Hyndman October 1878

Bankruptcy of India I


Source: Nineteenth Century, October 1878, pp. 585-608;
Transcribed: by Ted Crawford.


Many circumstances have combined of late years to direct public attention to the affairs of our Indian Empire. Since 1874 the Bengal famine, the visit of the Prince of Wales, the proclamation of the Queen as Empress at Delhi, the frightful dearth, far exceeding both in extent and intensity that of Bengal, which has for more than two years afflicted Madras and Bombay, the ordering of the Indian contingent to Malta, and now the Mission of Sir Neville Chamberlain to the Ameer of Affghanistan, have each and all had the effect of keep India before the minds of the English people. The movement of the Indian troops at the crisis of the Eastern difficulty has, however served to manifest more clearly than anything else the intimate connection which now subsists between ourselves and our greatest dependency. Henceforth England and India are one for purposes of offensive or defensive warfare, and are definitely leagued together against all possible antagonists, whether on this or the other side of the Suez Canal.

Lord Beaconsfield, by thus calling in Asia to redress the balance of military power in Europe, has thrown into the strongest relief the direct responsibility which rests upon Englishmen of all classes for treating India as an integral portion of the Empire. That great and populous country depends absolutely upon us for good government, moderate taxation, and consideration of its general needs. Any blunders which we make affect 190,000,000 fellow-subjects, and are wholly irremediable save by ourselves. Insurrection against unintentional oppression or well-meant injustice is hopeless, and the natives have no appeal to the capacity and openness of mind of us their conquerors to remove any grievances from which they may be suffering. It is fortunate for them that, in spite of other topics, the serious consideration of the relation which England bears to India and the future policy which ought to be pursued should have been forced upon the nation.

India has now been for fully twenty years under the direct administration of the Queen and Parliament. In 1858 the famous proclamation was issued which finally transferred the supreme authority from the old East India Company to the Crown, its only possible substitute. The twenty years which have since passed have been, so far as the internal condition of India is concerned a period of more than Roman peace. The few frontier expeditions rendered necessary by the turbulence of wild tribes beyond our border have been little more than reminders that all Asia does not belong to us. All that could be gained by profound peace ought therefore to have been already secured. Between 1858 and 1878 we have constructed nearly 7,000 miles of railway through the country, connecting all the great cities and provinces; we have carried out vast irrigation works intended to act as a general preventive of the dangerous effects of drought; and we have laid down besides a whole network of ordinary agricultural roads. No effort, indeed, has been spared to develop our great dependency according to the most approved modern methods; and none can doubt that, although too frequently a bad inclination has been shown at home to charge India with expenses which do not rightly fall upon her, there has been a most earnest desire on the part of our officials in that country to raise the condition of the great body of the people, and thus to make them thoroughly contented with our rule. It has been universally felt that we must depend for the stability of our government on the goodwill of the people even more than on our own strength.

We are constantly assured that we have succeeded in this noble attempt; that the natives of India are not only peaceful, but prosperous under the control of England; that in particular the cultivators are, as a class, far richer than they were; that the traders are at least equally flourishing; and that generally the great population of Hindostan, notwithstanding the necessarily increased taxation, due to a superior and more highly organised administration, is in every respect better off than when Lord Canning took up the reins of government.

All this Englishmen as a rule believe, and some of the benefits which we have conferred upon India are so obvious that the rest might not unfairly be taken for granted. Knowing that no harm is meant, it seems impossible that the gravest harm should be done.

But of late more detailed interest is taken in the subject, and it has been noted that almost every Indian official who has left the service and is free from the cares of administration openly gives it as his opinion that taxation in some directions has reached its utmost limit if it be not already too heavy for the simplest well-being of the agricultural classes; that, although there is no evidence to show that the seasons from 1858 to 1878 have been exceptional, the famines in almost every part of India have been unprecedented in number and probably unequalled in severity; that, so far as can be judged, the supply of cattle for agricultural purposes has dwindled considerably as well as gone off in quality; that in many districts the ordinary scale of nourishment is below what it was some years ago, approaching dangerously near the limit of permanent starvation; and that there are not wanting grave indications as to the deterioration of the soil all over India, owing to excessive cropping, want of fallows, and insufficiency of manure. These and other equally serious symptoms have occasioned the gravest uneasiness to those who have observed Lord Northbrook, who was certainly not an economical Viceroy, and who so lately as last year said, with all the authority derived from his high position and wide experience, that he ‘did not think any one who had any knowledge of the subject could doubt that the expenditure on the Indian railways was one of the most profitable investments that ever was made by a great nation,’ and further asserted that ‘in his opinion the finances of India were in a perfectly sound condition’ – even Lord Northbrook, has been compelled by the urgency of the case to protest against our recent financial policy as involving the gravest danger, and to move a resolution to that effect in the House of Lords. Twelve months could not so entirely change the situation in such a matter. The previous circumstances must have been very critical indeed. They both were and are most critical.

For where is the wealth of India? The cultivators clearly have not got it, for they, as is generally admitted, can scarcely support the pressure of the present taxation, and over large tracts are so destitute that they come upon the Government relief works at the very commencement of the slightest scarcity. There are no tombs or temples to point to, as in former ages, on which the savings of the population might have been lavished, nor are public works of general utility now built to any extent by private individuals. Indian investments are almost unknown. Barely a fraction of the enormous debt of 220,000,000 is held by natives; the capital for the railroads and irrigation works has all been borrowed in England; such cotton mills or other machinery as have hitherto been put up in our territory are for the most part dependent on the same source of supply, and the native manufactures, which have been ruined by our cheaper goods, are not yet at any rate replaced by new industries. Indian capital, if it is accumulating, acts very differently from capital elsewhere, seeing that it certainly does not compete to any extent for the most remunerative employment, and thus lower the interest on loans in the great industry of the tillage of the soil.

The main features of this state of things were well put some years ago in an article in the Quarterly Review:— ‘The wealth of native bankers and capitalists is on paper only – -in brief it is lent to their more needy countrymen. It represents the capital required for the agriculture of the millions of small farmers. If we trace downwards and downwards the wealth of the millionaire banker, we shall find it at last in thousands of miserable bullocks and such like investments, the working stock of a numerous but very poor people.’

And even this supply of capital, used at rates varying from 12 to 60 per cent., so far from increasing is getting smaller, though maybe the remainder is concentrated in fewer hands. What effect these rates of interest, in conjunction with our rigid system of law produce upon the cultivators, has lately been shown by Miss Nightingale in this Review. But the causes of all the misery which she has enlarged upon lie far deeper than the village usurer.

