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stances young men with a choice of career
before them were not to ask themselves whether
exile from home amid all the discomforts and
disadvantages of an Indian climate, with the
not too remote chance of assassination, were
good enough. The position of responsibility
which falls to the young Indian civilian at a
comparatively early age no doubt weighs heavily
against the drawbacks of the Service with many,
while the possibility of attaining to place and
power holds out a dazzling appeal to the am-
bitious. But only within the last few weeks
the young Indian civilian has seen the men of
his own Service passed over, and one of the
highest appointments under the Crown in India
handed over to a junior member of the English
Civil Service,-^ and again he asks himself, are
the exile and the drawbacks worth the while ?

It is not for a moment suggested that with
an open competitive examination in place of
nomination — the system which has now been
in force for more that half a century — any
difficulty will be experienced in filling the Service,
even if its attractiveness undergoes further de-
cline. But the danger is that the Service will
gradually cease to attract the right class of
men. Some comment is even now being made

^ See Appendix III.



SOME THOUGHTS ON INDIAN UNREST. 259

upon the deportment of some of the younger
members of the Service towards the natives of
India. Reported cases of inciviUty and dis-
courtesy are becoming more frequent. " Bad
manners," as Lord Morley has said, " are dis-
agreeable in all countries : India is the only
country where bad and overbearing manners
are a political crime." ^ Some change is con-
templated in the rules as to age and probation
of candidates for the Indian Civil Service, with
a view to extending the period of probation from
one to two years. Such a change will be all
to the good, since one year is admittedly too
short a time for the specialised study which a
probationer has to take up to fit himself for his
life and duties in India. But no extension of
the period devoted to special studies can make
up for any existing lack of breeding, and it
can never be reiterated with too much emphasis
that no one resents being governed by a man
who is not a gentleman more keenly than an
Indian. Far be it from me to suggest that the
Indian Civil Service suffers from an undue pro-
portion of black sheep. Such a suggestion would
be entirely contrary to my belief. But I have
had brought to my notice cases of gross affront
offered by members of the Service to Indian
gentlemen of birth and position, and it is be-

1 Speech at Arbroath, Oct. 21, 1907.



260 AN EASTERN MISCELLANY.

cause I am impressed with the truth of Lord
Morley's dictum that in India bad manners are
" a poUtical crime," and because I believe that
any serious faUing - off from the high standard
of excellence for which the Indian Civil Service
has always been known would constitute some-
thing like an Imperial disaster, that I have
ventured to unburden my mind upon so diffi-
cult and so delicate a matter.



261



CHAPTER XIII.

INDIA AND IMPERIAL RECIPROCITY.

It is sometimes said that although a tariff might
be advantageous in the case of a country like the
United States of America, with its immense area
and its vast and varied stores of raw material,
the contrary must be the case with the United
Kingdom, with its strictly circumscribed area, and
with supplies of raw material necessarily limited
in both quantity and kind. Such an argument
ignores the principles lying at the root of the
policy of Imperial Reciprocity which refuses to
regard the British Empire as a mere agglomera-
tion of water-tight compartments, but on the
contrary insists upon regarding it as a composite
whole. Looked at in this light, it becomes im-
mediately apparent that the variety and extent
of the natural resources massed within the con-
fines of a future British zollverein are without
parallel either in the United States of America
or in any other country. In his dominions in the



262 AN EASTERN MISCELLANY.

East alone the King Emperor possesses a treasure-
house of raw material of incalculable value, for
which reason, if for no other, it would be folly
to leave India out of account in any scheme of
Imperial Keciprocity. But India has other claims
to a respectful hearing based upon the fact that,
the United Kingdom apart, she can show an
overseas trade far greater in volume and in value
than can any other portion of the Empire.

