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his fellows; no man needs or helps his neighbors; all need and
help the foreigner only. " Half the human time and energy of
India runs to mere waste," says Mr. Chapman; and elsewhere
he says that of the cultivable surface of all India one-half is
waste. In 1831 the cotton weavers and merchants of Bengal
petitioned the English Parliament for reciprocal free trade.
They found their "business nearly superseded by the introduction
of the fabrics of Great Britain into Bengal, the importation of
which augments every year, to the great prejudice of the native
manufacturers." Knowing " the immense advantages which
the British manufacturers derive from their skill in construct-
ing and using machinery, which enables them to undersell the
unscientific manufacturer of Bengal in his own country," they
were " not sanguine in expecting to derive any great advantage
in having their prayer granted;" but with the meekness of the
Bengalee they ask it " as a manifestation of your lordships' good
will."

Dr. Bowring, a leading champion of free trade, said on the occasion of
this petition : — "It is a melancholy story of misery so far as they aro
concerned, and as striking an evidence of the wonderful progress of
manufacturing industry in this country. Some years ago the East India
company annually received of the produce of the looms of India 6,000,000
to 8,000,000 pieces of cotton good's. The demand lias now nearly ceased
In 1800 the United States took nearly 800,000 pieces: in 1830, not 4000.
In 1800 1,000,000 pieces were shipped to Portugal ; in 1830 only 20,000.
The poor India weavers are now reduced to absolute starvation ; numbers
of them have died of hunger. And what was the sole cause? The
presence of the cheaper English manufacture, — the production by the
power-loom of the article which they had been used for ages to make
by their unimproved ami hand-directed shuttles. It was impossible that
they should go on weaving what no one would wear or buy." But at
this very period the exportation of this better machinery, and even the
inducing skilled artisans to emigrate, was forbidden under heavy penalties
by English law. At the same time, as we shall see, every trade exercised
in India, and every tool that it employed, was heavily taxed.



INDIAN REVENUES. 325

Some feeble attempts to revive by mild protection the cotton manu-
factures of India have latterly been made. One member of the Man-
chester Chamber of Commerce, assailing the Canadian Tariff (see # 2S1),
told Mr. Gait: "This part of the country has been very restive lately
under the India duties of five per cent.," and another that " Exactly the
same process is going on in Canada that led to the erection of cotton-
mills in Bombay." The tariff in force at the era of the Rebellion taxed
British cotton, silk and woollen goods, and metal goods, 5 per cent.;
those of other countries twice as much; cotton yarn and twist from Eng-
land 3A per cent. ; from other countries 10 per cent. This was changed
in 1859 by abolishing the discrimination in favor of British goods, fixing
the duty on thread and twist at five per cent., and putting a duty of 20
per cent, on haberdashery, hosiery, millinery, and some other classes.
Mr. Jas. Wilson, the founder of the Economist, becoming Finance Min-
ister of India in that year, changed all duties on manufactured goods —
including yarns — to 10 per cent. But the pressure of direct taxation has
again forced a resort to high duties, and the people, with the cooperation
of English capital this time, are again taking to manufacturing. Man-
chester protests, but it can't be helped. The Spectator, edited by an
Anglo-Indian, says that if the tariff be kept long enough these manu-
factures will survive its removal ; but that as long as coal is dear, " and
the habit of manufacturing on a large scale is not yet formed," they
would first languish and then die out under free trade.

§ 299. The revenue from duties on imports being destroyed,
the necessity of raising money to pay the British troops and
officials, and carry on the government, led to a most oppressive
system of taxation and the creation of monopolies. Former
Indian governments drew the revenue from a laud tax, at first
payable in kind, but after the Mohammedan conquest exacted —
at least in part — in money. The English adopted the same
method, but (1) they carried it out with a thoroughness im-
possible under any Oriental government, — with the hard rigidity
of a Shylock. (2) They insisted on payment in money exclu-
sively, forcing the tax-payer to find a market for his goods, and
requiring the circulation of sums hitherto never employed in
India, yet the value of Indian coin declined. Silver was nearly
as valuable in India as gold in Europe; but the establish-
ment of absolutely free intercourse and competition with a
European nation brought its value down to the European
standard. On the other hand, the people were thrown into the



