the cost. Be- fore this, the Indian Army had been employed in China and in Afghanistan ; and the East India Company had received no payments for the service of Indian troops outside the frontiers of their dominions. But when British troops were sent to India to suppress the mutiny, England exacted the cost with almost unex- ampled rigour." " The entire cost of the Colonial Office, or, in other words, of the Home Government of all British colonies and dependencies except India, as well as of their mili- tary and naval expense, is defrayed from the revenues of the United Kingdom ; and it seems to be a natural in- ference that similar charges should be borne by this country in the case of India. But what is the fact? Not a shilling from the revenues of Britain has ever been expended on the military defence of our Indian Empire. " How strange that a nation, ordinarily liberal to extravagance in aiding colonial dependencies and for- "Lecky's " Map of Life," quoted by R. C. Dutt. 90 ENGLAND'S DEBT TO INDIA eign states with money in their time of need, should, with unwonted and incomprehensible penuriousness, refuse to help its own great Indian Empire in its ex- tremity of financial distress. '■' The worst, however, is not yet told ; for it would appear that when extra regiments are despatched to India, as happened during the late disturbances there, the pay of such troops for six months previous to sail- ing is charged against the Indian Revenues and recov- ered as a debt due by the Government of India to the British army pay-office. " In the crisis of the Indian mutiny, then, and with the Indian finances reduced to an almost desperate con- dition. Great Britain has not only required India to pay for the whole of the extra regiments sent to that country from the date of their leaving these shores, but has demanded back the money disbursed on ac- count of these regiments for the last six months' ser- vice in this country previous to sailing for India." ^^ But a far greater man than Sir George Wingate spoke on the subject of the mutiny expenditure in his own frank and fearless manner. " I think," said John Bright, " that the forty millions which the revolt will cost, is a grievous burden to place upon the people of India. It has come from the mismanagement of the Parliament and the people of England. If every man had what was just, no doubt that forty millions would have to be paid out of the taxes levied upon the people of this country." ^^ r^ Surely very little of this debt, if any, represented I.British investments in public works, as there were no 12 "Our Financial Relation with India," by Major Wingate, London, 1859. 13 John Bright's speech on East India Loan, March, 1859. " TRIBUTE " OR " DRAIN " 91 railways in India before 1850. When the Empire was transferred to the Crown it was provided that the divi- dend on the capital stock of the East India Company and other debts of the company in Great Britain and all the territorial and other debts of the company, were to be " charged and chargeable upon the revenues of India alone." Thus the annual interest which India had till then paid on the capital of the company was made permanent. Is there anything parallel to this in the history of the world? By i860, the public debt of India had risen to over one hundred million pounds. Since then it has gone upward by leaps and bounds. In 191 3-14 the total liabilities of the Government of India stood at iz^7r 391,121. The argument that the whole of this debt is a commercial transaction from which India got a re-, turn in the shape of productive works is on the fac^ of it untenable. It is a pity that eminent Englishmen when dealing with the question of " drain " should ig- nore this phase of the question and always harp on the misleading statement that the interest paid in Eng- land represents interest on capital invested in India on productive works for which India got a fair return in the shape of materials supplied by England. The com- piler of the Imperial Gazeteer from which we quoted above makes the bald statement that out of the total home charges amounting to seventeen and three- quarter millions (of what year it is not stated) nearly eleven millions " consist of payments on account of capital and materials supplied by England." The Extent of the Drain: It is impossible to state 92 ENGLAND'S DEBT TO INDIA in pounds, shillings and pence, of how much India has been drained since 1757. We give the various esti- mates made by Englishmen themselves. Montgomery Martin wrote in 1838: " This annual drain of £3,000,000 on British India, amounted in thirty years at 12 per cent, (the usual In- dian rate) compound interest to the enormous sum of £723,997,917 sterling; ... So constant and accumu- lating a drain even on England would soon have im- poverished her; how severe then must be its effects on India, where the wages of a labourer is from two- pence to threepence a day? " For half a century we have gone on draining from two to three and sometimes four million pounds ster- ling a year from India, which has been remitted to Great Britain to meet the deficiencies of commercial speculations, to pay the interest of debts, to support the home establishment, and to invest on England's soil the accumulated wealth of those whose lives have been spent in Hindustan. I do not think it possible for human ingenuity to avert entirely the evil effects of a continued drain of three or four million pounds a year from a distant country like India, and which is never returned to it in any shape." Mr. Digby says; " Estimates have been made which vary from £500,000,000 to nearly £1,000,000,000. Probably be- tween Plassy and Waterloo the last-mentioned sum was transferred from Indian hoards to English banks. " In estimating the loss to India in the nineteenth century the start must be made with Mr. Martin's figures : " Loss to India, prior to 1834-35 com- pound interest, at twelve per cent. . £723,000,000 " TRIBUTE " OR " DRAIN " 93 "The average annual loss, taking the trade tables alone, has been shown to be about £7,500,000. If that sum for the whole period be taken, and a charge of five per cent, compound interest be made (though the money and produce were worth vastly more than five per cent, to the Indian banker, merchant, cultivator, ar- tisan, and to all others in India who would have been in a position to employ capital to good account, were worth at least three times five, but I have taken only five) the re- sult is £4,187,922,732 Total £4,910,922,732 " Thus, the adverse balance of trade against India during the last century, even at the low rate of interest I have adopted, reached the enormous total of nearly £5,000,000,000. If one could follow the money in all the ramifications through which, in India, it might have passed, its fertilising effect in every one of the five hundred and forty thousand villages, its accumulating power ('money makes money') fructifying in a land where its expenditure would have led to an increase in substance, it would, even then, be impossible to put into words the grievous wrong which (unwittingly but, all the same, culpably) has been done to India. " Now that I have reached this point in my exposi- tion, I turn to page 372-373 of the latest issue of * Financial and Commercial Statistics ' for another pur- pose, and find that, in taking £7,500,000 as a fair esti- mate of India's annual payments to the India Office, I have greatly underestimated the facts. I ought to have reckoned those payments at £9,500,000 for each 94 ENGLAND'S DEBT TO INDIA year. The ' Amounts received in England at the India Office on Account of India ' during the period 1834-35 to 1898-99 were £610,389,135 " To this must be added debt in Eng- land existing at the end of 1898-9 9. £124,268,605 Total •• £734,657,740 ("Prosperous British India," pp. 224, 225.) " The figures indicating the drain of capital from India to England, given on page 225, must be amended. " Loss to India, as already shown. .£4,910,922,732 " Add, for remittances to England on official account, not shown in the trade returns, nearly £2,000,- 000 per annum, since (and in- cluding) 1834-5, at 5 per cent., per annum compound interest. .£1,044,980,684 " Borrowings in England (net re- maining after conversions, re- payments, etc £ 124,268,605 £6,080,172,021 " (Ibid, p. 230.) Says Mr. H. M. Hyndman: [Bankruptcy of India, pp. 56, 57 and 58.] " Now look at the trade figures for the twenty years : The total exports and imports of India, from 1857 to 1876 inclusive amount to £997,063,848 and £841,192,237 respectively. Discriminating between merchandise and bullion in the imports, we have merchandise to the value of £569,835,243 imported in that period, and ^271,356,994 worth of bullion. Between 1857 and 1876 the total export and import trade together in- cr( ased from £55,000,000 to £103,000,000, or very nearly doubled. Nothing could be more satisfactory is the general verdict. Trade doubled capital. Ex- " TRIBUTE " OR " DRAIN " 95 ports exceed imports — that is all right. Great inflow of bullion — the country must be getting richer. " But to estimate correctly the above figures, which are calculated at the Indian ports, it is obvious that at least 15 per cent, must be added to the exports for profit, etc., and that therefore the value of the imports to balance these exports should not be less than £1,- 145,000,000.^* They were £841,000,000. Here is a discrepancy to start with of more than £300,000,000. Of the imports, however, £271,000,000 consisted of bullion. Now of this £271,000,000, certainly not less than £120,000,000 represents the proceeds of loans raised or guaranteed by Government, and brought into India as a borrowed fund, wherewith to pay the wages of labourers, engineers, etc., engaged on public works. It is a treasure which has been borrowed for a definite period, which is still owing, and which has to be repaid. This, therefore, is no trade import. " We have thus the original disparity of more than £300,000,000 plus £120,000,000 as the drain from India in the twenty years. That amounts to £420,000,000, or £21,000,000 a year. It would be easy to show that the actual drain is much greater than this when the opium profits, and the import of treasure to carry on the in- creased private business (which is also a loan), are taken into account. The above figures are, however, sufficient to establish the principle for which I contend — that the export trade of India represents a most ex- hausting drain on the country. " Even leaving out the profit and taking no account of the opium monopoly, India has sustained a drain of nearly £280,000,000 in the twenty years. The exports for 1876-7 were £65,000,000, and the imports, exclu- sive of bullion, were £37,427,000, with bullion, nearly £49,000,000." 1* " The reason for this is, that the estimate of value is made at the Indian ports, where freight, profit, and insurance are calculated in giving the value of the imports, but no such ad- dition is made for the exports." 96 ENGLAND'S DEBT TO INDIA It is remarkable that the average of annual drain struck by Mr. Hyndman for the 20 years from 1857 to 1876 should coincide with the average estimate of " potential drain " found by Sir Theodore jMorison on page 203 of his book, " The Economic Transition of India" (London, 191 1). He says : " On the vv^hole, I do not think that any one who studies the evidence and extends his calculations over a series of years will find any justification for estimating the potential ' drain ' at more than i2i,ooo,0(X) sterling." Writing in 1882, Mr. A. J. Wilson, late editor of In- vestor's Review, an authority on finance, fixed the fig- ure at thirty millions sterling a year.^^ Writing in 1906 Mr. Hyndman estimated the drain at forty mil- lions sterling a year, but Mr. A. J. Wilson thought that thirty-five millions would be a safe figure, though in his own opinion it represented a low estimate.^* Figures. We have taken the figures up to 1898-99 from Mr. Digby's book. The figures from 1898-99 to 1913-14 are given below. The excess of exports over imports in the decade from 1899-1900 to 1908-09 is as below : ^^ 1899-1900 13,841,000 1900-1901 10,983,000 1901-1902 17,989,000 1902-1903 18,570,000 If* " An Empire in the Pawn," by A. J. Wilson, London (1911), p. 61. 18 " An Empire in the Pawn," by A. J. Wilson, London (1911), pp. 64-65. 17^ These figures are taken from Sir Theodore Morison's book as being likely to be more accurate, though they do not fully tally with the figures given in the statistical abstracts. " TRIBUTE " OR " DRAIN " 97 1903-1904 24,893,000 1904-1905 20,227,000 1905-1906 22,360,000 01906-1907 13,713,000 a 1907-1908 2,665,000 01908-1909 5,271,000 o These were the years when the Swadeshi Boycott was in force in Bengal as also in other parts of India. Total for the decade £150,512,000 or $752,560,000. Total Dis- Excess of Net Home bursetnents exports charges in England from 1902-03 to 1913-14 £ £ £ 1902-1903 17,667,016 25,730,325 1903-1904 17,399728 31,491,699 1904-1905 18,827,654 31,168,251 1905-1906 17,666,233 51,429,591 1906-1907 18,333,943 43,047,986 1907-1908 17,768,630 36,669,171 1908-1909 18,323,419 37,925,455 1909-1910 22,794,990 18,411,709 40,082,753 1910-1911 29,097,946 18,605,706 51,411,496 1911-1912 27,224,951 18,865,246 43,092,806 1912-1913 18,925,775 19,302,292 52,717,391 1913-1914 14,228,512 19,455,055 45,274,370 £112,272,174 £222,616,621 Total for 5 Total for 12 years years The figures taken from the 48th and 49th Nos. of the Statistical Abstract relating to British India (1915 and 1916). Mr. Digby's figures of drain are up to the end of the nine- teenth century. We will leave it to the reader to add the figures for the 13 years of the twentieth century given above and find out for himself the grand total of the drain from India up to the end of 1913-14. In the decade covered by Sir Theodore Morison's book, the total Home Charges (not total disburse- ments) amounted to £175,976,000, while the total ex- cess of exports for the same period was only £150,512,- 000. This discrepancy is explained by Sir Theodore 98 ENGLAND'S DEBT TO INDIA Morison by adding loans raised in England and sent to India in the shape of " stores, rails, machinery, etc." as part of her imports. According to his calculations " the direct and guaranteed debt, charged on the reve- nues of India" increased by £41,931,036 during the decade from 1899-1900 to 1908-09, Adding this sum to the total excess of exports during the decade, he raises the sum that was available to meet the Home Charges to £19,2/^4,000 per annum and argues that the margin of £3,502,000 per annum thus obtained, is suffi- cient " to defray the unknown remittances on private account." Following this line of argument he should have deducted from imports the proceeds of loans raised in England for the Government of India in bullion. Besides, it should be remembered that in fix- ing the amount of excess of exports over imports Sir T. Morison takes no notice of the fact that the im- ports include about 15 per cent, for freight, insurance, and brokerage and that the exports do not include any of these items. Sir Theodore Morison obtained his figures about the capital liabilities of India from the India Office, but the figures available to the public are those given in the Statistical Abstracts from which we take the following information for the years 1909-1910 to 1912-13. In 1909-10 the permanent debt in England stood at £176,- 105,911 ; in 1912-13 it rose to £179,179,193. The total liabilities of the Government of India at the end of 1913-14 were £307,391,121 ; on these liabilities £5,912,- 796 was paid for interest in England and £4,210,848 in India. " TRIBUTE " OR " DRAIN " 99 It is to be noted that in 1905-06 the public debt of India was classified as follows : — Railway Irrigation Ordinary ^149,035,455 ^27,050,799 £54,425,226 In 1906-07 an alteration was made in the method of classifying the debt by which the portion " attribu- table " to Railways was raised to £168,344,748 and that " attributable " to ordinary debt reduced to £37,917 - 252. The question of the drain for India is thus compli- cated by several factors. The excess of exports over imports is not a safe guide (a) because the value of the imports include shipping charges, insurance and brokerage in addition to the profits made by the manu- facturer and the importer ( Messrs. Hyndman and Wil- son have estimated these charges at 15 per cent, of the total value), while exports are represented by the cost price of goods (mostly raw produce at the Indian ports). The only thing they include over and above the price realised by the cultivator is the railway freight to the port of export and the profit and commission of the middleman.^^ (b) Because the debt raised in Eng- land is sometimes spent in England and must be added to the exports and the balance sent to India must be de- ducted from imports; (c) because private remittances sent by British servants of the Government and Brit- ish merchants and manufacturers in India, in many 18 See Hyndman's " The Bankruptcy of India," 1886, p. 57 footnote and also Mr. Wilson's " An Empire in the Pawn,"^ p. 54 ; see also note to p. 462 of the " Oxford Survey of British Empire" (Asia), p. 462. 100 ENGLAND'S DEBT TO INDIA shapes, are not necessarily included in the account; (d) because many transactions are settled by exchange entries in books. Many English firms dealing with In- dia have their branch offices in India and they pay for imports not always in exports. Sometimes they in- vest large sums of money in India. Mr. J. S. Cotton a retired Government of India official, who was the editor of the Imperial Gazeteer says : " The trade for export, even in up country markets, is largely in the hands of a few European firms who make their purchases through brokers ; and the busi- ness of shipping at the ports is almost entirely con- ducted by European firms to whom the Indian traders consign their purchases by rail. The import trade also is mainly in European hands." ^® It might be added that a fair proportion of the ex- ports are purchased by European firms directly from the producer.^** On the preceding pages we have given the various estimates made by Englishmen ; those made by Messrs. Martin, Digby, Hyndman and Wilson on the one side and those made by Sir John Strachey and Sir Theo- dore Morison on the other. We have also shown how the latter explain away the " Drain." In the Sta- tistical Abstract of 1912-13, the total interest paid in England in that year was £6,203,996 but in the table of Expenditure in England given on page 70 the in- terest on debt was as follows: 10 "The Oxford Survey of British Empire" (Asia), p. 172. 20 Ramsay Macdonald's " Awakening of India," p. 106, pop- ular edition. " TRIBUTE " OR " DRAIN " loi Ordinary £2,296,498 Railways 8,979,898 Irrigation 124,730 Total 11,401,126 The total expenditure in England in 1912-13 was £20,279,572. If we deduct the interest paid on rail- way and irrigation debts, there will be left a balance of over eleven millions to be accounted for. Accepting the arguments of Sir Theodore Morison, we may also deduct the price of stores supplied. Stationery and Printing £ 85,314 Civil Departments 253,585 Marine Stores 84,727 Public Works 144,773 Military 788,309 Miscellaneous 9,563 Total 1,366,271 Roughly speaking that leaves a balance of a little less than ten million pounds as expenditure in Eng- land for which India got no return in any shape or form. It will also be noticed that the Home Charges are al- ways on an ascending scale and the excess of exports over imports has risen considerably of late; i.e., since 1908-09, the last year for which figures were given by Sir Theodore Morison. In comparing figures of past years with later years it should be remembered that the figures in sterling do not give an exact idea of the increase. The economic value of the rupee (the unit of Indian coinage) was 2s. in the seventies of the nine- teenth century. It is is. 4d. now, and that makes a huge difference. 102 ENGLAND'S DEBT TO INDIA We think we have established beyond doubt that : (1) There is a drain. India does pay a tribute, which the Imperialists call compensation for services rendered. (2) The extent of the drain differs according to the way it is looked at by different persons. Mr. Hyndman fixed the amount in 1906 at forty mil- lion pounds sterling per annum ; Mr. Wilson fixed it at thirty-five millions per an- num; Sir Theodore Morison fixed the amount of what he calls " potential drain " at twenty-one millions. Com- puted in rupees it will be much larger. In an^case_this is sufficient to establish the fact that Great Britain does make a huge profit by Jier political ascendency in India. CHAPTER IV HOW INDIA HAS HELPED ENGLAND MAKE HER EMPIRE " Perhaps the most striking testimony to the virtue of benevolent despotism is seen in the employment of native races to fight our battles for us. . . . Having ex- tended the Empire by bringing the * inferior races * under our sway, by a master stroke of genius we utilise them to still further extend and also to defend the Em- pire, and convert them into instruments for bestowing upon their brethren the boons which they themselves have obtained. It is very largely in this way that our Indian Empire has been built up." — Mr. J. G. GoDDARD, M. P. — " Racial Supremacy." India and " The Empire." The present generation of Englishmen, born into conditions of extreme pros- perity, at a_ time when their country is at the zen ith of her imper ial glory, are ap t to forget how much they o we to Ind ia. _.l- he y ignore the fact that I ndia is The Empire, — pefRa ps the only Empire they have . Shejs^ the pivot round which the whole Imperial edifice has been built and revolvej! The self-governing domin- ions except in the present hour of war contributed little, if anything, to the prosperity and strength of the Em- pire. So far, they have laid more emphasis upon their rights than their duties, which they scarcely recog- nised at all. They rendered some help to Great Britain in the Boer War, and have splendidly borne their share 103 A 104 ENGLAND'S DEBT TO INDIA in the present titanic struggle, but looking at their past history, they have got immensely more from the Em- pire than they ever gave it. India, on the other hand, has always been the " milch- cow." She^ has^ supplied, the Brijisl3.js les with food , and with raw products to be turned into manufactured articles; she has supplied labour to deveT6p~thF-col- onies] she has fought for the Empire in almost every — hemisphere. She affords a vast field for all kinds of experiments; she is the training camp for engineers and generals from the British. liles. This point was frankly admitted by Lord Roberts in the evidence he gave before the Royal Commission on Indian Expendi- tures (97) when he said: "From the point of yjew of training, India is a very great strength to the United Kingdom." But^^at is even more significant, India conquered niQst of her Empire for_Gi^ her blood and her resources have been freely used by Eng-^ land to make new acquisitions, to put down revolts in existing dominions, and to maintain her prestige in Europe. At the time of the Boer War, India was the first to send an expedition to the Transvaal. The sarhe thing happened in the present European war; the In- dian expedition reached France very early in the con- flict, and helped materially. Since then, Indian troops have been used at Gallipoli, in Mesopotamia and in Egypt. India herself has paid the bills. Yet when her sons talk of post-war reforms in the Administra- tion, they are rebuked with a warning not to be sordid ! It is their duty to shed blood for their great bene- factor. For details of India's contribution to this war HOW INDIA HAS HELPED 105 in men and money see the Post-Scriptum to the Preface. In this chapter we purpose showing how India has helped England make her Empire. It would be well to remember, in this connection, that all the acquisi- tions of the East India Company in Asia were won through their Indian Government employing Indian troops, and paying the cost from Indian exchequers. It was the East India Company which acquired the Isle of France (Mauritius) the island of Ceylon, the settlement and port of Singapore, and other islands in the Indian Seas now in possession of England. It was the East India Company which originally obtained foothold in Persia and Arabia, conquered Burmah, and conducted military and naval operations for Great Brit- ain whenever the latter was at war with France, Por- tugal or Holland, and desired to strike at their Asiatic and African holdings. The following table, taken from the Report of the Royal Commission on Indian Expenditures, Vol. II, page 305, will show how India has been saddled with the expenses of the various wars she fought, or par- ticipated in, for the glory of the British Empire. Foreign Wars Whose Cost Was Charged to India Extra- Ordinary Charges ordinary Charges Expedition paid by paid by India England India England 1st Afghan War all none all none 1838--P 1st China War all none none all 1839-40 Persian War all none half half 1856 io6 ENGLAND'S DEBT TO INDIA Extra- Ordinary Charges ordinary Charges Expedition paid by paid by India England India England Abyssinian War all none none all 1867-68 Perak Expedition all none none all 1875 2nd Afghan War all none all except £5,000,000 1878-S0 £5,000,000 Egyptian War all none all except £500,000 1882 £500,000 Soudan War all none none all 1885-86 To this table, we append the following extract from the same Report, showing India's expenditures for Great Britain's consular representation in Asia: " The Persian mission was established in 18 10 and maintained at the charge of Great Britain until 1823, when it was transferred to India. From 1823-31 it was wholly supported by Indian funds. In 1835 it was transferred to the British Foreign Office, the Indian Government contributing i 12,000 a year towards its cost. Again, in 1859, the mission and consulate at Teheran, Tabriz and Resht were placed under the Gov- ernment of India. The cost of the mission was then estimated at £15,000 a year, towards which Great Brit- ain contributed £3,000, with £2,000 on account of the consulate. In i860, the mission and consulate were re-transferred to the British Foreign Office and from 1860-1880, India contributed £12,000 towards the mis- sion, leaving the consulate at the sole charge of Great Britain. In 1880-90, the Indian contribution was re- duced to £10,000 and further reduced, in 1891, to £7,000." That India has been unjustly and sometimes ille- gally treated in this respect, will be clear from a few extracts we submit from the evidence of British states- HOW INDIA HAS HELPED 107 men given before the Royal Commission. For fuller material, we refer the reader to the evidence itself and to the written statements of Colonel Hanna and Colo- nel Waterfield in Vol. II, India not only pays for a huge British garrison within her confines, but also for all the expenses incurred in connection with their enlistment, training and equipment ; for all pensions earned by the men and officers as well as every cent spent on medical and various philanthropic institutions maintained for their benefit in England. The whole thing is so unjust, that rather than trust our own lan- guage to express our feelings, we will let Lord North- brook, Sir Henry Brackenberry and Sir Edward Col- len speak about it. Lord Lansdowne on the Indian Army. I5'996 — Mr. Courtney — "Have you considered, Lord Lansdowne, from the point of view of India her- self, supposing she were isolated from Great Britain, whether it would be necessary to maintain a force such as is borrowed from the United Kingdom, and in the same degree of efficiency? " " Certainly not. The In- dian army is organised with a view to its employment upon operations which have nothing to do either with the internal policy of the country, or the mere repres- sion of tribal disorders on the frontier." 