J. D. (John David) Rees.

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Reforms which will probably sooner or later come
to pass are these: Intermarriage between subdivi-
sions of castes, the widening of the circle from which
husbands and wives may be taken, voluntary renun-
ciation of the habit of marrying infants and of
children unable to earn the means of subsistence,
reduction of expenses in the celebration of cere-
monies and the introduction of some discrimination
into the dispensation of charity. But without any of
the reforms the Hindoo system is one of which there
is little cause to be ashamed.



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CHAPTER XI

ECONOMIC POLICY

ONE cause of the unrest is the belief strongly
held by three-fourths of the educated
classes that the economic policy of the
Indian Government is radically unsound and grossly
unfair to India. They read and quote Bradlaugh,
Digby, and Naoroji, and maintain that the so-called
"drain" to England, and other results of our eco-
nomic policy, are the real causes of the poverty of the
people, of famine, and indirectly of plague. Here
again it is eminently desirable that some authorita-
tive pronouncement of the economic policy of the
Government of India should be available, a memo-
randum showing what it is and what are its results,
but none such exists, and even those who desire light
know not in what direction to seek it. Sir William
Hunter, as usual, is pressed into the service of the
detractors of British government in India. Mr.
O'Donnell circulated in the House of Commons on
the occasion of the last Budget debate a memoran-
dum called "Rack Taxing in Rural India," in which
he gave a sensational quotation from Hunter to the
effect that the "Government assessment does not
leave enough food to the cultivator to support him-

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self and his family throughout the year." If Hunter
had said this it would not have much mattered, for
probably there has never been an Indian civil ser-
vant who spent so much time in England and in
headquarter offices, and so little in rural India, as
he did, but as a fact he said nothing of the kind. He
was writing of a bill relating to four districts only of
one Presidency, and of these he said: "The funda-
mental difficulty of bringing relief to the Deccan
peasantry, as stated by the special judge entrusted with
this task, is therefore," and then follow the words
Mr. O'Donnell attributes to him, and he goes on to
say: "// the Government assessment reduces the
cultivator to this condition," and so on. Such is
quotation for the purpose of discrediting the British
Government.

The use made of what Sir W. Hunter wrote recalls
another and far more serious misrepresentation of
an able and humane minute penned by Lord Salis-
bury when Secretary of State for India. Who has
not read in the works of the anti-British writers,
"India must be bled," the odious admission, as it is
called, of one of Britain's greatest statesmen? Now
Lord Salisbury in 1875 was very anxious to relieve
the Indian cultivator as far as he could, and in
a minute on the land-tax wrote: "So far as it is
possible to change the Indian fiscal system, it is
desirable that the cultivator should pay a smaller
proportion of the whole national charge. It is not a
thrifty policy to draw the mass of revenue from
rural districts, where capital is scarce, sparing the

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ECONOMIC POLICY

towns, where it is often redundant. As India must be
bled, the lancet should be directed to the parts where
the blood is congested or sufficient, not to those
which are already feeble from want of it."

Of these humane, sensible, and statesmanlike
words Mr. Dadabhai Naoroji makes use of four,
"India must be bled." Then considering for a mo-
ment Mr. Naoroji's writings, which are regarded as
a kind of gospel by young Bengal, his "Poverty of
India" is a fearsome work of nearly 700 pages, writ-
ten, as the Indians say, without bundobast. True,
he prefaces most of his indictments by a profession
of faith in the British, but this expression can only
be looked upon like the Frenchman's "Que messieurs
les assassins commengent," for he does not scruple
to say "that British rule has reduced the bulk of
the population to extreme poverty, destitution, and
degradation, that it is a new despotism of civilisa-
tion, resembling the murder effected by a clever and
unscrupulous surgeon, who draws all his victim's
blood and leaves no scar," and he does not hesitate
to describe the English as "the most disastrous and
destructive of the foreign invaders of India." In
denouncing the home charges, which, no doubt,
should be reduced, as I have said elsewhere, to the
lowest possible figure, he leaves out of account the
fact that without the home charges there could be
no British Government in India. He says nothing
of remittances for interest on loans raised for the
development of the country towards which the
Indians will not subscribe themselves, and of allow-

