Englands Debt to India

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Englands Debt to India A Historical Narrative of Britains

Fiscal Policy in India

By

LALA LAJPA RAI

Te toad beneath the harrow knows

Exactly where each tooth point goes.

Te butter y upon the road

Preaches Containment to the toad

WWW.HINDUS ANBOOKS.COM2012

First Published in 1917


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AS A MARK OF HE AU HORS DEEP RESPEC

ANDINDIAS GRA I UDE,

HIS BOOK IS DEDICA ED

O

HOSE BRAVE, HIGHMINDED, AND HONES ENGLISHMEN AND ENGLISHWOMEN WHO HAVE NOHESI A ED O SPEAK HE RU H ABOU HE EFFEC S OF HE BRI ISH RULE IN INDIA HOUGH BY

DOING SO HEY EARNED HE DISLIKE OF

HEIR COUN RYMEN,

AND

ON WHOSE ES IMONY, PRINCIPALLY, HISBOOK IS BASED.

LAJPA RAI


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India will not remain, and ought not to remain con

tent to be a hewer o wood and a drawer o water or therest o the Empire.

J. AUS EN CHAMBERLAIN,

Secretary o state or India,

in the London imes,

March 30, 1917.


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FROM HE PUBLISHER Recently I got access to scanned copy o the book

England's Debt to India by Lala Lajpat Rai published inNew York in year 1917. I think it is a very vital resource orunderstanding true picture o economic e ects o Britishrule in India. Tere ore I am republishing this book withaim to providing a authentic historical resource available

to people who want to know the truth without prejudiceo current political interests.

Tis book analyze economic e ects o British Rulesin India taking an impartial view o the subject. Tis book contains extensive quotation rom contemporary Englisheconomists and politicians which can help in understand

ing true picture o Economic e ects o British rule in India. Tis book also analyze growth o Railways and it economic e ects. I believe that this book will help in clearingmany misconceptions about British Rule in India.

Tere are some very signi cant development whichI would like to mention here which happened a er pub

lishing o this book in 1917. A very ew people know thata very big cause o Indias post independence poverty isthe interest o the loan o 1800 crores 1 or which responsibility o repayment was inherited by Government o Independent India as per rans er o Power Agreement. 2 o

1 I lost the book in which I read details o this settlement. But this subject

was discussed in all economics books o 1960s which deals with subject o Public Finance.2 Dr. Rajender Prasads India Divided, published in 1946, reprinted by Penguin Books in 2010 in India, p. 401 405. Tis book puts estimate o public debt at Rs. 2000 crore (re er to table XLVII on p. 405)


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really appreciate value o 1800 crore rupee in 1947 you

will have to take into account that exchange rate o British Pound was at 13.50 rupee per pound, exchange rateor American dollar was 5.00 rupee per dollar, and PureGold was selling at 88.62 rupee per 10 grams. Now sinceall currencies British pound, American dollar and Indianrupee have devaluated due to in ation we will have to take value Pure Gold as a benchmark. Reader will have to remember that in last 60 years gold mines all over world areproducing gold worldwide at cost much less then prevailing gold price and increasing availability o gold worldwide. So in no way true value would have gone up in last60 years but reduced but we are assuming to remain thesame as it was in 1947. In June 2012 pure gold is being

traded at Rs. 30,000 per 10 grams. aking pure gold priceas benchmark the value o debt inherited by Governmento Independent in India comes at 6,09,274 crore rupee atcurrent rates.