326 SOCIAL SCIENCE AND NATIONAL ECONOMY.

hands of the native usurers who bad control of the great mass
of the coin in circulation ; these vampires form the only class
that has prospered under English rule, and desires its con-
tinuance. (3) The destruction of Indian manufactures has
brought down the price of raw produce and food by removing
the workshops of India to the British islands. It is by the
export and sale of these, in a country till recently almost desti-
tute of roads and means of transportation, that the land-tax is
raised. In many instances, from 60 to 70 per cent of the crop
was thus employed, and outside the Deccan the average was fifty
per cent. (4j The land-tax levied by the native princes was ex-
pended in the neighborhood ; if in money, it was spent on articles
of native manufacture. By the policy of centralizing the gov-
ernment, the same fund was now expended mostly in distant
parts of the country, and much of it in paying salaries in
London, still more in the payment of high salaries to foreign
officers " without root in the country, who either save money for
the purpose of carrying it away, or spend it for the most part on
articles of British growth and manufacture; they being more-
over few in number and residing only in the chief towns "
(Ludlow). " Formerly," the native would say, " the govern-
ments kept no faith with their land-holders and cultivators, ex-
acting ten rupees where they had bargained for five whenever
they found the crops good; but in spite of all this zolm (op-
pression) there were then more burkut (blessings) than now.
The lands yielded more returns to the cultivator, and he could
maintain his family better upon five acres than he can now upon
ten" (Col. Sleeman : Rambles in India}.

But this oppressive land-tax is not sufficient for the needs of
the government, and monopolies have been created to supplement
it. (1) When the English began the conquest of India, its
people were noted for ; ' their total abstinence from spirituous
liquors and other intoxicating substances " (Warren Hastings).
The government have set up distilleries, and supplied " arrack,"
a fierce alcoholic drink, to licensed venders. It used its facilities
to establish new depots for the sale where none were known



SALT AND OPIUM MONOPOLIES. 327

before. The price is low ; the sale immense ; the spread of
drunkenness is going on over the whole land ; and petitions for
a prohibitory law come to England from the most public-spirited
of the natives. (2) The Hindoo lives very largely on rice and
fish, consequently needs a considerable amount of salt, — far
more than those who live on wheat and flesh. Instead of a light
tax imposed by previous rulers, the E. I. Company established
a monopoly of the manufacture by which the price was raised to
famine rates, and it needed three months' work of a ryot in the
interior to provide salt for a small family, while fish were carried
inland half-salted or unsalted, and used in a state of half-
putrefaction. Fortunately the English salt-makers could not be
excluded from the Indian market, and their importations forced
down the price, while it diminished the demand for labor.
" Imagine," says Mr. Ludlow, " the possibility of Cheshire salt,
produced in a damp and comparatively cold climate like ours,
under all the disadvantages of rent and royalty, rates and taxes,
interest on capital and a high price of labor — after being carried
bulky as it is, to the other end of the world — being sold to one
of the poorest populations of the world cheaper than that manu-
factured on their own coasts, where evaporation takes place with
extraordinary rapidity ; where labor is at two pence a day ; by
a government which pays neither rent nor royalty, rates nor
taxes !" Yet even since this alleviation, salt sold (1855) for 14
times its cost at Madras, and £72 a ton wholesale in the interior;
and the average consumption was oDe-third as much per head
of the people as the company supplied to its Sepoys. And in
many ways the monopoly checks industry, restricts the fisheries,
and hinders the keeping of cattle. (3) The monopoly of opium
of Bengal began in 1795, the object being to supply the article
to the armed smugglers who introduce it into China in spite
of the efforts of the government to exclude the pestiferous drug.