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INDIA

ances for Englishmen who have spent their lives and
health in India. When he calculates the loss she
suffers by the excess of her exports over her imports
he says nothing of some of the most flourishing
countries in the world, which in this behalf are in
the same position, or of the approaching ruin of
England, as some folk predict, because her imports
exceed her exports. It is not serious treatment of
a difficult problem to add up the imports for a series
of years, subtract them from the exports, and call
the balance the life-blood drained from India. The
greater part of these charges represent interest on
capital invested in our Eastern Empire in repro-
ductive works, to the great advantage of that Empire,
and of its working classes, and most of all of those
weaned thereby from petty agriculture, to which
alone the masses of the people can ordinarily look
for a livelihood. It is difficult to criticise seriously
a writer who says: "Foreign trade adds nothing to
the wealth of the world, and not a single atom of
money is added to the existing wealth of India by
internal trade." And what does this profound
economist recommend to right a world in which
apparently everything is wrong? The further em-
ployment of natives in the public service! So he
has got no further than the failed B.A., in the study
of economics, and it is not wonderful that he should
be regarded by that individual as his guide in the
sphere of politics and economics. Apparently also,
when Indians are employed in offices now held by
European civil servants, he would, regardless of the

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ECONOMIC POLICY

cost, give them pay and pensions at the rate drawn
by the alien administrators. Of course Mr. Dadab-
hai Naoroji writes from very little knowledge of the
Indian people, he being himself a Parsee whose life
has been spent in England. Still, it is extraordinary
that a man should be accepted as an economic author-
ity who does not see that the best hope for India lies
in developing her resources; in encouraging her tea
industry which pays higher wages than obtained
before, and so tends to raise wages all round; in
encouraging the cotton and jute mills, gold and coal
mines, and in fact in developing that internal and
external trade which he thinks adds nothing to the
wealth of the nation, but to which alone others, no
less anxious than he is to see India prosperous,
look for the further improvement of her patient and
estimable population.

The case of the bleeding India school teems with
contradictions, and while Mr. Naoroji argues in his
classical works that India has become poorer because
the prices of Indian staples have not risen, and bases
an immense fabric or fabrication upon this assump-
tion, the Congress journals cry out because the wages
of agricultural and other labour have not advanced
pari passu with the rise in prices, and their premise
that prices have risen is of course correct, though
they suppress the fact, easily proven by reference to
old records, that there has been a more than propor-
tionate rise in the rate of wages.

Next amongst the prophets comes (the late) Mr.
William Digby, who revels in statistics regarding

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INDIA

the bleeding of India, and calculates the amount
extracted by the economic drain in the nineteenth
century, with the greatest precision, at 4,187,922,-
732. Like Mr. Naoroji, he holds that the influx of
imports is of little or no value, while the loss of
exports is a fatal wound, and he describes our rule
as "naked and unashamed exploitation, outrageous
plunder, a mockery and a curse to hundreds of
millions of British subjects." To prove this rather
comprehensive conclusion he makes elaborate com-
parisons of the condition of the natives of India
with that of the inhabitants of European states.
Had Japan, China, Arabia, or some other Eastern
nation been taken as a standard, something of some
value might have been evolved, but Mr. Digby
proves too much in showing that all Indians, for
instance the powerful Punjaubi, a far finer man than
the average Englishman, is habitually starved. He
makes much use of the Russian peasant, but I have
lived with Russian peasants. I am a Russian inter-
preter myself, and I know that if the Russian has
ten times the income of the Indian, his board and
lodging costs him several times ten times as much,
and that the Indians get more comfort from their
smaller resources. Space will not allow me here to
show how ways and means in the East and West
actually compare when considered with elementary
understanding, or to deal with Indian conditions and
Indian critics at length on this matter. So much
that is absolutely contrary to fact is taken for
granted, such frequent reiteration calls for such

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ECONOMIC POLICY

emphatic refutation, that considerable space is
required for overthrowing the structure, albeit it is
founded on sand.