Out o Debt o 1800 crore rupee inherited, 650 crorerupee was to be paid to Britain. Out o this 1800 crore

rupee loan Pakistan was to pay Rs. 300 crore to India, outo which it have not paid even a single rupee till now. 3 Maintaing peoples expectation o tax cuts, and payinginterest on 1800 crore at 3 percent per annum was a really di cult task in hand or Government o Independent India. For this very drastic steps were taken Gold

Import was banned to save oreign exchange, Income taxwas increased highest slab being at 60 percent and additionally National Saving Certi cates o 10 percent needed3 Union Budget, 2012 13


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to be purchased compulsorily. Employee Provident Fund

was introduced with aim o nancing governments Debtrepayment to Britain. Indian Government kept nancingrepayment o interest and principal with resh loans andcontinuing it still. Interest rate have varied rom 3 percentin 1947 to 18 20 percent in 1985 90 to 12 percent in 2012.I we take average rate o interest at 12 percent the loanwould have become 28 lakh crore rupee. otal government loan is 40,70,320.68 crore rupee. 4

Drain o wealth is still happening rom India to Britain and USA. When a skilled person migrate to Britainor London, along with him goes rare skills which wereacquired on indian money ( weather his athers or taxpayer does not matter), Britain take back more than hal o remuneration or these skill in term o exorbitant priceso accommodation and heavy taxes. Te saving o thesepeople also remains in Britain, this way Britain is able tokeep all remuneration o the skills in Britain. Tis skillhelp Britain take world's money to Britain by exportingproducts developed by these skills. India spend money on

harboring skills and Britain make money on that. In theend when parents living in India dies these people sell ancestral properties built by savings o generations and takethat money to Britain. Next generation which is born inBritain is surprisingly lacking in education and skill andend up taking petty jobs. It looks like even a good earning

person in London can't a ord good education or theirkids, otherwise it would have not been the case. A er oneor two generations decedents o these people are in state4 Annual Financial Statement, p. 6, Union Budget 2012 13


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penury.

When a rich person emigrate to Britain along withhim goes saving o many generations. At least hal o themoney a person took with him taken over by governmentin terms o taxes and exorbitant price he pays or ordinary accommodation which would have not got any buyers i Indian people would not take indian money there.

axes are very high in Britain and USA, government usestax income or wel are o native people and Indians don'tget bene ted by these wel are schemes. A er one or twogeneration when money the amily took rom India is exhausted NRIs have to live in humiliating conditions andtake up jobs which Indians are ashamed to associate therename to.

Hope this book will bring some positive change inthinking o Indian people.

Jasvant Singh

5 July 2012

Delhi


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PREFACETis book is a kind o companion volume to my oth

er book, Young India, I have discussed British rule inIndia, rom the political standpoint. In this volume, I havediscussed its economic e ects. Tere is not a single statement in this volume which is not supported by the bestavailable British testimony, o cial and non o cial. My

own opinions and personal knowledge have been mentioned only incidentally i at all. Similarly the opinions o other Indian publicists have been kept in the background.It is a sad commentary on the prevailing moral code o the world that those who succeed in imposing their ruleupon less power ul nations should also brand the latter asunworthy o credit. Tus every Britisher believes that anIndian critic o British rule is necessarily a ected by theinevitable racial and political bias o his position, whilehe in his turn is entirely ree rom it!

In the ordinary course o nature, the man whomthe shoe pinches is the best person to know about it butin politics the laws o nature are reversed, In judging o government and rulers, it is they whose word is to be accepted and not that o the governed and ruled.

Consequently to avoid that charge I have chosen tospeak rom the mouths o the English themselves. Lookedat rom that point o view the volume lays no claim tooriginality. It is more or less a compilation rom Britishpublications, government or private. Te case or Indiahas be ore this been most eloquently put orth by Mr.Digby in his monumental work ironically called Prosper


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PREFACE

ii

www.hindustanbooks.com

ous British India.Particular phase have been dealt with by

Messrs. Hyndman, Wilson and others rom whom I havepro usely quoted. My own countryman, Messrs, R.C. Duttand Naoroji, have done valuable work in this line. Teworks o the ormer, Early History o British Rule, India in the Victorian Age, Famines in India, and England and India published by Messrs. Kegan Paul, rench,rubner and Co. o London, are monuments o his industry, research and moderation. Mr. Naorajis Poverty o India is a collection o the economic writings o that veteran Indian nationalist during hal a century o his active political li e. Tese works o Messrs . Digby, Dutt andNaoraji must or a long time continue to be the classics o Indian economics and no student o the latter can a ord

