Harold Cox in To-day October 1887
Source: October 1887, pp. 101-113;
Transcribed: by Ted Crawford
One of the amiable weaknesses of Socialists, a weakness which they share with Manchester Liberals, is a doctrinaire indifference to foreign politics. Out of this indifference Mr. Hyndman, at any rate, has done his best to rouse those who follow him. More than once have the columns of Justice called attention to the danger which the working classes of this country run, in imagining that foreign politics are nothing to them, and Mr. Hyndman has from time to time, if my memory serves me right, taken up the position of the enlightened leader who is willing to advise his followers on matters occurring outside the coast line of Great Britain, as well as on their home policy.
And among such external matters, Mr. Hyndman has apparently selected for his special attention the condition of India and the questions arising out of our connection with that country. As to the line now taken by Justice on Indian questions I must plead ignorance, for I have been out of England for some time and since my return have unfortunately not come across a copy of the organ of the Social Democratic Federation. But I have distinct recollections of Sibylline paragraphs in that journal, vaguely hinting that the writer is in possession of information denied to the government official and the ordinary newspaper man, but of momentous import to the British empire. It was, therefore, with considerable interest that on my recent return from a residence of eighteen months in India, I took up the nicely printed volume that contains Mr. Hyndman’s collected utterances on the condition of our great dependency.
The title, The Bankruptcy of India, is a striking one, and its selection shows considerable ability on the part of the author. These terrible words induced a friend to call my attention to the book, and induced me to borrow it from a library, but they may have induced others to buy it. Possibly the author really thinks that India is on the point of refusing to meet her pecuniary obligations, for this is all that the title can literally mean. But there is certainly no proof of this position in the book, and the statement of it accords strangely with the fact that India 3½ p.c, stock is above par. However, let the title go; Mr. Hyndman is probably less blameable for choosing a sensational catchword than the British public, including myself, for requiring some such trick to attract its attention.
The first disappointment that many people will feel in reading this collection of essays is the author’s acknowledgement in the preface that he has never been to India. For there seems to have been a general idea among people having some knowledge of Mr. Hyndman that his interest in India and his acquaintance with Indian questions was due to a former residence in that country. The point is of less importance than many people imagine. As Mr. Hyndman has shown it is possible for a man to acquire considerable knowledge of Indian matters without leaving England; while on the other hand a man might in certain capacities spend a lifetime in India and return home almost as ignorant of India as when he left. Residence in a country is perhaps more certainly useful to the inquirer in the negative work it does in destroying previous misconceptions, rather than in the positive work of filling the mind with fresh information.
Thus in my own case I left England charged with the notion of the heartrending poverty of the Indian raiyat, and I expected on reaching India to find a peasantry weighed down to the depths of despair by the burden of an impious salt tax: – the gabelle of feudal France – and by heavy land revenue payments exacted with relentless regularity. My first bicycle ride seriously shook this notion. These quiet undemonstrative people that I met walking at an easy pace along the well-metalled road, or under the shade of the trees on either side, might indeed be poor, probably were, but in outward appearance at any rate they were not miserable; they might, indeed be badly fed, but at any rate they were not starving.
Poor is, in fact, a relative term, and can only be interpreted by a knowledge of the circumstances of the case. To mention that the usual wages of an Indian coolie, or labourer, are two annas (nominally 3d.) a day, is to convey absolutely no information as to the condition of the coolie. It is a trite truism that a statement of wages is useless unless accompanied by a statement of prices. But further than this we cannot infer from a mere description of the material condition of an Indian cultivator or an Indian coolie, the view that he himself takes of that condition. In other words, though he may appear poor to us, he may not appear poor to himself.
Thus the majority of the inhabitants of an Indian village are dressed in the simplest of clothing, often nothing more than a narrow loin cloth; their houses are tiny huts, four mud walls, a mud roof, and a mud floor; chairs and tables, and knives and forks are unknown; simple bedsteads of wood and string are indeed common, but poorer peasants have not even this luxury, and must sleep on the bare ground; finally, many of the cultivators and coolies can only afford one meal a day for themselves and their families, and this meal consists only of coarse girdle-cakes, made of cheap grain, perhaps washed down with draughts of warm milk.