It is, however, unnecessary to repeat what has been
said in previous chapters to refute the argument that
the British invented famine, which on the contrary
they have almost abolished. Mutually destructive
propositions are as common as over-confident and
unsupported assertions, and the numbers habitually
in want of food are calculated to have increased
from 40,000,000, itself the mere conjecture of one
individual of no special authority, to 100,000,000,
while elsewhere it is urged that owing to British
maladministration the population has not suffi-
ciently increased. Sir Salar Jung, who raised the land
revenue in Hyderabad by 260 per cent., is praised,
while the English, who in the same period effected
an increase of 25 per cent., as Mr. Digby says, are
condemned. The profits of the industries are said
to go to English capitalists, but does Indian labour
take no toll on these profits? The superior merits
of the administration of Indian states are extolled,
but their complete failure to feed their people in
famine days is suppressed.

When family after family is shown to earn too
little to support life, it is evident to anyone with
any knowledge of the country that the cost of living
has been pitched too high, and supplementary
sources of income have been ignored. Then official
results are repudiated because based upon official
figures, but it is an irrefragable merit of Digby 's

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INDIA

own conclusions that they are based upon such
figures !

Then in regard to Bengal, the permanent set-
tlement of which Mr. Digby, like Mr. Dutt and
Mr. Naoroji, is bound to praise for are not the
landlords of Bengal the supporters of the Congress?
he finds that in that province the average income
falls most below the official estimate. This is very
likely the case, though it would take a great deal to
prove, but if true it entirely shatters the creed that
permanently settled Bengal is exceptionally pros-
perous.

It is hardly to be expected that a writer who
ignores the most elementary principles of economics
should think worthy of mention the legislation for
the emancipation of the peasant from the clutches
of the money-lender, the extension of irrigation, the
establishment of co-operative agricultural credit,
and the industrial eminence of Bombay. In point
of fact, it is mere clap-trap to say the average Indian
got Zd. a day in 1850, ljd. in 1880, and Id. in 1900,
and contempt, as I suppose, has prevented the Gov-
ernment from exposing such nonsense. No one
knows what the average was in 1850, and it certainly
has not fallen since 1900. The Government has at
length, after an elaborate inquiry, found the average
income per head to be 30 rupees, and reasons have
been given elsewhere for thinking that this is as
fair an estimate as is likely to be made.

Mr. F. J. Atkinson, whose training and experi-
ence specially fit him to deal with Indian statistics,



ECONOMIC POLICY

calculated that between 1875 and 1895 the agricul-
tural income increased from 26 rupees to 35 rupees,
or 39 per cent.; the non-agricultural income from
28 rupees to 34 rupees, or 18 per cent.; and, as these
two classes were 97 per cent, of the population, that
the average annual income of the masses had risen
from 27 rupees to 35 rupees, or 28 per cent. Taking
into account the remaining classes, he made the
income of all three sections to be from 30 rupees
to 39 rupees, or an increase in the average income
of 29 per cent. These figures are worthy of great
respect, though their author does not claim for them
scientific accuracy, nor, though an expert, is he
capable, like Mr. Digby, of calculating a century's
drain within twenty shillings. Lord Cromer in
his day estimated the average income at 27 rupees,
as against the 30 rupees of Lord Curzon's Govern-
ment, so that there is not, when the difficulty and
complexity of the subject is considered, so great a
disparity as might be expected.

None of the chief detractors of British rule have
explained why, if the land is universally rackrented,
it happens that it sells for several times the assess-
ment, of which there is proof. Again, it was the
same Sir William Hunter, who saw so little of life
in India, who was so misquoted by Mr. O'Donnell, who
dogmatically asserted in 1880 that 40,000,000 of In-
dians went through life on insufficient food, an utterly
unsupported, and therefore mischievous, statement.

More light is thrown upon facts by one entry from
Mr. Digby's peasants' authentic family budgets

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INDIA

than from all his invective and bewildering statistics.
The cultivator of 4^ acres provides in his budget an
expenditure "of Sd. a month for the small goddess
and the local ghost." Starving men do not spend
much money on ghosts and goddesses.