These are the mere economic reasons for the
inclusion of India in any general scheme providing
for an Imperial Customs Union. But there are
also political reasons for doing so. The political
economy of the Manchester school has never
possessed any attractions for the people of India,
who have, indeed, scant cause for burning incense
at its shrines. They can never forget that it was
in the sacred name of Free Trade that they were
compelled to impose an excise duty on the most
successful of their modern industries ; and there
are few movements of greater significance than
the steady growth of public opinion in that country
in favour of protection. The Indian view has been
recently dispassionately summed up by a promi-
nent member of the Viceroy's Council in these
words : —

Nowadays we hear a good deal of Tariff Eeform ; there
is a swinging back of the pendulum in free trade England.
Why cannot the people of this country hope for a share in



INDIA AND IMPERIAL RECIPROCITY. 263

that reform when it comes ? . . . There is a general feel-
ing in favour of protection in this country ; a judicious pro-
tective tariff is demanded by intelligent public opinion in the
interest of the undeveloped industries. Can the Government
disregard this opinion long with either justice or advantage ? ^

The question seems to be a pertinent one. The
Government have been taking no little credit to
themselves for having given Indian opinion louder
expression in the government of the country by
means of the India Councils Act of 1909. Can
they, then, with justice continue to ignore the
clearly expressed opinion which they have invited ?
And when it is recalled that the desire for protec-
tion is so strong in India that, denied the ordinary
means of satisfaction provided by a tariff, it has
already assumed the undesirable shape of a boy-
cott of foreign goods, there are seen to be substan-
tial grounds for Mr Dadabhoy's further doubts as
to the possibility of the Government continuing to
ignore public opinion "with advantage."

Do not let us disguise from ourselves the fact
that it is protection for India against all competi-
tors — including the United Kingdom — that is
demanded. "Swadeshi" in other words is a
national movement in so far as the word " national "
may be properly used of India, and predicates
protection for home industries. A tariff does
not possess the terrors for the educated Indian

1 Mr Dadabhoy, March 29, 1910.



264 AN EASTERN MISCELLANY.

that it does for the English Free Trader. The
small increases in certain of the Indian Customs
duties recently authorised by the Government
were described somewhat contemptuously by Sir
Sassoon David as " chow chow or peddling," while
on another occasion Mr Gokhale reminded the
Government that the Indian duties once stood
at 7^ per cent, and bluntly asserted that there was
no reason why they should not do so again. The
question, then, that arises is this — is it possible to
convert what is at present a purely national
movement into Imperial channels? In other
words, would a scheme of tariff reciprocity between
India and the United Kingdom go any way
towards meeting the desires of India for fiscal
change ? There can be little doubt that such a
scheme could be devised as would at least be
regarded as preferable to the existing system,
and which, quite apart from political consider-
ations, would be of practical benefit to both
countries.

It is sometimes argued that the Government
of India in their despatch upon the subject in
1903 came to no such conclusion; that their
memorandum was, indeed, entirely unfavourable
to any policy of reciprocity between India and
other parts of the Empire. Even if this were so,
it does not follow that what was written in 1903
is applicable in 1911. As a matter of fact, there



INDIA AND IMPERIAL RECIPROCITY. 265

is nothing in the memorandum in question to
support the contention that the Government of
India would have been unwilling to discuss pro-
posals for reciprocal trade concessions. On the
contrary, what they pointed out was that they had
no definite scheme before them for their consider-
ation, and that " to determine whether on a priori
grounds it would be to our advantage or the
reverse to declare our adhesion to or dissent from
a general policy not clearly defined, would not be
altogether easy or conclusive." Nevertheless, they
considered that the attempt should be made, and
after discussing the question from various points
of view, concluded as follows : —

Firstly — " That without any such system, India
already enjoys a large, probably an ex-
ceptionally large, measure of the advan-
tages of the free exchange of imports and
exports."
Secondly — "That if the matter is regarded
exclusively from an economic standpoint,
India has something, but not perhaps very
much, to offer to the Empire ; that she
has very little to gain in return ; and
that she has a great deal to lose or to
risk."
Thirdly — "That in a financial aspect, the
danger to India of reprisals by foreign
nations, even if eventually unsuccessful, is