The truth is that Indian society as a whole has been frightfully impoverished under our rule, and that the process is going on now at an increasingly rapid rate.

The natives say, and have said for years, that as a whole life has become harder since the English took the country. They are right; it has become harder, and will become harder still if we proceed on our present lines. They say also that the taxation is already crushing. That is true too, and it has become yet more crushing in this present year. We, a business people, are forcing the cultivators to borrow at 12,24, 60 per cent. of their native money-lenders, to build and pay the interest on the cost of vast public works which have never paid nearly 5 per cent.; we overlook entirely the tremendous economical drain which has been going on for a century owing to a foreign rule, and we neglect to consider that, as land gets poorer, the assessment, rises in proportion to the produce. The dangers we have to face are grave indeed; no exaggeration, no forced rhetoric, is needed to increase the weight with which they must press upon us all. There is evidence enough already and to spare, whilst we are staggering on with our committees and commissions to a catastrophe which, unless facts and figures utterly lie, will be unequalled in the history of the world.

When poverty-smitten cultivators in one part of India are taxed – permanently taxed – to support famine-stricken ryots in another, who in their turn are to be taxed again for the like service, the whole country being drained all the while by enormous military charges, home charges, interest, remittances, and loss by exchange, it needs no great economist, no far-seeing statesman to predict that a crash is inevitable. The famines which have been devastating India are in the main financial famines. Men and women cannot get food because they have not been able to save the money to buy it. Yet we are driven, so we say, to tax these people more. The Irish famine was often predicted, and none gave heed. The facts relating to India lie open to all men. It is not yet perhaps too late to deal with them, there is assuredly no time to be lost.

At very threshold of an inquiry into the condition of India, the insuperable difficulty is encountered, that there are scarcely any early official statistics with relation to population and produce. Though we have been the leading power in India for upwards of a hundred years, it is impossible to state with confidence whether the population is increasing, decreasing, or stationary. This by itself is a most serious matter. There is a very general and probably well-founded impression that, owing to the long-continued peace, with early marriages and no infanticide, the people have largely increased numbers under our rule; but there is positively no direct evidence whatever to this effect and many careful observers altogether dispute the assumption. The only trustworthy figures are those of the general census of 1871, and these of course afford no criterion either way. In any case, the position will not be greatly affected if the population is taken as stationary for the whole twenty years, at the amount of that census, namely 190,000,000.

But the next point is in greater confusion still. The facts in relation to agricultural and other produce have never been tabulated with any approach to accuracy. The Statistical Abstract relating to British India, though fairly complete in other respects, gives absolutely nothing under this head, and the statistical departments here and in India seem quite unable to supplement the deficiency, though ready and even anxious to give every information. The almost incalculable importance of this omission will appear in the following pages, but the lack of such official data in the returns of a government which derives nearly one half of its net revenue from the rent or taxation the soil is surely not very creditable to us. In default of these, it becomes necessary to use such outside calculations as have been made from time to time. Now these calculations, worked out at various times by independent authorities, rate the value of the total average gross produce of India during recent years at 300,000,000. Mr Grant Duff, who cannot be accused of having ever erred in taking a too gloomy view of Indian finance, adopted these figures in 1871, as presenting a favourable view of the case. They have been accepted as not widely differing from an accurate estimate by the authorities at Calcutta and generally they may be relied upon as giving a safe, though if anything rather sanguine, estimate of the average gross value of Indian produce, agricultural and manufactured, during the last ten years.

It is not a little remarkable that a singularly able native writer,[1] who has been at the pains to work through all the attainable statistics of production, official and other, has arrived at almost identically the same conclusion by two different routes. He too gives this gross sum of 300,000,000 as a favourable average. The calculations as to the amount and value of produce made by him, though necessarily rough in some respects owing to insufficient data, are so far superior to anything to be found elsewhere that the results arrived at with reference to the year 1867-68 – a good season year, better indeed than any which we have had since – are valuable. The figures are in every instance put in excess of what might be taken as a good result on irrigated and unirrigated land. The following table shows the amount of acreage and return for all India.

 Acreage under cultivationValue of Product
Central Provinces12,378,21516,000,000
Punjab20,957,73536,000,000
North-west Provinces24,177,16140,000,000
Bengalsay 56,000,00096,000,000
Madrassay 18,000,00036,000,000
Bombay19,114,11340,000,000
Oudh7,991,04013,000,000
Total158,618,264277,000,000

Here is an entire agricultural produce of 277,000,000 for 158,618,264 acres, or at the rate of 1.14s. an acre. This seems an absurdly low return to us, but there is no reason to doubt its general correctness. When only 6 per cent. is deducted for seed, a return is left of 260,000,000. In all for this favourable year, adding a liberal amount for manufactures and every contingency, it is impossible to run the total above 340,000,000. Taking account, therefore, of the terribly low returns recently made manifest in Madras, Bombay, and other parts of India, sometimes not exceeding 10s. an acre, we may go back to the figures 300,000,000, with the assurance that the average produce of all India is not being undervalued.

Admitting then this 300,000,000 as a standard, it appears that the gross produce of 190,000,000 people is not worth more than 31s.6d. per head. To compare one country with another in matters of this kind is an altogether fallacious test of prosperity, and no stress whatever ought to be laid on this point; still it is worthy of remark that the average gross produce of the United Kingdom and Ireland is commonly put at not less than 30 a head, and is probably considerably more. What is, however, more to the purpose is how great a proportion of this 31s.6d. is needed to provide the actual necessaries of life at the current rates of the country, or, in other words, what proportion of his own produce can the agricultural labourer or the peasant cultivator retain, exclusive of taxation, for the use of himself and his family.

It must not be overlooked, in considering this, that although 31s.6d. is the average gross income, that sum by no means represents the amount which the bulk of the agricultural and labouring population can possibly secure when the richer and middle classes are provided for at a higher standard. Mr. Robertson has lately told us what luxury the honest pauper ryot of Madras would consider such living as that secured by the criminals in gaol, though this remark is applicable to the people of other countries than India. Madras, however, happens to be the most expensive province in India as regards the cost of feeding prisoners. Taking Bengal then to represent, as it does, the medium cost in the same year as that for which the above calculations are made – a year anterior to the heavy scarcity of 1868-9 in Northern India and the succeeding famines – we find the cost of feeding a prisoner alone comes to 28 rupees, or, making allowance for children that the cost of feeding the population out of gaol on the same scale as in, would be per head 23 rupees or 46s. Deducting what may be pleased for extravagance and bad management, this still leaves a startling deficiency between 31s.6d. and the gaol rate of nourishment, especially when it is considered that as yet no deduction has been made for the sustenance of bullocks, the cost of clothing, repairs to implements, house, &c., or for taxation.