Mr. Digby complains that the British have drained
away all the capital. Mr. Justice Ranade, however,
who is an authority accepted by the Congress school,
says: "There is no lack of capital in the country,'*
and if no Indian can exist on less than 30 rupees per
head per annum for food, which is, of course, absurd,
how can Mr. Digby be right in saying elsewhere that
"they can exist, if existence it can be called, on
almost nothing"? Mr. Digby's figures, in fact, are
compiled with the utmost levity, and his calculations
of the revenue of India are based on the assumption
that the land revenue is a certain proportion of the
gross produce, which he lays down with confidence,
if without knowledge. The lower the land revenue,
the poorer the Indian people must appear, accord-
ing to his method of calculation. It would be easy
to show that the agricultural produce of the country
is double the figure at which he assesses it, but of
course it is not from statistics, but from observation
in the field, that the condition of the peasants can
be really estimated; nor does Mr. Digby seem to
grasp the fact that the ordinary peasant carries on
a great deal of his traffic by barter or in kind. In
fact, he, like Mr. Naoroji, has no actual knowledge
of Indian rural life, which is not obtained by editors
whose Indian experience is confined to an office in

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ECONOMIC POLICY

the city of Madras. It is possible that Mr. Naoroji
may be acquainted with one of the languages spoken
in Bombay other than English, but it is certain he
has had little or no opportunity of using such knowl-
edge in his life, and Mr. Digby, as I know, had no
knowledge of the vernacular tongues.

No man with any practical experience of the
country would, like Mr. Digby, base an estimate of
the wealth of India upon the transparently absurd
assumption that the gross produce of "golden" Ben-
gal does not amount to l, or 15 rupees, an acre.
Yet this estimate is accepted in innumerable essays,
articles, and pamphlets, and, like any stick, is good
enough for the British Government.

If this method of calculation were followed, it
would be easy to prove that no person in England
had less than 45 a year, and in referring to land
revenue as taxation Mr. Digby ignores altogether
the fact that where the land is held directly from
Government, the land-tax includes what here we
call rent, and should be compared with the total
burden of the land in this country. Mr. O'Donnell
repeats the same error, though he must be aware
that the two charges are not in the same category.

Mr. R. C. Dutt, who arrives at much the same
conclusions, is a critic of a different class to Messrs.
Digby and Naoroji, but he is equally unsparing in
condemnation of British rule, and of the civil service,
of which he was a member, and he, too, does not
hesitate to make sweeping statements as if they
were facts of universal acceptance.

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INDIA

For instance: "The poverty of the Indian popula-
tion is unparalleled in any civilised country." Upon
what travel and inquiry is this statement based, and
what is it worth, unless based upon comparative
knowledge? "The famines of the latter part of the
nineteenth century are unexampled in extent and
intensity in ancient and modern times." The few
histories written by Indians prove this statement is
altogether contrary to the fact, and I have in previ-
ous chapters sufficiently dealt with this monstrous
misstatement: "The finances of the country are
not properly administered." If the Chancellor of
the Exchequer is a good authority, one may ven-
ture to quote Sir Michael Hicks-Beach, who said
that "the finances of India were not only better
administered, but in a more satisfactory condition
than those of Great Britain." Then, "India in the
eighteenth century was a great manufacturing as
well as a great agricultural country." True, she
had manufactures, though we have yet to learn
that she produced more than she does at present,
but she was always, and still remains, mainly agri-
cultural. Certain of her industries were, and one
industry still is, in some respects, subservient to the
same industry in Britain, but in consequence of
British rule she has been endowed with many other
new industries, which employ at least as much
labour. It is impossible to deny that prohibitive
tariffs were imposed at one time in England upon
competing Indian manufactures; but it is not in
any way proved that the balance of profit was not

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ECONOMIC POLICY

with India in the whole transaction, or that other
European races, one of which was bound to acquire
her, would not have imposed equal or heavier tariffs.