All this sounds very terrible to English ears, but it is not really quite so bad as it seems. First, as to clothing. The climate of India, it is hardly necessary to remark, is not the same as that of England. If the poor of necessity wear but little clothing, the rich do the same of choice. A wealthy Hindoo with perhaps a lakh of rupees locked up in his strong box, or invested in government securities, will wear but little more clothing than the peasant, and in some cases it will be of much the same quality. He will live, too, in much the same sort of house, though as a rule it will be larger. He will have a cheap bedstead to sleep upon, and sometimes to sit upon, and if he is a town shopkeeper he may have a ricketty old chair to offer to European customers. He will have also several rugs or mats spread about the floor, but he will eat his food squatting on the floor, and will help himself with his fingers. Like his poorer neighbour, too, he will wash himself beside the public well, or on the steps of the public tank, or by the river side. Finally, many rich a Hindoo will, as a matter of choice, have but one meal a day, though, unless he be a miser, the quality will be better, and the quantity greater, than in the case of the struggling coolie.
Therefore, though there is poverty, and very serious poverty in India, it is quite possible for an enquirer who has not visited the country to exaggerate in his mind both its intensity and the misery caused by it.
It is possible, also, that a traveller making the ordinary three monthly visit in the cool season might be equally misled. At first I was very much impressed by the continual references which my native friends made to the poverty and the growing poverty of India. But when I began to investigate a little and to cross-examine my friends I found that it was possible to attach too much direct importance to their statements.
When for example a Mahommedan gentleman talks of the growing poverty of India, cross-examination will generally elicit the fact that he means growing indebtedness of Mahommedan landowners to Hindoo money-lenders. And further examination will probably lead to the confession that this growing indebtedness is not due to a fall of rents, for they have risen, but to the increased extravagance of the landowner.
On the other hand, when a young Hindoo with an English education talks to you of the terrible poverty of his country, it probably means that he has been reading the Bengali newspaper, and that the Bengali newspaper man has been reading Mr. Hyndman’s book, or some similar production appearing in the London press.
The gravamen, however, of the charge brought by Mr. Hyndman and similar writers against the Indian administration lies not so much in the statement that the people of India are at present poor but in the further assertion that they are growing poorer. This, if true, is a very serious charge indeed, and unfortunately it is extremely difficult to ascertain whether the condition of the peasantry is permanently improving or not. The district officials, to whom I have talked on the subject, all seem to think that the cultivator, i.e., the tenant farmer, is considerably better off than he was, and the improvement is generally attributed to the growth of the export wheat trade. This, however, does not apply to the coolie, the day-labourer, who need not necessarily share in the prosperity of his employer.
On the other hand, rents are known to have risen, and the steadily increasing population presses more and more closely upon the cultivated area. There remains, too, the important question of the fertility of the soil. Year after year, Indian acres are being heavily cropped in order to send wheat to England. No return is made to the soil for this heavy yield, and it is therefore impossible to believe that the old fertility can be maintained. It is, in fact, generally asserted that the soil is considerably less fertile than it was.
Mr. Hyndman very properly calls attention to this evil, or approaching evil. It is difficult, however, to see how the Indian administration is responsible, unless it be for having promoted the railways which have made the export of wheat from the interior possible. It is to be noted that the same phenomenon has occurred in America, and probably in each case the people immediately concerned prefer to have the railways, with the evils they have brought, rather than be without railways.
It might of course be contended, and this is practically Mr. Hyndman’s argument, that were it not for the heavy taxes exacted by the British Government, the Indian raiyat would not be compelled to sell his wheat, but would himself consume it in his own village, instead of the inferior grain he now eats, and thus the elements of fertility extracted with each crop would sooner or later be restored to the soil. In other words, it is asserted that if taxation were reduced, the condition of the cultivator, and through him, of the soil could be improved.
This seems a modest proposition, but it cannot be hastily accepted. To begin with, what are the taxes which the Indian peasant has to pay? The only payments to Government that the cultivator is of necessity compelled to make are two, those on account of Salt Tax, and those on account of Land Revenue. If, further, he goes into court, he has to pay court fees, and if he buys intoxicating liquor, which he rarely does, he has to pay a heavy excise. Also, if he draws water from the canal, he has to pay a water-rate to the canal administration, but this payment at any rate can hardly be classed as a tax.