Thus, even if the population engaged in agriculture, labour, and other occupations incidental to cultivation of the soil, amounting altogether to fully 150,000,000 out of 190,000,000, were to retain all their produce, they would not be over-nourished or have much of saving.[2] Provision for a bad season becomes almost, if not quite impossible. Ryots and labourers are living from hand to mouth over the greater part of India, and even so on very insufficient food. It serves to confirm this view that the wages of unskilled labour in districts remote from the railroads are still from 1½d. to 4d. a day for uncertain employment, whilst officials state that prices have risen.

Now the total revenue of India for the year 1876, which was not a famine year, was 51,310,063. The amount of this which is raised by taxation taken absolutely out of the pockets of the people, is as follows:

Land Revenue21,500,000
Excise2,500,000
Salt6,240,000
Stamps2,830,000
Customs2,720,000
Total35,790,000

Or, in round figures, 36,000,000. The remainder is made up from the opium revenue, tributes from native states, departmental payments, & c., which do not come from the people. The opium alone produces over 8,000,000 gross, and more than 6,000,000 net. This 36,000,000 apportioned per head of population is 3s.9½d. each, truly to all appearance a ridiculously small sum. But it reduces the 31s.6d., which, as we have already seen, does not suffice to supply the necessaries of life, to 27s. 9d.; and 3s. 9½d. is on this calculation, a little over 12 per cent. taken from the people for purposes of government. It is often urged that the 21,500,000 of land revenue is really rent, which is taken by the Government instead of by the landowners in other countries, and ought not to be considered as taxation. But rent paid to landowners is a portion of the profit of the soil taken and used on the spot: our rent is used in a very different way; and besides, what has now to be considered is the amount actually taken from the people out of their total small gross produce. It amounts then to 12 per cent., exclusive of the very heavy local cesses and municipal rates, which have been increased 4,000,000 even since 1870, and now amount to 13,000,000, or more than an additional 4 per cent. for the whole of India. It will, therefore, in all likelihood be within the mark if we put the total taxation of India, imperial and provincial, &c., at 16 per cent. on the gross income or 5s. per head of population.

In 1857 the heads of taxation similar to those already given above for 1876 were:

Land Revenue17,720,000
Excise1,000,000
Salt2,680,000
Stamps620,000
Customs2,090,000
Total24,110,000

The amount of Imperial taxation twenty years ago was therefore, in round figures, 24,000,000, or as nearly as possible 28s.6d. per head of population. The increase of 12,000,000 directly levied from the people comes almost entirely out of the pockets of the cultivators; the additional 4,000,000 of the land revenue certainly does, and the greater part of the increase of the salt, stamps, and excise is derived from the same sources.[3] Moreover, as local and municipal cesses were then almost unknown, it will scarcely be an exaggeration to say that the total weight of taxation to-day is as nearly as possible twice what it was twenty years ago, or 50,000,000 to 25,000,000. Thus the extra 28. 6d. of Imperial and local taxation imposed per head in addition since the East India Company gave up the government amounts to 12s. 6d. in a family of five persons, an amount sufficient to make a material difference in the well-being of a whose total gross income on our favourable hypothesis would only reach a little more than 7. 17s.; whilst the Imperial taxation alone at 3s. 9½d. a head amounts to nearly 1 on the same trifling family income.

I again state here what I have stated before, that this taxation so increased is levied from a people who are becoming poorer and poorer, and consequently is becoming more and more crushing in proportion to their means, Wherever the Government examines into the circumstances of a particular district, there this same appalling fact is found, that, so far from becoming richer, the ryots are losing what little means they had, and are falling fast bound into the grip of the usurers. The condition of the ryots in the Deccan as exposed in the report of the commissioners, is not exceptional, though Mr. Stanhope, the Under-Secretary of State for India, says it is.[4] Mr. Robertson vouches for the same state of things in Coimbatore and the Famine Reports on Madras confirm his remarks in regard to many other districts in that province. There are 16,000,000 pauper ryots in Madras alone.

In the North-west Provinces Mr. Halsey says in regard to Cawnpore: ‘I assert that the abject poverty of the average cultivator oft this district is beyond the belief of anyone who has not seen it. He is simply a slave to the soil, to the zemindar, to the usurer, and to the Government ... The normal state of between three-fourths and four-fifths of the cultivators of this district is as I have above shown.’ The total gross produce of the North-west Provinces, as analysed by the native writer whose figures have been quoted already, is hardly 27s. a head. Nor is this all by any means. There is distinct evidence that between 1860-61, the period of the great famine on which Colonel Baird Smith reported, and the present date, the average standard of comfort and amount of income per family has greatly declined. On the very first symptom of scarcity in these provinces lately, thousands immediately died or came upon the hands of the Government. The pauper population here, too, is rivalling in numbers that of Madras.

In the Central Provinces we find precisely the same conditions; and Mr. W.G. Pedder, no alarmist we may be very sure, says: ‘The people, if an almost universal consensus of opinion may be relied on, are rapidly going from bad to worse under our rule. This is a most serious question, and one well deserving the attention of the Government’. Orissa has also been reduced even below what was the case prior to the terrible famine in 1866. What the condition of the people was there at that time may be learned from the evidence of Mr. Geddes before the Indian Finance Committee of the House of Commons, from the report on the famine, and from the correspondence which took place at the time in India and England. The ryots were in the hands of the zemindars and shroffs, and were wholly unable to stand against the effects of one bad season. Orissa has become also greatly poorer owing to that famine and the increased taxation. Some parts of Bengal are better off, but others are worse still.

Thus, wherever officials look into the matter and speak their minds, increasing impoverishment is found. Yet, as Colonel Baird Smith says, ‘In India we all know very well that when the agricultural class is weak the weakness of all the other sections of the community is the inevitable consequence.’ Is it not an extraordinary thing that in the face of such circumstances the Government should persistently refuse to listen to natives? Only three native witnesses have been examined in England in this generation with regard to the affairs of their own country. Two of these predicted precisely what occurred afterwards in one district, and gave a most significant warning of the fate that was likely to befall the whole of our Indian Empire.