15.997. " Then the difference in the cost of training that force so borrowed, between what would be neces- sary for Indian purposes and the standard kept up for Imperial and Home purposes, should be borne by the home exchequer?" "Your question points to the principle which I was endeavouring in my answers to enforce." 15.998. " That we for home and Imperial purposes, keep the army at a higher standard of efficiency than India taken by herself, requires, and we should make io8 ENGLAND'S DEBT TO INDIA that a consideration in settlement of charges between the two countries ? " " Certainly." Lord Roberts on India as Training Ground for Brit- ish Army. 15,664, " The argument that India affords the best training ground for the British army during peace is a ground for reducing the home charges of British regi- ments in India. Any one who has served in India must admit it affords the best training ground for troops and this should not be lost sight of in apportioning home charges. I doubt if any country is so peculiarly well adapted for training troops as India. 'From the point of view of training, India is a very great strength to the United Kingdom," Sir Henry Brackenberry on Indian Army Expendi- ture. i4,yS2. " The army in India is largely in excess of requirements for preserving internal peace. The for- eign policy of India is directed entirely from England and is a part of British foreign policy in general. The object of British foreign policy is to secure British rule over the British Empire. If British rule were main- tained in India only for India's sake, then it would be fair to make India pay everything that was due to Brit- ain's rule over India, But I cannot but feel Britain's interest in keeping India under British rule is enor- mous, India affords employment to thousands of Brit- ons; India employs millions of British capital; Indian commerce is of immense value to Great Britain, It seems to me Great Britain should pay her share of ex- penditures, and in estimating that share, she should behave generously, because England is a rich country and India a poor one ; — also India has no represen- tation ; where a nation is arbitrarily governed, the gov- erning power should behave generously," HOW INDIA HAS HELPED 109 14,896. "If this Royal Commission could see its way to recommend the abolition of all those accounts for military and naval services, for the Secretary of State's salary, and the expenses of the India Office, for diplomatic and consular charges in Persia and China and elsewhere, and to substitute for them a fixed con- tribution from India, many constant causes of irritation would be removed, and it would do much to convince all classes of India of the desire of this country which rules India, to treat her justly and generously." Sir Edwin Collen on the Apportionment of Ex- penses. 6,igy. "The division between the British and In- dian Treasuries of the charges for European troops in India should be determined with special reference to the fact that the military forces of the United Kingdom are organised to meet the requirements of the whole Em- pire, that India has no voice in deciding on the nature of such organisation, and that she as a poor country is made to enter into partnership with England, one of the wealthiest in the world. India's contribution should be decided with reference to the relative wealth of India and England, to the fact that India, supplies a great training ground for the British part of the Indian army. That a contribution should be made by the Imperial Exchequer towards the cost of fortifi- cations which have been erected on the frontier, or to defend the ports of India against attack by great Euro- pean powers, and that England should bear a share of the cost of Aden, which is practically an Imperial for- tress. That this is not to be regarded as a matter of generosity, but of justice and legality." Lord Northbrook on Wars Outside India. 14,108. " Have you paid any attention to the ar- rangements made for the payment of troops lent by In- dia for service outside the country ? " " Yes, I have no ENGLAND'S DEBT TO INDIA had occasion to give considerable attention to this mat- ter." 14.109. " Do you think that fair treatment has been given to India in the apportionment of these charges? " " I think India has been hardly treated." 14.110. "Could you go through the various cases and give us your reasons? " " The cases will be found in Sir Henry Waterfield's Memorandum in the Appen- dix, page 364. . . ." 14.119. " Do you remember the ground upon which the Government decided that India had an interest in the Abyssinian Expedition?" "No, I should like to see it — I never heard of it. I believe a protest was made at the time." 14.120. " I am speaking from memory. Was it not put forward that the Government of India was con- cerned, because Abyssinia, being within the purview of India, you may say the prestige of the English name must not be endangered by allowing any official Eng- lish subjects to be taken prisoner?" "The idea may have been put forward. I do not think any impartial person would have paid the slightest attention to it." 14,121 — Mr. Courtney — "I remember a French critic arguing at the time that the war was for the pur- pose of discovering a sanatorium for English troops ? " " That would be a better reason than the one adduced as regards prestige. Then I come to the next case, — the Perak Expedition, I cannot conceive any one doubting that India has been hardly treated. An ex- pedition beyond the frontier of India, and for which, to apply any portion of the Indian revenue, it is by statute necessary to address the Crown from both Houses of Parliament. I was Governor General at the time, and protested at this charge being put upon India. No notice was taken of the protest, made by the Govern- ment of India, and not even were the statutory ad- dresses from both Houses moved, so the law was broken, and the charge made upon India has never been repaid." HOW INDIA HAS HELPED in 14,124. " Have you mentioned the Egyptian opera- tion of 1882?" "That is the next case. There was no doubt that as regards keeping the Suez Canal open, India had a substantial interest. The question was, what interest ? It was intended that India should pay the whole cost of the expedition that was sent. The English Government was put to considerable cost, and we thought India would be put to small cost, so might fairly pay the cost of troops sent to Suez. The opera- tions became very extended and the expedition from India became a large one. The whole cost was 1,700,- 000 pounds. India paid 1,200,000 pounds and Eng- land 500,000. The Government of India thought it had been hardly treated, and looking at it now, I must say it would have been better if we had charged India half." 14,127 — Soudan War — "Would you consider, un- der the original plan, India was sufficiently interested in the expedition to justify her being called on to contrib- ute ? " " No, certainly not. I do not think there was a substantial interest of India in any expedition to the Soudan. By statute, the Indian revenues are not to be used except after addresses from both Houses of Par- liament; in my opinion, the continued employment of the Indian troops at Suakim as a garrison was not cov- ered by the address. As to the force sent to Suakim last year, certainly India should not have been charged." 14,166. "To sum up what I have put before the Commission, I think if the ordinary charges of the Abyssinian War were 600,000 pounds, India has a fair and equitable ground to claim that sum. The whole of the Perak charges ought to be paid. The whole of the garrison charges at Suakim ought to be refunded to India. On equitable grounds, £350,000 ought to be given India for the Egyptian Expedition of 1882, — be- cause India has been inequitably and in some cases, il- legally treated during many years, I do not see any reason why that treatment should not be redressed by some action at the present time." 112 ENGLAND'S DEBT TO INDIA We will conclude this chapter with a few instances, illustrating further India's contribution to the making of the British Empire: The First Treaty with Persia. The first British em- bassy to Persia was sent from India at the expense of the Indian exchequer. " The Embassy," to use the words of the negotiator, " was in a style of splendour corresponding to the character of the monarch and the manners of the nation, to whom it was sent; and to the wealth and power of that state from which it proceeded." Commenting on the above quotation, Mill remarks : " A language, this, which may be commonly inter- preted, lavishly, or, which amounts to the same thing, criminally expensive." The negotiator continues : " It was completely suc- cessful in all its objects. The King of Persia was not only induced by the British envoy to renew his attack upon Khurassan, which had the effect of withdrawing Zamanshah from his designs upon India ; but entered into treaties of political and commercial alliance with the British Government." ^ For the terms of the treaty, we quote again the language of Mill: " It was stipulated that the King of Persia should lay waste, with a great army, the country of the Afghans, if ever they should proceed to the invasion of India, and conclude no peace without engagements binding them to abstain from all aggressions upon the English : that should any army belonging to the French, attempt 1 Malcolm's Sketch, p. 31, quoted by James Mill, Bk. VI, Ch. 9, p. 187. HOW INDIA HAS HELPED 113 to form a settlement on any of the islands or shores of Persia, a force should be employed by the two con- tracting states to co-operate for their extirpation, — and if any individuals of the French nation should request permission to reside in Persia, it should not be granted. In the Furman, annexed to the treaty, and addressed to the governors and officers in the Persian Provinces, it was said: 'Should any person of the French nation attempt to pass our ports or boundaries, or desire to es- tablish themselves either on the shore or frontiers, you are to take means to expel or extirpate them, and never to allow them to obtain a footing in any place, and you are at full liberty, and authorised, to disgrace or slay them.' Though the atrocious part of this order was no doubt the pure offspring of Persian ferocity, yet a Briton may justly feel shame that the ruling men of his nation, a century ago, could contemplate with pleasure so barbarous and inhuman a mandate, or endure to have thought themselves, except in the very last neces- sity, its procuring cause." " The Embassy proceeded from Bombay on Decem- ber 29, 1799. * These treaties,' says Malcolm, ' while they excluded the French from Persia, gave the Eng- lish every benefit they could desire from the connec- tion.' " It appears, from Wilson's " History of India " that the East India Company had been maintaining a Resident at Bagdad for many years before the English Government resolved to send an ambassador to the Persian Court. The allowances of " His Majesty's Envoy Extraordinary and Plenipotentiary, Sir Hart- ford Jones, and the cost of the mission " were de- frayed by the Company, and the Envoy was to act un- der instructions from the Governor-General in India. The latter had meanwhile sent his own representative in the person of Sir John Malcolm, and protested 114 ENGLAND'S DEBT TO INDIA against the English Government sending their own ambassador to the Court of Persia, but his protests were unheeded, and upon this precedent, ambassadors to Persia were from that time forward sent directly from the Court of St. James. In 1 819, expeditions were sent from Bombay for the subjugation of certain Arab tribes. A political station had been maintained for a time at Kishme Mocha, where an officer was employed by the Company to superintend the affairs of its subjects. This station was bombarded in 1879, and the Chief taken prisoner. In 1828, the Indian Government paid to the Shah of Persia two hundred thousand Tomans as an equiva- lent for the final abrogation of the Treaty of Teheran. Other Nations of Asia. In Chapter VI., Book i of his " History of India," Wilson speaks of Lord Minto being " busily and anxiously engaged in asserting the ascendency of the British Empire in India over the other nations of Asia." The cost of every expedition into the Persian Gulf, whether against the Persians, the Arabs or the Afghans, was of course, defrayed by the Indian Revenues. We are told besides, that " the attention of Lord Minto was earnestly fixed upon ob- jects of European as well as Indian interest, arising out of the war which raged in the Western hemi- sphere." As a result of that interest, an expedition was sent from India, at the cost of India, to reduce the Portuguese possession of Macao in Chinese territory. The expedition failed, owing to the refusal of the Chinese to permit the British to occupy Macao, but this failure was " more than redeemed by the success which attended the employment of the resources of HOW INDIA HAS HELPED 115 British India in the furtherance of objects of greater importance to the nation." Isle of France. It was reserved for Lord Minto's administration to effect the extirpation of the remains of French colonial possessions in the Eastern hemi- sphere, " that had so long been suffered to inflict hu- miliation and injury upon the subjects " of Great Brit- ain. It was this motive and this excuse which actuated Lord Minto to attempt the conquest of the Isles of France and of Java. The expedition was successful, and though the Isle of Bourbon was subsequently re- stored to France when peace in Europe was declared, the Isle of France, or the Mauritius, is still subject to Great Britain as one of her Crown Colonies, quite apart from India. The Muluccas. The Muluccas, Batavia, and other Dutch possessions, including Java, were also captured at this time by Indian expeditions sent out by Lord Minto. Under the Treaty of 1844 the Dutch posses- sions were restored to Holland. Ceylon. In 1796, Ceylon was taken from the Dutch, as being identified with the Republic of France, by an expedition fitted out from Madras. For a short time it was subject to the government of Fort St. George, but in 1798 was annexed as a Crown Colony of the British Government. Eastern Archipelago; Straits of Malacca and Singa- pore. According to the terms of the treaty of 1814, made with the Dutch, the latter's settlements in the East were restored to them, but " no provision was made for the continued observance of those compacts which had been formed by the English while occupying ii6 ENGLAND'S DEBT TO INDIA Java, with the independent Native States." The Dutch consequently did as they pleased with the latter, and " extended their chains of supremacy over all the native princes, whom it was their interest to control — an invariable article of their engagements being the exclusion of all other European ships from their ports." This policy excited the resolve of the British Government to strengthen and preserve its own con- nection in the Archipelago so as to preserve the free passage of the Straits of Malacca, the other great thoroughfare to the China Sea. The Governor of Ben- coolen was accordingly appointed " Agent to the Gov- ernor-General of India, in charge of British interests " to the eastward of the Straits, and in " anticipation of the sanction of the British Government," Singapore, the key to all maritime activities in the China Sea, was occupied. Siam and Cochin-China. In November of the year 182 1, the British-Indian Government sent a mission to Bangkok, capital of Siam, to open commercial inter- course with that country and Cochin-China. Failing to obtain its designs in Siam, the mission proceeded to Cochin-China and there obtained permission from the King of that country to trade in the principal ports on the same terms conceded to the Chinese. Burmah. The first war with Burmah occurred in 1824, was conducted with Indian troops, and paid for from the Indian exchequer. It resulted in the annexa- tion of Arakan, Tenaserim and other parts of Burmah to the British Dominions. Malacca. In 1831, a revolt in Malacca was put down by an expedition of Indian troops sent there, HOW INDIA HAS HELPED 117 resulting in the annexation of Nauring to Malacca. The China Consular Representatives. The East In- dia Company bore the whole expense of diplomatic in- tercourse with China as long as it enjoyed the mon- opoly of British trade with that country. The Com- pany made the profit and the Indian people paid the expenses. The monopoly ceased in 1834, and thence- forth it was decided that Great Britain should pay two- thirds, India one-third of the cost of the superintend- ents of trade who were to represent diplomatic inter- ests in China. In 1876, the arrangement was revised, and India paid a fixed contribution of £15,000 a year, reduced in 1891 to £12,500. This was put upon the ground of the opium trade with China, which has now been discontinued. Aden. India bears the whole charge, civil and mil- itary, for Aden, which is not an Indian port but an Imperial dependency, from which the rest of the Em- pire, including Australia, derive more benefit than India. The Zanzibar and Mauritius Cable. The Govern- ment of India pays one-half the subsidy for this cable, although Sir David Barbour, the Finance Minister at the time, objected to incurring this expenditure, be- cause in his opinion, " the duty of protecting commerce on the high seas should devolve upon England." The Red Sea Telegraph. India contributed one- half the £36,000 annuity which was payable until 1908 for this useless cable. In conclusion, we cite the words of Mr. Thorburn, ps&c 350 of his book, " The Punjab in Peace and War": Il8 ENGLAND'S DEBT TO INDIA " The Government of India in their foreign proceed- ings are irresponsible and in pursuit of the chimera of high politics, sometimes a mere mount for vaulting ambitions, they plunge lightheartedly into adventures and wars which may benefit a few individuals, but in- jure the people of India collectively. When things go wrong in India, hardly a voice is raised against the wrong-doers ; officers may not speak, the press has little information, and if it had more, is timid, the line be- tzveen treason and criticism being finely drawn; and as for the masses — their horizon is the evening meal, and the next instalment of the revenue demand. " We give the following instances : 1. Lord Lytton's Afghan Wars — 'India bleeds si- lently.' 2. In 1890, our M^ars of pinpricks cost six or seven million pounds sterling. Once more, * India bleeds silently.' 3. An agent trails his coat in Chitral, a war follows, India pays and the agent is knighted and pro- moted. 4. The events of August 23, 1897, take place beyond the Khyber Pass, a serious war follows. Once more, India bleeds, — this time, happily, not quite in silence." PART THREE CHAPTER V THE COTTON INDUSTRY OF INDIA I HISTORICAL SURVEY -J "The birthplace of cotton manufacture is India, where it probably flourished long before the dawn of _^ authentic history. Its introduction into Europe took place at a comparatively late period where, for a long time, it existed like a tropical plant in northern lati- tudes, degenerate and sickly, until, by the appliance of modern art and science, it suddenly shot forth in more than its native luxuriance." (Baines, History of Cot- ton Manufacture, 1835, page 2). Early Mention. The arts of spinning and weaving, which rank next to agriculture, are supposed to have been invented very early in the world's history. In the time of Joseph, 1700 b. c, it is recorded that " Pharaoh arrayed him in vestures of fine linen " — and the writer quoted above adds ; " it is extremely probable that cot- ton was manufactured in India as early as linen in Egypt." Herodotus, writing about 445 b. c, stated that cot- ton was the customary wear of the Indians of that period. The subsequent writings of Europeans and Asiatics testify to the same fact. Strabo, whose au- thority is Nearchus, mentions " their flowered cottons, 121 \l v/ 122 ENGLAND'S DEBT TO INDIA or chintzes, and the various and beautiful dyes with which their cloths were figured." The first mention of cotton as an article of trade oc- curs in that valuable record of ancient commerce, " The Circum Navigation of the Erystheaen Sea," by Arrian, an Egyptian Greek living in the first or second cen- tury A. D. He describes particularly the imports and exports of several Indian towns, in their trade with the Arabs and Greeks. From this record, it appears that the Arab traders brought Indian cottons to Aduli, a port of the Red Sea ; that the ports beyond the Red Sea had an established trade with Batala, on the Indus, Ariake and Bazygaza (the modern Baroach) ; receiv- ing from them among other things, cottons of various weaves ; that Barygaza largely exported calicoes, mus- lins and other cotton goods made in the province for which this was the port, as well as in the more remote provinces of the interior. Mosalia, or Masulipatam, was famous then as now for its manufacture of cot- ton piece goods, and the muslins of Bengal were supe- rior to all others, receiving from the Greeks the name of Gangi, — i.e., made on the banks of the Ganges. In the days of the Roman Empire, silk, both raw and manufactured, was an important article of com- merce throughout India and Persia. Two Persian monks brought silk-worms and the art of silk manu- facture from China to Constantinople, in the reign of Justinian, 352 a. d. Indian cotton goods were im- ported into the Eastern Empire in the same age, as they are found in the lists of dutiable goods in the Justinian Code. From India, the art of cotton manufacturing went to THE COTTON INDUSTRY OF INDIA 123 Arabia. The English word " cotton " is a modification of the Arabian " Quttan." Marco Polo states that cotton was abundantly grown and manufactured in all the provinces on the Indus, — and was the staple manufacture of the whole of India. In the thirteenth century, the art of cotton manufacture went to China and thence to Japan. In the tenth century it travelled to Spain, being introduced by the Moors, and thence to Italy about the fourteenth century. The Moham- medans introduced it into Africa even earlier. Thus it spread east and west, " from its native seat in India across the breadth of the old continent to Japan east- ward and the mouths of the Tagus and Senegal west- ward." (Baines, page 47.) Excellence of Indian Cotton Fabrics. " The Indians have in all ages maintained an un- approached and almost incredible perfection in their fabrics of cotton — some of their muslins might be thought the work of fairies or insects, rather than of men," said Baines in 1835, when Indian fabrics were still being made. The Arabian travellers of the ninth century say ; " In this country, India, they make gar- ments of such extraordinary perfection, that nowhere else is their like to be seen, — sewed and woven to such a degree of fineness, they may be drawn through a ring of moderate size." Marco Polo (thirteenth cen- tury) says : " The Coast of Coromandel and especially Masulipatam, produce the finest and most beautiful cottons to be found in any part of the world." Many authorities show the quality of cotton cloth manufactured in India up to the end of the eighteenth ^ 124 ENGLAND'S DEBT TO INDIA century. In spite of the raw material not being brought to its highest state of cultivation, despite crude machinery and Uttle division of labour, the products were, according to Baines, " fabrics of exquisite deli- cacy unrivalled by any other nation, even those best skilled in the mechanic arts." He ascribes its excel- lence to the " remarkable fine sense of touch, and the patience and gentleness of the Hindus," Even now, fine muslins are woven in India, but since the introduction of machine-made cloths, the industry has suffered both in quantity and in quality. Extent of the Cotton Industry in Olden Times. " On the coast of Coromandel and the province of Bengal, it is difficult to find a village in which every man, woman and child is not employed in making a piece of cloth. At present much of the greatest part of the provinces are employed in this single manufac- ture (409). The progress of the linen (cotton) manufacture includes no less than a description of the lives of half the inhabitants of Hindustan." ^ Upon this and other testimony, Mr. Baines remarked in 1835 that cotton manufacture in India was not car- ried on in a few large towns or districts; it was uni- versal. The growth of cotton was nearly as general as the growth of food. Bengal was noted for the finest muslins ; Coromandel coast for chintzes and cali- coes; Surat for strong and inferior goods of all kinds; table cloths of superior quality were made at Patna. The basius or basinets came from the northern Cir- cars. Condaver furnished the beautiful handkerchiefs lOrme: in "Historical Fragments of The Mogul Empire," p. 413; quoted by Baines, p. 65. THE COTTON INDUSTRY OF INDIA 125 of Masulipatam, the fine colours of which are obtained from a plant growing on the banks of Kishna and the coast of Bengal. Chintzes and ginghams were made chiefly at Masulipatam, Madras, St. Thome and Pa- liam Cotta. Long cloths and fine petticoats came from Madras. Besides these, there were endless varieties of fabric known to the markets of Europe, Asia and Africa. Indian commerce was extensive from the Christian era to the end of the eighteenth century. For many hundred years, Persia, Arabia, Syria, Egypt, Abys- sinia and all the eastern parts of Africa were supplied with cottons and muslins from the markets of India. Owing to the beauty and cheapness of Indian fabrics, the manufacturers of Europe were apprehensive of be- ing ruined by their Indian competitors. The Dutch traders and the East India Company imported large quantities of these cotton goods in the seventeenth cen- tury. As early as 1678, a loud outcry was raised in England against the admission of Indian fabrics, which " were ruining our ancient woollen manufactures." We quote from a pamphlet of the period: The woollen trade " is much hindered by our own people who do wear many foreign commodities instead of our own ; . . . instead of green sey that was wont to be used for children's frocks, is now used painted and Indian stained and striped calicoes; . . . and some- time is used a Bangale brought from India, both for lynings to coats and for petticoats too. ... It would be necessary to lay a very high impost on all such com- modities as these are . . ." A writer of 1696 laments the misfortune of Indian 126 ENGLAND'S DEBT TO INDIA muslins and silks becoming the general wear in England. In 1708 Daniel Defoe wrote in his weekly review: " The general fansie of the people runs upon East India goods to that degree that the chintes and painted calicoes, before only made use of for carpets, quilts, etc., and to clothe children and ordinary people, become now the dress of our ladies; and such is the power of a mode as we saw persons of quality dressed in Indian carpets, which but a few years before their chamber maids would have thought too ordinary for them ; the chintz was advanced from being upon their floors to their backs, and even the Queen herself at this time was pleased to appear in China silks and calicoe ... it crept into our houses ; our closets, and bed chambers ; curtains, cushions, chairs and beds themselves were nothing but calicoes or Indian stufifs, and in short, al- most everything that used to be made of wool or silk, relating either to the dress of our women or the fur- niture of our houses, was supplied by the Indian trade." Defoe's complaint was not of an evil existing in 1708 when he wrote, but of one a few years earlier, for the prohibition of Indian goods had taken place in 1700, by Acts II and 12 of William III, Cap. 10. The intro- duction of Indian silks and printed calicoes for domes- tic use as either apparel or furniture was forbidden under penalty of £200 on the wearer or seller, and as this did not prevent the use of Indian goods, other acts were passed at later date. This " evil " of the con- sumption of Indian manufactures did not disappear by 1728, and other countries of Europe were making similar efforts to penalise the import and use of Indian fabrics. Baines says : " Not more than a century ago, the THE COTTON INDUSTRY OF INDIA 127 cotton fabrics of India were so beautiful and cheap that nearly all the governments of Europe thought it neces- sary to prohibit or load them with heavy duties, to protect their own manufactures." What, adds he, could not be achieved by legislation in Europe, was brought about by the exercise of politi- cal power in India. This is evidenced partly by the following petition submitted by the natives of Bengal to the British Government, in September, 1831 : " To the Right Honourable, the Lords of His Majesty's Privy Council for Trade, etc. " The humble petition of the undersigned Manufac- turers and dealers in Cotton and Silk Piece goods, the fabrics of Bengal ; " Sheweth ; that of late years your petitioners have found their business nearly superseded by the intro- duction of the fabric of Great Britain into Bengal, the importation of which augments every year, to the great prejudice of native manufactures. " That the fabrics of Great Britain are consumed in Bengal without any duties levied upon them to protect native fabrics. " That the fabrics of Bengal are charged with the following duties when they are used in Great Britain : " On manufactured cottons. ... 