Then "the land-tax is not only excessive, but,
what is worse, it is fluctuating and uncertain in many
provinces." But, as has been shown in previous
chapters, it is immensely less than that collected
by our predecessors in title. Of course, Bengal the
permanently settled is said to be more prosperous
than Madras and Bombay, but if Mr. Dutt has had
any experience of these other provinces, so as to be
able to compare conditions, he has omitted to say
so in his book. His official services, like those of
the other chief supporters of the Congress in Parlia-
ment, were rendered in Bengal, the home of the
Congress, and the place of origin of anti-British agi-
tation, and he takes no notice of the fact that it
is in Bengal that the British Government has chiefly
had to intervene to protect the tenant from the land-
lord, and he has never had the opportunities enjoyed
by civil servants in other provinces of seeing the
permanently settled system and the ryot-wari sys-
tem working side by side.

He does not scruple to say that "a special law,
called the slave law by the people of India" (query,
what people, and in what language?) "still exists for
providing labourers for the tea planters in Assam,
ignorant men and women, bound down by penal
clauses to work in tea gardens for a number of years,
for whom the utmost endeavours have failed to
secure adequate pay." I was a member of the

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INDIA

Select Committee of the Legislative Council which
examined this law, and from personal knowledge
can contradict the whole of this statement, but per-
haps it would be sufficient to refer to the Census
Report, which exposes this foolish charge. I have
referred to the matter before, and wages in tea
gardens are above normal rates, which this industry
has thus been the means of raising.

Of course revenue and magisterial functions should
be separated, but enough of that elsewhere.

As an instance of Mr. Dutt's treatment of his-
torical subjects may be mentioned his account of
the Black Hole tragedy: "Siraj-ud-Doulah's pris-
oners died one hot summer night." Now I do not
think it proved that this tragedy was ordered by
the Nawab, but this is a strange account of a cruel
outrage.

Again, "the reign of Queen Victoria has not
admitted the people of India to any share in the
control and direction of the administration of their
own affairs.'*

Elsewhere I have quoted Babu Bepin Chandra
Pal to the effect that "we," the Indians, "now govern
India." The fact that, except as regards something
under one thousand appointments, the whole public
service is manned by natives is not worth Mr. Dutt's
attention. It would be interesting to know where
history taught the lesson "that it is impossible to
govern a country in the interests of the people with-
out bestowing on that people some measure of self-
government and representation." History teaches

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ECONOMIC POLICY

the exactly opposite conclusion, and self-government
and representation obtains to-day amongst a mere
fraction of the inhabitants of the world, nor does
the system seem to work well at present in regions
to which it is being extended in Europe and Asia.

The alliance between the Congress and the social-
ists in Britain will be severely strained if Mr. Dutt
expresses the matured opinion of the former, "that
the soil was private property in India, as amongst
all other civilised nations," but the statement is, if
true, not in India by any means the whole truth.

Mr. Dutt's work teems with allegations which are
erroneous and unsustainable: "Only those who pay
light rents are prosperous"; yet the fact is notorious
that the districts in which rents are lightest have
been in times of scarcity most seriously affected, the
obvious reason being that there the land is poorest.
The Indian cultivator is indeed worthy of all praise,
but to single out his "habits of prudence" for eulogy
is to indulge in untimely sarcasm.

Mr. Dutt's contentions regarding assessments are
noticed in Chapter III. He finds that the extension
of cultivation has not made the nation any more
prosperous a position which can hardly need seri-
ous refutation and that India is the poorest coun-
try on earth. Has he then visited all the countries
on earth and are statistics in respect of all such
available? Has he compared them or are his
conclusions the fruits of omniscience? If so let the
claim be made, and then ordinary mortals will know
how to deal with the revelations. Meanwhile, like

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any other Congressman, he combines the out-and-
out advocacy of democracy and reform with the
stoutest possible defence of landlordism and aris-
tocracy, at any rate in Bengal. In one respect,
however, he throws over the tenets of his school
and of its ex-official, now anti-official, supporters
and admits that there is no strong feeling in India
against the opium monopoly.

One fact to be remembered in dealing with the
writings of Messrs. Dutt, Naoroji, and Digby is
this that statistics are wanting for the first half
of last century, that the first regular Census was
taken in 1872, and that the Statistical Department
at Calcutta was not created till 1880. Never was
so vast a superstructure raised upon such pure con-
jecture as the case against the British Government
according to the Congress, which now has the sup-
port of the British socialists.

The opportunity of attacking British rule at a


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