The most important of his payments is that on account of Land Revenue. With reference to this payment Mr. Hyndman makes some remarks, p.21, et. seq., which are more dogmatic than logical. “And here I may deal with a gross economical error which, to their shame be it said, still finds its way into the most important reports of the very highest officials. It is argued that the land revenue of India is not a tax at all, but that it is merely ‘rent,’ and therefore cannot be reckoned as any real imposition on the people. The Government or the State is the landlord, and in taking the land tax it exacts only what the landlord would take if the State did not! It is difficult to deal seriously with such nonsense as this. As usual, it arises from our determination to apply English views and English theories to a totally different economical and social system. .... Even so, under a capitalist system, let us suppose that the Government calls upon the landlord to pay a large or a small proportion of his rent for the purposes of administration, is not that a tax? Clearly it is. .... Well then, in India, where the ryots, as a rule, grow the crops to supply their families or to exchange merely for such simple articles as they require, the State says such and such a fraction is needed for administration, pay it over to the revenue collector – is not that a tax? The matter is too clear for dispute.”
I had always imagined that land nationalisation and appropriation of rent to the State was one of the subsidiary planks of the Socialist platform. Was I misinformed, or is it that Mr. Hyndman thinks any stone good enough to fling at the Indian Government? It is curious, to say the least of it, that a Socialist of the Iron-Law-of-Wages-School should describe the proposition that a land tax is a deduction from rent, as nonsense. In England there is a small charge on land called the Land Tax. If that were removed by Act of Parliament, who would benefit, the landlord, the tenant, or the labourer? There is another charge called the Tithe. Who again would benefit by its removal? During the re-adjustments necessary it is possible that one or other of the two economically dependent parties might be temporarily benefited, but if competition were free to work the ultimate benefit would inevitably accrue to the landlord.
Why is not this also true in India? Mr. Hyndman gives no reason for treating the two cases as fundamentally different. He seems indeed to ignore the fact that over a very large part of India a zemindar and raiyat system prevails, corresponding in its main features with fidelity to the Irish landlord and tenant system. Does Mr. Hyndman think that an Irish landlord would make a present to his tenant of any public burden remitted from his land? Still less would an Indian zemindar. And what makes the above quotation more utterly inexcusable is that in India the remission of burdens has been tried.
Under the Permanent Settlement of Lord Cornwallis for the Province of Bengal, the zemindars who previously had been merely tax gatherers, retaining a percentage of their gatherings, were made practical freeholders subject to the payment of a quit rent to the Government. The result is – that while the revenue of Bengal has remained stationary – the zemindars of Bengal have waxed fat exceedingly, and the raiyats of Bengal, some sixty millions, living in the most fertile of India’s provinces have become perhaps the poorest of India’s peoples. Happily the Government interfered some years ago on behalf of the cultivator, and passed an act on the model of the Irish Land Act of 1881, to protect the raiyat from the exactions of the zemindar.
In other parts of northern India the wiser plan of settling the revenue for only a period of thirty years has been adopted, thus allowing the State to participate in the rise of rents. But in the interim the increased value of land, owing to increase of population, higher prices, or improved communications is annexed by the landlord, and any permanent remission of. revenue would be at once snapped up by him. An act similar to the Bengal Tenancy Act was last year passed for Oudh, under the name of the Oudh Rent Act. In introducing the bill for this act into the Legislative Council, Mr. Quinton said, “I may add that there was general testimony to the fact that, rents as a rule, were enhanced more with a view to what the tenant could, under a threat of eviction be forced to agree to pay, than from any estimate of the value of the land and its produce.” 
These being the relations between landlord and tenant in Oudh or many parts of it, it is probably a distinct advantage to the tenant that the British Government continues, in spite of Mr. Hyndman, to follow the example of preceding governments from time immemorial and exact land revenue. For pace Mr. Hyndman, it is probably a good deal better for the cultivator that some of his rent should be expended by an organisation called the government in defending him from foreign invasion, in protecting him from the possible violence of his neighbours, and his property from their possible depredations, in building dispensaries, hospitals and schools, in making roads and railways, and organising a postal service, rather than that it should all be squandered by an irresponsible rent-receiver.