See The Opium Trude, as carried on in India and China, by Dr. Nathan
Allen. Lowell 1850. 2d Edition, 185.3. The attempts of the Chinese
government to suppress the traffic was the chief if not the only cause "I'
the " Opium War " between England and China in 1840-1. In a petition



328 SOCIAL SCIENCE AND NATIONAL ECONOMY.

addressed to the English government by the merchants engaged in it, it
is said, " That the trade in opium had been encouraged and promoted by
the Indian government under the express sanction and authority, latterly,
of the British government and Parliament, and with the full knowledge
also, as appears from the detailed evidence before the House of Commons
on the renewal of the charter" of the E. I. Company in 1833, "that the
trade was contraband and illegal." When it was proposed in Parliament
to suppress the monopoly, and thus put an end to the contraband trade,
a committee reported : " In the present state of the revenue of India it
does not appear advisable to abandon so important a source of revenue,
— a duty upon opium being a tax which falls principally upon the foreign
consumer, and which appears upon the whole less liable to objection
than any other that could be substituted." The Emperor refused to legal-
ize what he could not put a stop to, declaring " nothing will induce me to
derive a revenue from the vice and misery of my people."

But wherever opium is grown it is used; and the company's
servants tell us that " One opium cultivator demoralizes a
whole village; and that one-half the crimes in the opium dis-
tricts, — murders, rapes, and affrays, — have their origin in opium-
eating." The ryot was not allowed to profit much by the crop ;
before planting the poppies he must make an engagement to sell
the juice at a specified price, and to the government alone ;
when they were ripening, his fields were examined, the amount
of the yield estimated, and another engagement to furnish at
least that quantity was made. If less was furnished, he was
heavily fined for neglect; if the government advanced him
money — as was commonly done — to buy seed and get the crop
in, he paid twelve per cent, interest. Nor had he his choice as
to whether he would plant the poppies ; he was forced to give
up a portion of his land to them. (4) Equally oppressive and
exacting were the methods pursued in carrying on the monopoly
of tobacco on the Malabar coast. But these are only a few out
of a multitude of monopolies resorted to in order to avoid taxiu<*
the importation of British manufactures. The moturpha, one
of the worst abominations of Moslem finance, was levied upon
the exercise of every trade and occupation, sometimes in the
form of a license, sometimes as a tax upon the tools employed,
often at six times their cost. A tax was laid on every cocoanut



Belgium's industrial record. 329

tree; on the knife with which the tree was tapped for its
saccharine juice ; on the pot in which the juice was boiled.
The fisherman paid a tax for the very stone on which he beat
his clothes. A petition sent to England by the natives of
Madras complains of the practice of annually " leasing out to
individuals certain privileges, such as the right of measuring
grain and other articles ; the right to the sweepings of the gold-
smiths' shops; the right of dyeing betelnut ; of cutting wood
in the jungle ; of grazing cattle ; of gathering fruit and wild
honey; of catching wild-fowl ; of cutting grass for thatch, and
rushes for baskets ; of gathering cow-dung, and innumerable
other such rights of levying taxes on the poorest of the poor."
In Malabar the company claimed all the wax made by the bees,
leaving only the honey to the keepers ; and actually destroyed
several branches of industry by exacting a license for their
exercise.

§ 300. The progressive peoples are in every case those who
have fostered and protected national industry by national legisla-
tion.

(1) Belgium, "that old cockpit of Europe," is inhabited by
two peoples, " who speak different tongues, intermingle but
little, are jealous of each other, and inhabit different halves of
the kingdom. The one occupying the northern half of the
kingdom," the Flanders provinces, where Flemish is spoken, " is
now famous for its husbandry alone, though once as famous for
its manufactures." Its linens, woollens, and other fabrics held
the markets of the world until the seventeenth century, when
the protective policy of England and France fully acclimatized
these manufactures on their own soils. Its superior skill in linen
weaving enabled it to retain a large measure of that industry,
until the invention of spinning and weaving machines superse-
ded the spinning-wheel and the hand-loom. Its deficiency of
coal, and the prohibition upon the export of linen machinery
from the British Islands, kept up till 1842, forbade competition
with the power-loom, and the country was reduced to a number
of small local industries." For till 1844 Belgium was a Free



