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in 1898–99. Our readers, who have perused the previous chapters on trades and manufacture in the present work, will not be at a loss for an explanation. The trade of India is not natural but forced; the export of food grains is made under compulsion to meet an excessive Land Revenue demand. The year 1897-98 was a year of widespread famine in India, and millions of people died of starvation. Nevertheless, the Land Revenue was collected to the amount of 17 millions sterling; and cultivators paid it largely by selling their food grains, which were exported to the amount of 10 millions sterling in that calamitous year. In the following year the crops were good. The agriculturists sold large quantities of their produce to replace their plough cattle, and to repair the losses of the previous famine year. Unfortunately, too, the Government realised the arrears of the Land Revenue with a vigour as inconsiderate as it was unwise ; and vast quantities of the new produce had to be sold to meet this pressing Land Revenue demand. Both these causes operated to increase the export of food grains to a figure which it never reached before. Those who judged the prosperity of India by its revenue collection were jubilant. A Land Revenue collection of over 18 millions sterling gave them the evidence they relied upon. The usual misleading statements were made in India, and in the House of Commons, about the recuperative power of India. Few cared to inquire if the enormous exports and the enormous Land Revenue collection had left any stores of food among the people.
The Nemesis followed soon. The following years were years of scanty harvests: Bombay and the Central Provinces had been denuded of their food resources. And those Provinces suffered from å three years' continuous famine, which is unparalleled in the history of modern times.
Nature set a limit which the cultivators had not obtained from the moderation of their rulers. Popula
tion decreased in Bombay, and still more in the Central Provinces. Miles of cultivated land became waste. Jungle grew on homesteads, wheat lands, and rice lands. The Land Revenue demand of the Government could no longer be collected. Then, with a reluctant confession of blunder," the demand was revised. Both in Bombay and in the Central Provinces the demand was reduced in District after District. The Land Revenue in the years immediately succeeding did not reach 18 millions sterling. The export of the food grains has never reached 18 millions sterling since.
But the relief is only temporary. There is nothing to restrain Settlement Officers from screwing up the Land Revenue demand again on the first signs of prosperity. There is nothing to give an assurance to the people as to the limits of the State demand from the produce of their fields. A system which is virtually one of adjusting the demand to the utmost paying capacity of an agricultural population demoralises the nation, and makes any permanent improvement in their condition impossible. The people ask for some rule limiting Land Revenue enhancements to definite and specific grounds. The Marquis of Ripon granted them such a rule, but it was withdrawn the month after his departure from India. Lord Curzon has declined to grant them such a rule, as we have seen in the last chapter.
The facts stated above also show the unwisdom of judging the condition of the people of India by the volume of India's foreign trade. Englishmen find this a fairly correct test in their own country, and make the natural mistake of applying it to India. Englishmen live to a large extent on their commerce and manu
1 “Mr. Dutt seemed to think that, in the Central Provinces, the Government of India were exacting an exorbitantly high Land Revenue. He (Lord George Hamilton) was very reluctant to dogmatise as to what was, and what was not, a reasonable Land Revenue; and he should be very sorry to say that in the past they might not, here and there, have placed the Land Assessment too high."-Report of Lord George Hamil. ton's speech in the House of Commons, the Times, April 4, 1900.
facture. The sale of their manufactures enables them to buy food from foreign markets. The profits of commerce and of the carrying trade add to their wealth. The volume of trade is a fairly correct index of their national income.
But the circumstances are different in India. The external trade is carried on by foreign merchants with foreign capital. The profits of the trade come to Europe and do not remain in India. The earnings of the foreign trade are not the earnings of the people. The volume of the foreign trade is not an index to their national income. In the year 1881-82, under Lord Ripon's reign of peace and comparative prosperity, the total imports and exports of India were 83 millions sterling. In 1900-1901, a year of famines and distress, the total imports and exports were 122 millions. Who that knows India, or has heard anything of India, will say that India earned more, or was better fed, and was more prosperous, in 1900-1901 than in 1881–82 ?
Commerce, even when carried on by foreign capital and foreign merchants, is beneficial to a country. It brings in articles cheaper than the country can produce. And it also brings a higher price for the home-produce than can be obtained at home. In both these ways commerce is beneficial, even though the profits of trade go to other lands. But in India, even this benefit is restricted because her foreign trade is forced, not natural. The excise imposed on cotton manufactures restricts the production of articles which the country could produce. And the Land Revenue system of India, as well as the Home Charges, forces the export of food grains, mucho of which the country needs for its own population. Thus large imports of cotton goods into India are secured by restrictions on the Indian industry. And large exports of food are compelled by a heavy Land Tax and a heavy Tribute.
HISTORY OF TARIFFS
IN a previous chapter we have narrated the history of Indian Tariffs down to 1879, when Lord Lytton sacrificed an important source of Indian revenue in a year of war, fainine, and deficit. His successor, the Marquis of Ripon, concluded the Afghan War, established peace, and secured a surplus. And his Finance Minister, Sir Evelyn Baring, now Lord Cromer, abolished the reinaining Import Duties in March 1882,-excepting those on salt and liquors.
There was some justification for the abolition of import duties in a year of peace and prosperity. Nevertheless, Lord Ripon and his Finance Minister would have acted more in the interests of the people of India, if they had, in the first instance, withdrawn the Cesses which had been imposed on land, since 1871, in addition to the Land Revenue. While agriculture, the inain industry of the people, remained overtaxed, it was not fair to surrender a legitimate revenue derived from customs, which did not operate as a protection.
No fresh import duties were levied for twelve years, between 1882 and 1894, except a small duty on petroleum imposed in 1888. But the steady increase
in Military Expenditure which was made after Lord . Ripon's departure from India, the large addition in the
army sanctioned by Lord Dufferin, and the mischievous activity of Lord Lansdowne's Government beyond the frontiers, disturbed the financial equilibrium of India. And the fall of the rupee created difficulties in remitting to England the increasing Home Charges which were paid in pounds sterling. It is remarkable how little of the increase in Indian expenditure, between 1884 and 1894, was due to improved domestic administration, and how much of it was due to extravagant military charges and impoverishing Home Charges. In 1894 the Indian Government found itself face to face with a deficit of over two million sterling.
Lord Herschell's Committee was appointed to inquire into the possibility of further taxation in India. The Committee came to the conclusion that, “Of all the suggested methods of adding to the revenue, the reimposition of Import Duties would,' according to the evidence before us, excite the least opposition, indeed it is said that it would be popular.” But the Committee took care to add that any attempt to re-impose duties on cotton goods would meet with great opposition.
Accordingly, in March 1894—twelve years after the abolition of Import Duties by Sir Evelyn Baring—they were re-imposed on articles imported into India, other than cotton. A duty of 5 per cent. ad valorem was imposed generally on all articles with a few exceptions. Iron and steel paid i per cent.; petroleum, which paid id. per gallon; and railway materials, industrial and agricultural machinery, coal, raw materials, grains, books, and miscellaneous articles were duty free. The Bill was vigorously opposed in the Legislative Council, specially on the ground of the omission of cotton from the schedules, and Lord Elgin, in passing the Tariff Act in March 1894, hinted that it was not a final measure.
It was indeed a very temporary measure. For in December 1894 a fresh Tariff Act was passed, including cotton fabrics and yarns, on which a duty of 5 per cent. ad valorem was levied. But the Indian Government thought it wise to propitiate Manchester by imposing a countervailing Excise Duty of 5 per cent. upon yarns produced in Indian mills, which could compete with Lancashire yarns. As a rule, Lancashire manufactures, imported into India, are of the finer classes; and goods,