Next to the land revenue or land tax – the name makes no difference as long as the conception is clear – the most important payment the Indian peasant has to make is that on account of salt tax. This is really the only tax that necessarily falls on the peasant; the land revenue, if it be a tax, is a tax on the landlord; court fees and stamps and excise do not enter seriously into the life of the ordinary peasant. What then is the salt tax? To begin with we must dismiss from our imagination all pictures of the old French gabelle. The gabelle was let out to tax-farmers, who were empowered to compel people to buy a certain minimum quantity of salt whether they wanted that quantity or less. In India the tax is not farmed, and no one is compelled to buy more than he wants.
The supplies of Indian salt are generally in the hands of the Government, who sell to private traders, reserving to themselves a net profit of two rupees per Maund – 4s. (nominal) per 82 lbs. In the case of Cheshire salt a duty of two rupees per Maund is levied at the port of entry, and distribution of the salt takes place through the ordinary channels of trade. In Bengal and the North West Provinces in 1884, the selling price of salt, with the tax, was 6 to 8 Rs. per Maund, in the Punjab, 5 to 7 Rs., in the Madras Presidency 41/2 to 6 Rs., in the Bombay Presidency, 5 to 61/2 Rs.. Thus taking 6 Rs., as an average, we see that the Government tax represents a duty of 50 per cent. on the untaxed price, or in other words the price to the consumer is enhanced 50 per cent. The duty on tea in England, calculated in the same way, enhances the prices of tea to the consumer between 25 per cent. and 50 per cent.; the duty on tobacco enhances the price Some 250 per cent. In all three cases the enhancement is really higher than it appears, for the retail trader must also make a profit on what he has paid for duty.
So much for the rate of the salt tax, next as to the amount falling on each individual. The gross salt revenue from all sources for the whole of British India was in the year ending March 31st, 1885, Rx 6,507,236. Part of this tax would be paid by the inhabitants of Native States, but for simplicity we will suppose that it is all paid by the 198,000,000 British Indian subjects. On this supposition the salt tax is equivalent to a poll tax of a little over five annas – say sixpence – a head per annum. Or supposing a labourer’s family to consist of five persons and the labourer to earn £5 a year, the salt tax will represent to him an income tax of sixpence in the pound. This is no doubt a heavy tax on such a low income, and it would be well if it could be further reduced. But it must be remembered that it is practically the only tax the raiyat is compelled to pay, and the figures hardly justify the scathing denunciations of the tax by some English writers.
One of the points on which Mr. Hyndman constantly and angrily dwells is the government policy of irrigation works. If he had been in India he would have discovered that canals have brought in their train certain unanticipated evils which cause some people to doubt whether they have been a net gain to the country or not. But as he has not been in India he contents himself with making mis-statements as to the financial results achieved. Thus on page 66, “in spite of cultivators having in many cases been forced to take and pay for water which they do not want, there is a dead loss on the working.”
Here are two important statements for which no authority is given. With regard to the first I can only say that it is grossly improbable. The cultivators are only too willing to take the water, and the canal officers complain that they use too much. Hence follows one of the evils alluded to above, namely the saturation and consequent deterioration of the land. With regard to the second statement it is disproved by figures.
The total capital expended on irrigation works up to the end of the financial year, 1884-5 was Rx 23,122,591, the gross revenue for the financial year ending March 31st, 1885, was Rx 1,540,844, the working expenses were Rx 571,423  leaving a net revenue of Rx 969,421, and thus showing a profit of slightly over 4 per cent. on the total outlay. If we bear in mind that many of these canals were started simply to protect certain districts from famine and without any hope of profit, that the work done upon them is thoroughly solid and built to last, and finally that the capital account is swollen by several undertakings not yet opened, it will be seen that there is absolutely no justification for Mr. Hyndman’s statement that “there is a dead loss on the working.”
