flourish in any part of the world. But Lord Ripon left India in December 1884; and his wise settlement was negatived by the Secretary of State for India in January 1885. The compromise which had been arrived at after years of inquiry and anxious thought in India was vetoed at Whitehall; and a nation of agriculturists was once more subjected to that uncertainty in the Statedemand which is fatal to successful agriculture.

The Half-Rental Rule still remained-in theory. But in practice it had been violated. The expenses of the Mutiny wars had vastly added to Indian liabilities, and demanded increase in taxation. Commerce could not be

taxed against the wishes of British merchants and British voters; the increased taxes therefore fell on agriculture. Accordingly, from 1871, a number of new taxes were assessed on land, in addition to the Land Revenue. If the Land Revenue was 50 per cent. of the rental, the total assessment on the soil, including the new taxes, came to 56 per cent., or 58 per cent., or even 60 per cent. of the rental. And the people of India asked, what was the object of limiting the Land Revenue, if the limits were exceeded by the imposition of additional burdens on agriculture.

The late Marquis of Salisbury was Secretary of State for India in 1875. His deep insight in matters to which he devoted his attention is well known. And he condemned the weakness and the one-sidedness of the Indian Fiscal policy in a Minute recorded in 1875, which is often cited. "So far," his lordship wrote, "as it is possible to change the Indian Fiscal system, it is desirable that the cultivator should pay a smaller proportion of the whole national charge. It is not in itself a thrifty policy to draw the mass of revenue from the rural districts, where capital is scarce, sparing the towns where it is often redundant and runs to waste in luxury. The injury is exaggerated in the case of India where so much of the revenue is exported without a direct equi

by European officers, drawing their salaries from Indian Revenues; and this remittance increases as the employment of European officers increases in India.

The 17 millions remitted as Home Charges are spent in England (1) as interest payable on the Indian Debt; (2) as interest on railways; and (3) as Civil and Military Charges. A small portion, about a million, covers the cost of military and other stores supplied to India.

A very popular error prevails in this country that the whole Indian Debt represents British capital sunk in the development of India. It is shown in the body of this volume that this is not the genesis of the Public Debt of India. When the East India Company ceased to be rulers of India in 1858, they had piled up an Indian Debt of 70 millions. They had in the meantime drawn a tribute from India, financially an unjust tribute, exceeding 150 millions, not calculating interest. They had also charged India with the cost of Afghan wars, Chinese wars, and other wars outside India. Equitably, therefore, India owed nothing at the close of the Company's rule; her Public Debt was a myth; there was a considerable balance of over 100 millions in her favour out of the money that had been drawn from her.

Within the first eighteen years of the Administration of the Crown the Public Debt of India was doubled. It amounted to about 140 millions in 1877, when the Queen became the Empress of India. This was largely owing to the cost of the Mutiny wars, over 40 millions sterling, which was thrown on the revenues of India. And India was made to pay a large contribution to the cost of the Abyssinian War of 1867.

Between 1877 and 1900, the Public Debt rose from 139 millions to 224 millions. This was largely due to the construction of railways by Guaranteed Companies or by the State, beyond the pressing needs of India and beyond her resources. It was also largely due to the Afghan Wars of 1878 and 1897. The history of the

b

Indian Debt is a distressing record of financial unwisdom and injustice; and every impartial reader can reckon for himself how much of this Indian Debt is morally due from India.

The last items of the Home Charges are the Civil and Military Charges. This needs a revision. If Great Britain and India are both gainers by the building up of the British Indian Empire, it is not fair or equitable that India alone should pay all the cost of the maintenance of that superb edifice. It is not fair that all the expenses incurred in England, down to the maintenance of the India Office and the wages of the charwoman employed to clean the rooms at Whitehall, should be charged to India. Over forty years ago one of the greatest of Indian administrators suggested an equitable compromise. In a work on Our Financial Relations with India, published in 1859, Sir George Wingate suggested that India should pay all the expenses of Civil and Military Administration incurred in India, while Great Britain should meet the expenses incurred in England, as she did for her Colonies. Is it too late to make some such equitable adjustment to-day? India's total Civil and Military Charges, incurred in England, come to 6 millions-a sum which would be considerably reduced if it came from the British taxpayer. Is it too much to expect that Great Britain might share this burden, while India paid all the Civil and Military charges incurred in India?