266 AN EASTERN MISCELLANY.

SO serious, and their results would be so
disastrous, that we should not be justi-
fied in embarking on any new policy of
the kind unless assured of benefits greater
and more certain than any which have so
far presented themselves to our mind."
These three conclusions invite some comment.
Number one does not appear to have any very
great bearing on the question. It is true that
later on in their despatch the Government of
India lay stress upon the advantage with which
India might make use of a tariff" for purposes
of negotiation and retaliation. " In Japan," they
write, "both our indigo and our saltpetre are
subject to unfavourable treatment, and the
representations which we have constantly urged
the Secretary of State to make on our behalf
have hitherto borne no fruit. The knowledge
that Japanese matches and silk are in any case
secure of equal treatment in India has possibly
not been without its effect in producing this
barren result." And again, " All that we seek
is that we shall not be pledged in advance to
accord equal treatment to the imports of all
countries alike, irrespective of whether they
penalise our exports or not." From which it
appears that they were disposed to think that
if allowed greater freedom of action in fiscal
matters, they could obtain further advantages



INDIA AND IMPERIAL RECIPROCITY. 267

for Indian trade. In other words, they distinctly
declare for a policy of retaliation. But why
it should be imagined that adhesion to a scheme
of Imperial preferential tariffs should stand in
the way of their adoption of a policy of retaliation
against foreign countries is not apparent.

When we consider the second of their three
conclusions, we find that great developments
have taken place in the conditions of Indian
trade since 1903. There were at that time, as
the Government of India themselves admitted,
imports of the value of £10,000,000 in which
" effective competition " prevailed, and in respect
of which " a substantial preferential tariff against
the foreiofner would be of material benefit to
the British manufacturer." For the five years
ending 1902-3 the value of foreign goods
imported into India averaged only £12,000,000.
Since that time the value of her foreign imports
has risen by leaps and bounds, and has now
reached the figure of £23,500,000. In spite of
the obviously advantageous position which our
own traders must enjoy in the world's competition
for the Indian market, our foreign rivals continue
to increase their trade at a very much greater
rate than we do. Thus we find — to take the case
of the trade in which we have always possessed
an absolutely overwhelming preponderance — that
" during the last ten years while the import



268 AN EASTERN MISCELLANY.

of cotton goods into India from Lancashire has
(with certain fluctuations) done little more than
hold its own, while the production of Indian
cotton mills has only approximately doubled
itself, the imports from Japan, Germany, and
other protected foreign countries have been
multiplied fourfold." ^ It appears, therefore, that
there is now a far wider field in which " effective
competition prevails" than there was in 1903,
and that a preference which would admittedly
have been of " material benefit to the British
manufacturer " at that time, would pro tanto be
of increased benefit now. Nor did the particular
proposals for preferential trade examined by the
Government of India exhaust the possibilities of
the case, as will appear later on.

Of the last of the three conclusions it must
be observed that the fear of reprisals by foreign
nations therein expressed does not accord with
the belief in the efficacy of retaliation set forth
in a later portion of the same despatch. Nor,
indeed, does any fear of the kind seem to have
deterred the Indian Government from actually
attacking foreign countries with fiscal weapons
in the past. When in 1897-98 the Indian sugar
industry was being threatened by the rapid in-
crease in the importation of bounty -fed beet

1 Sir E. Lethbridge, K.C.I.E., in the 'Imperial and Asiatic
Quarterly Review' for January 1910.



INDIA AND IMPERIAL RECIPROCITY. 269

sugar from the continent of Europe, the Indian
Government examined the weapons in their
armoury, and having decided that in a counter-
vailing import duty they possessed an effective
weapon, they proceeded to impose the same on
the sugar of Germany, Austria, France, and in-
deed all other countries giving a bounty to
their producers. In the speech of the Viceroy
to his Council in support of such a policy I find,
indeed, a delightful dig at the super-orthodox —
if such a word be permissible, — but no suggestion
of the " danger to India of reprisals by foreign
nations," which forms the gist of the conclusion
now under consideration. " I do not think," he
said, " that we need pay much attention to the
mutterings of the High Priests at the free trade
shrines. Their oracles do not stand precisely at
their original premium. This is not a question of
economic orthodoxy or heterodoxy ; it is a
question of re-establishing a fiscal balance which
has been deflected for their own advantage and
to our injury by certain of our foreign com-
petitors." And let me add again, even at the
risk of becoming tedious, that the Government
of India did not hesitate to re-establish the
fiscal balance by having recourse to fiscal ex-
pedients regardless of the "danger of reprisals"
by those affected.