to neglect them. My obligations to them are unlimited.I have made ree use o the books o Messrs, Digby

and Dutt, though I have re rained rom quoting Mr. Duttsown language. At one time I thought o taking up the sub ject, rom where they have le it in 1901; but in developing my ideas I decided that a change o arrangement also

was needed to bring the matter within the grasp o the lay reader. Mr. Dutt has arranged his books chronologically,dealing with the same matter in several chapters, scatteredall over the two volumes o his Economic History o British Rule. I have tried to include everything relating to onesubject in one place , thus avoiding repetitions otherwise

unavoidable. For example, I have given a complete history o the cotton industry rom the earliest time to date in onechapter and so also with shipping and shipbuilding. Similarly everything relating to drain has been included in


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PREFACE

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one chapter and so on. Te book is thus, in my judgment,

an improvement on those re erred to above .It brings thewhole subject up to date and makes it easily understandable by the ordinary lay reader. I would like to have addedchapters dealing with nance and currency, amine insurance, banking railway rates etc., but the size which I xedor this volume having already been exceeded, I must reserve these objects or another volume i needed.

Tere is talk o great adjustments being made in theBritish Empire , a er the war. India also is on the tiptoeo expectations. Te Jingo Imperialists in England and India are already making proposals which i accepted, aresure to cause urther economic loss to India. Some wantIndia to take over a part o the British war debt: others arelooking with jealous eyes at India hoarded wealth theexistence o which is known only to them. What will happen no one can oretell; but one o the reason which haveimpelled the writer to publish this volume at this junctureis to remind the Anglo Saxon how India has so ar aredeconomically under British rule. Any resh burden might

tend to proverbial camels back. We know that the English will do what they please; yet we have dared to say:perchance it may all on ruit ul ground. Te book is notwritten in a spirit o hostility to British rule. It is not my object to irritate or to excite. What I aim at is to givematter or thought and re ection and to supply a reason

or the exercise o the restraint I the determination o thescal policy which British statesman may decide to ollow towards India a er the war. Great Britain has su eredhuge losses in the war As soon as war is ended, there will


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PREFACE

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we cry to make them up. No other part o the Empire o

ers such a eld as India. She has the largest area and largest population. She has no voice in her government and ishelpless to make hersel heard. She can neither check norretaliate .What can be easier than to make her pay or thewar? What this is likely to mean to India may be gatheredrom this volume .What eeling it will create in India may be imagined .Te world is anxious to know how GreatBritain is going to reward Indias loyalty and devotion. I the decision rests with men o the type o Lord Sydenham it is already given. He recommends the immediateand nal rejection o all the demands made by India orpost war re orms as embodied in the memorandum o the Viceroys council. Tese demands are extremely mod

erate. Tey all or short o even home rule. Teir rejectionwill be very distressing to India .We hope that wiser counsels will prevail and the statesmanship o England willprove that India did not pin her aith to British justice in vain. India has stood by England magni cently and someo the national leaders have had a hard time in resisting

the advances made by the enemies o Great Britain .Letus hope that they were not laboring under vain illusionsand that Great Britain was sincere when she pro essed tostand or right and justice in international dealings .In themeantime British statesman are assiduously engaged inimpressing on the neutral world that India is happy, prosperous ,and the most lightly taxed country on earth.

For the bene t o the reader I reproduce the ollowing interview which the Finance Minister o India issaid to have given to a correspondent o the Associated


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Press:

FINANCE MINIS ER DENIES HA INDIA GROANSUNDER AX. O AL REVENUE , DIS RIBU EDAMONG 244,000,000 PEOPLE ,SEVEN SHILLINGS

PER CAPI A

Simla, India, Dec.20 (Mail correspondence to theAssociated Press.) So ar rom the people o India groan

ing under an enormous burden o taxation , India is oneo the most likely taxed countries on the ace o the earth,according to Sir William Meyer, minister o nance orIndia ,in response to the charges o over taxation preerred by so called extremists.