These are the plain facts of the economic situation in India. Given these conditions, any fertile, industrious, peaceful country in the world would be what India is to-day. If manufactures were crippled, agriculture overtaxed, and a third of the revenue remitted out of the country, any nation on earth would suffer from permanent poverty and recurring famines. Economic laws are the same in Asia as in Europe. If India is poor to-day, it is through the operation of economic causes. If India were prosperous under these circumstances, it

would be an economic miracle. Science knows no miracles. Economic laws are constant and unvarying in their operation.

The evils suggest their own remedies. The Excise tax on Indian mill industry should be withdrawn; the Indian Government should boldly help Indian industries, for the good of the Indian people, as every civilised Government on earth helps the industries of its own country. All taxes on the soil in addition to the Land Revenue should be repealed; and the Land Revenue should be moderated and regulated in its operation. The Public Debt, unjustly created in the first instance, is now an accomplished fact: but an Imperial Guarantee would reduce the rate of interest; and a Sinking Fund would gradually reduce its volume. Civil and Military Charges, incurred in England, should be borne, or at least shared, by Great Britain, as she shares them in the case of her Colonies. Civil charges in India should be reduced by a larger employment of Indians; military charges in India should be repressed with a strong hand; and India should pay for an army needed for her own requirements. All further extension of railways from StateLoans, or under guarantee of interest from the taxes, should be prohibited. Irrigation works should be extended, as far as possible, from the ordinary revenues. The annual Economic Drain from India should be steadily reduced; and in carrying out these fiscal reforms, representatives of the people of India,-of the taxpayers who are alone interested in Retrenchment in all countries,should be called upon to take their share, and offer their assistance.

k

The Government of a people by itself," wrote John Stuart Mill," has a meaning and a reality, but such a thing as government of one people by another does not, and cannot exist. One people may keep another for its own use, a place to make money in, a human cattle farm for the profits of its own inhabitants." This state

",

ment contains a deep truth. Large masses of men are not ordinarily impelled by a consideration of other peoples' interests. The British voter is as fair-minded as the voter in any other country on earth, but he would not be a British voter, and he would not be human, if he did not ordinarily mind his own interests and secure his own profits. Parliament carries out the mandates of voters; the Indian Secretary, a Member of the British Cabinet, cannot act against the joint wishes of the Cabinet. The Members of his Council are appointed by him, and do not in any sense represent the people of India. The Viceroy of India is under the orders of the Indian Secretary of State; and the Government of India is vested in his Ordinary Council, which, in the words of Sir William Hunter, is an "oligarchy," and does not represent the people. The Members of the GovernorGeneral's Council are generally heads of spending departments, and "the tendency is," as Sir David Barbour said before the Indian Expenditure Commission, "ordinarily for pressure to be put on the Financial Department to incur expenditure. It is practically pressure. The other Departments are always pressing to spend more money: their demands are persistent and continuous." Nowhere in the entire machinery of the Indian Government, from the top to the bottom, is there any influence which makes for Retrenchment, any force which represents the taxpayer. Fiscal reforms are impossible under this Constitution. If Retrenchment is desired, some room must be found, somewhere in the Constitution, to represent the taxpayer's interests.

The Indian Empire will be judged by History as the most superb of human institutions in modern times. But it would be a sad story for future historians to tell that the Empire gave the people of India peace but not prosperity; that the manufacturers lost their industries; that the cultivators were ground down by a heavy and variable taxation which precluded any saving; that the