As a disquisition on the merits of Reciprocity



270 AN EASTERN MISCELLANY.

the despatch is inconclusive, and a careful perusal
of it as a whole suggests that, in their considera-
tion of the subject, the Government of India
were haunted by the fear that in event of India
being committed in advance to adherence to
some future scheme of Imperial preference, her
interests would be subordinated to those of
other parts of the Empire. It was, indeed,
frankly admitted by Lord Curzon at a subse-
quent date that this was the case. " May I
confess," he said, speaking in the House of Lords
on May the 21st, 1908, "that our real apprehen-
sions when drawing up the despatch about the
fiscal future of India were not so much economic
as political? We said to ourselves — 'What
guarantee should we have, if any new system
were proposed, that India would have free
speech in the discussion of the subject or a free
judgment in its decision ? ' "

Now it cannot be denied that, judged by the
test of past experience, the Government of India
had every justification for their fears. The
stormy and acrimonious controversy which raged
round the Indian tariff in both England and
India during the years of 1894-96 resound in
the ears of Indians even now, while resentment
at the final outcome, far from dying down with
the lapse of time, increases proportionately with
the growth of interest on the part of educated



INDIA AND IMPERIAL RECIPROCITY. 271

Indians in the industrial and economic problems
of their country. " Such is the strength of
public feeling in this matter," wrote the secretary
of the Bengal National Chamber of Commerce
in 1894, " that ordinary language scarcely meets
the requirement for its expression " ; and although
sixteen years have elapsed, Mr Dadabhoy obvi-
ously experienced equal difficulty in finding
moderate language with which to clothe his
feelings when dilating upon India's needs in
the Viceroy's Council in 1910: "The counter-
vailing excise duty upon Indian cotton fabrics
is an impediment — unnecessary, unjust, irritating,
and vexatious — which a wise Government would
in the circumstances hasten to remove."

I do not think it is possible to deny that in
this matter the interests of India were sub-
ordinated to those of Lancashire, though an
attempt to do scf is sometimes made. One such
attempt has, indeed, been made quite recently
by a Lancashire member in the House of Com-
mons. Referring to the policy of this country
in refusing to allow India to impose an import
duty which might have a protective effect upon
cotton goods, Sir George Kemp asked — " Why
have we not allowed it ? " And he proceeded
to answer the question as follows : " Because
we have said that if the fiscal system which we
enjoy here in England is best for us, it is also



272 AN EASTERN MISCELLANY.

best for India." The suggestion here made that
it was in the interests of India herself that we
insisted upon an excise duty equivalent to
the small revenue duty on imported cottons
being imposed upon the Indian cotton industry,
coming as it does from a Lancashire member,
must command our highest admiration — as an
example of magnificent audacity. It might have
been more successful in carrying conviction if
the history of the Indian Tariff Acts of 1894
and 1896 were not on record. Unfortunately,
however, for those who seek to attribute the
Indian cotton excise to British altruism, the
history of those measures is on record and is
easily accessible to any one who cares to
take the trouble to make himself acquainted
with it, and since it is important that the Indian
attitude towards the fiscal policy of the ruling
Power should be properly understood, it may
be well to briefly recall the facts.

From 1882 to 1894 India had no general tariff
of import duties. In the latter year it became
necessary to tap fresh sources of revenue, and
the Government of India, acting upon the re-
commendations of the Herschell Committee, re-
imposed duties upon imports at the general
rate of five per cent, with one significant ex-
ception — that of cotton goods. This exception
was insisted upon by the Secretary of State in



INDIA AND IMPERIAL RECIPROCITY. 273

defiance of a unanimous vote of his Council whose
views were voiced by Sir Alfred Lyall when he
pointed out in his minute of dissent that —
" The only ground for this special reservation
in favour of cotton is that powerful manu-
facturing interests in England are opposed to
laying on even a five per cent duty."

The passing of the Act, with its invidious
exception, aroused a storm of indignation through-
out India, and protests were showered upon the
Government from all parts of the country. Let
one example suffice. The Indian Currency As-
sociation of Bombay resolved that " to exempt
all cotton manufactures would, in their opinion,
be to sac7^i/lce the interests of India to those
of a political party in England."