10 per cent. On manufactured silks 14 per cent. " Your petitioners most humbly implore your Lord- ships' consideration of these circumstances, and they feel confident no disposition exists in England to shut the door against industry of any part of the inhabi- tants of this great empire. " They therefore pray to be admitted to the privilege of British subjects, and entreat your lordships to allow the cotton and silk fabrics of Bengal to be used in Great 128 ENGLAND'S DEBT TO INDIA Britain free of duty or at the same rate which may be charged on British fabrics sold here. " Your Lordships must be aware of the immense ad- vantage the British manufacturers derive from their skill in constructing and using machinery, enabling them to undersell the unscientific manufacturers of Bengal in their own country; and although your Peti- tioners are not sanguine in expecting to derive any ad- vantage from having their prayer granted, their minds would feel gratified by such a manifestation of good will towards them; and such an instance of justice to the natives of India would not fail to endear the British Government to them. " They therefore confidently expect that your Lord- ships' righteous consideration will be extended to them as British subjects without exception of sect, country, or colour. " And your Petitioners, as in duty bound, will ever pray." The petition was signed by 117 natives of high re- spectability. (P. 82.) In a footnote, Baines remarks that " this reasonable request has not been complied with, the duty on Indian cottons being still 10 per cent. The extra duty of 3>^d. per yard on printed cottons was removed when the excise duty on English prints was repealed, in 183 1. English cottons imported into India pay duty of only 2y2 per cent." This document in his opinion fur- nished abundant proof how a manufacture which had existed without a rival for thousands of years with- ered away under the competition of a Power which had arisen but yesterday. Decline of the Indian Industry. Let us enumerate the causes which made the English industry flourish while the Indian declined: THE COTTON INDUSTRY OF INDIA 129 1. The invention of the power loom and other me- chanical appliances ranks first. But these might have been of no avail had not the capital for their develop- ment been taken from India, as shown in a previous chapter. 2. The monopoly created by the East India Com- pany in their own favour. 3. The imposition of a heavy tariff in England on Indian cottons. The following scale of duties on im- ported cotton goods is copied from Baines (P. 325). Rate of Duty on Cotton Goods Imported East India East India Mus- East India White Calicoes lins and Nankt ?ens Dyed Goods per Piece Per cent ad val. Per cent ad vol. s.d. L. s. d. L. s. d. 1787 5 3 & 16 10 18 Prohibited 1797 5 9 & 18 3 19 16 1798 5 9 & 21 30 22 16 1799 6 8 & 26 91 30 3 9 1802 6 8 & 27 II 30 15 9 1803 59 I 3 30 18 9 1804 6s 12 6 34 7 6 180s 66 18 9 35 I 3 1806 71 6 3 37 7 I 1809 71 13 4 2,7 6 8 1813 85 2 I 44 6 8 1814 67 10 I 37 10 N. B. The importation of cotton goods other than from the East Indies, was inconsiderable until 1825. Cotton Manufactures of all Sorts, Not Made Up. 1825 10 per cent, ad valorem, additional duty of 35^d. per sq. yd. if printed. 1832 Repeal of the additional duty of 3^d. per sq. yd. on printed goods. Inspector General's Office, Customs House, London, January 21, 18^4. Signed; Wm. Irving. In 1783 Parliament passed a law sanctioning boun- 130 ENGLAND'S DEBT TO INDIA ties on the exportation of British printed cottons, viz. : Under value of sd. per yd. ; (before printing) l/zd. per yd. Value 5d. under 6d. " " ; id. per yd. Value 6d. under 8d. " " ; V/zd. " Besides the Drazvback of the Excise Duty. These bounties were continued for more than thirty years, when they were repealed. The duties on Indian goods were raised from time to time, till in 1813 and later, up to 1831, they stood at the figures quoted below. The following statement is taken from the evidence of Mr. Ricards given before the Select Committee of the House of Commons in 1813. (See Report Appendix, page 581.) " The duties of many articles of East India produce are also enormously high, apparently rated on no fixed principle, and without regard to market price. . . . The rates of duty imposed on Indian imports into Britain when compared with the exemption from duty of British staples into India (cotton goods being sub- ject to a duty of only 2^/2 per cent), constitute an im- portant feature in the present question. Indians within the Company's jurisdiction, like English, Scotch, or Irish, are equally subjects of the British Government. To make invidious distinctions, favouring one class but oppressing another, all being subjects of the same em- pire, cannot be reconciled with the principles of justice ; and whilst British imports into India are thus so highly favoured, I know that Indo-British subjects feel it a great grievance that their commodities when imported into England should be so enormously taxed." The following charges on cotton manufactures in 1813 are significant: — £ s. d. Flowered or stitched muslins of white calicoes (for every £100 of value) 2'^ 9 2 And further (for every £100 of value) 11 17 6 Calicoes and dimities (for every £100 of value).... 81 2 11 And further (for every £100 of value) 3 19 2 THE COTTON INDUSTRY OF INDIA 131 £ s. d. Cotton, raw (per 100 lbs.) 16 11 Cotton, Manufactured (for every iioo of value)... 81 2 11 Articles of manufacture of cotton, wholly or in part made up, not otherwise charged with duty (for every £100 of value) 32 g 2 (Digby, p. 90.) John Ranking, an English merchant, when examined by the Select Committee of the House of Commons in 1813, said that he looked upon these duties as " pro- tecting " duties, to " encourage our own manufactures." The real object of the Parliamentary Enquiry in 1813 was to promote the interests of the manufacturers of England. This is evident from the nature of the questions that were put to the witnesses that were examined then as also in 1831. For instance War- ren Hastings was asked : " From your knowledge of the Indian character and habits, are you able to speak to the probability of a demand for European commo- dities by the population of India, for their own use? " Similar questions were asked Sir John Malcolm and / other witnesses, among them Sir Thomas Munro, who -^ in reply to a question whether the civilisation of the Hindus could not be improved by the establishment of an open trade said : y " I do not understand what is meant by the civilisa- tion of the Hindus ; in the higher branches of science, in the knowledge of the theory and practice of good government, and in education which, by banishing prejudice and superstition, opens the mind to receive in- struction of every kind from every quarter, they are much inferior to Europeans. But if a good system of agriculture, unrivalled manufacturing skill, a capacity to produce whatever can contribute to convenience or luxury; schools established in every village for teach- 132 ENGLAND'S DEBT TO INDIA ing reading, writing and arithmetic ; the general prac- tice of hospitality and charity amongst each other ; and above all, a treatment of the female sex full of con- fidence, respect and delicacy, are among the signs which denote a civiHsed people, then the Hindus are not in- ferior to the nations of Europe ; and if civilisation is to become an article of trade between the two countries, I am convinced that this country (England) will gain by the import cargo." ^ In less than seventy-five years (from 1757 to 1829) India was reduced from the position of a manufactur- ing country to that of a supplier of raw materials. By 1830 the English people had begun " to look to India for the means of rendering Great Britain independent of foreign countries for a considerable portion of raw material upon which her most valuable manufactures depend. . . ." ^ By this time the Manchester school of free traders had come into prominence who in the interests of English industrial workmen were anxious to have cheap food for them imported in exchange for the products of their manufactures, which had by then been well established. Cobden and Bright could not under the circumstances be expected to give a thought to the devastation of Indian industries, but what es- caped their notice was observed by a German econo- mist (quoted by Dutt) * as far back as i866. He wrote : " Had they sanctioned the free importation into Eng- land of Indian cotton and silk goods, the English cotton and silk manufacturers must, of necessity, soon come to a stand. India had not only the advantage of ^ 2 " Minutes of Evidence, &c., on the Affairs of the East India _ Company" (1813), pp. 124, 127, 131. 8 Sir John Malcolm, Governor of Bombay in 1830, 4 Dutt : " India Under Early British Rule," p. 300. THE COTTON INDUSTRY OF INDIA 133 cheaper labour and raw material, but also the expe- rience, the skill and the practice of centuries. The ef- fect of these advantages could not fail to tell under a system of free competition. " But England was unwilling to found settlements in Asia in order to become subservient to India in man- ufacturing industry. She strove for commercial su- premacy, and felt that of two countries maintaining free trade between one another, that one would be supreme which sold manufactured goods, while that one would be subservient which could only sell agri- . cultural produce. In the North American colonies, ^ England had already acted on those principles in dis- allowing the manufacture in those colonies of even a single horse-shoe nail, and still more, that no horse- shoe nails made there should be imported into England. -— - How could it be expected of her that she would give up her own market for manufactures, the basis of her future greatness, to a people so numerous, so thrifty, so experienced, and so perfect in the old systems of manufacture as the Hindus? " Accordingly, England prohibited the import of the goods dealt in by her own factories, the Indian cotton and silk fabrics. The prohibition was complete and peremptory. Not so much as a thread of them would England permit to be used. She would have none of these beautiful and cheap fabrics, but preferred to con- sume her own inferior and more costly stuffs. She was, however, quite willing to supply the Continental nations with the far finer fabrics of India at lower prices, and willingly yielded to them all the benefit of that cheapness ; she herself would have none of it." ^ 5 The reader might also read the statement of Henry St. John Tucker, a British administrator on the panel in " Memor- ials of the Indian Government," being a selection from the papers of Henry St. John Tucker (London, 1883), p. 494, and also that of the historian H. H. Wilson in " Mill's History of British India," Wilson's Book I, Chapter VIII, note. 134 ENGLAND'S DEBT TO INDIA In 1840 the East India Company, who had now ceased to be directly interested in Indian trade, in their new character of adminirtrator pure and simple, re- sponsible for the good of the people of India, pre- sented a petition to Parliament for the removal of invidious duties which discouraged and repressed In- dian industries. A Select Committee of the House of Commons was appointed. One of the witnesses ex- amined was a certain Mr. J. C. Melvill. We take the following questions and answers from his evidence : " Have native manufactures been superseded by British? " Melvill was asked. " Yes, in great measure," was his reply. " Since what period ? " " I think principally since 1814." " The displacement of Indian manufactures by Brit- ish is such that India is now dependent mainly for its supply of those articles on British manufacturers?" " I think so." " Has the displacement of the labour of native man- ufacturers at all been compensated by any increase in the produce of articles of the first necessity, raw produce? " " The export of raw produce from India has in- creased since she ceased largely to export manufac- tures; but I am not prepared to say in what propor- tion." « Mr. Andrew Sym said that " the people of India de- prived of their occupations," by the displacement of Indian labour by the introduction of English manu- factures — clothing, tools, implements, glassware, and brass articles, turned " to agriculture chiefly." « Questions 577, 578, 583, 584. THE COTTON INDUSTRY OF INDIA 135 Testimony of G. G. de H. Larpent, and other Brit- ishers. Mr. Larpent supplied the Committee with the following figures relating to the import of Indian cot- ton goods into England, and the export of English cotton goods into India. Cotton Piece Goods Imported into Great Britain from the East Indies. 1814 1,266,608 pieces 1821 534,495 " 1828 422,504 " 1835 306,086 " British Cotton Manufactures Exported to India. 1814 818,208 yards 1821 19,138,726 " 1828 42,822,077 " 1835 5^777,277 " In spite of this decline in the Indian manufacture, and the increase of British manufacture, British cotton goods were still imported into India on payment of an ad valorem duty of 33^2 per cent, while Indian cotton goods imported into England were subjected to an ad valorem duty of 10 per cent. Quoting from Mr. Shore, witness read : " This supersession of the native for British manufactures is often quoted as a splendid in- stance of the triumph of British skill. It is a much stronger instance of English tyranny, and how India has been impoverished by the most vexatious system of customs and duties imposed for the avowed object of favouring the mother country." Mr. Larpent did not agree with Mr. Shore in these observations to the full extent; but they showed the feeling of a distinguished servant of the Company, a feeling which was likely to prevail among the people of India, Silk Goods. British silk goods were admitted into Calcutta on payment of a duty of 3^ per cent. Indian 136 ENGLAND'S DEBT TO INDIA silk goods were subjected to an import duty of 20 per cent, in England. Corahs or Indian silk piece goods in the grey (unprinted), were imported into England mainly for being printed in England and then exported to other European countries. The following figures were given for Corahs imported into England : For Home Consutjiption For Re-export Pieces Pieces 1838 16,000 , 310,000 1839 38,000 352,000 Bandannas or Indian printed pocket-handkerchiefs were imported into England in considerable quantities. Mr. Larpent pleaded strongly for the equalisation of duties between Great Britain and India with regard to silk goods. Mr. Brocklehurst, one of the members of the Select Committee, represented British silk manu- factures, and necessarily desired the continuance of un- equal duties to the advantage of England. Mr. Brocklehurst. — You give your opinion without reference to the effect it would have on the British pro- ducer? Mr. Larpent. — I have no doubt there would be, to a certain extent, a rivalry in competition with the silk manufactures of this country; but I submit on principle that India ought to be admitted as one of our own pos- sessions. The argument has been used that while our manufactures are allowed to go into India at a very reduced duty, we ought to have admitted theirs on as low a duty. Mr. Brocklehurst. — Is there any colony of this coun- try whose manufactures are admitted on so low a scale as those of India? Mr. Larpent. — There is no colony of this country whose manufacturers are of a magnitude calling for it. We have destroyed the manufactures of India. (And then the witness quoted the views of the Court of Di- rectors, stated in Lord William Bentinck's minute of THE COTTON INDUSTRY OF INDIA 137 May 30, 1829 : " The sympathy of the Court is deeply excited by the report of the Board of Trade, exhibiting the gloomy picture of the effects of a commercial revo- lution productive of so much present suffering to nu- merous classes in India, and hardly to be paralleled in the history of commerce.") But Mr. Brocklehurst was not convinced. He re- turned again and again to the subject. Mr. Brocklehurst. — Are you aware that they have already so far displaced silk handkerchiefs made in this country, that attempts are now made to introduce a spurious article from waste silk as a substitute ? Mr. Larpent. — I have heard that an article is intro- duced made of waste silk ; and that as I stated before, the ingenuity and science of the parties who are making those goods, will probably introduce into the home mar- ket a quantity of goods at a low price, which will be in very general use. Mr. Brocklehurst. — Driving the British manufac- turer to make inferior articles to maintain his ground in competition ? Mr. Larpent. — The articles alluded to are those made here; the British manufacturers have made those in- ferior articles. Mr. Brocklehurst. — It would be more desirable per- haps that India should produce the raw material, and this country show its skill in perfecting that raw ma- terial ? Mr. Larpent. — The course of things in India is de- cidedly leading to that ; and it is in the main articles such as we have already alluded to, that we do think every assistance should be given to the agricultural produce of India; but I submit that as this is the last of the expiring manufactures of India, the only one where there is a chance of introducing the native man- ufactures, at least let it have a fair chance, and not be oppressed with the duty of 20 per cent., in favour of the British manufactures. 138 ENGLAND'S DEBT TO INDIA Testimony of Montgomery Martin. " 1 have examined at considerable length, and for a series of years, the trade of India. I have taken the utmost pains to arrive at correct conclusions by examining various documents which the Honour- able Court of Directors of the East India House, with their usual liberality, permitted me access to. And I have been impressed with the conviction that India has suffered most unjustly in her trade, not merely with England but with all other countries, by reason of the outcry for free trade on the part of England without permitting to India a free trade herself." And he added that, " on all articles except those where we are supplanting the native manufacturers, and consequently impoverishing the country, there is a decreasing trade." Cotton Goods. In 1815 the cotton goods exported from India were of the value of £1,300,000. In 1832 they were less than £100,000. In 181 5 the cotton goods imported into India from England were of the value of £26,300. In 1832 they were upwards of £400,000. " We have during the period of a quarter of a century compelled the Indian territories to receive our manu- factures ; our woollens, duty free, our cottons at 23^ per cent., and other articles in proportion ; while we have continued during that period to levy almost pro- hibitory duties, or duties varying from 10 to 20, 30, 50, 100, 500, and 1000 per cent, upon articles, the produce from our territories. Therefore the cry that has taken place for free trade with India, has been a free trade from this country, not a free trade between India and this country. . . . The decay and destruction of Surat, of Dacca, of Murshedabad, and other places where na- tive manufactures have been carried on, is too painful a fact to dwell upon. I do not consider that it has been in the fair course of trade ; I think it has been the power of the stronger exercised over the weaker." Evidence such as this brought about a keen contro- THE COTTON INDUSTRY OF INDIA 139 versy between the witness and Mr. Brocklehurst, the representative of the British manufacturer. Mr. Brocklehurst, — The fact being that weavers, either in the one country or the other, must be sacri- ficed, and that sacrifice having already taken place in India, you wish to revive the population of India at the expense of this country? Mr. Martin. — I do not wish to revive it, but I wish to prevent continued injury to India. But it does not nec- essarily follow that the weavers of England would be destroyed by admitting the natives of India to compete with them in this country, because the natives of India have no power looms, and no means of employing skill and capital to the extent that the manufacturers of Glasgow and Manchester have. Mr. Brocklehurst. — The questions that have been asked refer entirely to fine fabrics which cannot be woven by power. The question is, whether we are to give up fine weaving in this country, or retain it? Mr. Martin. — If it is only to be retained at the ex- pense of injustice to India, my answer is, that England ought to act with justice, no matter what the result may be. That she has no right to destroy the people of a country which she has conquered, for the benefit of herself, for the mere sake of upholding any isolated portion of the community at home. Mr. Brocklehurst. — When the transfer of India to the Government of this country took place in 1833, the destruction of weaving in India had already taken place, and therefore it is not a question of destruction, for that is past ; and Vv^e have it in evidence that India is an agricultural rather than a manufacturing country, and that the parties formerly employed in manufactures are now absorbed in agriculture. Does it occur to you that there is an opening in this country, if manufactur- ers are displaced, for the people to turn to agriculture ? Mr. Martin. — I do not agree that India is an agri- cultural country; India is as much a manufacturing 140 ENGLAND'S DEBT TO INDIA country as an agricultural; and he who would seek to reduce her to the position of an agricultural country seeks to lower her in the scale of civilisation. I do not suppose that India is to become the agricultural farm of England ; she is a manufacturing country, her manu- factures of various descriptions have existed for ages, and have never been able to be competed with by any nation wherever fair play has been given to them. I speak not now of her Dacca muslins and her Cashmere shawls, but of various articles which she has manufac- tured in a manner superior to any part of the world. To reduce her now to an agricultural country would be an injustice to India. Another committee with John Bright as chairman was appointed to inquire into the growth of cotton in India. The evidence given before this committee laid stress on the necessity of land assessments being re- duced to put heart into the cultivator and also on the improvement of means of transportation. Some members also spoke of the economic drain. On the condition of the cultivators of Madras and Bombay the committee remarked that they were " almost wholly without capital or any of those means which capital alone can furnish by which industry may be improved and extended. They are in reality a class of cultiva- tors in the most abject condition." Their other recom- mendations are not relevant to this part of our subject. Duties on the import of cotton (raw) into England from Bengal had been abolished in 1836, those on Bom- bay cotton in 1838 and those on Madras cotton in 1844. THE COTTON INDUSTRY OF INDIA 141 II THE HISTORY OF IMPORT DUTIES AND THE PRESENT STATE OF THE INDUSTRY Legislative Acts. — Various acts were passed from time to time between 1833 and 1853 by the Indian Legislature to regulate trade and navigation and to fix the tariff. We have already stated in the previous section how the export of raw cotton was freed of any duty between 1836 and 1844. In 1853 the import duties ranged from 3^ per cent, to 5 per cent, ad valorem except in the case of foreign (i.e., non-Brit- ish) cotton and silk goods, foreign cotton thread and yarn and foreign marine stores and foreign metals. These foreign goods had to pay double duty. These duties were imposed for revenue purposes and not for protection. In the case of cotton and silk manufac- tures there was no question of protection as there was no industry in India to be protected and later when the industry did come into existence, the duties were more than once remitted. The higher duties on for- eign goods, though, were a sort of protection to British goods. In 1858 when Queen Victoria assumed the direct sovereignty of the Indian Empire, the import duties, as before, stood at 33^ per cent, ad valorem upon cotton twist and yarns and at 5 per cent, on other articles of British produce and manufacture, including cotton piece goods. The duties on foreign articles were still double. In 1859, on account of the heavy financial pressure after the Mutiny, all differential tar- iffs were abolished; duties on all articles of luxury 142 ENGLAND'S DEBT TO INDIA were raised to 20 per cent, ad valorem; duties on other articles, including cotton piece goods, were raised to 10 per cent. ; and those on cotton twist and yarn to 5 per cent. In i860, only a year later, there was another change in favour of uniform tariff of 10 per cent, ad valorem, with special rates upon beer, wines, spirits and to- bacco.'