Te total revenues ,imperial and provincial, or the

current year, during which some additional taxation wasimposed, amounted to 86,500,000, Sir William said ,and this sum distributed among the 244,000,0000 peopleo British India gave a resultant contribution per capitao only seven shillings. He pointed out that in three otherAsiatic countries ,Japan, Siam, and the Dutch Indies, the

rate per head was higher, being 23 shillings in Japan 13shillings 4 pence in Siam and 11 shillings 3 pence in theDutch Indies.

Te nance minister said the land revenue hasbeen one o the points upon which opponents o the government have been most bitter, it being claimed that the

armer was kept in poverty by taxation. Sir William statedthat o the total revenue o 86,500,000 or this year, about22,000,000 was derived rom the land, India being mainly an agricultural country.


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that the nance minister added to the burden o taxation

and raised the tax on one o the great necessities o li esalt. Tis he did in spite o the universal opposition i the country and the results as reported by the press aremost disheartening .Te price o salt has risen considerably beyond the means o the people to pay, and there is ageneral cry o pain.

Will the people o England, with whom the ultimateresponsibility or the government o India rests, look upand compel their statesman to put into practice the principles or which they say they have been ghting this war?We will wait and see.

I tender my acknowledgements to the numerous

writers whom I have quoted as also to the publishers o books and magazines re erred to by me. Te manuscripthas been very kindly read or me by Pro essors E. R. A.Seligman and H. R. Mussey o Columbia University,New York, as also by my riend Dr. Sunderland. Pro essorH.R. Mussey has also read the proo s. My acknowledgements are due to them or valuable suggestions. Te writing o this book has been made possible by the courtesy o the librarians o Columbia University, whose uni ormkindness I cannot su ciently admire.

LAJPA RAI.

New York

10th February, 1917.


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A WORD ON REFERENCES

It will be observed that no uni ormity has beenmaintained in the spelling o Indian names. Te reasonis that we have not altered the originals spellings o thedi erent quotations given. With regard to the ollowingnames, use o a single work is indicated when the authorsname is used instead o the work by title.

Mill always means Te History o British India, by James Mill.

orrens always means Empire in Asia, by W.M.orrens, M.P.

Torborn always means Te Punjab in War andPeace, by S.S. Torburn.

Blunt always means India under Ripon, by Wilred Scawen Blunt.

Loveday always means Te History and Economics o Indian Famines, by A.Loveday.

Morison always means Economic ransition inIndia, by Sir Teodore Morison.

Baines always means Baines History o cottonManu acture.

It may be stated generallay that italics in quotationsrom other authors are ours unless the context shows otherwise.

With regard to Indian currency, it must be kept inmind that a rupee consists o 16 annas, an anna being


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equivalent to an English penny or two cents in American

money. Tree rupees are thus approximately a dollar inAmerican money and een rupees means one Englishpound sterling.


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POS -SCRIP UMIndias Gi o One Hundred Million Pounds to

England. Since the above was put in type our work earshave come to be true .Te British Government o Indiahas decided, with the sanction o the secretary o state orIndia, to oat a war loan in India o an unlimited amountTe idea is to make a gi o 100,000,000 (or $500,000,000)

to the British Exchequer. Te amount o the loan , or asmuch is raised, will be made over to the Government o Great Britain and liability or the rest will be accepted by the Government o India. Te British cabinet have , withthe sanction o Te house o commons, accepted this gi and in lieu there ore allowed the Indian Government toraise their customs duty on the imports o cotton goodsby our percent.ad valorem. Tis transaction involves anadditional burden o 6000,000 a year (or$30,000,000) onthe Indian tax payer. It is expected that out o this some1,000,000 will be recovered by the additional duty oncotton imports and the rest will be raised by additionaltaxation.