But when this terrible state of affairs is insisted upon, and the absolute certainty of a general collapse is spoken of, many smile and point to the vastly increasing trade of British India as quite conclusive of the prosperity of the country. In commenting on the Indian Budget this was the common tone of those who supported the present policy, and it was thought a sufficient answer to warnings of the danger of perpetual and ever increasing deficits to talk of a total export and import trade considerably in excess of 100,000,000. Before dealing with this unfortunate mistake, there is the effect of the drain upon India for payment of the home charges to be taken account of. These amounted in 1857, and generally under the East India Company’s rule, to about 3,000,000, apart from remittances made by private individuals, officers of the army, loot, & c. In the twenty years from 1857 to 1876, India has paid home charges to the amount of 270,000,000 at the very lowest estimate. As this is almost all for unremunerative expenditure in a foreign country, there is room to judge what a drag this alone must have been upon such a poor country. Can we reasonably contend that this expenditure of the proceeds of Indian poverty in the shape of interest, army disbursements, an engineering college, & c., is compensated by the public works and the increased security under our rule? It is to be feared not. At any rate the home charges for 1877-78 amounted to 16,500,000. Thus the depletion is progressing by leaps and bounds. No serious attempt whatever is made to check it, and yet it is scarcely necessary to show that a removal of 16,500,000 in 1877-78 from India to England is not only actually, but proportionately, a much more serious matter than a similar scale of home payments would have been in, say, 1873, seeing that, apart from the depletion of capital involved in the interval, there have been two great famines to impoverish the people.

Returning now to the trade of India, which is supposed to settle the question of her increasing wealth. Her exports are almost exclusively agricultural, and therefore it might be taken for granted that, as she does export agricultural produce so largely, the return from her soil, miserably small as its value appears, is, as with America, Australia, New Zealand, & c., far more than sufficient to support her cultivators, who form with the labourers three-fourths of the population, in at least moderate comfort and to maintain them well nourished. I have ready shown that this is not the case, both a priori from the gross value of the produce as compared with the cost of the simplest necessaries of life, and then from the actual evidence of competent observers in various parts of India as to the almost incredible poverty of the mass of the people. The export, therefore, on which we pride ourselves, does not, so far as can be seen in India, proceed from a well-fed people.

How does it look from England? It is calculated by a gentleman who takes a most sanguine view of our position in India, and who would utterly scout the idea that the British connection as at present managed must prove fatal to that country, that the amount of the annual earnings of Englishmen connected with India which are transmitted home cannot be less than 20,000,000, and he would be inclined to place it at a very much higher figure.’[5] I do not say myself it is so much, but, admitting that even 10,000,000 is so sent home each year, what is the effect of this? The Englishmen who are working in India are remunerated for their labours by a proportion of the produce of the soil of that country. This remuneration is paid to them in money, but the money to pay them with and the money which they send to us here at home to keep their wives and families, to provide for the future, and to increase their pension – which is another remittance already provided for in the home charges so far as officials are concerned – is originally taken, of course, from the pockets of the people whom they govern or whose business they transact. Englishmen do not take up their abode in the country, do not now even live there very long together. In this we differ from all the foreign conquerors who have been in India before us, and the distinction is becoming more marked every year. Soldiers, civilians, engineers, all European agencies of every sort and kind, are not only paid out of the produce of India at a rate from 3 to 8 times – people who have spent their lives in the country say in some cases from 20 to 25 times – as much as would have to be paid to natives, but the greater portion of this produce so paid for work done is sent to be used and expended in a foreign country, and thus India loses every way. This is an ordinary process going on every day.[6]

Now look at the trade figures for 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 has increased from 55,000,000 to 103,000,000, or very nearly doubled. Nothing could be more satisfactory is the general verdict. Trade doubled – capital. Exports 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, & c., and that therefore the value of the imports to balance these exports should be not less than 1,145,000,000. They are 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, & c., engaged on public works. It is 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 show that the actual drain is much greater than this when the opium profits, and the import of treasure to carry on the increased private business (which is also on loan), are taken into the account. The above figures are, however, sufficient to establish the principle for which I contend – that the export trade of India represents a most exhausting 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, exclusive of bullion, were 37,427 ,000, with bullion, nearly 9,000,000. Thus the drain goes on. The return for 1877-8 is only just to hand. Exports, 67,421,000; imports, excluding bullion, 41,500,000l; with bullion, 59,000,000 in round figures.

A further examination of the trade and the conditions under which it is carried on – always bearing in mind that if ever there existed a poor agricultural country in this world, India is that country – tends to remove what little ground for complacency is still left to us. Looking into the list of imports, we find that, with the exception of one large item, the greater portion of the import is for stores, & c., on European and Government account, and is therefore no demand by the population at all. That one large item is, of course, cotton. The import of cotton of various kinds into India in 1857 amounted 6,000,000. Similar imports in 1876 amounted to 19,000,000, a subject doubtless for a good deal of congratulation to us. Whether the gain to India is quite so manifest is another thing. No doubt the cultivators get their scanty clothing cheaper than when they bought the native manufactures; but the destruction of those manufacturing industries, has that been entirely a gain to India? Unquestionably not. India paid to England in 1876 13,000,000 for wages, profit, and freight, which in 1857 she paid to her own countrymen, less the price of the raw cotton; and though the ryot gets his cotton a little cheaper, there is nothing to show that he is any better clothed than he was twenty years ago, or is enabled to spend more upon dress – rather the contrary. Surely this is no evidence then that our trade is benefiting India. The workers in cotton industries whom our goods have displaced have had to seek their living elsewhere. They have not gone into fresh manufacturing industries, that is certain. It is almost beyond question that they and their families have been driven to agriculture, and if the operation of this cause could be traced, I have very little doubt it would be found that here is one great reason for the cultivation of waste lands of which have heard so much. If India profits by the trade, if indeed she be not an enormous and an increasing loser by it, where is the evidence of well-being? To that question we ever return.