^ In 1861, the duty on cotton twist and yarn was reduced to 5 per cent. In 1862 it was further re- duced to 3}^ per cent, and the duty on cotton and other manufactures was reduced to 5 per cent. In 1863 the duty on imported iron was reduced to i per cent. In 1867 a great number of articles were added to the free list. In 1870 a new Tariff Act was passed which placed the import duties generally at 7^ per cent, on manufactured goods and raw materials, at 5 per cent, on piece goods, at 33/2 per cent, on twist, at i per cent, on iron and at 10 per cent, on tobacco. The law was again changed in 1871 but the altera- tions were not material. A select committee of the House of Commons which sat from 1871 to 1874 took evidence on the oper- ation of the duties, in which objection was made to the import duty on cotton piece goods and to the export duty on grains. At that time there were only two or three cotton spinning and weaving mills in Calcutta. Sir Bartle Frere expressed himself in favour of keeping down the import duty on cotton piece goods in order to foster the sale of British goods. He con- fessed that " the interests of India and England on that point seemed to be at variance. No doubt some con- ^ Export duties on Indian raw produce were abolished. THE COTTON INDUSTRY OF INDIA 143 siderable increase of revenue might be realised by in- creasing the import duties; say upon piece goods and yarn, but the direct result of that would be to diminish consumption and to stimulate production on the spot," which, of course, he and his countrymen did not de- sire. Mr. Walter Cassels, a Bombay merchant who had been a member of the Bombay Legislative Council, agreed that even the small import duty of 5 per cent., on cotton piece goods operated as a protective duty, though he added he did not desire its abolition on that ground. He stated that at that time there were twelve cotton mills in Bombay employing 319,394 spindles, 4199 looms and 8170 hands. A glimpse into the helplessness of the Government of India in the matter of its fiscal policy can be had by a study of questions that were put to Lord Lawrence by Henry Fawcett and the answers given by the former. Lord Lawrence had tried to raise the ex- port duties on jute and other Indian products in 1865, to get a little additional revenue and save the country from a deficit. But British interests had been too strong for him and the Secretary of State for India had disallowed his proposals. Eight years after, when he was questioned by Mr. Fawcett, he guardedly ex- pressed his painful impressions of the influence of British trade over the financial policy of India. The British trade interests have virtually dominated the fiscal policy of the India Government ever since Brit- ish occupation of India, and they do so to this day. In 1874, the Lancashire manufacturers, by a me- morial addressed to the Secretary of State for India, 144 ENGLAND'S DEBT TO INDIA started their attack on the 5 per cent, and 3}4 per cent, duties on cotton piece goods and cotton twist respec- tively, representing them as protective duties. The complaint was that on account of the duties a protected trade in cotton manufacture was springing up in Brit- ish India to the disadvantage of both India and Great Britain. The reference to India is very amusing. The interests of India and of the poor people of In- dia have always been present before the mind of the English merchant and his protector, — the Secretary of State for India. We shall find it referred to, in feeling terms almost every time a mandate has had to be issued to the Government of India for the fur- therance of the interests of British trade, so often that we are afraid the reader might be disgusted by its con- stant reiteration and repetition in documents so pal- pably harmful to Indian interests. The reply of the Secretary of State to this memo- rial being rather evasive on the main points raised by the memorialists, they found it necessary to state in so many words that what they objected to was the opening of new mills in India. They said : " The statements as to the harmful operation of these duties on commerce, and on the best interests of her majesty's subjects, both in India ( !!) and Eng- land are abundantly confirmed by the latest advices from Bombay, which show that, under protection ex- tended by the levying of duties on imports, to the spinning and weaving of cotton yarns and goods in India, a large number of new mills are now being pro- jected.^ * Quoted by Dutt from Government of India Resolution No. THE COTTON INDUSTRY OF INDIA 145 On this, the Government of India appointed a com- mittee to consider the question. All the members, we are told by Dutt, were English merchants and officials. Yet the committee was unanimous in rejecting the Manchester demand for the repeal of import duties on cotton yarns and goods. Lord Northbrook, then Viceroy of India, a free- trader, refused to sacrifice a source of revenue which in his opinion did not operate as protection. A new Tariff Act was passed which retained the import duties on cotton yarn and goods ; largely reduced valuation ; and imposed a 5 per cent, duty on the import of long staple cotton " to prevent Indian Mills competing at an advantage in the production of the finer goods." ^ They also abolished all export duties except on indigo, rice and lac, reduced the general rate of import duties to 5 per cent, and raised the duties on spirits and wines. This resulted in a total loss of £308,000 to the Indian revenues. Meanwhile by the turn of the political wheel in England, the Conservative party had come into power and Lord Salisbury had been appointed Secretary of State for India, in the administration of Disraeli. In July, 1875, he wrote to the Viceroy: " If it were true that this duty is the means of ex- cluding English competition, and thereby raising the price of a necessary of life to the vast mass of Indian consumers, it is unnecessary for me to remark that it would be open to economical objections of the gravest kind. I do not attribute to it any such effect; but I cannot be insensible to the political evils which arise from the prevalent belief upon the matter. 2636 of August 12, 1875, forming an enclosure to Despatch No. 15 of 1875. The italics are ours. 8 Dutt, " India in the Victorian Age," p. 404. 146 ENGLAND'S DEBT TO INDIA " These considerations will, I doubt not, commend to your Excellency's mind the policy of removing, at as early a period as the state of your finances permits, this subject of dangerous contention." Lord Northbrook replied by cable that the Bill had been passed, giving the substance of its provisions. Lord Salisbury wired back his dissatisfaction and ob- jections. The dispute between Lord Salisbury and Lord Northbrook raised a question of principle, viz., the competency of the Governor General in Council to pass any important measure without obtaining the previous sanction of the Secretary of State for India. Finding himself unable to accept this principle. Lord North- brook resigned his office. His resignation was ac- cepted, and Lord Lytton appointed in his place. After this affair, Lord Salisbury laid down the principle in black and white, in a despatch to the Viceroy — a view from which two of his counsellors dissented. Ever since, the Government of India has been in theory as well as fact " a government by mandate." With Lord Lytton succeeding Lord Northbrook to the Viceroyalty of India, the path of Lord Salisbury became smoother. He at once ordered the repeal of the import duty on cotton goods in spite of the dissent of three members of his council. Lord Lytton, though quite willing to do the bidding of the Secretary of State, found that in the meantime the terrible famine of Madras had affected the finan- cial situation of India so seriously that even he could not sacrifice this item of revenue immediately. So, with the concurrence of the Secretary of State, the THE COTTON INDUSTRY OF INDIA 147 import duties had to be continued for two years longer. But the manufacturers of Lancashire were losing patience. The question was raised in the House of Commons and that august body resolved : " That, in the opinion of this House, the duties now levied upon cotton manufactures imported into India, being protective in their nature, are contrary to sound commercial policy, and ought to be repealed without delay, so soon as the financial condition of India will permit." Lord Salisbury forwarded the Resolution to the Government of India and referred to the fact " that five more mills were about to begin work ; and that it was estimated that by the end of March, 1877, there would be 1,231,284 spindles employed in India." (Let- ter to the Governor General in Council of August 30, 1877.) So in the coming year, the Government of India began by exempting from duty certain kinds of imported goods with a calculated loss of £22,227 to the Indian revenue. Lancashire was not satisfied and pressure was brought to bear upon the Govern- ment of India to repeal the duties on cotton imports altogether. The Council of the Governor General, however, was not unanimous on the point and the minutes of the dissenting members speak for them- selves. Mr. Whitley Stokes' first objection was in the inter- ests of Indian finance : "We have spent our Famine Insurance Fund, or what was intended to be such. We are carrying on a costly war with Afghanistan. We may any day have 148 ENGLAND'S DEBT TO INDIA to begin one with the King of Burma. We have now to borrow five crores (five millions sterling) in India, and we are begging for two millions sterling from Eng- land. "Secondly, because the proposed surrender would eventually lead to the surrender of the import duty on all cotton goods. * The powerful Lancashire manu- facturers will be encouraged by their second victory to new attacks on our revenue. ... If ever we have any true surplus, we should, in my opinion, lessen some of our direct taxes rather than abohsh any of our moder- ate import duties.' " Fifthly, because, by the proposed repeal, * the Man- chester manufacturers would practically compel the people of India to buy cotton cloths adulterated, if pos- sible, more shamefully than such goods are at present. The cost of the clothing of the people would thus be in- creased rather than lessened.' "Sixthly, because Indian newspapers will proclaim in every bazaar that the repeal was made * solely in the interest of Manchester, and for the benefit of the Con- servative party, who are, it is alleged, anxious to ob- tain the Lancashire vote at the coming elections.' Of course the people of India will be wrong; they always must be wrong when they impute selfish motives to the ruling race." ^^ Among other objections he also pointed out that the repeal was demanded by the manufacturers of Lan- cashire and not by the people of India. Sir Alexander Arbuthnot pointed out that " The people of India attribute the action which has been taken by her Majesty's Government in this matter to the influences which have been brought to bear upon it by persons interested in the English cotton trade ; in 10 The italics are ours. THE COTTON INDUSTRY OF INDIA 149 other words by the manufacturers of Lancashire. It is notorious that this impression has prevailed throughout India from the time, just four years ago, when the Mar- quis of Sahsbury informed a large body of Manchester manufacturers that the Government of India would be instructed to provide for the gradual abolition of the import duties on cotton goods. " Nor is this feeling limited to the Native community. From communications which have been received from the Chambers of Commerce at Madras and Calcutta, it is evident that the feeling is shared by the leading rep- resentatives of the European mercantile community in those cities. " It is equally shared by the great body of the official hierarchy throughout India. I am convinced I do not overstate the case when I affirm my belief that there are not at the present time a dozen officials in India who do not regard the policy which has been adopted in this matter as a policy which has been adopted, not in the interests of India, not even in the interests of England, but in the interests or the supposed interests of a politi- cal party, the leaders of which deem it necessary at any cost to retain the political support of the cotton manu- facturers of Lancashire." [The italics are ours.] Similar protests were made by Mr. Rivers Thom- son (afterwards Lieutenant Governor of Bengal) and Sir Andrew Clarke. Against all these protests, and in defiance of the opinion of the majority of his Council, Lord Lytton, with the concurrence of Sir John Strachey and Sir Edwin Johnson, exempted from im- port duty " all imported cotton goods containing no yarn finer than 30's." The Secretary of State of course approved of the act of Lord Lytton, though seven members of his own Council, including Sir Fred- eric Halliday, Sir Robert Montgomery, Sir William Muir, and Sir Erskine Perry, dissented. 150 ENGLAND'S DEBT TO INDIA This shows conclusively how even the Anglo-Indian Administrator is helpless to protect Indian interests, when the latter clash w^ith the financial interests of Great Britain. The question of cotton duties has been one of the most exciting questions that have exercised the public mind in India for the last fifty years. It is one of those few questions on which the Indians and the resi- dent Anglo-Indians hold exactly the same views. It affects an industry, in the prosperity of which the In- dian and the resident Anglo-Indian mill owners are equally interested. To proceed with the story, the tariffs were again tampered with during the viceroy- alty of Lord Ripon, with the result that in March, 1882, the remaining import duties w-ere also abolished, excepting those on salt and liquors. For the next twelve years the matter remained at rest, until the financial embarrassments of the Govern- ment of India forced the latter to reopen the question in 1894, when the Indian Government had to face a deficit of more than two million pounds sterling. A committee, called Lord Herschell's Committee, was appointed, which recommended the re-imposition of import duties except on cotton goods. When a tar- iff bill was brought before the Council, on the lines of the recommendations of the Committee, it met with strong opposition from the non-official members of the Council on the ground that it exempted a class of goods which should pre-eminently bear an import duty and a duty that would yield the best results, as " the volume of trade in cotton goods and yarns then represented nearly one-half of the total imports from abroad." It THE COTTON INDUSTRY OF INDIA 151 was argued that " the exemption of these important commodities when practically every single commodity was being subjected to an import duty could not be justified on its merits as a sound fiscal measure much less when it was an admitted fact that the Budget would still show a deficit." ^^ The Government of In- dia, however, could not accept these views, as they had a mandate from the Secretary of State for India which they dared not ignore. This Act was thus passed in the teeth of the strong and united opposition of the In- dians and the Anglo-Indians, in March, 1894, but in December, 1894, the subject was re-opened under in- structions from the Secretary of State who in the meantime found out another way of propitiating Lan- cashire without sacrificing revenue — viz., by imposing a counteracting excise duty upon yarns produced in Indian mills, which could possibly compete with Lan- cashire yarn. Accordingly two bills were introduced in the Legislative Councils, the first of which subjected cotton yarn and fabrics to the general import duty of 5 per cent ad valorem and the second imposed an ex- cise duty on all cotton yarns of 20's and above pro- duced by Indian mills. In introducing this latter bill, the then Finance Minister, Sir James Westland, stated in the Council that the policy underlying its provisions had been imposed on the Governments of India by the Secretary of State in pursuance of the resolutions of the House of Commons passed in 1877 and 1879. The law, however, satisfied nobody. The Indian mill owners were of course dissatisfied with the whole 11 The Indian Year Book issued by the Times of India Press for 191S, p. 234. 152 ENGLAND'S DEBT TO INDIA policy but they also added another objection and pointed out how impossible it was to spin precisely to a particular count. Lancashire on the other hand con- tended that the bill left loopholes for evasion. Con- sequently the matter was reconsidered in 1895 and another Act (II of 1896) was passed by which yarn was altogether exempted from duty and a uniform duty of 3^ per cent, was imposed on all woven goods whether imported or manufactured in India. The measure was of course opposed by both Indian and Anglo-Indian non-official members. Mr. Stevens, afterwards Sir Charles Stevens, representing the Ben- gal Chamber of Commerce, said : " I fear it must be owned that the measure has not received the support of the public as a whole. For this there are two main reasons. First, the suspicion existing in some quarters that it has been called for by the exigencies of party politics in England rather than by the wants of India ; secondly, that the trade will be disturbed to the disadvantage of important in- dustries and of poor consumers in this country." What has happened since then may be stated in the words of the writer of the article on this subject in the Indian Year Book of 1915 : " New Factors in the Situation. Since the passing of this measure into law the policy of the Government of India in this respect has frequently been the subject of attack in the press and in the Legislative Councils while it has also formed the subject of continued repre- sentations by the industrial interests affected and po- litical organisations. In more recent years the agita- tion in favour of the abolition of the Excise duties has been revived by the growth in England of a strong THE COTTON INDUSTRY OF INDIA 153 body of public opinion in opposition to the policy of Free Trade. Advantage has been taken of this new phase in English economic thought to press on behalf of India the acceptance of a policy of Protection, and the removal of the Excise duties is now claimed by the opponents to this measure as a necessary corollary of the application to the British Empire of the principles associated with the name of Mr. Chamberlain. A new factor in the situation which has strengthened the posi- tion of those who are in opposition to the Excise duties is to be found in the severe competition which Indian mills have to face in China as well as in India from the Japanese industry. The Japanese market was lost to India in the early years of this century. More recently, however, Japan has entered as a competitor with India into the China market, while within the last few years it has pushed its advantage as against the Indian mill- owner in the Indian market itself. Again it is claimed that the recent enhancement of the silver duty has ma- terially affected the position of the Indian spinner who relied on the China market. On two occasions within the last five years the question of Excise duties has come prominently to the front as a result of debates in the Viceroy's Council. The official attitude is firmly based on the position that the Excise duties stand and fall with the import duties. Against such an attitude all arguments based either on the advantages of a Pro- tectionist as opposed to a Free Trade policy or on the handicap to which the present system exposes the In- dian millowner can, of course, make no headway. The Government of India are confronted with a heavy re- curring loss in their revenues as a result of the abolition of the opium traffic. The import duties on cotton piece-goods represent nearly fifteen per cent, of the total revenue collected as Customs duty while the Ex- cise duty itself realised no less than 47 lakhs in 1912-13. The strength of the arguments which support the Gov- ernment position is so patent that the movement in favour of the total abolition of the Excise duty is grad- 154 ENGLAND'S DEBT TO INDIA ually giving way to a feeling that a solution may be found in maintaining the Excise duty at its present rate while enhancing the import duties to the level of the general rate of Customs duty. This policy which is frankly of a protective character, can to some slight extent be supported by the change in the position of Lancashire in respect of the imports of cotton piece- goods. In 1894 when the duties were first imposed the share of Lancashire was no less than 98 per cent, of the total import trade in piece-goods. Foreign competi- tion, notably from Japan has reduced its share to 91 per cent, and it may be expected that the success of this at- tack on the position of Lancashire will in the near future loom largely in the arguments of those who favour a modified form of protection within the Em- pire." In spite of these drawbacks the cotton industry re- ceived a great and extraordinary stimulus by the Boy- cott and Swadeshi movements started by the Indian Nationalists in 1905 as a protest against the administra- tion of Lord Curzon ; but as the momentum created by the movement has declined by the force of time and change in circumstances the rate of progress in the development of the industry has also gone down. In 1904 there were 191 mills in the whole of British India, working 5,118,121 spindles and 45,337 looms. By 1909 the number had risen to 259 mills, with 6,053,- 231 spindles and 76,898 looms. In 1910 the number rose to 263 mills, covering 6,195,671 spindles and 82,- 725 looms. In 191 1 the number of mills remained sta- tionary though there was a slight increase in spindles and looms. In 191 3 the number of mills rose to 272 with a total of 6,596,862 spindles and 94,136 looms. In 1914 there has been no increase in the number of THE COTTON INDUSTRY OF INDIA 155 mills, though there has been a slight increase in the number of spindles and looms. The number of the latter stood on August 31, 1915 at 6,898,744 and 108,- 009 respectively. The following figures about the trade in cotton goods might be useful for purpose of refer- ence: In 1915-16 the Indian mills' outturn in yarn was a little over 722 million lbs. and in woven goods a little over 352 million lbs., of which 160 million lbs. of yarn and tweed and 113 million yards of piece goods were exported as against 198 and 89, in 1913-14 and 136 and 67 in 1914-15. In 1913-14 the total value of the exports of cotton manu- factures from India, is given at a little over 8 million lbs. sterling. The imports of cotton manufactures in that year were valued at over 66 million pounds ster- Hng. In March, 1916, at the time of the Budget dis- cussion, Sir William Meyer informed the members of the Indian Legislative Council that in deference to the unanimous opinion of the non-official members, Lord Hardinge's Government had proposed to the Secretary of State the abolition of the excise duty and an in- crease in the duty on imported cotton goods, but that the Secretary of State had decided that the considera- tion of the matter might be postponed, during the war.^2 So while the Government of India increased the price of salt (manufactured in India and a Gov- ernment monopoly) they had to submit to the decision of the Secretary of State in the matter of the duties on cotton goods. The matter has been thus summed up by the writer of the article on " Industrial and Eco- 12 The duty has now been raised to 7^ per cent. The excise duty is being maintained (see P. S. Preface). 156 ENGLAND'S DEBT TO INDIA nomic Conditions " in the volume of the Oxford Sur- vey of the British Empire dealing with Asia (pages 140, 141 ) : " It is but natural that Indian politicians should ex- press dissatisfaction with the meagre results at present achieved in industrial enterprise. They complain that, in the interest of Lancashire, their cotton fabrics were first excluded from the English market and now suffer from unrestricted competition at home. They are not content with the exportation of raw materials as an in- dication of prosperity, but rather regret that these are not profitably used up in the country. They quote the dictum of Mill that * nascent industries ' may be legiti- mately protected. They point to self-governing col- onies which are allowed to impose a tariff even against the mother country. They point also to the analogous case of Japan, whose industrial development, fostered by the State, already threatens rivalry in their own markets. These complaints, when uttered by Indian representatives in the reformed legislative Councils cannot be ignored, especially when it is known that Anglo-Indian opinion, both official and commercial, largely sympathises. As long as no fresh taxation is required, a final solution of the problem may possibly be postponed ; but when the time comes it will test, as no other question has done, the altruism of English statesmanship." Before bringing this chapter to a close, we must, in fairness to the other side, mention some " alleged re- cent discoveries " of a retired Indian Civil Servant, Mr. C. W. McMin, who in 1908 read a paper before the East India Association, extracts from which have since been incorporated into a pamphlet entitled: " Truths About India." The obvious purpose of this document, which may be had for the asking, is to show THE COTTON INDUSTRY OF INDIA 157 the world that the charge brought against England of the " destruction of indigenous Indian industries " is unfounded. A few extracts, copied verbatim, are appended be- low, with comments by the author opposite. EXTRACTS A " In a great work on ' Eco- nomic History ' by R. C. Dutt, it is stated the British im- posed 'unjust and enormous' duty on Indian cottons of 20 per cent ; on reference to the quoted authority I find it was 4d. per cwt. As cotton was 5d. per lb., the rate was less than I per cent. This was not printer's deviltry, for taf- fetas, sugars, mats are simi- larly misstated. The truth was that foreign cotton was paying 5s lod. per cwt. about 20 per cent, while Indian cot- ton had a preferential tariff, less than i per cent." B " In 1789 England reduced the British tariff tax on tea to 121/2 per cent, on piece goods to 18 per cent ; and to make up the deficiency so created, in the Inland Rev- enue, imposed a window tax on the English people. This proved a hardship and evil to the poor and an annoyance to the rich. _ William Pitt did this ; possibly he remembered that Indian trade had made his grandfather rich, and founded the fortune of Chat- ham. Up to i860, in tariffs, Britain favoured India more ANSWERS A Mr. Dutt's alleged mistake has nothing to do with man- ufactured cotton and silk goods. How England treated Indian raw cotton has not been treated in this book — it was to her interest to en- courage the cultivation of raw cotton in India, and sup- ply it as cheaply as possible to the Lancashire mills. So the point made in the extract is of no significance whatever. B The statement of duties on piece-goods in 1789 does not show Baines' scale of duties levied on " East Indian White muslins and Nankeen, to be in any way wrong. Baines' table covers 1787-1814, and shows that the duty varied from 18 per cent, to 44 per cent, ad val. and from £16 15s. 3d. in 1787 to £85 2s. id. per piece in 1813. East India dyed goods were absolutely prohibited. On the other hand, bounties were given for the exportation of English cottons. The table of duties 158 ENGLAND'S DEBT TO INDIA or less. In 1838 there were 43 articles, every important article of necessity or luxury, for which there were prefer- ential light duties for British possessions. For raw silk from Bengal there was a spe- cial light duty — it paid 4s. 6d. while the rest of the world paid 5s. lod. per lb. British tariffs were not only just to India, but even benevolent from 1825 onward. Opium, indigo, tea, jute, cotton, were bringing wealth to the Empire surpassing the Moguls. I admit that in Bengal es- pecially for the first 20 years after the Company assumed the Dewani, there were most serious drawbacks to the peace and prosperity intro- duced by British rule. From 1785 amendment commenced due to a great improvement in Customs regulations, and lower tariffs on tea and piece- goods, dating 1780-4. The East India Company, far from being hostile to In- dian manufactures, spent about £160,000,000 in training artisans, establishing factor- ies, buying and transporting to England the piece-goods, silk, salt-petre, indigo, sugar, which were the principal staples. They sold piece goods alone for 659 million pounds in forty years (1771- 1810). filed before the Select Com- mittee of the House of Com- mons in 1813 