Te British statesmen have called it a ree gi o thepeople o India and thanked the latter or their generosity. Te act is that the people o India or their representatives in the legislative council were never consulted aboutit . Te transaction was settled between the Governmento India and the Secretary o State or India, at Whitehalland then announced to the Indian Legislature as a decision. Te Manchester Guardian and the Lomdon Nationhave exposed in its true colours. Te ormer says, in its


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issue o March 15th:

Te great services which Indian manhood and Indian production have rendered in this war we all grate ully acknowledge. But their very magnitude is an argumentagainst the wisdom and justice o adding to them a contribution in money and nancing that have already made thegreat sacri ces. Mr. Chamberlain [the Secretary o State

o India] says that the assumption o the 100,000,000loan was a ree will o ering coupled with the conditionthat the Indian cotton trade should be given protection. Mr. Chamberlain obscures one not unimportant circumstance. It is we who govern India and not the Indianpeople. Te initiative in all nancial proposals necessarily come rom government we appoint in India and cannot reach the light o public discussion in the LegislativeCouncil or elsewhere until they have received sanction o the Secretary o State here. For Mr. Chamberlain to throw upon the people o India the responsibility o originating and devising the 100,000,000 contribution and theprotective duties which have been coupled with it, is as

unconvincing a rhetorical exercise as the House o Commons has witnessed or many a long day. Te responsibility or the whole scheme rom the rst to the last is his andthat o Indian Government. We have said more than onceand we repeat it, that in our opinion a wise statesmanshipwould both nd better use in India or Indias millions and

employ India more advantageously or the common causeby using more o her manhood and less o her money.

In a previous issue o the same paper it was ob


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served:

Why was the matter o a nancial contributionrom India raised now? For our own part we have thegravest doubts as to the wisdom or justice o taking any nancial contribution rom India. We believe that this isnot the best way or India and the Empire, in which Indiacan serve the common cause and the loss it represents to

an extremely poor population like that o India is muchgreater than the gain it represents to England. I we really are seriously concerned that India should develop in every way the vast potentialities o her indigenous it wouldbe better to spend that 100,000,000 on developing herresources than to take that money rom India and in exchange give Bombay a tari .

Te London Nation in its issue o March 17th says:

Te people o India have no voice in this or any other act o Government , and, i they had, they wouldbe orced to think twice be ore contributing out o theirdire poverty [ the italics are ours] this huge sum o a hun

dred millions to the resources o their wealthy rulers. Norought a poor subject people already burdened with largeincreases o war taxation to be compelled by its Government to make this gi . Further on , the Nation characterises the whole transaction as one o sheer dishonestyand adds: India is not sel Governing and this particularaction is not the action o a body justly claiming to torepresent the will or interests o the Indian people.It is thearbitrary action o a little group o o cials conniving witha little group o business men and playing on the mistak


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means loss o vitality and e ciency.

According to this writer, Te services o India a estimated at a value o $240,000,000 or the two and hal years that the war will have lasted at the close o the present nancial year. Calculating the pre war insurance, aorded by Indias expenditure on the army o 14,000,000(or $70,000,000) a year, at een years purchase he xes

its value to the Empire at 210,000,000 or $1,050,000,000.He also explains how India has helped the Imperial authorities by various other nancial measures and by a warloan o 4,500,000 and concludes: Te act is that India, so ar rom having super uous capital, was and in urgently in need o capital, and the launching o a more ambitious scheme must hinder, instead o helping , the causewhich India is holding with so much sel sacri ce.

Evidently the raising o this new loan o $500,000,000was in the air when he wrote the article and Mr. Yusu Ali,who is permanently settled in London, with his Englishwi e, thought it was his duty to raise a voice o protest.Te act that the article was published in the NineteenthCentury and A er shows the high esteem in which thewriter is held in journalistic circles in England. Mr.Yusa Ali has never identi ed himsel with the nationalistic party and his views are those o a loyalist whse loyalty doesnot necessarily mean his supporting everything, just orunjust, which the Government does. His protest, however,

proved to be a cry in the wilderness.In this connection it might be o interest to add the

ollowing extract rom the Proceedings o the Govern


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ment o India, in the Legislative Department:

Replying to the Hon. Maharaja Manindra ChandraNandis question regarding contributions to the war by Indian Native States and Indian Provinces the Hon. Sir Reginald Craddock said: Complete or detailed gures o theamounts subscribed in all the Provinces o India towardsthe war and the charities connected with it, it cannot be

given. Te statement given below gives such in ormationas is immediately available. Ten ollow the details o sums given, aggregating 2,047,375. In addition to thegures given in the statement , lavish contribution both incash and kind have been made by the ruling Princes andChie s in India . It is regretted that the details o these cannot conveniently be supplied.

All these lavish contributions , however , ailed tosatis y the British and the government did not scruple toload an additional burden o $500,000,000 on the already crushed shoulders o the Indian ryot.

Indian opinion rather timidly expressed, my be

gathered rom the ollowing report o a speech made by a Hindu member o Viceroys Legislative Council, on theoccasion o the discussion, on the current years Budget.Said the Hon. Mr. Rangaswami Iyenger: My Lord, theprovision o a hundred million sterling together with itsinterest, which amount nearly to double the gi towardthe war expenditure o the Empire, is undoubtably themost prominent eature o the budget o this year. Apartrom the consideration, as has been pointed out by ouresteemed colleague, the Hon. Pandit Madan Mohan


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Malaviya, o neglecting to take this Council into con

dence be ore contribution was made, the burdening tothe breaking point o a country, whose poor people arealready su ering owning to result o a peculiar economicpolicy o the Government o India, without leaving a margin or emergencies, should urnish an insoluble problemto statesman ......

In this connection it has been pointed out, especially in view o the unmerited complains bought againstIndia in certain Anglo Indian organs, that even withoutthis huge contribution India has borne more than herown air share as compared to other part o the Empirerom the services already rendered by her in her sacri ceso men and money.

Here is a statement as regards the help in men aloneuntil the end o 1916:

1: Four expeditionary orces .... 300,000

2: Wastage and renewal ............ 450,000

3: ransport, Marine, etc. ......... 50,000

_______

800,000

Increase in unit since war ....... 300,000

_______

o end o 1916 ..........................1,100,000

All these men have been trained in India and not in


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Salisbury as was the case with the Colonials.

Again coming to the contribution in money till1916:

Military stores, services, and supplies .. 50,000,000

Advances to Britain rom Reserves, etc.. 27,000,000

Deduct loans rom Britain ....................... Nil

________________otal 77,000,000

Whereas the help the Colonies rendered in this direction partook mostly o the nature o loans. I challengei any Colonies people with richer classes have

made a similar sacri ce. Is it air to strain the resources urther ?

How these nancial exactions are likely to cripple India, where millions have died rom amine withinlast y years, millions have died rom plague, where evennow thousands die rom same ell disease and where the

vast bulk o the people are illitrate and so abjectly poor, asto excite pity even rom the stone hearted, may better beimagined than described.

For the latest testimony to this e ect we may citerom an article that has appeared in Te Quaterly review (British) or April 1917, over the signature o Mr. W. H.

Moreland, C. S. I., C. I. E.It is matter o common knowledge that the stand

ard o li e in India is undesirably low; that while the mass


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es o the people are provided with the necessities o bare

existence they are in ar too many cases badly housed andbadly clothed, badly doctored and badly taught, o enoverworked and o en under ed; and the present incomeo the country, even i it is equitably distributed, wouldnot su ce to provide the population with even the mostindispensable element o a reasonable li e.

Finally it may be noted that Indian Budget or military expenditure has, in the current year, been raised to26,000,000 while be ore the war it was only 20,000,000.Beside troops ghting in the trenches, India has also supplied England with the ollowing medical equipment:

40 Field Ambulances

6 Clearing Hospitals35 Stationary Hospitals

18 General Hospitals

9 x ray Section

8 Sanitary Section

7 Advanced Depots

1 General Medical Store Depot

About 2,327 doctors and nurses, and about 720nursing orderlies.