‘In the exports of course’ will not perhaps be said quite so confidently as before this inquiry was commenced. When a trade can be shown to have depleted a country to the extent of at least 420,000,000 in twenty years – when it can be shown almost beyond the possibility of question that a poor agricultural population has been driven, with the action of that trade in full work, to cultivate yet poorer soils and to part with its few manufacturing industries – when we are obliged perforce to admit that the bulk of the people have less and less to fall back upon in a scarcity year – then an increasing export of food stuffs or other produce becomes a very sinister symptom. What once more say English officials on the spot? That the cultivators must grow for export, must cultivate what is saleable for money in order to pay their taxes in money, and to satisfy the demands of the native usurers, who besides have, to all intents and purposes, a great proportion of the crops in their hands. The prospect of famine does not check the export, actual famine does not altogether stop it. In Orissa, though famine was seen to be coming upon them in 1865, food stuffs were exported from the province in order to get money to meet the Government demand. During the past year the Northwest Provinces exported grain largely, have been exporting grain up to this very time to Madras and England, though 300,000 people have, according to thoroughly trustworthy testimony, died in those provinces of starvation in the last few months. The first thing to be met is the revenue and local charges, the next the soucar’s usurious interest; provision of food for men and animals comes afterwards.

It should never be left out of mind that in India at this time millions of the ryots are growing wheat, cotton, seeds, and other exhausting crops, and send them away because these alone will enable them to pay their way at all. They are themselves, nevertheless, eating less and less of worse food each year in spite, or rather by reason of the increasing exports. In England, a rich country, we eave money to ‘fructify in the pockets of the people,’ and keep taxation low. In India, a very poor country, we want the money to fructify in the hands of the Government, and keep taxation high. The total export and import trade of India, – and the trade of the native states with a population of 50,000,000 is included in the above returns – amounts, after all, to but 12s. per head of the population. It is not such a foreign trade as this, even assuming the largest rate of profit conceivable, that will restore India to wealth and prosperity. An increased Indian trade is very far indeed, under present circumstances, from being a make-weight against increased Indian taxation.

But still graver features may be noted. There is no reason to suppose that the soil of India is naturally poorer than that of any other land nor is there any obvious cause why the return from the soil should be so low – why, indeed, it should not produce as largely as any other tropical country under good management. The variation of the seasons is more than compensated by the wonderful effect of warmth and sunshine in a good year. There is, however, grave reason to fear that in many districts the soil is being worse cultivated, or is going steadily through a process of deterioration, or sometimes one of these causes and sometimes the other, and not unfrequently both together, are at work. Undoubtedly exhausting crops are being grown to an extent previously unknown. What is taken out of the soil by such crops must be put back into it either by fallows or by skilful rotation of crops, or by an extra supply of manures from some source outside of the particular land. Fallows have almost ceased in India, rotation of crops is at best very imperfect, and the supply of manure from bullocks depastured in waste lands has all but disappeared. Here again the want of trustworthy agricultural statistics is to be deplored. But as to the imperfect cultivation compared with former times the evidence unfortunately seems only too conclusive.

The Indian peasantry depend for the cultivation of their soil upon bullocks. A good supply of good bullocks, other things being equal, means good cultivation; an insufficient supply of inferior bullocks means inferior cultivation, and this invariably. Now there are beyond all question fewer bullocks in India than there were. Lord Lawrence speaking from the result of forty years’ experience in every capacity gives it as his opinion that good cattle for any purpose are much more difficult to come by than they were, and this is the general statement of qualified observers. In one district in Madras which, to all appearance, does not differ from others, tabulated statistics have lately been published, which show clearly owing to the breaking up of pasture, the taking in of waste lands and other causes, the bullocks are fewer and of a far inferior and weaker breed. This process of deterioration is going on all over India, so far as can be judged. Everywhere it is a matter for remark that, whatever drawbacks there may be to native rule in other respects, cattle in the native states are of a far finer quality and more numerous than in British territory. Under our regime all is order and security, more land is tilled, and the people ought to be better off and have, of course, better cattle. But want of capital, absorption of waste land, and the murrains which Lord Lawrence attributes to the excessive price of salt under our system of taxation – a system almost infinitely heavier on this particular item than was ever known under native rule – have gradually lessened the numbers and enfeebled the breed even in good times; whilst the old Hindoo aversion to killing off the old and useless animals remains as strong as ever.

Famines, of course, tell strongly in the same direction. The cattle lost in Orissa were estimated at a value of 1,000,000. The sacrifice in Behar I have not been able to trace, but it must have been considerable. In Madras it is officially calculated that fully 75 per cent. of the non-agricultural cattle have died, and probably not less than 40 per cent. of the agricultural cattle will have shared the same fate. In spite of the most strenuous efforts made by the natives to save them – for on their method of cultivation, deprived of bullocks, sheer starvation stares the ryots in the face – in spite of using the thatch of their poor hovels for fodder, the deaths of cattle in 1876-77 alone, according to the Administrative Report for that year, were 935,000, and as many in the other famine year. The deaths of cattle in the famine-stricken districts of Bombay stand in the same proportion. They are dying fast even now, also in the North-West Provinces, the Southern district of the Punjab and Bengal. This destruction of bullocks has perhaps been almost the most serious result, in the long run, of the six, some reckon eight, great famines which have afflicted India during the last twenty years. Leaving manure entirely out of the question, we here have cultivation carried on by fewer and feebler beasts as well as by poorer and worse-nourished men. Need we look much further to understand how it is that famines are perpetuated under our rule? An impoverished people, an imperfect cultivation by fewer and weaker bullocks on a too often deteriorated soil, increased taxation, and, on the top of all, a drought. Allow this process to go on, the Government paying for the cost of saving the majority alive, and the State itself – which is after all but another name for the organised resources of the people – will rest upon a crowd of half-starved paupers. How will they be able to support one another in time of need?

Here, however, the railways and irrigation works of which we have heard so much, and which have positively given rise to two hostile parties of economical reformers – the railway-builders and the irrigationists – should come in to help us. Names of eloquent advocates of both methods rise unbidden to one’s tongue, and if half we have heard of their value were true all that would have to be done would be to continue borrowing money for the purpose of constructing one or the other, or the two together. This is the opinion of Sir John Strachey, the present Finance Minister, and of the Government of India, as well in England as in India. Public works, made from the proceeds of fresh taxation or fresh loans, are the great official panacea for famine now as heretofore. It is not even yet understood that the only means whereby a nation as a whole can provide against years of scarcity is by laying aside food out of years of plenty, or, which amounts to the same thing, saving the money obtained from the sales of surplus produce in one district or country, if surplus produce there be, to buy the surplus produce of another in case of need. Take reserve either for railway-building, irrigation, or any other purpose and scarcity deepens at once into famine. True, the railways did bring food from the North-West Provinces and the Punjab to Bombay and Madras; but the people had not the money to buy it with when it came. Therefore they starved.