shows the duty on " Calicoes " was i8i 2s. I id. for every " 100 of value" (also cottons) while the duty on raw cotton was i6s. iid. per 100 lbs. The duty on tea in 1761, customs and excise is given as £96 os. od., etc. The statement that opium, indigo, tea, jute and ale brought wealth to the Empire is true if by " Empire " is meant England and English manufacturers, who monop- olise those industries and tne profits therefrom. The last statement is too vague to be tested. The East India Company in its char- acter as trader, was inter- ested in certain industries of which it had the monopoly. We are not told how the £160,000,000 was spent; how much in " training artisans " or ill what kind of work, how much in " establishing factories " or what sorts ; nor what proportion went into the pockets of the Company's servants. Nor was there anything re- markable in the " fact " that in forty years, 1770-1810, the East India Company should THE COTTON INDUSTRY OF INDIA 159 have sold goods to the value of 659 milHons of pounds, — where and to whom is not stated. An industry like that of the piece goods industry of India could not have been destroyed in a day. In conclusion it is well to recall the testimony of such competent witnesses as Henry St. John Tucker, Larpent, Montgomery Martin, and others. That the number of those who depend on textile industries for their living is still declining is made clear by the results of the census of 191 1. See Mr. Gait's report, chapter on occupations, wherein he says that "As compared with 1901, there has been a decrease of 6.1 per cent, in the number of persons supported by textile industries. This is due mainly to the almost complete extinction of cotton spinning by hand. Weaving by hand has also suffered severely." Cotton duties — /p// developments. Since the above was written, the duty on cotton goods imported into India has been raised to 73^ per cent, ad valorem while the countervailing excise duty has been main- tained at the old figure. The action of the Govern- ment of India, taken with the sanction and approval of the Secretary of State for India, as a part of the plan whereby the Government of India was to contribute iioo,ooo,ooo to the British war fund as a " free gift," from India has furnished occasion for a very interest- ing discussion on the point, between Lancashire and the Free Traders on one hand and the Tory Secre- tary of State for India and The Times on the other. In the course of the controversy certain admissions have been made in high quarters which corroborate i6o ENGLAND'S DEBT TO INDIA and support the statements made in this chapter. In the course of a letter addressed to the West- minster Gazette, Lord Curzon says : " I have always regarded the attitude of Lancashire toward India in respect to the Import duties on cotton and still more of the countervailing excise as an injus- tice and a wrong. . . . When in India, as Viceroy, I more than once expressed myself in the same sense. On my return to England I made a speech in the House of Lords on May 21, 1908, in the course of which I said that the fiscal policy of India during the last thirty or forty years has been shaped far more in Manchester than in Calcutta. In the speech at Man- chester in 1910, I alluded to the same facts, namely, to the subordination of Indian fiscal policy to the Secre- tary of State and a House of Commons powerfully affected by Lancashire influence." [The italics are ours.] Mr. Charles Roberts, M. P., said in the House of Commons : " Long ago we forgave ourselves for the selfish commercial policy of the eighteenth century which crushed out the beautiful fabrics of India by fiscal prohibition." Mr. G. W. Forrest, writing to The Times, London, (March 14, 1917), said: "The tale of England's dealing with Indian industry was one of littleness and injustice. ... By positive prohibition and by heavy duties, the Indian textile trade in England was de- stroyed and our own trade was fostered." Mr. Harold Smith, M. P., also condemns " the un- economic and indefensible protection which " the Brit- ish cotton trade " has received at the expense and the THE COTTON INDUSTRY OF INDIA i6i exploitation of India. ... It is impossible that India can forever remain satisfied with this throtthng hold on her own natural development." {Times, London, March 14, 1917.) The Times has defended India's right to levy duties on cotton goods in the course of several leading articles on the subject. We beg to make a present of these opinions to the East Indian Association of London, with reference to their book called " Plain Truths About India." This addition to the cotton duties has, however, been char- acterised as a war measure and we are not quite sure whether it will be maintained after the war is over. CHAPTER VI SHIPBUILDING AND SHIPPING Conditions in Former Times. Considering that In- dia has a seaboard of more than 4000 miles and that except in the north, the north-western, and the north- eastern corners of the peninsula, the only outlets to the outside world are by sea, there is no wonder that for thousands of years before the advent of the Brit- ish, India should have developed shipping and mari- time trade to a marvellous extent. There is ample justification for the claim made for her by one of the Indian writers on the subject, that " the early growth of her shipping and shipbuilding, coupled with the genius and energy of her merchants, the skill and dar- ing of her seamen, the enterprise of her colonists, . . . secured to India the command of the sea for ages and helped her to attain and long maintain her proud posi- tion as the mistress of the Eastern Seas." The claim has been made good in an excellent bro- chure written by Prof. Radhakumud Mookerji of Cal- cutta, and published by Messrs. Longmans, Green and Co. of London. The work is called, " A History of Indian Shipping and Maritime Activity from the Earli- est Times." The evidence collected in this volume is both indigenous and foreign and goes back to about 3000 years b. c. Dr. Sayce, the famous Assyriologist, 162 SHIPBUILDING AND SHIPPING 163 has been quoted in support of the statement that com- merce by sea between India and Babylon must have been carried on as early as about 3000 b. c. One re- ^ markable feature of the foreign evidence collected by Professor Mookerji is that it establishes beyond doubt that for ages before the British period, India was a great manufacturing country known for the excellence of her fabrics and that as a rule she was principally an exporter of manufactured articles, importing only gold and silver and other precious metals. As early as the first century a. d. this flow of gold into India was the cause of alarm to Pliny, who deplored the " drain " from the Roman Empire to the Orient in exchange for articles of luxury.^ There is abundant testimony of Greek and Mohammedan historians, of Chinese and other foreign travellers as to ships of war forming a regular and significant feature of the offensive and de- fensive equipment of Indian rulers. A Board of Ad- miralty was one of the six Boards which made up the War Office of Chandra Gupta, the Hindu Emperor of India, who reigned from 321 b. c. to 297 b. c. Coming to the time of Akbar, the great Mogul who was a con- temporary of Elizabeth in the sixteenth century, we find elaborate details for the upkeep of the Admiralty given in the monumental work of Abul Fazal, known , as the Ayeen-i-Akbari (the laws of Akbar). Akbar's Admiralty, we find in the Ayeen-i-Akbari, looked to the supply and building of ships. Bengal, Cashmeer and Thatta in Sindh were famous for their shipbuild- ing industry, though ships were built nearly everywhere on the banks of navigable rivers or on iseaboard. The \ * Mark the use of the word " drain " here. i64 ENGLAND'S DEBT TO INDIA organisation of a ship given in the Ayeen-i-Akbari, is sure to be of interest to modern readers and we there- fore make no excuse for making the following lengthy extract from Professor's Mookerji's book. " The second duty of Akbar's Admiralty was re- garding the supply of men, of efficient mariners who knew the nature of tides, the depths of channels, the coasts to be avoided, and the character of the prevailing winds. Every ship required officers and men of the following titles and descriptions : (i) The Nakhoda, or commander of vessel, who directed the course of the ship; (2) the Manllim (the mate), who knew the soundings, the situation of the stars, and guided the ship safe to her destination; (3) the TundeU, who was the chief of the khelasses or sailors ; (4) the Nakhodak- hesheh, whose duty it was to provide fuel for the peo- ple and assist in lading and unlading the ship; (5) the Sirheng, who had to superintend the docking and launching of the ship ; (6) the Bhandaree, who had charge of the ship's store; (7) the Keranee, or ship's clerk, who kept the accounts and also served out water to the people; (8) the Sukangeer, or helmsman, of whom there were sometimes twenty in a ship; (9) the Punjeree, whose duty it was to look out from the top of the mast and give notice when he saw land or a ship, or discovered a storm rising, or any other object worth observing; (10) the Goomtee, or those particular khelasses who threw the water out of the ship; (11) the gunners, who differed in number ac- cording to the size of the ship; (12) the Kherzvah, or common seamen who were employed in setting and furling the sails and in stopping leaks, and in case of the anchor sticking fast in the ground they had to go to the bottom of the water to set it free." It might be noted in passing that Akbar was practically a free-trader ; the duties on exports and imports never SHIPBUILDING AND SHIPPING 165 exceeded 2^^ per cent.^ India could afford to be a free-trader then. She may again become a free- trader under a national government, but the present policy of free-trade followed by a foreign Government is inimical to her industries. The Venetian traveller Cesare di Fedrici, writing about the year 1565, states that such was the abundance of materials for shipbuilding in the eastern parts of Bengal that the Sultan of Constantinople found it cheaper to have his vessels built here than at Alex- andria.^ Even in the early days of the British the shipping industry was in a flourishing condition in In- dia, The East India Company built many of its ships there. A building yard was maintained at Surat, up to 1735, in which year most of the work was trans- ferred to Bombay. The foreman of the Surat ship- yard was a Parsee Indian. In 1774 the grandsons of this foreman, Lowjee, built two ships of 900 tons each. Later on in the latter part of the eighteenth and the early part of the nineteenth century in this ship yard and under the supervision of Indian foremen were built nine ships, seven frigates and six smaller vessels for the British Royal navy. In 1802 the British Ad- miralty ordered men-of-war for the King's navy to be constructed at Bombay. The master builder was a Parsee. From 1736 to 1837, the position of master- builder was always held by an Indian. In 1775, a visitor recorded the following observa- tion about the shipyard : " Here is a dockyard large and well-contrived with 2 Ayeen-i-Akbari, by Gladwin, p. 193; quoted by Mookerji, p. 208. 3 Taylor's Topography of Dacca, quoted by Mookerji. -y i66 ENGLAND'S DEBT TO INDIA all kinds of naval stores . . . and . . . forges for making anchors. It boasts such a dry-dock as is, per- haps not to be seen in any part of Europe, either for size or convenient situation^ Lieut.-Col. A. Walker wrote in i8il : " The docks (i.e., those at Bombay) that have recently been con- structed are capable of containing vessels of any force." As for their quality the same authority said : " It is calculated that every ship in the navy of Great Britain is renewed every twelve years. It is well known that teak- wood built ships last fifty years and upwards. Many ships, Bombay built, after running fourteen or fifteen years have been brought into the navy and were considered as strong as ever. . . . No Europe built Indiaman is capable of going more than six voyages with safety." As to their cost the same authority says : " Ships built at Bombay also are executed by a quarter cheaper than in the docks of England, so that the English- built ships requiring to be renewed every twelve years, the expense is quadruple." ^ The East India Company maintained several ship- yards in Bengal, but gradually Calcutta came to be the centre of the industry. In 1781 to 1800 inclusive, 35 ships with a total ton- nage of 17,020, were built at Calcutta; in 1801, 19 ships of 10,079 tons; in 1813, 21 ships of 10,376 tons. Including the above from 1801 to 182 1, both inclusive, there were built on the Hugh 237 ships of 105,653 * The History of the Indian Navy, by Lieutenant C. R. Low, L. N., and other authorities, quoted by Mookerji, p. 245. ^Mookerji, pp. 245, 246, 247. SHIPBUILDING AND SHIPPING 167 tons, which, reckoned at an average cost of 200 Rs per ton {£20 then) cost £2,000,000. Lord Wellesley, the Governor General of India, wrote in 1800: " From the quantity of private tonnage now at com- mand in the port of Calcutta, from the state of perfec- tion which the art of shipbuilding has already attained in Bengal (promising a still more rapid progress and supported by abundant and increasing supply of tim- bers) it is certain that this port will alzvays be able to furnish tonnage to whatever extent may be required for conveying to the Port of London the trade of the private British merchants of Bengal." A Frenchman, F. Baltazar Solvyns has recorded the following observation (1811) about Indian ships: " In ancient times the Indians excelled in the art of constructing vessels, and the present Hindus can in this respect still offer models to Europe — so much so that the English, attentive to everything which relates to naval architecture, have borrowed from the Hindus many improvements which they have adopted with suc- cess to their own shipping. The Indian vessels unite elegance and utility, and are models of fine workman- ship." « The Decline of the Industry. The decline of the In- dian Marine, remarks Mr. Mookerji, began after 1840, no large ships having been built after that date. " It was finally abolished in April, 1863, shortly after the assumption of the Government of India by the Crown." '' « Quoted by Mookerji, p. 250. ^ Italics everywhere in this chapter are ours. i68 ENGLAND'S DEBT TO INDIA Reading the despatches of the directors of the East India Company of 1801 it appears that shipbuilding lin- gered in India for more than half a century against the wishes and inclinations of her masters. In a despatch quoted by Mr. Digby on page loi of his book one can find " the reasons " against shipbuilding and shipman- ning. One of the reasons was that Indian-built ships will have to be manned by Indian sailors which was " undesirable," " inadvisable " and " unpatriotic." While shipbuilding was stopped in India only sixty years later, the Europe-built ships running to the East continue to employ Indian sailors to a considerable number, though in the lowest capacities. The changes represent (a) the destruction of the shipbuilding industry, (b) and the bar to the rank of officers. " Scarcely anything has struck me more forcibly," says Mr. Digby, " than the manner in which the Mis- tress of the Seas in the Western World has stricken to death the Mistress of the Seas in the East." Statistics from the beginning of the century are not available — to me at least — but from the Statistical Abstracts I gather the following significant facts : 1857 Vessels Tonnage Indian (entered and cleared)..../..... 34,286 1,219,958 British and British-Indian 59,441 2,475,472 1898-99 Indian (entered and cleared) 2,302 133.033 British and British-Indian 6,219 7,685,009 Foreign 1,165 1,297,604 In 1899-1900 the native craft declined to 1776 (109,- 813 tonnage). The present conditions (1912) may be judged from the following figures taken from Mook- erji's " Conclusion." SHIPBUILDING AND SHIPPING 169 Our oceanic trade represents 11,800,000 tons, our indigenous shipping represents only 95,000 tons or only about .8 per cent. Of the aggregate tonnage of 29.61 million tons in the inter-portal trade, only 3.24 million tons is our own and over 89 per cent foreign. Our na- tional shipping at the present day consists of only 130 vessels of under 80 tons each, used in the oceanic trade and 7280 in the inter-portal trade of the country of un- der 20 tons each. . . . Our shipbuilding is now so con- tracted as to give employment to only 14,321 men, who build only about 125 galbats a year. As for the status of the Indian sailor, he is after all only a lostan, at best only a Tindal. In 19 12- 13 the total number of ships (sail and steam) that entered the Indian ports was 4408, with a tonnage of S,y2y,62y. The number of those that cleared from Indian ports was 4341, with a tonnage of 8,756,764. Of these, Brit- ish Indians were 313 and 296 respectively of 188,977 and 174,286 tonnage ; and native craft 823 and 765 re- spectively (tonnage 65,076 and 62,822). The following figures taken from the Statistical Ab- stract are of interest: No. lyg. — Number and Tonnage of Steam and Sail- ing Vessels which Entered with Cargoes or in Ballast from Foreign Countries, distinguishing Nationalities. British British Indian No ifive No. Tons No. Tons No. Tons 1904-05 2,843 5,820,723 522 55,398 1,022 ' 62,840 1905-06 2,408 5,079,474 468 47,250 1,065 59,096 1906-07 2,476 5,461,686 351 80,171 1,394 93,323 1907-08 2,397 5,375,833 396 306,668 1,384 87,529 1908-09 2,144 4,936,332 325 203,338 1,117 79,400 1909-10 2,395 5,693,703 ■ 36s 142,716 780 62,731 I9I0-II 2,417 5,916,437 312 162,695 1,049 70,564 I9II-I2 2,582 6,370,217 325 204,512 946 72,591 I9I2-I3 2,544 6,521,527 313 188,977 832 65,076 I9I3-I4 2,444 6,198,848 243 152,678 853 63,062 I70 ENGLAND'S DEBT TO INDIA A^o. i8o. — Number and Tonnage of Steam and Sail- ing Vessels which cleared with Cargoes or in Ballast to Foreign Countries, distinguishing Nationalities. British British Indian Native No. Tons No. Tons No. Tons 1904-05 2,790 5,723,410 509 48,197 938 58,340 1905-06 2,430 5,070,609 490 48,835 1,112 62,657 1906-07 2,442 5,422,275 388 99,190 1,174 76,809 1907-08 2,388 5,419,334 478 349,808 1,204 79,333 1908-09 2,094 4,886,545 386 247,387 946 67,579 1909-10 2,327 5,660,314 408 200,952 681 48,804 I9I0-II 2,334 5.799,263 325 187,788 1,075 68,362 19II-I2 2,535 6,347,338 322 208,836 922 71,451 1912-13 2,577 6,613,992 296 174,286 765 62,822 1913-14 2,507 6,486,282 260 145,216 844 63,871 But even of greater interest are the figures of ships built at Indian ports. SHIPBUILDING AND SHIPPING 171 tN <>) ro • 00 ■* ■* 8 00 1- Tf . fo 00 ■<*• m i S « N ; 00 CJ "C 00 ti • « tN h. «i to S: n • >t 00 ^ * « ^ fOM -00 'h'* vo VD 00 M g j^t^ • •-« a Mil t>. 1 M M ■ t^ " N ro 8 n • r^n • n m ■«■ •« 00 "l- K to ; •> I '^ '^ ^ N "C ^ 1 • " • ^ HI lO »^ <^ Gh N • nao • «-» t^ r> ■<*■ <: • N • •>!• n M s '^ "3 (Ml ■ ^ ION NOO «^ « N f* S g M MVO >ol>. t^ >- 00 "f S \0 I-. J>. N o\ fN 10 "0 i-T N tC •iA h^ ?• •i* . IN w 10 " ■* vo 00 'S fe: N i-i «^ ■<»■ ^ >o Cq ^1 «0 s • . r^N -on « N .•^ V 10 ; ro »^ -^ ►Si 1 1 '. CO • >" ►N tC Co h. • . MOO • i" 00 >o VO Ov S: . . ro • •"■ ■«• ■* Tj- " ti • a Steam g: Sail d Sind Steam iling . Steam iling . irts: oi : Ph.-: 1^ « •• C C .. « .. rt r 3 R ^ rt P « ;>.tAl — CrtCLiV } aiC/ ) <«(/ :t7 H engal Calcutt Chittag ombay Bomba: Karach Other .. 3 in «-* 3 .. ea n 172 ENGLAND'S DEBT TO INDIA 64 o Ov tN 00 vo Tl- lOO\ • rN to M to '-' "^ ; M to '^ 5 N ►T >n T t-i <^ 5^ o in M l^ -vo •-< - ■>)■ 3: w . 00 ■ N ■* " in 1 r-i ^H c^ •-H o moo w fo «*5 • I/- • »1 ^ • ^ to ts xf « Ov *^ s « « ; Tf W J M vq <3 I 11 . ■* •** o. t3 S c> ►H M »n . tv c ►> M fx 00 •~~i S; w . ■* (O o> -♦-» Q 2 to 3 per cent, at the lowest, here in India, the dividend goes a little beyond half a per cent.! Thus though Indian railways show progress generally, the ultimate financial progress is indeed most disappoint- ing. The only satisfactory feature is the growth of coaching and goods trafiac. The number of passen- gers increased by fully 17.68 crores in 10 years, say, at the rate of 1.76 crore per annum. The growth is equal to 90 per cent, in the decade, while the percent- age of increase shown in coaching receipts came to 70. Goods traffic showed an increase in receipts of 9.19 crore rupees, equivalent to 43.26 per cent. Of course, it goes without saying that with 10,691 more miles of new railways open or under construction, the number of all classes of employes should in- crease. The total increase was 176,577, say at the rate of 17,657 per year. The European 292 ENGLAND'S DEBT TO INDIA employes increased by 35, the Eurasians by 17, and the Indians by 50 per cent. But the railzvay authori- ties have for years deliberately suppressed the salaries and wages annually earned by each class of em- ployes." While the railway administration reports and the government blue books repeat every year the num- ber of Europeans and Indians employed on Indian railways they have persistently omitted to state the amount paid to the classes in salaries. According to the parliamentary return of salaries of May 17, 1892, there were, in all, 2,448 Europeans earning salaries of 1,000 rupees (333 dollars) and upwards per annum in the civil and military employ of the Government of India. Their total salaries came to R. 8,062,840. There were, however, only 895 natives who earned salaries of R. 1,000 or upwards per annum and the total of these salaries amounted to R. 1,367,350. It will be very interesting to have similar information about railway employes. In discussing the blessings conferred on India by the railway system, the Anglo- Indian imperialist is apt to point out : (a) The huge growth of the foreign trade of the country. (b) The number to whom the railways give employ- ment. (c) The help which, in years of scarcity, the rail- ways afford in carrying the surplus produce of one province to another. Whether (a) is a blessing or not depends on who profits by the foreign trade. We have already shown that the foreign trade is in the hands of the Euro- RAILWAYS AND IRRIGATION 293 peans, and while they purchase Indian produce on their own terms, they convert it into manufactures and resell the same to India, also on their own terms, pocketing all the profits which accrue from manufac- ture, carriage, insurance, brokerage, etc. As to (b), the number of natives employed by the Indian rail- ways cannot be by any means larger than what were employed in the transportation business on land and waterways before the railways. The railways have practically displaced both. As to (c), in this respect the railways have been more of a curse than a blessing. They have helped in the export of grain more than the needs of the Indian population warrant. Sir W. W. Hunter has left it on record that if every Indian were to have two full meals every day there would be left much less to export than is at present exported. The export of food stuffs has raised prices, without raising the wages of labourers to the same extent. The rise in prices has been one of the potent causes of the increase in land revenue, which in its turn compels the peasant to sell his crops at the price offered by the exporter. All this adds to the income of the railways. Writes Mr. A. K. Connell : ^ " To sum up, the joint results of railways and free trade may be briefly stated in this way : India used to clothe itself, now England sends clothes, and Indian weavers have lost an enormous source of income, with the gain to the country of the difference in price be- tween English and Indian goods. But to pay for these goods India has to export vast quantities of food and those who sell this food make larger profits than be- fore. Therefore a certain portion of the community 2 " The Economic Revolution of India and the Public Works Policy," p. 53. 294 ENGLAND'S DEBT TO INDIA gain by cheaper cotton goods and higher prices for grain. But in order to attain this result they have had to pay the sums before mentioned to build the rail- ways. Besides that, they have to support in years of scarcity a gigantic system of outdoor relief. Is it not obvious that, taking the economic changes as a whole, the country has lost an enormous source of wealth? If the import of cotton to India and the export of grain from India ceased to-morrow, the Indian people would be the gainers, though the Indian Government would be at its wit's end. In fact, the interests of the two are not identical. The Indian Government is now do- ing its best to stimulate the export of wheat in order to lessen its ' loss by exchange ' ; but this will only re- sult in higher food prices in India. We now see the explanation of Mr. Hunter's assertion that two-fifths of the people of British India enjoy a prosperity un- known under native rule ; other two-fifths earn a fair, but diminishing, subsistence; but the remaining fifth, or forty millions, go through life on insufficient food. And in ten years, according to Mr. Caird, there will be twenty millions more people to feed. Can it, then, be maintained that the material condition of India has been improved by the enormous outlay on railways? " But you forget, replies the opponent of these her- etical views, that in time of famine the railway brings food to starving districts. What would have become of the people of Madras, Bombay, and the North- West Province during the last famine if it had not been for the railways? My reply is: What did become of them ? It is true, the railways brought grain ; yet they had previously taken it away, and they brought it back at a quadrupled price, and the Government had to spend millions of pounds to enable the peasants to buy it, and even then could not prevent frightful mortality. What has been the native's custom from time im- memorial of providing against bad years? Why, the simple method of Joseph in Egypt — that of storing RAILWAYS AND IRRIGATION 295 grain. This is what the official report on the Mysore famine tells us : " * The country had suffered in former years from deficient rainfall, but actual famine had been staved off by the consumption of the surplus ragi, a coarse millet, stored in underground pits, from which it is withdrawn in times of scarcity, as the grain will keep sound and good for forty and fifty years.' Only two of the Famine Commissioners, Messrs. Caird and Sul- livan, seem to have recognised the importance of this custom. In the above-quoted very interesting appen- dix to the first part of the report, they write on the subject of grain storage as follows: 'The food of the people is of the simplest kind, grain, salt, and a few condiments for a relish. The grain is easy to han- dle, bears storage in pits for many years, and the people themselves grind it as they require it. The pits are made in the ground, in a manner with which the natives are familiar, and cost nothing beyond the encircling ring of baked clay and labour in construc- tion.