Still more unfortunate has Mr. Hyndman been in his quotations of figures. On page 86 and again on page 87 he quotes the population of India at 190,000,000 people;  but on page 180 he says “the total population of British India by the census of 1881 is put at 224,000,000.” Where did Mr. Hyndman get his figures from? In the Statesman’s Year Book the total population of British India, according to the census of 1881, is stated at 201,790,000; in the Statistical Abstract, it is stated at 198,790,000. There is a curious discrepancy here, of which let Mr. Hyndman have the full benefit, as tending to justify his much larger discrepancies. Again on page 180, Mr. Hyndman states the cultivated acreage of British India at 148,992,000 acres, but according to the Statesman’s Year Book the cultivated acreage is 181,816,000 acres. These errors are not essential though it sounds rather better to say (page 193) “224,000,000 people subsisting on the produce of 148,000,000 acres” than to say, “198,000,000 people subsisting on the produce of 181,000,000 acres.” Still the error may be accidental.
There is one case in the book of a somewhat similar kind which is obviously a case of real carelessness. On page 156 Mr. Hyndman says, “Close on £75,000,000 taken in one form or another for state purposes from a people whose total gross income is put at £300,000,000 on a fair, and at £400,000,000 on an optimist calculation, is in itself a statement sufficiently startling to arrest the attention of all save those who deliberately refuse to understand.” It is. The sum of £75,000,000 was approximately the whole revenue of account for the year ending March 31st, 1886, that is to say it included not only the sums raised by taxation, but also the post-office and railway accounts, and the various adjustments between different government departments, the tribute from native states and finally the immense sum raised by the sale of opium abroad, and the revenue of a million sterling raised by the sale of timber from state forests.
Making these deductions we find that the total revenue raised by taxation, including Land Revenue, was only £42,000,000.
Now, Mr. Hyndman knew this, for on pp. 160,161, where he requires his figures for a different purpose, he says, “It is still more clear now than it was six years ago that India cannot afford such a frightfully extravagant system of government as that which pays away for military services and civil salaries, £24,000,000 out of a total net revenue of £40,000,000.” Where he gets either of these two latter figures from I cannot discover, but it doesn’t matter much. As I said just now, this is obviously a case of real carelessness. The real carelessness consists in placing these statements only five pages apart. The ordinary memory can bridge that interval.
Page 161 seems to be an unfortunate one for Mr. Hyndman. A few lines lower down he says, “The increase of the total debt to £250,000,000, of which not a tenth is held by natives, should alone check the exuberance of Anglo-Indian apologists.” There are two mis-statements in this sentence. In 1885 the total debt of India of all kinds was £173,000,000, of which £104,000,000 was held in India, and £69,000,000 in England. Therefore, if only a tenth of the debt of £173,000,000 is held by natives of India, Anglo-Indians must hold the remaining £87,000,000. No wonder they are exuberant.
These quotations, of course, do not cover the whole ground of Mr. Hyndman’s book. Much of what he has written is quite true, and many of his suggestions, though not new, are excellent. The two following paragraphs pp.151, 152, seem to summarise Mr. Hyndman’s general view of our position in India:-
“The drawbacks to our rule since the Mutiny are only too apparent, their effects only too grievous. Yet all these can – all these must be – remedied. The alternative – what would almost certainly occur if we were to leave India before we had finished the task of remedying our blunder, and re-organising a country which, under good administration, would be one of the richest and most flourishing portions of the earth – is not pleasant to contemplate. Natives of India, broken up as are into many races and religions, would never be content to settle down, each to the peaceful management of their own. We have enforced peace, order, general security, but we have not yet built up – have not even tried to build up – any native system fit to take our place. What then would ensue? A savage contest between Mahommedan and Mahratta, Sikh and Pathan for the supremacy of the country. Our controlling influence removed, all the elements of disorder would burst forth and have free play. Railways would be torn up, tanks broached, cities sacked, Nepaulese and other hill tribes would descend again into the plains, and the condition of India in this nineteenth century of ours would be worse than if we had never entered it.
For this intestine strife would not be the end: other European States would take advantage of all the turmoil to thrust their yoke upon the conflicting natives, and to renew in a yet sterner shape the mischievous system from which we, at least, should be willing to set it free.
The last chapter of Mr. Hyndman’s book is devoted to considering the effect on India of the depreciation of silver. The author evidently recognises the difficulty of the question as well as its enormous importance to India, and cautiously expresses himself in favour of bimetallism. If the whole book had only been conceived in the same spirit of caution and modesty as this chapter, it would have been instructive to the English public and stimulating to Anglo-Indians. As it is, every reader who has any knowledge of India must feel that the author has set himself, as an advocate, to make out a case against the Indian Administration, and that the occasional scraps of praise thrown in are but intended to give piquancy to his criticisms. It is a pity that the book should have been written, for such an attitude as this inevitably damages the writer’s cause.