To take nevertheless the cost of the Indian railways and their work. According to Mr. Juland Danvers, the 5,900 miles of guaranteed lines have cost, up to 1877, 95,200,000 on capital account; and the 28,000,000 advanced for guaranteed interest to the 31st of December. We thus arrive at a grand total of over 130,000,000 in figures as the cost of, say, 6,000 miles of railway, or at the rate of 21,000 a mile. 21,000 a mile for railroads in the poorest agricultural country in the world! Even so the value of the land and other government grants is not reckoned. Thus, leaving aside the capital account as purely English, we find that 28,000,000 of money has been spent on these guaranteed railways, which only earned their interest last year for the first time since their construction, because of the enormous transport necessitated by the famine. The State railways, on which 17,000,000 has been spent are in a yet worse case; they do not earn 1 per cent. interest on the money they have cost. Every unfortunate ryot who has had to borrow an additional five or ten or twenty rupees of the native money-lender, at 24, 40, 60 per cent., in order to pay extra taxation, every poor famine-stricken creature whom that small sum might have tided over to a better day, has bitter reason to ask whether this is what Europeans mean by development – whether these are the highest calculations of English finance.

The story of our irrigation works tells nearly the same sad tale. Here again millions have been squandered – squandered needlessly with wholly inadequate results. The only works which have been even partially successful are those which have supplemented or restored old native systems of wells: tanks, and anicuts, or cautiously attempted new works on the same lines. Though the Indian Government has been asked over and over again to give accurate accounts of the returns of these irrigation works, it has never yet done so, and Mr. Stanhope confessed that no accounts could even now be given. According to those appended to the current Return of East India Finance and Revenue Accounts, a sum of 16,000,000 has been spent; and yet, in spite of cultivators having in many instances been forced to take and pay for water which they do not want, there is a dead loss on the working. That the cultivators in the immediate neighbourhood of these irrigation works, or those close to the rail roads, may be benefited by such outlay, is quite possible; but they are so at the expense of the great mass of the people, who have been still further impoverished by the additional taxation necessitated to pay the interest charges on these costly failures.

Irrigation water will not run uphill, nor always be at hand in a year of drought; railways will not put back that money into the pockets of the cultivators which has been drained away from them, or which they have been forced to run into debt for at usurious interest; further borrowing to construct public works which, so far as can be judged now, are likely to turn out no better than their precursors, is most dangerous: in India improvements ought to be made out of savings from a light taxation instead of out of borrowing (which may impose a permanent charge on the country through any miscalculation), or by increasing an already heavy taxation for the like purpose. Lord Salisbury saw all this clearly enough, but unfortunately both for England and for India he had not the courage of his opinions. Speaking at Bradford last year, he, as Secretary of State for India, said: –

We must not look to irrigation as an extensive remedy against famine. If we expend money rashly upon irrigation works which will not pay, and cannot be used by the inhabitants, the interest of that money must be found out of taxes which must in the main be levied on the peasant; and the end would be that in order to save him from famine which comes [upon him individually] once in twenty years, we should crush him under an increased burden of taxes which comes upon him every year .... Now depend upon it the only true remedy against famine and scarcity is the frugality of the people. The people ought in years of plenty to make money enough to lay up against these times of famine, and it is to the improvement of their social and moral condition, it is to this rather than to any great and passionate expenditure on public works, that I should look for a remedy.

How severe a criticism is this speech of Lord Salisbury’s on the policy now definitely adopted by Sir John Strachey and Lord Lytton and sanctioned by the Home Government!

Finance is indeed the key to Indian prosperity – nay, it is the door of the building, or rather the whole house itself. The bearing of what has gone before on the Indian Budget is therefore obvious. We have to deal with an inelastic revenue. The grand total of the actual revenue for 1876-77 is indeed given as 55,995,785 as against 51,310,063 for 1875-76, but this apparent increase is obtained by the addition of certain figures to both sides of the account. The facts of course, are not changed in the least by this process. The revenue for 1877-78 is put at 58,635,472 on the same basis. Now the deficit for 1876-77, including Public Works Extraordinary, now called Productive Public Work Capital Expenditure – works, as we have seen, very far from ‘productive’ hitherto in natural sense, and entailing a loss in working of over 1,100,000 that year – amounted to just 6,000,000; in round figures the deficit for 1877-78 is 8,200,000, and the deficit for 1878-79 is estimated at over

2,000,000. Thus we have here an accumulated deficit in the three years of more than 16,000,000 on a stationary revenue. Strachey, in his Budget statements at Calcutta, reckoned the total cost of the Bengal and Madras famines at 16,000,000, imposing as he said, a permanent extra yearly charge upon India of no less a sum than 640,000.

Now it seems almost incredible that, in the face of this and of the result of public works expenditure up to the present time, the Government in India and at home should positively propose to raise 1,5000,000 additional taxation from the impoverished inhabitants of India, adding to their already crushing impost of 5s. a head on a total gross produce (it is much less this year and last) of 31s.6d. to build yet more public works. Yet so it is.

As to the extent to which this terrible mania is already carried, be it may be pointed out that, apart from the loss of over 1,100,000 on working expenses and interest in 1876-77 on these ‘productive’ public works already spoken of, there was spent a total amount in that year of no less than 7,300,000 on public works ordinary and extraordinary; or, adding the 1,100,000, an amount of 8,400,000 and more represents the money swept away by this single item in a year of most frightful suffering for millions of the people. The manner in which the additional 1,500,000 is to be obtained is even more objectionable than the purpose to which when raised it is to be applied. It is to be raised from the ryots and small traders in the towns by increased land cesses and a license tax because – but Sir John Strachey must really speak for himself. Hear what he said in his speech at Calcutta on the 27th of December, 1877:—

There is certainly no reason in the condition of the agricultural classes why they should not bear their share of any necessary fresh taxation for the purpose of protecting themselves and the country against famine .... In times of famine no large proportion of these [the upper classes] come upon the relief which the Government has to administer. The poorer field labourers in the villages and the poorer members of the trading and industrial classes in the towns are the first section of the population which suffers; and even when famine is at its height the mass of the people receiving relief are field labourers, petty ryots, and artisans. Very few priests and lawyers and schoolmasters and people with fixed incomes actually demand Government relief, although they may feel sorely the pressure of famine prices. This class with more or less fixed incomes, then, although we cannot relieve it, will have no fresh burdens imposed upon it by the measures which we now desire to take.