* It is this storage of grain, the easiest kind of Famine Insurance Fund, that the teachings of plain experience have forced the native to adopt throughout the length and breadth of India, though the amount of stores varies according to the necessities of each dis- trict. " Since the introduction of railways there is reason to believe that the ryot, tempted by immediate gain, or forced by taxation to sell his grain, is beginning to store rupees instead of food ; but, as he cannot eat his rupees or jewelry, and cannot buy fuel so as to keep the manure for the land, and has, according to the Famine Commissioners, to give in famine times a quad- rupled price for his food, it is very doubtful whether he gains in the long run. Anyhow, the landless labourer, who has no produce to exchange for rupees, finds the market price in time of scarcity utterly be- yond his means. Then the Government comes to the 296 ENGLAND'S DEBT TO INDIA rescue with relief works, the raihvays make roaring profits — in fact, famine and war, both exhausting for the country, are perfect godsends to the foreign in- vestor — and the Indian Government complacently holds up its Public Works policy to an admiring and interested English public. It wholly omits to mention that in time past nearly £30,000,000 of taxation have been squeezed out of the country to pay interest charges, and that, if that sum had been left in the agri- culturist's pockets, he might himself have been better able to face bad times, and have helped the labourer to do the same. But Sir John Strachey utterly ignores this aspect of the question; he is quite content with pointing to the relief works, and then insists on the necessity of constructing more railways to meet the next famine cycle. One would suppose that railways proceeded as a free gift out of the benevolent bosoms of British capitalists, instead of being paid for out of the hungry bellies of the Hindoo ryot. The sum of £30,- 000,000 represents the amount which India has had to pay out of taxation to get its railways built, and then it has paid £15,000,000 (part of which went to the railway shareholders) to keep the people alive, and after all has lost about five millions of human beings." This was written in 1883. Since then the evil has grown enormously out of proportion to the so called advantages. For fuller information and discussion of the subject we may refer the reader to Mr. A. K. Connell's book, to Mr. A. J. Wilson's " An Empire in Pawn," to Mr. Digby's " Prosperous British India," to the statements made by Messrs. Naoroji, Wacha, Gokhale and others before the Royal Commissioners on Indian Expenditure in 1896, and to the evidence given before the Famine Commissioners of 1880 and 1897-98. We have no space left to discuss the policy underlying railway rates and railway fares in India. RAILWAYS AND IRRIGATION 297 The Indian Chamber of Commerce and the British Indian Association of Calcutta both have voiced the feelings of the Indian community as to the unfairness of the discrimination that is made in favour of for- eign trade, to the neglect and cost of inland trade and Indian industries. Benefits of Capital Investment. There remains one more point to be noticed. It is often said that the foreign capital invested in Indian railways must have benefited the country a great deal by affording " in- creased profitable occupation to the people of the country." The statement was examined by Mr. Con- nell (page 31 of his book, 1883) and his reply was: " The truth about the capital expenditure is as fol- lows : Of the Guaranteed Railways capital of £96,- 794,226, spent up to the end of 1880-81, £46,918,177 were withdrawn in England and £49,876,049 in India, while the charge for interest, amounting, as shown above, to about £28,000,000, was almost entirely re- mitted to England. Thus of the sum total of capital required for the construction of these railways only £21,000,000 were actually spent in India, and as the sum remitted by the railway companies themselves up to 1881 reached the amount of over £29,000,000, there was no balance at all remaining in the country. In- deed, there was a deficit on the whole transaction of £8,000,000. So far, then, from this investment of for- eign capital leading to an ' outlay of a larger sum than the interest sent away,' it actually led to the outlay of a smaller sum than would have been spent in the country if no guaranteed railways had ever been built. " Of the £32,000,000 odd raised for State railways, twenty-four millions have been appropriated in India, and seven and a half millions in England, while the 298 ENGLAND'S DEBT TO INDIA charge for interest, between two and three millions to be added to the capital account, has also gone to Eng- land." Irrigation. The total outlay on irrigation works up to the end of the year 1914-15 was as follows: Productive major works £33,780,252 Protective major works 4,364,073 Minor works 4,525,445 Total £42,669,770 The total area irrigated was .... 25,600,000 acres. The net receipts on capital outlay for the three classes of irrigation works were : — 8.97 ; 0.59, and 4.52 per cent, respectively. Of the permanent debt £41,122,020 was on account of irrigation out of a total debt for public works (railways and irrigation) of £275,245,288 on the last day of March, 1915.^ It must be freely acknowledged that the twentieth cen- tury has seen a very wise change in the policy of the Government of India in the matter of irrigation works to bring large tracts of waste lands under cultivation. The way in which this last is being done is open to several objections but the work itself is highly com- mendable and beneficent. 3 The latest facts and figures are taken from the " Material and Moral Progress " report for 1914-15, issued under orders of Parliament. CHAPTER XII EDUCATION AND LITERACY Early Conditions. It is a mere truism that educa- tion and literacy are not the same thing. One may be well-educated without being literate, and vice versa. Old Hindu India was universally educated as well as literate. During Moslem domination, India was only partly educated and partly literate. In this connec- tion the reader should remember the remarks of Elphinstone and others about education in pre-British days quoted in the chapter dealing with agriculture. Education and literacy in mediaeval India were in no way less than the same in mediaeval Europe. To- wards the end of the eighteenth century, India had as much education and literacy as Europe. The nine- teenth century, however, has brought almost a com- plete revolution. It is an age of universal literacy. Under modern conditions, literacy is the necessary road to economic efficiency, and that is denied to India. If education makes a man gentle, kind, God-fearing, considerate, temperate and sober, India has enough of it. Even her masses have sufficient background of character and intelligence. They are quick to under- stand and ready to assimilate. But this is an era of scientific knowledge. For that, literacy and formal instruction are necessary steps. In that India is lag- 299 300 ENGLAND'S DEBT TO INDIA ging behind other nations. The Government has made no provision for the instruction of the masses. Eighty-two of every hundred boys of school age, and ninety-five of every hundred girls, receive no instruction. Education in India is neither universal, nor compulsory, nor free. The kind of education provided for in Indian schools is in its nature anti- quated; it does not fit its recipients for the battle of life, according to modem conditions. The expendi- ture on education is trifling when compared with other countries. The neglect of every kind of vocational training is most palpable. There is no provision for training skilled labour, nor any worth the name for teaching modern languages and modern commerce. The following facts taken from the last quinquennial report of the Government of India, published in 1912, speak for themselves. Facts and Figures about Education Total population of India 315,156,386 Population of British India 244,267,542 School enrolment for 1912 6,781,000 The population of India of school age has been calculated as 15 per cent, of the total. The actual time spent under primary instruction is three to eight years. This period, however, cannot be taken as suf- ficient to obtain permanent results. The primary course ordinarily occupies from five to six years ; the average age of school life is from the completion of the fifth to the end of the eleventh or twelfth year. These ages include 13.7 per cent, of the population, if we reckon to the end of the eleventh year, and just below 16 per cent, if we reckon to the end of the EDUCATION AND LITERACY 301 twelfth year. On the assumption of 15 per cent, of the population being counted as of school age, only 17.7 per cent, of that number are now at school (i.e., at the end of 1912.) Total expenditure on education in 1912 ^5,239,507 Amount expended on education from public funds just one-half the total £2,700,000 The average cost of education of a pupil in India is twelve shillings and ten pence, or about $3.10; of this amount, the share defrayed by the Government from public funds is a little more than one-half, or six shillings and eight pence, — $1.60. Number of universities in India in 1912 .... 5 Two have been added since that time, making a total of 7 Number of colleges affiliated to the universities 179 From 1907 to 1912 there was an increase of 3 Number of students in colleges 36,533 1 Expenditure on university education (p. 43) £90,000 One hundred and twenty-three of the hundred and seventy-nine colleges in India are those in which purely arts courses are given ; the number of students regis- tered for arts courses, 28,196. The number has risen by 10,000 in the quinquennium. Law. There are twenty-five law colleges where courses in law and jurisprudence may be pursued. The number of students registered was 3,046. Medicine. Of medical colleges there are five, with a total enrolment of 1,822 students. 1 The total expenditure on colleges for general liberal edu- cation is given as 4,726,000 Rs. or about $1,600,000 (p. 61). This includes income from fees and private benefactors. 302 ENGLAND'S DEBT TO INDIA Engineering. Engineering is taught in four col- leges and three schools, with a few miscellaneous classes given in private and other institutions. Madras has one college of engineering, with provision for an elementary study of the subject in three techni- cal schools. Bombay boasts of one college and three small aided engineering classes. In Bengal there are one college and two technical schools. The United Provinces have one engineering college among them. In the Punjab there are one school and one class held in a private college. Burma has one school where engineering is taught. The number of pupils availing themselves of these courses is not shown in the Gov- ernment report on technical institutions, but the fol- lowing figures were obtained from the tables given in the second volume : Total number of students in Governmental Schools and Colleges of Engineering 1,607 Total cost to Government of enrolled students in Engineer- ing Rs. 799,388 or $267,000. Agriculture. There are three government institu- tions where agriculture is taught, with a total enrol- ment of 267 students. Cost to Governinent: Rs. 170,- 353, or $56,784. These figures, taken from page 258, table 139 of the report, do not tally with those given in vol. i, ch. i, dealing with the subject of agriculture. It would appear from this account that there are seven agricultural colleges in India: I. At Pusa, opened in 1908 as a post-graduate school. Nineteen pupils were registered, but by 1912 their number fell off to seven. Short courses were given in such subjects as management of cattle, poultry, EDUCATION AND LITERACY 303 fruit-growing, lac and silk production. From 1908 to 19 1 2 students enrolled in special courses were 2; 45; 59 ; 33 respectively. II. Poona College, in 1908 made a separate institu- tion; in 1912, 104 students were enrolled, of whom 15 took short courses. III. Coimbatore College, opened 1909; students en- rolled in 191 2, 50. IV. Behar and Orissa College opened 1910; in 191 1- 12 students numbered 18. V. Cawnpore College and Research Laboratories; projected 1907-8, formal opening 191 1, with enrol- ment of 122. VI. Nagpur College, with 58 students ; time of open- ing not stated. VII. Lyalpore College, opened 1909; in 191 2 en- rolled 49 students. In addition to these there are four veterinary col- leges and one school, with a total attendance of 458 students. Technical and Industrial Education, There are three classes of technical and industrial educational schools: I. Technological institutions for instruction in principles of science as applied to industrial arts, with the intention of producing masters and managers of industry, and scientific advisors ; 2. Technical intermediate schools for the training of foremen and others who require some knowledge of scientific principles and machinery; 3. Trade or craft schools intended to train artisans to follow their calling with dexterity and intelligence. "In 1907," we are told (page 176), "there were no institutions of class I in India, though education of an advanced type was given in mechanical and electrical engineering at the professional colleges. In place of 304 ENGLAND'S DEBT TO INDIA such institutions, scholarships tenable abroad were of- fered Indian students, that they might benefit by the facilities available in England and elsewhere. The scholarships were first started in 1908 and have been given on an average of about nine a year" (that is to say, three for every 100,000,000 people.) [Italics are ours.] During the quinquennium, an institute was opened at Bangalore, Mysore, for which a sum of more than a million dollars was donated by a private individual, the late Mr. J. N. Tata of Bombay. It took the Government about ten years to formulate its policy in connection with the gift. Eventually, in 191 1, the institute was opened. Seventeen students entered, and, in the language of the report, " it is too early to judge the results." Besides the endowment fund, the Tata family have given land in Bombay which yields an annual income of Rs. 125,000 or about $41,666; the native State of Mysore has contributed a sum of Rs. 500,000, or $166,666; the Government of India contributed one-half that amount towards the initial expenses, and adds the magnificent sum of $29,000 a year towards upkeep and expenses. The institution, which originally owed its existence to private munifi- cence, is hampered on every side by government inter- ference and restrictions. Public opinion holds that the teaching is incompetent, and that no education worthy the name is being imparted. In 1911-12 there were altogether two hundred and forty-two technical and industrial schools of the sec- ond and third class, out of which but twenty-five are maintained by the Government. At the close of 1912, there were 12,064 pupils in these schools, out of which EDUCATION AND LITERACY 305 number only 1,365 were in government schools ; the latter are very poor institutions, from the point of view of both teaching and equipment. In the year just cited, the total amount of money spent on the upkeep and expenses of these government schools was Rs. 525,506 or about $175,000, — provincial revenues, local and city funds included. Thus, out of a population of 315,000,000, only 12,- 064 pupils are receiving technical and industrial train- ing, and this mostly of an elementary kind. A com- parison of government expenditure for technical edu- cation, in India and in America, would be an interest- ing study in extremes. Commercial Schools. At the close of 1912, there were twenty-eight commercial schools, with 1,543 stu- dents enrolled. Six of these schools are maintained by the Government. The total expenditure for the year was Rs. 28,888, or less than $10,000, provincial and local funds included. Art Schools. Of these there are four throughout the length and breadth of India, with a total enrol- ment of 1,234, or about four art students in a million. The total expenditure incurred by the Government for this branch of education is Rs. 164,049, or $54,683. Education of Europeans. The Europeans in India, British and native States included, number about 301,- 433. The report shows that of these 36,000 are at school ; it adds that practically all those of an age to receive education are getting it. The cost of educat- ing these 36,000 children is Rs. 6,524,645 annually, out of which sum Rs. 2,124,554 are derived from pub- lic revenues. The compiler of the report points out 3o6 ENGLAND'S DEBT TO INDIA with care that the annual tuition fee for a pupil in an European institution averages Rs. 38, while for a pupil in an institution for Indians it averages Rs. 2. Let it be remembered, as the report itself points out, " that the majority of European pupils are educated in sec- ondary schools," while the majority of Indian pupils are educated, when at all, in elementary schools ; thus the comparison loses all its force. The average cost of education for an Indian pupil is estimated at $3.00 a year (Rs. 9-4-1 1-); the average cost of educa- tion for a European student is Rs. 181, or $60.00 a year. Towards the expense of the Indian's education, the Government contributes $1.50 a year, while its expenditure for the European student is $20.00 a year. This vast difference in favour of the European student is specially significant when viewed in the light of the fact that the bulk of the revenues spent on all educa- tion in India comes, of course, from the pockets of the tax-paying natives. 'Education of Girls. There are only 952,911 girls at school in the whole country, which constitutes 5.1 per cent, of the girls of school age. The follow- ing figures are taken from page 215 of the quinquen- nial report: Colleges High Schools Middle English Schools Middle Vernacular Schools Institutic Pupils . Primary 12.866 ms ... 12 173 Schools with 446,225 pupil mber institutions imber pupils 15,269 s. 193 15,033 168 13,804 13,394 Total nt . . . . 490,504 It is said that these latter figures represent only " those in schools especially established for girls." EDUCATION AND LITERACY 307 The average cost of educating an Indian girl is Rs. 4.6 per annum, i.e., slightly less than $1.50. The cost to public funds is about half of that amount, Rs. 2.5 per annum. The total amount spent for the education of girls is Rs. 6,075,045 or a little more than $2,000,000. Less than half is defrayed from public funds. CHAPTER XIII CERTAIN FALLACIES ABOUT THE " PROSPERITY OF INDIA " EXAMINED There are certain outstanding fallacies about the " prosperity of India," which form the stock in trade of British imperialists in all discussions relating to India. We will examine them briefly. (a) The first and foremost of them is the argu- ment that is based on the absorption of precious metals by India during the last seventy years. In a paper bearing the date August, 191 1, in the collection of the East India Association papers, it is said that within the seventy years preceding, India absorbed gold of the value of £240,000,000, out of which no less than £82,000,000 worth was imported in the first decade of the twentieth century, leaving a balance of £158,000,000 for the preceding sixty years. Taking the figures from the statistical abstracts of 1901-02 to 1910-11, the total of net imports of gold comes to a little over £75,000,000 only. The writer of the East India paper also gives the figures of silver imports. He says that within the seventy years India absorbed 2,250,000,000 ounces of silver, out of which 720,000,000 ounces were imported in the decade immediately preceding, valuing it at £88,000,000. 308 CERTAIN FALLACIES EXAMINED 309 To the quantity of gold thus imported he adds another £35,000,000 as Ukely to have been in India in 1840 and this brings the grand total to £275,000,000 for the total stock of gold in India in 191 1. Simi- larly he values the total stock of silver in India, at the end of 1910, as worth £250,000,000. On the basis of these figures he remarks, " with such figures before them, how can people say that India is being drained of her material wealth ? " Mr. Digby's masterly reply to this argument is con- tained in Chapter V of his monumental work. We can only notice the argument very briefly. First as regards the total value of gold and silver imported into India, Mr. Digby's figures for the sixty- five years from 1835 to 1900 come to £377,853,857. From this figure Mr. Digby deducts the following: The British Indian Mints coined in sixty-five years from silver supplied by Government . . £34,570,665 The Feudatory States have minted, say 13,000,000 Total £47,570,665 To this must be added, to replace wear and tear, estimated before a Committee of the House of Commons at £666,666 a year £43,333,290 as also £65,000,000 on account of wastage in the trinkets and ornaments of the population at the rate of one penny per head per annum. This account gives a balance of £221,949,902 to the credit of the people of India in sixty-five years. Dividing the bal- ance on the average population of 180,000,000 during the period, Mr. Digby concludes that in the sixty-five years concerned, the treasure imported into India would amount to £1 4s. i^d. per head or to 4>^d. per head per annum. 310 ENGLAND'S DEBT TO INDIA Taking the figures of the writer of the East India paper, the total value of the imports of gold and silver into India in ten years from 1900 to 1910 would be £170,000,000 or say an average of £70,000,000 per an- num. Divided on 315,000,000 it results in about 4s. 5d. per head per annum (no cents). This average is struck without making any deductions for coinage, for government reserves and for " the hoards " of the feudatory States. In the statement of moral and material progress of India for 1911-12 "the total importation of gold sovereigns for the decade " is given as £57,000,000, out of which about £18,000,000 were imported in 1911-12 alone. Of this, nine millions were held in government treasuries, and forty-eight millions were either in cir- culation or held by the people. The total net addition to the silver currency during the decade was about sixty-eight crores of rupees valued at £45,300,000. This sum includes only rupees and half rupees. On March 31, 1912, the Government reserve con- sisted of Gold £21,259,400 Silver Coin £10,328,100 Bullion ,. . . £ 52,500 It would be thus seen that after proper deductions the net treasure really absorbed by the people and princes of India considerably dwindles. At this stage it would be well to remember that the native States of India take a great deal of precious metals in return for the goods which they supply. CERTAIN FALLACIES EXAMINED 311 Their import of merchandise per head is considerably less than in British India and they get the price of their exports mostly in bullion. The fact is that when making pleas like this the British Imperialists forget the huge population with which they are dealing and fail to make the necessary deductions. Besides, they ignore that India is a heavy borrower. Debts raised in England must be sent to India in the shape of gold and silver. No one contends that there are no rich people in India. Some of the rulers of the native States may have amassed big treasures. Besides, the Govern- ment contractor, the banker, the lawyer and the stock exchange dealer have all made some money. In every country, however poor generally, there must be a cer- tain section of the population who are rich. Their existence, though, does not prove that the people are prosperous. The fact remains that in spite of these imports of gold and silver the average income of an Indian has been officially estimated to be not more than $10 a year ^ and the average wealth per capita in India is £11. We have given the comparative tables in another chapter. (b) The trade figures are also cited as proof of India's prosperity. We have already shown who profits by this trade. If we divide the total foreign trade on 315 millions of Indians it comes to much less than £1 per head. (c) The same may be said about the figures relat- ing to railways. See the chapter on railways. 1 At which figure it has stood for the last thirty years (see Appendix). 312 ENGLAND'S DEBT TO INDIA As to the poverty of the masses and the general lack of money in India, we may in conclusion quote from an article by Sir D. Hamilton in the July, 1916, num- ber of the Calcutta Review. Says Sir D. Hamilton: " We have given India peace ; but we have not given her power — the power to rise in the human scale. India is four-fifths of the Empire but has not one-fifth of her strength . . , Weak in education, weak in med- icine, weak in sanitation, weak in political power, and weak in all that is due to weakness in finance more than anything else." Again : " Money is power, and modern money is Credit, of which India has little or none ; and a people without Credit are a people without a present or a future." " How is it," asks he, " that in the year of our Lord 1916, after a hundred years of British rule and under a Government the most humane in the world, India is so bare of Credit and Cash." His answer is : " Mainly because the Government has overlooked the first principles of political economy. . . . The first ob- ject of its political economy has been to square its own budget rather than to enable the people to square theirs. It has enabled the people to provide a plentiful revenue not for themselves but for others." " The national purse is empty for peace as for war and will remain empty until the purses of the people are first filled in accordance with the first principles of political economy." " Russia understands this." Sir D. Hamilton then makes some quotations from a recent speech of the Russian Finance Minister and finally winds up this part of his paper by remarking, CERTAIN FALLACIES EXAMINED 313 " While Russia plans and prospers, is India ' to wait and see '? " In another part of the same paper he observes, " Financially the people stand where they did at the commencement of British rule." The Indian Nationalists, however, think that the people are financially worse ofif than they were at the commencement of British rule. How the recent " gift " of $500,000,000 by the Gov- ernment of India to the Imperial Government will affect the financial resources of India remains to be seen. CHAPTER XIV TAXES AND EXPENDITURE Abstract of Revenue and Expenditure. The pre- ceding chapters of the book give some idea of the principal sources of government revenue and also what proportion of them is spent in England. In this chapter I propose, for facility of reference and comparison, to give a summary of government revenue and expenditure. The statistical abstract available to me is that of 1913-14, and I take my figures from it. Gross Revenue for 1913-14 £85,207,175 Expenditure charged to Revenue in India 62,583,079 Expenditure charged to Revenue in England 20,311,673 Surplus 2,312,423 Principal Heads of Revenue Land Revenue £21,391,575 Opium 1,624,878 Salt 3,445,305 Stamps 5,318,293 Excise 8,894,300 Customs 7,558,220 Assessed Taxes 1,950,250 Forest 2,229,872 Registration 518,962 Tributes from Native States 616,881 Provincial Rates 180,210 Total .... £53,728,746 Net receipts from Railways £17,625,634 Irrigation 4,7I3,I59 Military Receipts 1,369,652 314 TAXES AND EXPENDITURE 315 Interest £1,352,119 Post Office 2,410,210 Telegraph ; 1,188,309 Mint 339,841 Receipts by Civil Departments such as Courts of Law, Jails, &c 1,408,286 Miscellaneous Receipts 772,579 Total Revenue . . £85,207, 175 Expenditure Charges in respect of Collections, Refunds, Draw- backs, Assignments and Compensation £9,274,597 Interest on ordinary Debts and ordinary obliga- tions 1,515,653 Post Office 2,092,019 Telegraph ,... 