330 SOCIAL SCIENCE AND NATIONAL ECONOMY.

Trade country. Under the imperial rule of Napoleon she shared
in an unusual degree in the impulse that the continental sys-
tem imparted to the manufacturers of the Continent. Her
cottons and woollens were noted for their excellency, and com-
manded the French markets. But the cheaper price of the in-
ferior goods with which England flooded the Continent on the
return of peace inflicted great injury upon both manufactures,
especially that of cottons. Being transferred from Spain to
Holland by the Treaty of Vienna, Belgium had free access to
the markets of the latter and its colonies. But the Revolution
which gave her independence in 1830 closed both these against
her. The new government, taking its cue from the English
Whigs, who had given it moral support, announced the purpose
that Belgium should be an agricultural country, contented with
" the commerce of commission and transit " as a port of entry
for English goods on their way to the Continent. The Liberal
party upheld this course, but some of the clerical party, notably
the Abbe Defoer, contended for protection to home industry.
They pointed to the increasing prostration of manufactures ; to
the repeated failures of new enterprise through their exposure
to unfair competion, English goods selling at one-fourth less
than the London price, as long as any one attempted to make
them in Belgium, and French agents acting for years together
under general orders to undersell the native manufacturers.
They showed that although coal and iron had been found in
close proximity in the southern (Walloon, or French speaking)
provinces, yet no general success had attended the attempts to
develop this and the other vast resources of the country.
Associations and companies had been formed ; there had been a
sort of mania for industrial associations, but they came to
nothing. At last a government inquiry into the state of Bel-
gian commerce and industry was ordered, and in 1842 it re-
ported ; in 1844 the first Belgian protective tariff was adopted,
and Holland followed the example in 1845; in 1840 a commer-
cial treaty on the basis of reciprocity was effected between
the two countries, in order that this new tariff might in no



THE BELGIAN TARIFF AND ITS EFFECTS. 331

way interfere with their old commercial relations. The
results are known to all the world in the rapid and vast de-
velopment of manufactures in the Walloon provinces, which
now compete with the English in the British markets and those
of the world. Even in the north " steam factories are now
rising in Flanders — the excellence of its flax, and the industry
and manipulative skill of its numerous rural population, may go
far, as regards the manufacture of linen, to compensate for the
total absence of iron and coal." Two Englishmen, selected by
the iron masters to ascertain the reasons of this, made inquiries
on the Continent, and report that, " with the advantage of pos-
sessing the best and most skilled workmen in the world, Belgium
and France have been thrusting; us out of foreign markets to an
extent which the public will hardly credit, and of which the
trade itself is hardly aware." .... For instance, in Spain,
" England is thrust aside, defeated by Belgium and France.
We cannot compete with their producers either in price or in con-
tinuousness and certainty of supply. Nor is this all. Even at
home these industrious and pushing people are challenging our
supremacy, and that not infrequently with success. In bar
iron, in rails, in engines for agricultural purposes, and even
in locomotives for railways, they have lately been obtaining
orders in our own market."

It is easy to believe that this is rather an overstatement of
the case, but it has truth enough to be unpleasant reading in
Birmingham. Upon it they base a plea that English workmen
should be contented with lower wages, in order that their em-
ployers may compete with the cheaper labor of the Continent.
But the development of manufactures in Southern Belgium has
caused a great advance in the rate of wages, and by furnishing
the farmer with a near and steady market, has made him fully
able to pay these. Protection has also naturalized in those pro-
vinces new species of tillage, such as the culture of beets for
sugar, from which the bulk of the sugar now used in Belgium
is derived. "The AValloon farm laborer earns two francs ;i day,
and often more, while the Fleming earns but oue." " The line



832 SOCIAL SCIENCE AND NATIONAL ECONOMY.

of division between high and low wages closely corresponds with
the line of division between the two races;" it is also like the
same line in England, the line of division between the purely
agricultural and the manufacturing districts. Liege lies on the
line ; three miles south of it farm wages are twice as high as
they are three miles north of it. The northern provinces, in
spite of the unequalled agriculture, which has turned Flanders
into a garden, are afflicted with pauperism. When hand-loom
weaving ceased it was at its height ; in 1848 there were nearly
200,000 " indigents," one-fourth of whom were women who
had lived by spinning. The blow fell heavily on the farming
class also, as the small holders lost the employment "by which
they eked out a living, and lost the home market for their
flax. But even Flanders is rallying under the shelter of the
protection that might have saved her workmen from beggary in
the process of adopting better methods of manufacture.