And Mr. Hyndman could hardly have selected a more worthy object than that of calling the attention of the English public to the fears and hopes of the Indian raiyat. We, the English public, are ultimately responsible for the prosperity of India. It is true that we have delegated our immediate responsibility to a body of able administrators, who are bound by their duty to do their best for the people they govern. It is true further that these men, though they are called Anglo-Indians, are still Englishmen, and are ultimately guided by the principles they have learnt at home. But no one can deny that an official body, however good, is always bettered by having occasionally to run the gauntlet of public criticism.
In order that the English public may be in a position to bring such criticism to bear with effect on the Indian administration, it is necessary; first, that the latent interest of the English public in Indian questions should be thoroughly aroused; secondly, that the information provided for it should be accurate. Perhaps Mr. Hyndman only thought of the first of these points, for about the second he is apparently quite indifferent.
1. The Bankruptcy of India, by H.M. Hyndman, Swan, Sonnenshein 1886.
2. The word lakh. means 100,000; crore means 10,000,000. They are useful words, which are wanting in English
3. I do not mean to imply by these paragraphs, that no native informants are to be trusted on Indian questions. There are, of course, many Indians who have an intimate acquaintance not only with matters affecting their own caste-fellows and co-religionists, but also with Indian people outside those circles. But, as a rule, I would sooner go for information about the condition of the peasantry to an English official, who has spent an important part of his life in district work, than to a Bengali or Parsee gentleman who, however freely he may talk about his country, has possibly not been outside of Calcutta or Bombay except to visit England.
4. These remarks are intended only to apply to the North West Provinces of India. They are obviously inapplicable to parts of India where a different land system prevails.
5. Supplement to the Gazette of India, 1886, p.228.
6. The following anecdote is illustrative of this subject: I was talking to a native barrister, who is also a large landowner, and asked him quite without arrière pensée, whether rents had risen in his part of the country. For some reason or other he rather wriggled at the question, but finally blurted out – Well, of course, if the Government keeps on imposing new taxation, rents must rise. But, I replied, the only new tax imposed for a long time is the Income Tax of last year and that is not chargeable on any incomes derivable from land. No, that’s true enough, he said, but you see, I for example have to pay Income Tax on my professional income as a barrister, and of course it is quite natural that I should make my tenants pay it back to me, (the italics are mine), If this gentlemen goes to England again and is lucky enough to meet Mr. Hyndman I have no doubt that he will pose as a devoted patriot and produce plenty of “facts” illustrative of the tyranny and extortion of the British Government.
7. Statistical Abstract for British India, p.279.
8. Id. p.67. By Rx. is meant tens of rupees. The ratio of the rupee to the sovereign varies according to the rate of exchange. At present £1 = Rs. 14 above or Rx.1 is about a third less than £1.
13. Financial Statement for 1887-88, as published in the Pioneer of March 29th, 1887.
Net Revenue in tens of rupees after deducting Refunds and Drawbacks, but including charges in respect of collection. Accounts 1885-86.
|Tributes from Native States||689,575|
To get at the revenue raised by taxation in British India, deduct from this total the revenue due to Opium, Forest and Tributes.
14. Stat. Abst., p.77.
15. According to the census of 1881 the number of British-born subjects in the whole of India was 89,798, of these 77,188 were males, of these males 4,043 were under 20 years of age. Of the remaining 73,145, the head Army accounts for 55,000, leaving some 18,000 to be accounted for – Agriculturists, Barristers, Brokers, Clerks, Artisans, Planters, Naval Men, Sailors, Domestic Servants, Firemen, Engine-drivers, Clergymen, Merchants, Missionaries, Police, Railway Servants and Labourers, Surgeons, Tailors, Teachers and – the CIVILIAN VAMPIRE. – See Stat. Abst., pp.46-49.
Besides British-born subjects there are other Europeans in India. and also Eurasians (half-castes). Thus: British-born subjects 89,798; other Europeans 52,812; Eurasians 62,084; Total 204,694· – Stat. Abst., p.33.