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is one of the best manures that can be used ; and if the seeds had been used in India and the oils exported, an ample supply of manure would have been available for the purposes of cultivation. To export the entire seed is, in the words of Dr. Voelcker, “ to export the soil's fertility.”1

The indigo and tea exported were mainly grown and prepared by British capital and by Indian labour. The profits of the capital went to the shareholders in England; the wages of labour remained with the people of India. The many acts of coercion and oppression, by which an unwilling peasantry was forced to grow indigo by planters in Bengal, led at last to a serious disturbance and rioting in 1860. Dina Bandhu Mitra, an Indian writer, exposed the oppression in a drama of remarkable power; and the Rev. James Long translated it into English, for which public-spirited act he was fined and imprisoned by the High Court of Calcutta. The Hon. Ashley Eden, afterwards Lieutenant-Governor of Bengal, supported the cause of the oppressed cultivators; and an inquiry made by a Commission disclosed the many evils of the system. The question came up through Lord Canning to Sir Charles Wood, then Secretary of State for India, and that strong and upright administrator exerted himself to remove the evils which had stained the history of this industry. Large classes of the Bengal cultivators freed themselves, and refused to grow indigo under compulsion. The figures given in the table above will show that the export of indigo steadily went down between 1859 and 1862, and that it was not till 1869 that it showed indications again of a steady rise. A different cause the invention of artificial indigo-finally ruined this industry in India at the close of the century.

On the other hand the export of tea showed no fluctuations, but a steady and rapid rise—the export increased fortyfold in nineteen years, from £60,000 in 1858–59, to over 2} millions in 1876–77. The rise was continuous

1 Dr. Voelcker’s Report on Indian Agriculture.

and uninterrupted—every year within this period ended in a larger export than the preceding year. Many wild wastes in hills and valleys have been thus converted into gardens, and hundreds of thousands of poor people have found employment in these gardens. But a dark stain is cast on this industry by what is known as the “slave-law” of India. Ignorant men and women, once induced to sign a contract, are forced to work in the gardens of Assam during the term indicated in the contract. They are arrested, punished, and restored to their masters if they attempt to run away; and they are tied to their work under penal laws such as govern no other form of labour in India. Hateful cases of fraud, coercion, and kidnapping, for securing these labourers, have been revealed in the criminal courts of Bengal, and occasional acts of outrage on the men and women thus recruited have stained the history of tea-gardens in Assam. Responsible and high administrators have desired a repeal of the penal laws, and have recommended that the tea-gardens should obtain workers from the teeming labour markets of India under the ordinary laws of demand and supply. But the influence of capitalists is strong; and no Indian Secretary of State or Indian Viceroy has yet ventured to repeal these penal laws, and to abolish the system of semi-slavery which still exists in India.


RAILwAY operations were commenced in India under an arrangement, calculated to lead to extravagance, and not calculated to secure the comfort of passengers. Private companies working under a State guarantee of profits at 5 per cent. or 4% per cent. on the outlay, were not likely to observe economy in the outlay, or to seek the convenience of travellers. If there was extravagance and waste in construction, the shareholders nevertheless got their guaranteed profit on all the money that was spent, wisely or unwisely. If traffic decreased and the earnings fell short of the guaranteed rate, the difference was made good from the revenues of India, i.e. from taxes paid by the people. The experience of twenty years showed that these apprehensions were not unfounded. There was an extravagance in the construction of lines, and a disregard for the comfort of travellers, perhaps unexampled in the history of railway enterprise in any other country. And these facts were proved by witnesses of the highest rank and position, examined by the Parliamentary Committees of 1871, 1872, 1873, and 1874, of which we have spoken in the last chapter. Juland Danvers and William Thornton, who were examined together in March 1872, were, from their position, the most important witnesses on the subject of Indian railways. Danvers was the Government Director of Indian Railways; and, while he admitted the extravagance and waste which had proceeded from the guarantee system, he nevertheless denied that “any other system would have the system of railways that has been carried out in India.” Thornton was precisely of the contrary opinion, and held that “the guarantee system has not served any purpose whatsoever which might not have been better served without it.” 1

enabled the Government at the time to have constructed

Speaking at a subsequent examination, Thornton said: “I do believe that unguaranteed capital would have gone into India for the construction of railways, had it not been for the guarantee. Considering how this country is always growing in wealth, and what an immense amount of capital is seeking investment which it cannot find in England, and goes to South America and other countries abroad, I cannot conceive that it would persistently have neglected India. I conceive that, as a result of the capital going to India and not being guaranteed—and it being known that if the investors made great mistakes, they would have to take the consequence of those mistakes very much greater care and very much greater economy would have been adopted in the construction of the railways.” “But,” said Thornton, “when once Companies had been guaranteed, then there was no chance of unguaranteed Companies coming forward.” 2

It is difficult to believe, but nevertheless it is true, that the contracts were so hastily and carelessly drawn up, that they afforded no protection to the Government or to the Indian revenues on important points. “I think,” said Thornton, “that the contracts are a perfect disgrace to whoever drew them up, for they contradict themselves two or three times in the course of their several clauses, and they are seldom appealed to for the protection of Government interests without turning out to be practically worthless for that purpose.” “This is the necessary result of the way in which they are drawn up that, a railway having been commenced on the understanding that a certain guarantee would be given by the Government whatever

| Report of 1872 ; Questions 1863 and 1864.

2 Ibid.; Questions 3030 and 3031.

the railway might cost, the Government is practically bound to continue the guarantee of interest upon the expenditure. Therefore, of course, the undertakers of the railway, the Company, are deprived of one of the great inducements to economy; they know that whatever blunders they make, those blunders will not prevent their getting full current interest on their expenditure."1

Lieutenant-Colonel Chesney, who had been auditor of railway accounts for six years, and was afterwards President of the newly established Cooper's Hill Engineering College, testified to the costliness and the carelessness of the work done under the guarantee system. “Railways,he said, “ began in India in the year 1848, when the first staff of engineers were sent out; and I need hardly say that in those days engineers in England were not accustomed to make economy their first consideration. These gentlemen were sent out to make the railways, and there was a kind of understanding that they were not to be controlled very closely. . . . Then, too, the system of audit was extremely imperfect; it was what is called technically a post audit-nothing was known of the money expended till the accounts were rendered. The result of the system was that on one railway, the East India Railway, four millions sterling out of twenty millions had been disallowed from the capital account. The only thing to be done, however, under those circumstances, was to allow it, and bring it all into the capital account again, because, under the contract as it was worded, it was quite impossible to disallow it finally, and it was quite understood that whatever was spent must be eventually passed.” 2

Higher officials than Colonel Chesney spoke of the extravagance of the railway operations in India under the guarantee system. The Right Hon. William N. Massey, who had been Finance Minister of India under Lawrence and Mayo, said: “The East India Company cost far more,

1 Report of 1872; Questions 1856 and 1857. 2 Ibid. ; Question 2623.

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