Moved by the strength of feeling exhibited
in India, the Secretary of State embarked upon
further correspondence with the Government at
Calcutta, with the result that in December 1894
an amending Act was passed removing the ex-
emption of cotton goods from the operation of
the tariff. At the same time an Act to levy
excise duties on such Indian cotton yarns as
competed with Lancashire goods was placed upon
the Statute-book. In introducing this latter
Bill, Mr (afterwards Sir James) Westland said :
" I would not be dealing straightforwardly with
the Council if I pretended that this measure was

S



274 AN EASTERN MISCELLANY.

recommended by the Government of India on its
own merits. No Government would desire ... to
impose a duty on an industry so deserving of any
fosterino- care which the Government can bestow
upon it as the cotton manufacturing industry of
India."

Even this measure of self-sacrifice imposed upon
India aofainst India's will was not sufficient to
appease Lancashire. Some trace of protection
was still scented in the tariff". The Indian manu-
facturer, it was urged, only paid duty on "grey
yarn value," while the Lancashire manufacturer
paid on the "finished goods value"; and during
1895 a fierce ao-itation was carried on throuo-hout
the County Palatine. Speaking as a member of
a deputation to the Secretary of State in Dec-
ember of that year, Mr J. Whittaker, who had
earlier drawn up an impressive statement of the
Lancashire Case on behalf of the "Joint Committee
of cotton manufacturers and operatives," said that,
" while a year ago the fears of Lancashire were
scouted as imaginary, twelve months' experience
of the duties had resulted in a year of almost un-
'precedented prosperity to the Indian mills, and un-
precedented disaster to those of Lancashire," and
urged upon the Secretary of State the consequent
necessity for immediate action — an interesting com-
mentary, surely, upon Sir George Kemp's interpre-
tation of the motives by which we were actuated.



INDIA AND IMPERIAL RECIPROCITY. 275

This agitation resulted in a further manipula-
tion of the Indian tariff in the interests of Lanca-
shire, in the shape of the Indian Tariff Act of
1896, by which the existing cotton duties were
repealed and a duty of 3|- per cent imposed
upon all cotton manufactures except yarns and
twist, an equivalent excise duty being imposed
upon the products of Indian power-looms.

To refer to the strictures passed upon the Act
of 1896 in India would be tedious ; but a quotation
from a minute of dissent by Sir A. Arbuthnot, at
that time a member of the Council of India, may
be permitted : " I object to them " (the Indian
Tariff Acts of 1896), he wrote, "on political
grounds. . . . The course taken by the Govern-
ment of India in passing them was certain to,
and has excited discontent in India, and has
impaired that confidence in British justice which
is essential to the stability of our rule."

A vast volume of evidence can, of course, be
adduced to show that it was Lancashire's fear
of Indian competition which dictated our policy
in this matter. Enough, however, has been said
to show how grievous is the misconception under
which they labour, who would have us believe
that it was from an altruistic desire to benefit
India that we spent two years in jerrymandering
her tariff. It would surely be both entertaining
and instructive to have set out in parallel columns



276 AN EASTERN MISCELLANY.

explanations by — let us say — Sir George Kemp
and Mr Dadabhoy, of the motives by which we
were actuated when in 1721 — the cotton industry
being at that time an infant industry in Great
Britain but one of importance in India — we im-
posed not a duty on, but prohibition against, the
importation of Indian calicoes into this country.
Was this another outbreak of solicitude for the
Indian cotton industry ?

Apart from the seriousness of the matter, the
controversy is not without humour. The spec-
tacle presented by a strait-laced Cobdenite
fiercely insisting that a minute import duty had
secured to the Indian mills " almost unprece-
dented prosperity " is delightful ! We had
laboured under the impression — apparently a
delusion — that in the view of the Cobden Club
a duty was not an assistance but a hindrance
to production ! But however humorous to the
unorthodox is the spectacle of the orthodox
vehemently testifying to — and even exagger-
ating ^ — the stimulating effect of small duties

^ As a Tainff Eeformer I of course accept with satisfaction so


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