That is to say, the only really well-to-do classes in India, the European officials, officers, and professional men, are shielded from any additional taxation, and the wealthy native traders, and merchants and bankers, who alone benefit by the trade of the famines, are lightly taxed, because they never suffer from famine or lose their substance; but the ryots and small hawkers are taxed because they feel the pressure of scarcity immediately. Why, at this rate all the poor-rates in Great Britain would be raised from the agriculture and artisan classes, and they would be taxed an additional amount in an exceptionally bad year. To tax the miserably poor population of India still more at such a time to build more public works when already the peasants are insufficiently fed and are wholly unable to exercise that ‘frugality’ in a year of plenty which, Lord Salisbury rightly urges, is the only remedy for famine – to tax them so, I say, is but to hurry on and render more utterly hopeless that catastrophe which all must be anxious to avert.

In Bombay and Madras the already almost prohibitive salt-tax is raised 40 per cent. A tax on a necessary of life to the people is increased in that ratio at the time of their direst need. There is not an official in these provinces who would affirm that even at the old prices the poorer natives could afford enough of this absolute necessary. If there is one fact which has been made more clear than another, it is that the salt-tax, as at present levied, is injurious to the health of the people, damaging to their cattle, and that it positively cuts at the root of many essential industries. Sir John Strachey himself spoke last year strongly of the necessity, the pressing necessity, of reducing the salt-tax; this year he raises it to a starving population. But the salt-tax has been lowered in Bengal, which at present, owing to the permanent settlement over a great portion of the province, is comparatively the most prosperous part of India; but the Customs Line has been removed; but no addition has been made to the local cesses in Southern India. This is so, and furthermore, by the obviously too low estimate of the Government of India itself, 1,400,000 people have died from actual starvation in Southern India, more than 50 per cent. of the cattle have perished in many districts, and the bulk of the population, utterly destitute to-day, can, under the most favourable circumstances, hope for no more than the barest subsistence to-morrow. Droughts and scarcities there must ever be, death and disease no government can prevent, but we are aggravating every ill that the flesh is heir to by the policy now in favour in Calcutta and in London.

But the revenue of India itself when collected is subject to such terrible chances, that at all times the closest watching and economy are needed. To say nothing of the opium revenue, which, though more to be relied upon than some think, is not a good item on which base the stability of each successive budget to the amount of at least a net 6,000,000, we have in future to encounter a great and increasing loss by exchange on the home charges to the amount of an estimated 3,000,000 for the year 1878-79. This no one has yet even proposed to deal with. Years hence, perhaps, it will be thought strange that an empire which received 50,000,000 of its revenue in silver should have been anxious and even eager to secure the demonetisation of that metal. But we must take the facts as they are, and they are awkward enough. For the total net revenue of India to supply all needs, when cost of collection is deducted, is placed by Sir John Strachey himself at a sum not exceeding 40,000,000. Out of this the army, including marine and incidental charges for military purposes, must be taken to cost little less than 19,000,000. The interest on the debt is 5,400,000. Absentee allowances, superannuation payments, and political agencies amount to over 2,500,000, and when to these items is added the loss by exchange and loss on ‘productive works,’ it is manifest that the 40,000,000 leaves but little for the administration – without any talk of the improvement – of 190,000,000 people. The cost of the army is so enormous that this disbursement alone is deserving of special notice. Lord Canning, speaking after the Mutiny, said that the whole military charges for India ought not to exceed 12,500,000; and there can be little doubt that if the old Indian army were re-established as a portion of the Imperial forces and proper reforms introduced in the service, this sum would fully suffice to support at least our present force. As it is, including the cost of military works, &c., the amount falls not far short of the figures named above, of 19,000,000. During the last fifteen years also, the increase in the home military charges alone has been quite alarming. In. 1862-63 the home military charges for 75,899 men serving in India amounted to 2,139,205, or a little more than 28.3s. a head. In 1877-78 the home military charges amounted to no less than 4,168,600, though the numbers have been decreased by 13,000 and the European force is now only 62,652 men. This shows a charge per head of over 66; or more than 2 times the cost in 1863. During the last ten years of the Company’s rule the average recruiting charge was 19.14s.10½. per man; now it is 79.3s.10d. per man, the cost having increased fourfold. The more narrowly the details of these charges are examined into, the more extravagant and unjust do they appear. Such reckless expenditure soon necessitates fresh loans from England. Further borrowing, however, will soon become impossible at present rates. Investors must soon appreciate the real state of affairs – the sooner the better for India. The debt at present is over 127,000,000, putting aside the guaranteed railways; and still we borrow on.[7]

National bankruptcy is a very ugly phrase, but it surely rests with those who impose extra taxation in a famine year to show that the fast increasing uneasiness is unfounded, and that their figures, which show how near the final collapse of the Indian finances under present management must really be, are utterly fallacious. During the last twenty years also we have had perfect peace. How long may that continue? Yet even with this profound peace sixteen out of the last twenty years have been years of deficit, and in the meantime Imperial and local taxation has been doubled.

It is needless to go further. I can only repeat that the natives of India are growing poorer and poorer; that taxation is not only actually but relatively far heavier; that each successive scarcity widens the area of impoverishment and renders famines more frequent; that most of the trade is but an index to the crushing over-taxation of the people; that a highly organised foreign rule constitutes by itself a most terrible drain upon the country; and that all the railways and irrigation works on the planet if concentrated in India at the cost of the peasantry, would but serve to hasten the inevitable catastrophe. The remedies are at hand but it will take us five-and-twenty years at least of continuous and unremitting statesmanship to repair the blunders we have committed. Reduced expenditure on the army, suspension of public works, the steady substitution of natives for Europeans in the government and administration, a really light permanent settlement in every part of India, and lowering of taxation of every description at any rate for the present – these are a few of the steps which have become absolutely essential.[8]

From the narrowest view of self-interest this is to our advantage. All agree that, so long as the agricultural class is well affected to us, they will fight on our side, and we can easily maintain our rule; but let them become discontented, as they are becoming discontented now, and no man can tell what it would cost us in men and money to hold the country.[9] To say that this or that reform cannot be carried out, means simply that we prefer to postpone the day of reckoning, which will be all the more terrible for India and for us when it comes.

