produce of corn from the cultivators and send it to other parts of the country.

So much for the distribution of the produce. It is not necessary, however, that the shares should go to different persons. Very often, all the factors are controlled by the same person, and in such cases all the shares would go to him. India is a country mainly of small industries which are carried on by the workers on their own account. They supply the labour as well as the small capital required, and they are themselves the organisers. In a large number of cases, therefore, the whole of the produce goes to the same persons and the question of distribution does not arise at all. In the institution of peasant properties also, as we have seen, there is hardly any distribution among different parties. Thus, at present, the economic problems of India are mainly those of production rather than of distribution; but with the growth of large-scale industries, the problems of distribution are likely to assume greater importance in future.1

1 The effects of the misdirection and waste of capital and labour due to the inequitable distribution of wealth in the west have been thus generalised by Mr. L. G. Chiozza Money: "The unduly large share of the national dividend possessed by the rich produces in them grave faults of character and purpose which make them indifferent administrators of the capital without which labour is powerless. The unduly small share of the national dividend possessed by the poor is the source of a stream of moral and physical evils which, mingling with the waters of death which descend from the high levels of luxury, produce effects whose causation is only obscure as long as we neglect the study of the Error of Distribution” (Riches and Poverty, p. 152).

I. E.

K

Trade in

ancient times,

by sea,

CHAPTER IX

EXCHANGE

1. A BRIEF HISTORY OF INDIAN COMMERCE

FROM the very earliest times, trade between India
and the neighbouring countries was carried on by
land as well as by sea. India was once
<< the seat

of commerce."

As early as the sixth or seventh century B.C., India had commercial relations with Italy, Greece, Egypt, Phoenicia, Arabia, Syria, Persia, China, the Malay Peninsula, and the islands of the Indian Archipelago. The Hindus built ships and navigated the ocean as early as the age of Manu's Code. Later, they held in their hands all the threads of international commerce, whether overland or by sea. The unknown author of that remarkable book, the Periplus of the Erythraean Sea, describes the commerce in detail,1 and from him we learn that Indian vessels frequented the Arabian Sea, the Red Sea,

1 Vide Periplus of the Erythraean Sea, and others works by Greek writers, translated by J. W. M'Crindle. The term Erythraean Sea was applied to the Indian Ocean with its bays and gulfs.

the Persian Gulf, and the Indian Ocean, and his
testimony is corroborated by that of other ancient
historians and geographers, such as Pliny, Arrian,
Strabo, and Ptolemy. The chief Indian seaports
were: Barygaza (modern Broach), Saurstra (Surat),
Masalipatan, Barbarikon, Mouziris, and Nelkunda.
There were other commercial towns, some of which
also attained to great eminence. The value of this
maritime commerce must have been very consider-
able. The chief articles of export were rich
apparels made of silk and cotton, pearls, diamonds
and other precious stones, ivory, spices, drugs and
aromatics; and those of import were gold, silver,
brass, copper, and tin. A brisk coastal trade was
also maintained between the seaport towns.

Trade by land with Central Asia, China, and by land.
other parts of Asia, as well as some countries of
Europe, was carried on by caravans.
There were

several trade-routes which were availed of by the
merchants. Besides, an active internal trade was
carried on between the different parts of the country
itself. The great rivers served as commercial routes,
and royal roads connected the important cities.

During

times.

The commercial activities were continued in full In mediaeval vigour till the ninth or tenth century A.D. the Mahomedan rule, however, maritime commerce was gradually abandoned; but trade intercourse by land was maintained. In 1498, the voyage of Vasco da Gama round the Cape of Good Hope opened a route for commerce between India and

1 Strabo says: "I found that about 120 ships sail from Myos Hormos to India."

In modern times.

Europe, so much easier, cheaper, and safer than any that had previously been used, as to completely change the destinies of the country and its relations to the general affairs of the world. Foreign maritime commerce was thus once again revived, this time, however, by Europeans. In the seventeenth and eighteenth centuries, the Dutch, the Portuguese, the French, and the English companies competed with one another for the largest share in the commerce with India. Ultimately, the English East India Company was able to practically oust the other companies from the Indian waters. The invention of steamships led to a further increase of the maritime commerce. And lastly, the opening of the Suez Canal brought India much nearer to Europe and gave a fresh impetus to the commercial development of the country.

The foreign trade of India is now steadily increasing, but Indians have very little share in it. The bulk of the internal trade still remains in the hands of Indians, but even in this they hardly display the enterprise, pluck, foresight, and resourcefulness which are essential for success in business.

Indigenous system of internal trade. The village trader.

2. THE INDIGENOUS SYSTEM OF INLAND TRADE

Every village has its resident traders. In many instances the chief trader combines the functions of the money-lender and grain-merchant with his own proper vocation, vocation. Buying and selling are done in the markets, which meet daily in the more important villages and on fixed days in the week in other

places. In addition to the shopkeepers, there are
hawkers or itinerant sellers who supply the people
with articles of merchandise in their homes. The
religious festivals and fairs, some of which are Fairs and
attended by large numbers of pilgrims and visitors, festivals.
religious
also serve as important marts for the exchange of

commodities.1

A portion of the village produce is sold in the village markets for local consumption, and the surplus is handed over to the agents in the towns and thence dispatched to trade centres in other parts of the country, or exported out of it. Imported merchandise is distributed by the same machinery working in the opposite direction. Internal trade may be divided into two kinds: (a) Two kinds of traffic with the ports, and (b) commerce between internal trade. different parts of the country. The former is largely concerned with the collection of manufactured products for export, and with the distribution of imported merchandise; the latter with supplying the surplus produce of one part to the other parts of the country. Trade passes through the hands. of a considerable number of middlemen and is consequently hampered to no small extent.

Towns spring up where trade activity increases, and historical cities lose their importance as soon as they cease to be trade centres.

1 Vast concourses of people gather at the Kumbha melas which are held at Allahabad, Hardwar, and other places. The car-festival at Puri and the fairs at Harihar Chattra are attended by people from the most distant parts of the country. These fairs serve not only the purpose of marts but also of industrial exhibitions.

Growth and

decay of towns.