" If any one," says a Belgian Free Trader, " had left the
country in 1835, after having visited our principal manufactu-
ring centres, and were to come back to it now," in 1861, " he
would be struck with the transformation that they have under-
gone, the advances they have achieved ; he would find a nume-
rous, intelligent and active population of working people, where,
a quarter of a century ago, he would have seen nothing but
country houses scattered at wide intervals over extensive plains.
As a consequence, production, except of articles of food, has
outrun the needs of the population, although it has increased in
numbers and in wealth, and we are obliged to seek for foreign
outlets."

See J. F. Constant: Du Regime Protecteur en Economie Politique,
Bruxelles, 1S42. H. F. Matthysens : La Hollande, V Angleterre, el la
Bey I i que ; Anvers 1S50. De Lavelye : L' Eennomie Rurale de Behjique
(largely reproduced in Cliffo Leslie's Land Systems and Industrial Eco-
nomy.) Ejusdcm : "The Land Systems of Belgium and Holland" in
Cobden Club Essays on Systems of Land Tenure; London 1S70. H. H.
Creed and W. Williams, Jr. : Handicraftsmen and Capitalists ; London.

§ 301. (2). Germany is now taking her place among the
great industrial nations, through the removal of all restrictions



FREDERICK IN THE ROLE OF COLBERT. 333

upon internal commerce and the legislative fostering of home
industry. The first king of Prussia, gruff old Frederick Wil-
helm, and his son, the great Frederick, began the work of raising
the land to the place that its vast resources, its intellectual vigor
and its past history entitle it. "Frederick," says his greatest
biographer, " was the reverse of orthodox in ' Political Economy';
he had not faith in free trade, but the reverse ; nor had ever
heard of those ultimate evangels, unlimited competition, fair start
and perfervid race by all the world (towards ' Cheap-and-
NastyJ as the likeliest winning-post for all the world), which
have since been vouchsafed to us. Probably in the world there
never was less of a free trader. . . . The desperate notion of
giving up government altogether, as a relief from human block-
headism in your governors, and their want of even a wish to be
just or wise, had not entered into the thoughts of Frederick.
. . . Many of Frederick's restrictive notions, as that of watch-
ing with such anxiety that ' money ' (gold or silver coin) be not
carried out of the country, will be found mistakes, not in orthodox
Dismal Science as now taught, but iu the nature of things ; and
indeed the Dismal Science will generally excommunicate them
in a lump, too heedless that fact has conspicuously vindicated the
general sum-total of them, and declared it to be much truer than
it; seems to the Dismal Science. Dismal Science (if that were
important to me) takes insufficient heed, and does not discrim-
inate between times past and times present, times here and
times there."

" In improving the industries and husbandries among his
people, his success, though less noised of in foreign parts, was to
the near observer still more remarkable. A perennial business
with him this, which even in time of war he never neglected,
and which springs out like a stemmed flood whenever peace
leaves him free for it. His labors by all methods to awaken new
branches of industry, to cherish and further the old, are incessant,
manifold, unwearied, and will surprise the un instructed reader
who comes to study them. . . . Certain it is, King Frederick's
success in National Husbandry was very great. The details of



334 SOCIAL SCIENCE AND NATIONAL ECONOMY.

the very many new manufactures, new successful ever-spreading
enterprises, fostered into existence by Frederick ; his canal-
makings, road-makings, bog-draininp-s, colonizing and unwearied
endeavorings, will require a technical philosopher one day, and
will well reward such study and trouble of recording in a human
manner, but must lie massed up here in mere outline on the
present occasion." Excepting some small mention of two Prus-
sian chemists that are busied, with aid and comfort from this
protectionist king, in getting sugar out of beet-juice — Herr Mar-
graff, 1747 till 1773, and after him a French Monsieur Achard,
refugee for his religion. This latter finds a second partner in
Napoleon, with notable results for France (§ 273).

See Carlyle's Frederick the Great, Book XVI., Chapter VIII. Also
Book XXI., Chapter II., where the younger and greater Mirabeau's
Monarchie Priifisienne (Paris 1788), a free trade pamphlet in eight octavo
volumes, is noticed with the summing up: " M. le Comte, would there
have been in Prussia, for example, any trade at all, any nation at all,
had it always been left ' free'? There would have been more sand and
quagmire, and a community of wolves and bisons, M. le Comte."



Online LibraryRobert Ellis ThompsonSocial science and national economy → online text (page 30 of 38)