Furthermore, the ryots of India would be our best customers if only we could leave the most thrifty, patient, hard-working peasantry in the world the means to improve their own condition. Their demand now for our manufactured goods is at the outside 2s.6d. a head, though, to secure this, we have displaced nearly all the native industries. A demand of even 1 a head for English goods would still be trifling by the side of that of the population of our great free-governed colonies, but would secure us here alone an active export of 190,000,000 a year. There would be no need to grumble about fresh markets then. Our best markets are with our own people, and their continuous impoverishment must tell even on their present insignificant purchases. Already we seem to have reached the extreme limit of their buying capacity, and the only encouraging feature for India is that she seems once more on the road to supplying her own, or a portion of her own, necessities. On the grounds, therefore, both of national security and national wealth, the present extravagant and dangerous, though doubtless thoroughly well-meaning, policy must be abandoned.

Here, if anywhere, it behoves us to rise to the level of our vast responsibilities. A true Imperial policy – which I for one cordially welcome – means a constant endeavour on the part of the whole nation to secure liberality, welfare, and contentment in every part of the British dominions, to knit together the various communities under our flag, and to exercise far and wide that continuous influence in favour of the principles that have made the greatness of this country – justice, freedom, and respect for each one’s rights – which the steadfast integrity and dauntless courage of our fathers have happily secured for us, their children. This matter of the impoverishment and decay of India is no affair of this party or of that, of regard for one man or for the other. It is a question which deeply concerns every Englishman among us, and can only be adequately handled by the strenuous exertions of all. An empire may as easily be lost by economical blundering and well-meant bigotry as by imbecility or cowardice. We have entered finally upon a wide-reaching Imperialism, but its success or its hopeless failure depends wholly on ourselves. The situation in India is one which must be dealt with immediately, and yet upon sound principles which will stand the test of years. Continuity of statesmanship – statesmanship of the highest order, which grasps details, but can safely apply great principles – this, if ever, is called for at this most critical juncture, The Secretary of State for India holds an office where ability and resolution are absolutely necessary: he need not fear to deal with the circumstances arising out of this great emergency; for Englishmen, noble and generous throughout their history, were never more noble or more generous than they are to-day. The widest publicity, the most implicit confidence in the people, would but serve to strengthen the hands of the Minister who attempted courageously to discharge so honourable a duty; for it is in the seasons of real difficulty and danger that his countrymen have always shown the highest capacity, and have most earnestly supported those strive to avert the disasters which may threaten the community.

H.M. Hyndman


1. Mr. Dadabhai Naoroji

2. The mass of the people of India are so miserably poor that they have barely the means of subsistence; it is as much as a man can do to feed his family or to half feed them, let alone spending money on what you would call luxuries or conveniences. Lord Lawrence.

3. It will be observed that the chief weight of the taxation falls on the cultivators in any case. The whole land revenue is raised from them, 21,500,000, and they certainly pay their full proportion of other taxes. Yet they are only three-fourths of the population.

4. ‘The Calcutta Missionary Conference dwelt on the miserable abject condition Bengal ryots, and there is evidence that they suffer many things and are often absolute necessaries. As a rule they are comparatively better off in Eastern Bengal and worse off in the west; the rates of wages being higher in the east, and food cheaper while rents are screwed up to rack-rent pitch and light in comparison to the productiveness of the soil, and the remunerative character of their special crop – jute. In the west and in Behar and Orissa many labourers supplement home means by going to other parts of the country for temporary service and labour. In Bardwar the people are poorer than elsewhere, and the people of Assam, judged by an Indian standard, are very well off.

‘In the North-West Provinces the wages of agricultural labour have hardly varied at all since the early part of this century; and after the payment of the rent the margin left for the cultivator’s subsistence is less than the value of the labour he has expended on his land. The wages of a labourer in the ploughing season furnish him fifty ounces of behjur, a compound of barley and peas, of which about forty-six ounces are nutritious. In the digging and weeding season he only gets thirty-four ounces, but sometimes his wife earns enough for twenty-five ounces more. He only tastes salt two or three times a week. Many live on a coarse grain called kesari, which is most unwholesome, and produces loin palsy. The small tenant farmers only get the same amount of behjur, although they can have salt daily. This extreme poverty among the agricultural population is one of the reasons which makes any improvement in farming and cultivation so difficult.’ – Moral and Material Progress of India 1872-73. Read also the sentences which immediately follow with relation to wages and prices of food in other parts of India.

A subject which has attracted much serious attention in connection with the administration of the land is the alleged indebtedness of the cultivating classes, with the result that their ancestral estates are gradually passing out of their hands through heavy mortgages and compulsory sales. This is reported to be the case in the Bombay Presidency, the Punjab, North-West Provinces, Oude, and Central Provinces’ – Moral and Material Progress of India, 1873-74. Why ‘alleged’? These are official reports stating definite facts in relation to a very wide extent of country, containing tens of millions of people. If they are not to be relied upon, what have evidence we got? Natives are not even listened to. See also Moral and Material Progress of India for year 1874-75.

5. Mr. J.M. Maclean, a witness before the Committee of the House of Commons on East Indian Finance, 1873.

6. A single illustration will suffice to show how the whole system of foreign agency works and how absolutely necessary it is to keep it within very moderate limits. An English official in India receives say 3000 a year and saves one-third of his salary. In ten years he will have remitted to England the sum of 10,000 in addition to any pension which he might hereafter be entitled to. A native filling the same post at the same salary would undoubtedly save at least twice as much; but assuming that he saves only 1,000 a year, at the end of ten years he would have l0,000 in his hands for remunerative employment in India; his pension also would be spent in India. Thus the capital of India would be l0,000 larger in the one case than in the other, and the pension would be used to feed Indian mouths instead of foreign ones. One great object, therefore, for the future should be gradually to supplant Europeans by natives, at lower salaries if desired, in all save the very highest posts. These should be used merely for purposes of superintendence, to insure right principles of administration. Steps are being taken to give more employment to natives, but hitherto they have been very hesitating.

7. After the figures which have been given, all can judge for themselves how capable India herself is of spending even 1,000,000 on an Afghan War. The main cost of the coming campaign must be defrayed by England.

8. The reduction of the armies of the native princes is good policy if it can be arranged in a friendly manner. Otherwise, our European army may have to be increased instead of diminished. This is one of the matters that ought to have been settled at the Delhi Assembly.

9. ‘We are an alien power ruling at an enormous disadvantage, principally by force of character and administrative skill. As long as the natives of Hindustan believe that whatever power might follow us, Native or European, will tax them more heavily than we do, we are safe. Should the other feeling prevail, we shall lose our hold on the country.’ – Hunter’s Life of Lord Mayo, vol. ii. p.286.