1,180,965 Mint 132,630 Salaries and Expenses if Civil Departments ... I7,934ii99 Miscellaneous Civil Charges 5,403,804 Famine Relief and Insurance 1,000,000 Railway Revenue Account including interest on debt 12,836,101 Irrigation 3,531,867 Other Public Works 7,010,038 Military Services 21,265,765 Total Expenditures £83,177,688 Deducting two minor sums about provincial allot- ments not spent the total expenditure charge- able to Revenue i emains £82,894,752 Expenditure not charged to Revenue for Rail- ways, Irrigation works and the construction of new Delhi 12,212,596 Total Charges £95,107,348 Ingenious Way of Calculating the Burden of Taxa- tion. In the statistical abstract a very ingenious method is adopted to show the burden of taxation, (a) The heads of Taxation are reduced to Salt, Stamps, Excise, Provincial Rates, Customs, Assessed Taxes and Registration. All other 3i6 ENGLAND'S DEBT TO INDIA sources of income are omitted. The figure realised from these sources is thus reduced from over 85 millions to 27,278,680. This figure divided over the estimated population of British India brings the payment per head to 2 shillings and 2-4 pence. It is however added that " if Land Revenue [which is not properly taxation] be added the payment per head comes to 3 shillings and 10-4 pence." It may be noted that receipts from opium, courts of justice, jails, railways, post office, telegraphs, canals, forests and public works are all excluded, omitting other minor heads of income. The Growth of Army Expenditure. In 1884-85 the total army expenditure was 170 million rupees, i.e., a little less than 57 million dollars. In 1899-1900 it was 264 millions of rupees =: 88 million dollars. In 1909-1910 it rose to 286 millions of rupees = 95^^ million dollars.^ In 1914-15 it was about 306.5 millions of rupees = over 102 million dollars (£20,434,915). In the budget of 1916-17 22 million pounds or 330 millions of rupees or no millions of dollars were pro- vided for. As to the percentages of military expenditures to the total budgets of the diflferent parts of the British Empire, see an article in The Nineteenth Century and After for February, 1917, by Yusaf Ali from which extracts are given in appendix (A). 1 Figures are taken from the Honourable Mr. D. E. Wacha's pamphlet on " Indian Military Expenditure." This year's budget exceeds 26 millions sterling. TAXES AND EXPENDITURE 317 The army alone absorbs the total revenue from land andmore. The Grozvth of Expenditure on Education. To a total of £6,696,587 spent on education from all sources including fees and private munificence in 191 3-14, the provincial funds contributed £2,436,900 (see the sta- tistical abstract). According to the Year Book (191 5) issued by The Times of India Office, Bombay, the Government of India spent on education 2,610,000 in 1912-13. In the year 191 3-14 they made a provision of 4,078,000 in the original budget, but in the revised one the figure was reduced to 3,242,000. In the budget for 19 14-15 a provision of 4,000,000 was made, but in the finan- cial statement made by the finance-member in March, 19 1 6, it was explained that the total sanctioned was not spent and in the estimate presented by him for the next year the figure available for education was actually reduced. It was my intention to show how much of the ex- penditure on the civil departments consisted of sala- ries paid to Europeans in India, but the latest figures available to me are those given in the Material and Moral Progress Statement for 1911-12 and they are not complete. It is stated in that report that out of the aggregate salaries of officers drawing twenty-five dol- lars a month (£5) or over Europeans received R. 3,590,000 Eurasians " 844,000 Indians " . 2,457,000 Of posts carrying salaries of R. 1000 a month (3333^ dollars or £66%) 1721 were held by Europeans 3i8 ENGLAND'S DEBT TO INDIA and i6i by Indians. For a comparison of the salaries enjoyed by Europeans in the service of the Govern- ment of India with corresponding officers in the United States, see appendix. CHAPTER XV SUMMARY AND CONCLUSION The British conquest of India has no parallel in history. It is the most romantic and the most subtle of all political revolutions that have taken place in the world. It was never formally planned; it was never authoritatively resolved upon. Yet, paradoxical as it may seem, we cannot believe it was the blind accident that Professor Seeley characterises it. In the preface to the second volume of Sir William Hunter's " His- tory of British India," the editor has said: "As early as 1687 the Court of Directors hoped to lay the foundations of a large, well-founded, sure English dominion in India for all time to come." He inclines to think the British aimed at a commer- cial rather than a political supremacy, but the history of British acquisition in India conclusively proves that successful commercial ascendency is but the sure and inevitable prelude to political domination. Of all forms of conquest, that which proceeds under the guise of comiherce is most msidious, most pro- longed^ an d most devastatmg to the conq uered. A mi litary inv asion, undertaken from frankly ^olitfcal motives, at least does no t take the peop l eunawai'e s. The waf^of olden times were short and swift, and th eir results certain. A change of despotisms mat- 319 ') 320 ENGLAND'S DEBT TO INDIA tered little to the people of East or West ; in the long run, they adapted themselves to the change. The swift horrors of warfare, with its d ecisiveness of ac- tion and certainty of outcome, are inconceivably pref- erable to The sTo w torYufes 6TX"imIitary~ mvasion thaf" comes cloaked under the guise of comm er c ial enter *. pris"er" H ad the Br itish Government, in 17^7, invaded India by force of arms and subjugate d the country on the^"open field of battle, a century of incessant warfare, no less agonising bec ause of its p rotracted nature, mlghrHav¥ been spared her. But behind military and commercial exptoitatioiT'slcuIked the Tust for political dominidri. Most of the rriisTorliIiTes~ef" India,''^om 1757 to 1857, are due to the manner in which she was / subjugated. ^*To'"fHe victor T)elong the spoils *' is~a universal law of warfare, but martial law cannot last forever, and a more stable government under politi- cians and statesmen inevitably reasserts itself. But who is to call a halt on the plundering of commercial adventurers? Where is the limit to their greed and rapacity ? In^^a ^ was never c onq uered by the English s word — not by military valour, but by a subtle and cunning diplomacy. To have used more direct means, Msed upon an avowed determination to subdue the country by force of arms, would have roused the warring chiefs to a sense of mutual danger, and united them against the common enemy. When Clive, in 1765, of- fered to conquer Hindustan for Great Britain, Pitt refused, saying it was beyond the resources of the government. T he c onquest of India was accom- plished in the only way England coul d afford to do it^ SUMMARY AND CONCLUSION 321 at I ndia's expfi p&e. Lulled by professions of a purely commercial interest, the native chieftains vied with one another in extending opportunities of trade to the British, in return for military services rendered by these armed merchants in subduing local rivals. Too late they found that the mailed fist which encompassed the ruin of their enemies was turned with equal ef- fectiveness against themselves ! The English pol icy was si mply ^"^ rnngigtpnf — \n^ create schisms in the camps of the Nabobs and Rajahs, ustfig'one side agamst the other, for the furtheraynce'of their l)wntntere5tr"C6urd'fRFTSrabob of Bengal have seen the finger of fate in the concessions to build forts and factories on his eastern coast, which he granted to the East Indian traders ; could the Vizier of Oude have foreseen that the power whose help he invoked to ruin Benares and extirpate the Rohillas would in less than a century pension off his descendants as helpless para- sites on its mercy and magnanimity ; could the Grand Mogul have realised the significance of his grant of Dewani to Clive ; had the Nabob of Karnatic had pro- phetic eyes to read the future ruin of his house,.when he obtained aid from the English to overcome the Mah- rattas ; if the Nabob of Surat and the Rajah of Tan- jore might have read their twin fates in the stars — this petty warfare would have coalesced into a united stand against this alien foe, and cast him out of India. But what Indian prince could doubt the treaties of ""eternal friendship " sworn to by these British trad- ers, — or their solemn abjurations of all thoughts of territorial aggrandisement? A house divided against itself cannot stand, and betrayed by their own rivalry. 322 ENGLAND'S DEBT JO INDIA the y sold th eir countr)- to a fo reign power, w hose servants, urged on by private greed and patriotic zeal, bought their undisputed sway over a contihenfi PhiHp Francis, in an epigrammatic speech delivered on Indian affairs in 1787, describes the process thus: " From factories to forts, from forts to fortifica- tions, from fortifications to garrisons, from garrisons to armies, and from armies to conquests, the grada- tions were natural, and the results inevitable ; where we could not find a danger we were determined to find a quarrel." The directors of the East India Company wanted money. That was the burden of their communica- tions to Warren Hastings and his successors in the Presidency of Bengal. But their agents in India also wanted money for themselves. It was well said by one of them that when " more money could not be had by legitimate means, they took to the road." Trade, external and internal, afforded too restricted and slow accumulations of wealth ; political intrigues, backed up by military force, could alone secure desired results. The examples of Clive, Governor Vansittart, and Warren Hastings offered too strong an inducement of success to be resisted by men of human passions and human weaknesses undeterred by any check upon their fears. Governors and members of council, not to mention generals and commanders, all had their fixed share in the booty which every military exploit brought. In addition to the ordinary loot, secured in the sacking of towns after military conquests, every treaty entered into with a native prince was ratified SUMMARY AND CONCLUSION 323 by large grants of money made by the latter " to the officers concerned in settling the treaty." ^ Every interest, private and public, personal and patriotic, drove the representatives of the East India Company to seek opportunities of exploitation through military operations and political intrigues. Most of the proceeds of prize money, booty and presents were appropriated by the company's servants, the charges of administration and the maintenance of the army being met by the revenues proper. From time to time, the directors reiterated in solemn terms their freedom from territorial designs, but where treaties had been made, and lands acquired, they quietly confirmed the former and accepted the latter, often conferring signal honours on those instrumental in securing them. India'sJtnisiortunes .w£re-thus enhanred by the vacil- lating policies of the merchant masters of the com- "pahy,^ whom CIiatTiam once cfescribedTas " th^ lofty Asiatic plunderers of Leadenhall Street." The traders of Leadenhall were not conquerors. They did not care for an empire. What they wanted was money, and they were quite happy when tlie~mili- tary^anBTpoITtical opeTatiDTTTXff their" s^enrants" brought them substantial gains. But when the reverse was the 1 One such item is £300,000 mentioned by Malcolm in con- nection with the treaty which was made with Tipu. Another by Torrens : " when the prize money came to be decided upon, after the campaign of 1799, £100,000 which, according to rule would have fallen to the share of the Governor General, Marquis of Wellesley, the latter waived in favour of the troops." (Malcolm, Vol. I, Ch. 5, note, — Torrens, "Empire in Asia," pp. 230, 248.) Another mention of prize-money in connection vvith Lord Wellesley is made in reference to the war with Scindhia. 324 ENGLAND'S DEBT TO INDIA case, they were equally ready to condemn and re- pudiate.^ Between these conflicting policies, the Indian people wefe ground into the du st. Ihe security of the native rulers was practically gone from the moment Warren Hastings confiscated the territories of the Rajah of Benares and assisted the Vizier of Oude to extermi- nate the Rohillas. Thus their own chiefs could not protect them from new ones whose wars of exploita- tion soon developed into wars of annexation. It was the Marquis of Wellesley who first saw the monstrosit y of the dual system, and who determined by hook or crook to put an end to native~rule. With the totaf lack of scruple characterising most empire builderi^ he~pursued a policy of deception, telling delibefate lies in his public despatches, while availing himself of every pretence to make wars and snatch territories.^ Justice, honest;^,2'iaIf pTay7 and tlie^^^ w of the 2 Sheridan described their attitude when he said that "there was something in their operations which combined the mean- ness of a pedlar with the profligacy of a pirate. Alike in military and political manoeuvres could be observed auctioneer- ing ambassadors and political traders, and thus we saw a revolution brought about by affidavits, an army employed in executing an arrest, a town besieged on a note of hand, a prince dethroned for a balance of account. Thus it was tliey united the mock-majesty of a bloody sceptre and the little traffic of a merchant's counting house, wielding a truncheon with one hand, and picking a pocket with the other." (Speech, Feb. 7, 1787, Pari. Hist., Vol. XXV, Col. 287.) 3 The Rajah of Benares lost his territory for refusing to make an exorbitant contribution towards defraying the ex- penses of the Company's wars in the South, for which he recognised no obligation. The Rohillas were extirpated be- cause the Nabob of Oude required it in compensation for large sums he was forced to pay to the English. Torrens, p. 221, for quotations of Marquis of Wellesley's despatches. Vol. I, and certain correspondence between the Governor General and Mr. Dundas. SUMMARY AND CONCLUSION 325 people never entered into the programme of- Wellesley and' his lieutenants, who entered wholeheartedly: iato l^s__sche.mfiS..__Jhe only criterion was the chance of success for theiF enterprises. Arguing agairisTTmme^ diate further conquest, the Marquis wrote to Munro : " I agree with you that we ought to settle the Mah- ratta business and the Malabar Rajahs, but I am afraid that to extend ourselves will rather tend to delay settlement . . . as,,jjgjijh£jvish^af^ the people, I piitthem out of the question." * The italics are ours. Munro was for out and out conquest, though he cautiously added, " we should not all at once attempt to extend ourselves so far, for it is beyond our power, but we should keep the object in view, though the ac- complishment might require a long series of years. The dissensions and revolutions of the native govern- ments will point out the time when it is proper for us to become actors." ^ Thus spoke the company's representatives in India, the while they openly opposed territorial expansion and signed treaties sworn to endure till the sun and moon failed in their course. Native dissensions and revolutions not coming with sufficient speed, the serv- ants of the company used every available means to hasten them, for the furtherance of their designs. Alliances were made, and broken ; subsidies were de- manded and exacted, and residents placed in native courts to sow the seeds of internal dissension and do- mestic revolution. Says Torrens: " Lord Wellesley's purpose in persuading the Native 4 Gleig's " Life of Munro," Vol. I, p. 266. 5 Ibid., Vol. I, p. 123. 326 ENGLAND'S DEBT TO INDIA Governments to maintain within their confines bodies of English troops, instead of Native corps officered by Frenchmen, was too obvious to be misconceived. . . . It was obviously meant and felt, if not declared, to be a guarantee against the development of schemes hostile to English interests and the growth of English ascend- ency, ... It was the glove of mail courteously but undisguisedly laid upon the shoulder of Native rule, with an irresistible but patronising air, felt to be a little heavy and hard at first, but soon destined to be- come habitual. " Its financial scope was conceived and executed with the same pitiless and inexorable purpose. The permanent appropriation of revenue for the mainten- ance of the subsidiary force was calculated mainly with the inability of the State to bear it. . . . The opening of a running account of deficiencies, arrears, balance cleared off from time to time by new conces- sions, became inevitable. Arriving at ultimate suprem- acy, the means taken were called by the subject race, perfidiously wicked, — by the conquering race, pro- foundly wise." ^ Besides bodies of English troops stationed at native courts, there were the active efforts of the Residents, " everywhere feared and hated as the symbol of humil- iation," employed in corrupting ministries, spying on chiefs, and seeking provocation to disrupt and disor- ganise the government in which they played the role of dictator.'' Glimpses of these Machiavellian policies may be found in the contemporary records of the great actors <> Torrens, " Empire in Asia," pp. 233-34-35, ^ See Garwood, Wellesley Correspondence; also "Papers and Correspondence of Lord Metcalfe," regarding the policy of Sir Thomas Barlow ; also the Private Journal of Lord Moira, Vol. I, p. 44, quoted in Torrens, Chapter XIX, SUMMARY AND CONCLUSION 327 themselves, a glance at which will amply repay the reader who desires first hand knowledge. Enough has hq en said to illustrate the point taken, that the British s ubjugation of India was a long process of miUta ry a nd economic exhaustion, a sort of killing by inche s, which took a century to complete . ]\|a ny a nob le- minded Englishman tried,_as best he could, to allevia te the sufferings of the peo£le^of_Iiidia. Some of these attempted to persuade their masters at home to adopt a more humane policy towards the country which they were exploiting to its ultimate ruin. But they failed. There were periods of comparative peaceT when some constructive upbuilding was attempted, Ibut ~o h th e whole, the century was one of destruction and ex - ploitation. People died by milHons ; the country was drained of wealth; fields were devastated and m.anu- factures ruined; the seal of poverty, hopeless, unrmfi- gated, unredeemed, was set upon the land once fabled for its riches. Lord Dalhousie, so lauded by English historians for his high-minded justice, may be regarded most char- itably as the unintentional and involuntary instrument of Providence which brought India's long agony of civil strife and bloodshed to a close. His unjustifiable and piratical acts exasperated both people and princes, and drove them to open rebellion. The British were now determined to make an empire from East to West, and as early as 18 16 had decided to " annihilate all powerful native Governments." ^ So the criminal breaches of trust and acts of high-handedness in re- gard to the Punjab, Oude, Jhansi, Nagpur, Satara and 8 Metcalfe, in " Kaye's Life," p. 432. 328 ENGLAND'S DEBT TO INDIA Scinde but hastened the annexation which at best could only have been deferred a few years longer. Up to 1858, India was British by courtesy only. After the mutiny, the British Government took over the di- rect administration of its affairs. Queen Victoria started the new regime auspiciously with a proclama- tion guaranteeing equal treatment of natives and Eng- lish, — promises so far honoured more in the breach than in fulfilment. The reason is obvious. Under the Crown, as under the Company, there is the same clash of interests between Indian democracy and Brit- ish plutocracy — under the new system, as under the old, England still battens on India's wealth, which is drained off in a golden stream, bearing her life blood with it. During the last fifty-seven years, the fiscal policy in regard to the Great Dependency was laid down in Whitehall, and no English Cabinet dared to sacrifice the interests of the British merchant class for a mere consideration of Indian well-being. As the prosperity of Britain is grounded on manu- factures and trade, Briti sh interest s demand that In- ^^ia live, toil a nd have her being to the end o t British A prosperity, by"~sending grist to the mill and buying the tflouf^ "HeFsl sTtre dou bl er^lFo^ supp lying the raw ma- terial a nS purchasing the finished product. A self- gnvprnin^_Jj ldi-^ wnnid npvpr submit JO play ffirs"" part, hence she remains a dependency under pressure. A distinguished Indian economist said recently: "India's misfortunes ar€ due to the fact that she is economically passive j what she needs is to be econom- ically active." ■^tr ,\/lJ t is futi l e for Indians or j^nglish_t^ talkof^ Indiaj SUMMARY AND CONCLUSION 329 e conomic developmpnt nnf i'l glip I'g free tn lay down h er o wn fiscal policy in [-"^r own int'"r?f^tg c Xhis can neve r be until the Indian Government is so transformed as VTfhake it responsible, not to the India Otiice m Lon- doiT,"l)Ut to the people of India themselves.^ JThe pres - ei^tT^dm inistration has neglected everything__upon which her prosperity as a nati.on„cauld.-be-built. The re is virtually no provision there for producing skilled labour "oFliHe hi gher orde r7~educatr6n,~ both general and technical, is shockingly neglected. In all the length and breadth o( India, there is but one technolog- ical institute, and this owes its existence to private munificence. Even now its usefulness in promoting the development of Indian industries is virtually nil, so hedged about with restrictions is its management. The princi pal industry of India is agriculture, yet before 1907 there was not a_sm^le agricujjhj^^ col- lege in the whole cpunlry. A privately-endowed com- mercial college has been opened recently in Bombay, but even this institution rests under the suspicion of being a reserve for third-class men from England. For a number of years, Indians have been crying for a definite Government policy towards native industries. This agitation reached its climax during the present war. The successful entry of Japan as a competitor has forced the hand of the Administration, and a com- mission has been appointed to inquire and report upon the industrial situation. The questions of tarifif and fiscal policy are declared to be outside its scope, and already the independent Indian mind suspects the ap- pointment of this body a mere sop to public opinion. The Hon. D. E. Wacha, Member of the Supreme 330 ENGLAND'S DEBT TO INDIA Legislative Council, a recognised authority on Indian finance, declared he had no reason to think this Com- mission likely to be different from others of which we have had such bitter experience in the past. " In the long run," he says, " their recommendations are akin to a change from Tweedledum to Tweedledee." The economic situation of India to-day was very tersely summed up by the able young publicist, the Hon. C. Y. Chintamani, in his address to the Provincial Conference at Jhansi, Oct. 8, 1916: " The mass of the population is poor, very poor. A state of destitution, accompanied by disease and debt, is the normal condition of the bulk of the people. A comparative study of the aggregate annual national income, expenditure and savings of the peoples of dif- ferent countries, would reveal a painful state of things in India. John Bright said that if a country possess- ing a most fertile soil and capable of bearing every variety of production, found the people in an extreme state of suffering and destitution, there was some fundamental error in the government. The observa- tion was made of India. The Duke of Argyll, Secre- tary of State for India under Gladstone, recorded his opinion, ' of chronic poverty and permanent reduction to the lowest level of subsistence such as prevail among the vast population of rural India, we have no example in the Western world.' In a paper on the wealth of the Empire, read before the British Association in 1903, the aggregate annual income of the United King- dom (whose population is less than our United Prov- inces) was put at 1,750,000,000 pounds and that of India at 600,000,000 pounds, roughly, 30 rupees per head per annum. The general survey of the Empire led Sir Robert Giffen to consider * how vast must be the economic gulf separating the people of the United Kingdom from India when we find that 42,000,000 of SUMMARY AND CONCLUSION 331 people in the United Kingdom consume in food and drink alone an amount equal to the whole income of 300,000,000 Indians. Unless relieved from their state of semi-starvation, the Indian problem and diffi- culty remain untouched.' He further pointed out the anomaly of Britain requiring of India and India alone, a substantial military expenditure, though the wealth of the self-governing colonies is so enormously greater than that of India. This though the Indian army is freely used for imperial and general purposes, and is not employed exclusively for local defence. " Agriculture is our one national industry, but it is in a depressed state. We are told that the increased cultivation of exportable crops such as jute, cotton and oil seeds, and the higher level of prices have brought greater prosperity to India — but all things considered, their state is hardly better than before, and the oft-recurring famines, each one meaning, besides intense suffering, enormous loss of wealth ; the grow- ing pressure of the revenue demand ; and the higher cost of living have made their condition worse. The output per acre is smaller in India than elsewhere, be- cause the cultivator cannot afford to adopt costlier methods. The magnitude of agricultural indebtedness is appalling, nor is it due to the extravagance of the ryots. The land revenue system has an intimate bear- ing on the condition of the agricultural population, and Mr. J. E. O'Connor recommended a general reduc- tion of 33 per cent, in the Government demand, a plea as ineffectual as the repeated resolutions of the Indian National Congress and the efforts of Mr. R. C. Dutt have been. " Manufacturing industries are a second source of national wealth. India was not a stranger to them in the past, but what was euphemistically described as ' the tide of circumstance ' deprived her of them. Mr. Justice Ranade's impressive description of our indus- trial helplessness is not out of date: 'The country is fed, clothed, warmed, washed, lighted, helped and com- 332 ENGLAND'S DEBT TO INDIA forted generally by a thousand arts and industries in the manipulation of which its sons have every day a decreasing share. This dependency has come to be regarded as a plantation, growing raw products to be shipped by British agents in British ships, to be worked into fabrics by British skill and capital, and to be re- exported to India by British merchants to their British shops there and elsewhere. Stagnation and depend- ence, depression and poverty — these are written in broad characters on the face of the land and its peo- ple.' The recent Government efiforts at industrial de- velopment hardly touch the fringe of the problem. " A third source of wealth, — foreign trade, does not contribute to the prosperity of Indians, being mainly in the hands of Europeans whose home is away from India, besides the drain of wealth due to political causes." Indian public opinion is thus practically unanimous on the following points : (a) British policy in India is responsible for the destruction of Indian industries. (b) The British Government in India has so far failed in a duty which is recognised by all national governments to revive indigenous in- dustries and establish new ones. (c) The fiscal policy of the Indian Government has been dictated from Whitehall mainly in the interest of British trade, in opposition to, and often in defiance of the best Anglo-Indian administrators. (d) India has suffered from a constant drain of her national wealth, which has enriched England to India's cost. (e) While free trade has been profitable to Eng- land, it has been ruinous to India, with its doctrine of laissec-faire. (f) Railway construction, by means of foreign loans, interest on which was guaranteed by SUMMARY AND CONCLUSION 333 the Government to be paid from Indian reve- nues, has been ruinous to Indian finance. Up to 1 899- 1900 it brought no return to the tax- payer. (g) The railways discriminate against Indian in- dustries and internal trade in their freight rates.^ (h) The governmental neglect of education, gen- eral, commercial and technical, retards the growth of modern industries in India, as it re- sults in lack of skilled labour. (i) In view of India's impoverished condition, there can be no justification for the system of costly administration in force for the past 150 years, as it is maintained at the expense of native economic, industrial and educational development. Far too much money has been spent on the military. (j) India's resources have been squandered in mili- tary expeditions in which she had no interest. A policy of Imperial expansion has been fol- lowed at the cost of India. *(k) The only effective remedy for these crying evils is " self-government," with " fiscal au- tonomy." In the language of one of our most conservative leaders of public thought, the Hon. Mr. D. E. Wacha, already quoted above: " If Indian poverty is to be reasonably reduced, if the standard of living of the teeming masses is to be 9 The Chairman of the Indian Merchant's Chamber and Bureau of Commerce stated in his last annual report : " The indigenous Industries Committee appointed by the Bombay Government found that over and above the difficulties of lack of expert advice, and of adverse raihcay rates, in some cases, these industries suffered from under-capitalisation." Italics are mine. The British Indian Association of Calcutta, a body of Bengal Zemindars, have recently made the same representa- tion on railway discrimination, to the Government. ^- 334 ENGLAND'S DEBT TO INDIA satisfactorily raised; if education and sanitation are to be greatly accelerated, the first and fundamental assumption is a well-devised scheme of fiscal auton- omy. Unless the people are allowed full freedom to work out their own economic destiny, it is hopeless to foresee a prosperous India." Thus we see that not only the left wing of Indian Nationalists, but conservative native opinion as well, s ees in self-government the only potent rem pdy fnr thp In dian Problem.^ English opinion on the subject is widely divided. The number willing to concede India her rights is painfully limited. A few intellectuals favour the idea, as well as a scattering of radical thinkers, writers and Members of Parliament. Those statesmen who are at the helm preserve an ominous silence. In the mean- time, the proposal to make the colonies partners in the Empire has created consternation in India. Indian opinion on the point was correctly voiced by the Hon. C. Y. Chintamani when he remarked : — " Brother-delegates, the war has brought the supreme question of India's political status to the front. What is to be her future position in the Empire, and what the system of internal government ? The fervid utter- ances of British statesmen, the even warmer utterances of politicians and the British press, during the early months of the war, must be still fresh in your minds. England went to war for the practical assertion of the rights of nations to freedom, and India was not to be denied. The British Empire, of which India com- prises the largest single whole, was to be a really free empire. India was not for long to remain a mere dejicndency, — she was to be recognised as a partner. Im;)erialism was no longer to stand for the aggran- disement of the white peoples at the expense of the SUMMARY AND CONCLUSION 335 coloured races, so-termed. Indians were no longer to be mere subjects of exploitation for the benefit of His Majesty's colourless subjects. Even the colonists of the self-governing dominions seemed to be thinking kindly of us. We have always asserted our indefeasi- ble right to absolute equality of status, and these first signs of recognition gave us fresh hope to claim what we have always been entitled to as our just right, and not a favour. The Prime Minister and other eminent British statesmen have made repeated public declara- tions that the constitution of the Empire will undergo a change upon the war's termination. But in the whole of the discussions very little reference to India is found. The Secretary of State, our * Grand Mogul at Westminster,' has had scarcely a cheering word to utter. He has found time to put through Parliament two such uncalled-for and retrograde measures as the Indian Civil Service Act and the Government of India Act — the Prime Minister has spared parliamentary time for their passage through both houses ; but the annual debate on Indian affairs has been suspended during the last three years, and there has been no au- thoritative statement on the policy of His Majesty's Government in relation to India. In India itself, the ' new angle of vision ' has manifested itself in the form of internments and prohibitions under the * Defence of India ' Act ; a too free employment of the arbitrary * Press Act,' with controversial legislation, increased police expenditure (particularly the C. I. D. branch) and a reduced outlay on education. " But a far worse menace confronts us. It has been given out that the present self-governing dominions are to be admitted into partnership with England in governance of the Empire; the Crown Colonies, India among them, will be subjected to a further degrada- tion of their already low political status, subject to the politicians of Canada, South Africa, Australia and New Zealand. Why should any one think of inflict- ing such a grievous wrong upon India? What are 336 ENGLAND'S DEBT TO INDIA these colonies of yesterday by the side of this hallowed land of ours, which stretches in its sublime past to the beginnings of humanity, with a culture and a civili- sation which will for all time shed lustre on the human race ; with qualities of heart and head in respect to which her children need fear no comparison with any people in any country ; and looking forward with con- fidence, to a future not unworthy of her ancient past? Why should they be our rulers, — why should we sufifer them to be? We mean to insist with greater deter- mination that there shall be no governing caste in In- dia, — no rulers and ruled, but equal subjects with common rights and obligations, living on terms of manly comradeship. How galling to contemplate subjection to the colonies whose superior title in any respect we see no reason to acknowledge. It is our im- perative duty to make it known to all concerned that India's position in the Empire shall, in all respects, be identical with that of the present self-governing do- minions. To compromise is to commit political sui- cide as a nation and a race." ^° English opinion on the economic effects of British rule in India may be divided into three classes : First : Men such as Hyndman, Digby, Martin, Wil- so.i and others, who frankly admit the economic harm done to India by British rule, and express their regret therefor. Second: Men who do not admit the economic ex- ploitation of India by England, but maintain that Eng- land's management has made India more prosperous than ever before in her history. To this class be- long men of the Strachey school. Third: Men who honestly admit the fact of In- 1" Since the above was in type a reassuring statement on the subject has been made by the Secretary of State for India. SUMMARY AND CONCLUSION 337 dia's exploitation for England's profit, but who justify it by the right of conquest. They maintain, and rightly, that India was acquired for the purpose of commercial gain, and should be administered on that basis. This is the Morning Post school, and thor- oughly to be commended for the absence of hypocrisy, which governs the utterances of diplomats and polit- ical apologists. Grandiloquent bursts of rhetoric are inconsistent with British bluntness and do no credit to her national candour. If Englishmen have ex- ploited Indi a, it can be justified on the only tenabl e ground of India's having allowed herself to be so ex- ploited? One nation does not conquer another out of philanthropy, and at its best, the rule ot one peo^e over another can 5"e bi lt " benevolent despotism." Dofmhation is always dictated by self-interest, justified by~the~righ t of mijJflU. The crime of India ..was_her weakness, and she expiates it under the heel of Im- n^erialTsnTr^I-^tJier ffow strong or perish — the woH cl g ives no place to senili ty. Such is the creed of the twentieth century, worked out in the bloody struggles of the past, and in the law of the survival of the fittest. But in expounding the law, let us not prate of ethics. Exploitation and conquest may have peculiar ethical value in the vast economy of Nature, but for that, credit and a sancti- monious justification is not given to the exploiter and the conqueror. Let me not rob a weaker brother, and cry " holier than thou " as an added claim to his possessions. It profanes the might of right. It lies within the reader's judgment, based on the facts here stated, to decide how benevolent is Eng- 338 ENGLAND'S DEBT TO INDIA land's despotism in India. Bl itish rule iii _Jiidia-has its brighter side. Young India has drunk deep from the "spn ngs of liberty and the rights of man, as em- Bodied in Enghsh history and literature; it has im- bibed the spirit of modern civiTrsatTorr,~epitomised ni the activity and efiefgy of the West; it isIeTrm fun- damental law of nations, " self-pfeservatioTi iy the law of hfe." From her own standpoint, E ngland has not been an unmixed blessing to India, and from ours, she has n ot proved an urmiHe d cui^e7 ~ Slie'Tia"s~tau us the blessing s of the wealth she has deprived1I5'~0f: ; she~Iias awakened the need for the ed ucation she has nof~g!ven ; she~has proven the value of the power she dares not__b£Stow. The West has not knocked at the door of the East without response, — we are learning to answer it in kind. Patriotism, NationaHsm, Hu- man Brotherhood and the Rights of Man echo around the world to-day, but before these sacred sentiments become truths no less sacred, they must be won, it seem^ by right of might. England says that she had ruled India to India's own best interests, and that we should never have been so prosperous or happy as a nation, as under British rule. Imperial Britain would imply that Englishmen are angels, dwelling in an Utopian dream. Where is the human being above self-interest and greed? Where is the man who will not wield his power to his own ends? One may meet such individuals, though they are rare ; but to seek for a nation so dis- interested as to rule another in the best interests of the latter, is futile. It is time England, as well as In- dia, faced the situation squarely and accepted it for SUMMARY AND CONCLUSION 339 what it is, or make a better one.^^ There has never been sincerity in the relationship of foreign ruler and native ruled. The farce of paternalistic dominan ce mu st end, and some clear adjudication be made of re- sgective rights and obligat ions, else a grim trage ^ w.illb^jeriact£d^ Under the existing system, a thin stratum of governnienij fficlaTsT~^a\v'ihg"~prTncely sal- aries,— -lawyers, bankers, constructors and stock-ex- change traders,— ^^ay ignore "the humiliation of their position, and consider themselves benefited by British rule. But the majority of them are sullen and discon- tented, feeling themselves for what they are — para- sites, battening on the vitals of their motherland. The masses, whether traders, agriculturists or labourers, cflre t)eing crushed beneatti the weight of thi5"-pttiless Western Jug'gfernautr-- From one-third to one-fifth are insufficiently fed, housed and clothed ; ninety per cent, are illiterate ; truly, if ** to be weak is miserable," their helplessness makes them most wretched. The very ef- forts of Englishmen themselves to succour them have failed, under the present inexorable regime.^^ The 11 " The connection between England and India is a political anomaly that has no parallel in history. Calling the Indians 'our fellow subjects' is misleading." ("Colonies and De- pendencies," Macmillan & Co., 1883.) 12 Says Mr. Thorburn, late Financial Commissioner of the Punjab (p. 349): "Looking back for twenty-five years, re- membering the causes of the Afghan War of 1878-80, the straining of our relation with the Amir, 1890-93, the subse- quent thrusting of * friendly relations ' and a protectorate upon the independent tribes beyond our frontier, the enforced delimitations of some of their hinterlands, the futile con- sequential wars of 1897-98; unprejudiced minds must recog- nise that the tax-paying masses of India have received scant consideration, and that some of the heads of Government and subordinate officers answerable for the blunders and wastage of different periods, should have been discredited, instead of 340 ENGLAND'S DEBT TO INDIA attempt of Lord Crewe to carry his India Council Re- form Bill of 1914; the attempt to obtain an Executive Council for the United Provinces under the Govern- ment of Lord Hardinge ; the effort to repeal the coun- tervailing excise duties on Indian cotton goods, all ended in failure, and demonstrate the hopelessness of ameliorating the system. T here is but one panacea f or Indian ills : the road may lie rough before us, the march long and dangerous, but the goal lies clear ahead a s the sum mum honu m of our natio nal existence : Qlome Rule, Self Government, Auto nomy. Th js is the end for which we must live, putting our soul's salva- tion upon the at'fainmentot Li berty, the spiritual~lTe r- ifage'"oFman. Woe to us if we fail! Eternal glory i f "we succeed! rewarded. So long as the Government of India is practically an irresponsible despotism, and the Indian public merely a powerless mass of uninformed and inarticulate taxpayers, mud- dling misrepresentation and waste in the conduct of Indian foreign affairs will not cease, and high-placed blunderers in authority will never be called to account. Until some force in India arises with the power, the will and ability necessary for securing a commonsensc management of affairs, business-like prudence will not always be practised. " Present methods suit a bureaucracy : unless forced from the outside, reforms from inside are hopeless. Without the cer- tainty that the truth will come out, and be intelligently ex- amined and judged, no government will proclaim its mistakes, or alter its ways." (" Punjab in Peace and War," p. 349.) APPENDIX A Extract from an article by A. Yusaf AH, a retired Indian Civil Servant, published in The Nineteenth Century and After for February, 1917 : " The Indian Income Tax brings within its net only 332,000 persons out of a population of 244 millions in British India, the exemption limit being as low as 66 pounds (that is $330). Only 13,000 persons have an income of 666 pounds ($3,330) or over in British In- dia." The following remarks are made in regard to the Government policy of control of the price of wheat during the war : " Government policy in the matter was directed to- wards two objects: (i) to divorce India prices, which by themselves would have been lower, from the world prices. (2) To secure the surplus of India's bumper wheat production last year for lowering the prices of wheat in the United Kingdom. In 191 5 the prices broke famine records and went as high as six: seers for one rupee in a year when the wheat crops had been splendid and the prices would, in normal times, have been very low." Mr. Yusaf AH gives the following figures about the military expenditure of the different parts of the Brit- ish Empire and its proportion to the total Budget of Revenue : Military Budget for ipi^-ipi4 Millions of Percentage to total Pounds Budget of Revenue Great Britain 28.2 14.5 India 18 22 Australia 2.5 10 Canada 1. 5 5 South Africa r.15 7.7 341 342 ENGLAND'S DEBT TO INDIA This is exclusive of the cost of the Imperial Service troops maintained by the Indian Princes at their own cost and used by the British for Imperial purposes. APPENDIX B Extracts from an article by Mr. Manohar Lai, B. A. (Cantab), late Minto Professor of Economics in the University of Calcutta, published in the Indian Jour- nal of Economics for July, 1916: " The average income per head has remained the same (that is $10 a year) during the last thirty years and more. ... It is a fact that deserves careful study at the hands of all students that with signs of grow- ing prosperity everywhere, with an undoubted advance in the whole apparatus of industrial life, the average Indian income has remained stationary. How far this fact involves that a vast proportion of our population can have taken no share in the general urban rise in India, and in view of the undeniable fact of large in- creases in prices how far it probably has entailed some depression in the economic status of her masses — these are enquiries that must present themselves to every student of economics in the country, and thoughtful Indians have not been able to interpret their bearing in a sense favourable to the country's prosperity. " Poverty, grinding poverty, is a tremendous fact of our economic, and therefore national, position, and it is to the mind of the present writer an immeasurably more potent fact than even the ignorance and illiteracy that prevails among our masses. This poverty exposes us to the havoc of disease and pestilence, famine and plague and it makes advance at every step difficult." Mr. Monohar Lai then compares the food budget of an English workingman's family, that of a railway APPENDICES 343 carriage washer with that of an Indian field labourer as given by Mr. Keating, an Englishman, in his very careful work on rural economy in the Deccan and observes : " It is a picture of literal starvation mentally, and all but so physically ; it can represent the life of no unit of civilised humanity." Further on, summarising the present situation, he re- marks : " Indian population grows, her earning power per head is stationary, such increase in her industries as has taken place is nothing compared to the growth of her population. The inference is irresistible; life in India continues on the lowest plane, untouched by all the movements and progress that is in the air." APPENDIX C How the Villagers Live in the Madras Presidency — An Article from the Tribune of Lahore of January 19, 1917. In England and other European countries the study of the condition of the working classes has led to their improvement. A similar study of the condition of the Indian people is necessary to devise measures for their economic improvement. The Government were asked several times to hold such enquiries in vil- lages exposed to frequent famines. But they thought that it would serve no useful purpose to do so. In England private individuals and public associations have aroused sympathy for the working classes and Government have readily adopted necessary reforms. It would be useful if similar work was undertaken by individuals and associations in India. A good ex- ample has been set in this direction by Mr. S. P. Patro, who read an interesting paper at the Madras Eco- nomic Association on the nth instant. His Excel- 344 ENGLAND'S DEBT TO INDIA lency the Governor presided. The enquiries were held in 15 villages of the Ganjam District and the places selected were those in which the conditions were alike as far as possible. The people living in the villages were asked certain questions regarding their income and expenditure as also their debts. And care was taken to prevent exaggerated or incorrect answers by verifications of facts supplied by others. After going through the details of assessment, population, number of agriculturists, the income of a typical family, the food consumed, etc., Mr. Patro found that in a par- ticular village the budget of the ryot showed a deficit of Rs. 22-9-0 every year and it was not possible to obtain a full meal every day. Dealing similarly with a typical village in the Chicacolo division, Mr. Patro found that the annual income of a family of a typical zamindar, who had wet and dry lands, was Rs. 129-8-0, and that the expenditure, including cost of rice, oil, clothing, etc., was Rs. 181-8-0, leaving a deficit of Rs. 52 a year. For marriage and litigation the head of the family raised a loan of Rs. 380 in 1907 and dis- charged the same in 1913 by sale of rice and by living on inferior corn and the profits of rice-pounding. The family had full meals only from January to the month of May according to the statement of the ryot. In a zamindari village the annual income of a typical family was Rs. 316 and the expenditure Rs. 321-6-0 and there was a debt outstanding against the family. In another zamindari village, the income of a typical family was Rs. 786 and the expenditure Rs. 698-4, leaving a balance of Rs. 68 to the credit of the family whose aflfairs were conducted in a most economic way. That was not a profit, but it represented the wages which the members of the family earned for their personal labour on the land at Rs. 14 a head per year. On these facts Mr. Patro made the following re- marks : " I tried to place before you actual conditions ob- served in my investigation into some of the villages APPENDICES 345 in the Ganjam district. The investigation commenced more than a year ago, and I do not attempt to discuss the many problems to which the studies give rise. Others will have to draw conclusions and advocate remedies. From the sketches it will be seen how the population is increasing and the actual cultivating owners are decreasing; how the holdings are split up, and the landless labourers are growing, how little im- provement is made in agricultural methods and how little possibility there is for improving agricultural methods owing to the growing poverty, physical de- terioration and indebtedness of the agriculturist ; how the cultivation of the present holdings can never pay and the ryots are sinking lower and lower. The ra- tions available for the agriculturist in some cases are poorer than the diet given to the prisoners in jails. That large number of agriculturists and labourers emi- grated to Calcutta, Burma, Straits Settlements and other places is a common factor in all these villages. In the last named village about one hundred out of a population of about 878 have gone out in search of better wages and to work in non-agricultural work. There is therefore pressing need for full enquiry into the economic conditions of the agricultural population in this Province." These enquiries are very interesting and show the desirability of conducting similar enquiries in other provinces and districts. Punjab is not much different from Madras in regard to the land tenure and gen- eral conditions of the agricultural population. We think that the enquiries made by Mr. Patro are of particular interest to us and the fact that the people are sinking lower and lower in poverty is particularly distressing. That some of them receive poorer diet than the jail population is a statement which should suggest the adoption of urgent remedies. Mr. Patro, it will be seen, does not want Government to accept his conclusions but invites further enquiries of the kind. Throughout India educated people are press- 346 ENGLAND'S DEBT TO INDIA ing for the reform of land laws so as to improve the condition of the masses, and experienced men have shown how deeply the ryots are sunk in poverty and in- debtedness. Mr. Patro's enquiries go to confirm these opinions and to contradict the official theory about the prosperity of the peasantry. In the typical village homes whose family budgets were examined the peo- ple had an annual deficit in three out of four cases — a fact which cannot but show the pitiable condition of the agriculturists. His Excellency the Governor ex- pressed his appreciation of the enquiries made by Mr. Patro and admitted that the facts ascertained must be fairly accurate, though no general conclusion could be drawn from them alone. APPENDIX D WAGES IN INDIA The reports and publications of the Government of India do not give sufficient data to enable one to fix the exact position of the wage earner in the national econ- omy. In the latest report on prices and wages the only retail prices given are those of food grains, only one kind of dal (pulse) and salt. The report gives wholesale prices of staple articles of export and im- port, but they are of no help in fixing the wage earner's budget. As regards wages there is also a great deal of confusion. For some districts the wages are given up to 1906, for others up to 1907, 1909, and 1912. In some cases the wages given are monthly ones ; in others weekly or daily, rendering it impossible to make comparisons. However, some approximate idea of wages can be gathered from the following tables com- piled from the above mentioned report. The Indian currency unit is a rupee. This is divided into 16 annas. Roughly three rupees are equal to an Ameri- APPENDICES 347 can dollar and an anna is equal to two cents. We give the approximate equation in dollars of the Indian rupee in the table. The wages are given for the vari- ous towns mentioned in the report, omitting all refer- ence to Burma. Weekly wage of an Weekly wage of a able bodied agricul- mason, carpenter, Bengal. tural labourer or blacksmith Rangpur $1.00(1910) $r.66 (igio) Backerganje $ .82 to$i.oo (1910) $1.30 to $1.66 (1910) Calcutta $1.33(1917) Patna $.49(1907) $1.00(1907) United Provinces of Agra and Oude. Cawnpore 1906 $.33 to $.49 $1.66 Fyzabad 1906 $.16 to $.33 $ .49 to $ .66 Meerut 1906 $ .35 $ .82 Punjab. Delhi 1909 $.82 $1.66 Ameitsar ....1909 $.79 $2.50 Rawalpindi ...1909 $ .82 $2.33 Sindh. Karachi 1912 $1.08 to $1.33 $2.08 to $3.33 Bombay. Belgaum 1908 $ .50 |i.i6 to $1.33 Ahmadnagar .1914 $.82 $1.33 to $2.00 Bombay 1912 $1.33 $2.33 to $3.50 Ahmadahad ..1912 $ .66 About $2.00 Central Provinces. Jubbulpur — 1908 $ .50 $2.50 Nagpur 1908 $ jk> $2.00 to $2.50 Raepur 1908 $.50 $1.33 Madras. Bellary 1907 $.50 Less than $1.50 Madras 1907 $ .50 " " " Salem 1907 $ -35 " " Postal Runners. Only in one division, that of Sindh, do the postal runners in the service of the Gov- ernment get one dollar a week. In others they or- dinarily get two-thirds of that amount. In some 348 ENGLAND'S DEBT TO INDIA places they receive even less than that. These are the figures for 1914. Postmen. Postmen, who are also in the employ of the Government and are supposed to be literate, get salaries ranging in amount from $.90 to $1.33 per week (1914). Railroads. In the railroad service (1914) we find the following figures : Mirzapur-East Indian Railroad. Skilled labour Unskilled labour Carpenter $1.00 to $1.66 $.50 Blacksmith $1.66 Permanent Inspector.. $2.00 Cazvnpore. Skilled $ .50 Unskilled. . .Less than $ .50 Delhi. Skilled labour from $1.66 to $2.30 Unskilled. . . .about $ .66 Lahore Railway Work Shops. Skilled Fitters $1.66 Unskilled $ .70 Skilled Carpenters $175 Average daily wages paid on canal work, foundries, and workshops: Skilled labour from 7^ to 16^ Unskilled labour ordinarily below 7 UNIVERSITY OF CALIFORNIA LIBRARY Los Angeles Is DUE on the last date stamped below. ¥^ ITJ^ v^V^m^ <^^2il\%l^ \\9.\. , u--i- o\scv^«^ WL JfiN REC'D LD-UraS V.^^ 61984 1^ 1 \S80 41584 ;i\Tr)C7v o S^ >■ =3 r>r r* 1 1 cnn . ..0^ ^OFCAllFOMj^ ^ . ^ME UNIVERiV/, O O %il3AINn3UV ^^t•LIBRARYQc. ^UIBRARYQr^ ^, _„^ ^^m\\m\^^ \ojiiv3jo'f^ ,„„ , liim 3 1158 00339 7246 ■^■yo b\\ in UC SOUTHERN REGIONAL LIBRARY FACILITY AA 001 150 866 o § >^> — ^^ '^Aa3AINfl-3WV AWEUNIVER% o vvlOSANCElfj> o %a3AiNn]WV ^;^HIBRARYQ^ ^UIBRARYQr. %JI1V3J0^ %0JnVDJO^ .^WEUNIVER5■//, I — .^ ' ^ *^ ^ -Tl ^lOSANCElfx> o •— — • ^^,OFCAIIFO% .^0FCA11F0% ^J?i30Nvsoi^ "^AajAiNnjwv^ ^6>Aavaan-^^ "^^Aavaan-i^ ^tllBRARYQ^;^ -5^lllBRARYQ/:. ^OFCALIF0%, .^,0FCAIIF0% ^4 J<^-Z- ^4 ^->- "^ ^\\^EUNIVER% ^lOSANCflfj>