Tese gures are taken rom the speech which theSecretary o State or India made in the House o Commons in March, 1917. He also made mention o act thatIndia had supplied about 20,000 camp ollowers. Te


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speakers, an Indian make take com ort in the hope that

a day o real reedom was drawing upon his un ortunatecountry, and that this at least, the British meant what they said.

I word o sympathy, promises o a uture state o autonomy, compliments and acknowledgements couldbring happiness and prosperity to the millions o India,

she has had a copious outburst o them within the last twomonths and a hal , nay in act, rom the very beginningo the war. I , however, the value o words is to be judgedby deeds, an Indian may still be pessimistic about actualrealisations.

Sweet words are now raining upon India, remarks

the Investors Review, London (April 28, 1917), and wetrust oreshadow generous deeds. Do they? Is the question.

India would be content i even hal o what has beensaid were realised in near uture. Te actual behaviouro the Government in India and in England however, is

not at all encouraging. Te restriction on the reedom o speech and reedom o meeting have not been relaxed inthe least. In one province, alone, 800 young Indians arerotting in jails without ever having had a chance o beingtried or their supposed o ences. Te inequalities in thepublic services, civil and military, have not been removed.Te appointments to the executive o ces both in Indiaand in England are o the most reactionary type. Te solicitations o Indian Nationalists to get larger appropriations or education and sanitation are unheeded. Te only


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thing actually done is the increase in the cotton duties, o

which we have spoken above.Te Speeches o the Maharaja o Bikanir. Te Posi

tion o Indian Princes. Te speeches o Maharaja o Bikanir and Sir S. P. Sinha, the Indian delegates to the Imperial War Con erence, have done at least one good. Tey have cleared atmosphere somewhat. Te Maharaja has

made it absolutely clear that ruling princes o India are inull accord with people o India in demanding sel government, and scal autonomy. In the words o the Investors Review, Te Maharaja impressively pointed out thatar rom being alarmed at the political progress o India,the ruling princes o India rejoice in it. At least 10 per cento the more important states already have representativesel government, and every year the constitutional government is being extended. Tough autocrats, the princeso India are marching with the time. I they are o thatmind. asks the Investors Review, why should we hesitate?

Tose who read the speeches made by the Indiandelegates to the Imperial War con erence in London,should bear in mind that neither o them were the spokesman o the Indian Nationalist Party. One o them, Sir S. P.Sinha, did, no doubt, preside at an annual meeting o theIndian National Congress in 1915, but that was his only connection ( rst and last) with the movement. Be ore his

election to the o ce o president o that session, he was agovernment man, and soon a er he again became a government man. He is an o cial o the Government o India


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and owes his prosperity, his rank and his wealth to the

Government.Te Maharaja o Bikanir comes rom an ancient roy

al amily o India, though the state over which he rulesis not a rst class principality. By heredity, instinct, andtradition he is an autocrat. For his elevation to the presentposition o prominence in Indian political li e, he is under

obligations to the British Government o India. He comesrom a amily which has, our last our hundred years,kept well with paramount authority, Mughal or British.Personally he is an enlightened and progressive ruler. Under these circumstances, he has rendered signal serviceto the cause o his country, worthy o the great ancestry rom which he has sprung, in making some airly boldand outspoken utterance about aspirations o India. Atlast, in him, the princes o India have ound a worthy representative, and the people o India a sincere, though by limitations o his position, a rather halting champion o their rights. Speaking at the luncheon given by the EmpireParliamentary Association, he said that the unrest that ex

ist in India is o two kinds:Tat which the seditionists attempt to spread, hap

pily with small results, has to be aced and is being acedand suitably tackled by the authorities, and it is our earnest hope that it may be possible gradually to eradicatethe evil, which is a cancerous growth, not, however, pe

culiar to India. Te other kind o unrest is what has beenhappily described by a British statesman as legitimate. Itis in minds o people who are as loyal as you or I. (Hear,


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hear.) I decline to believe the British statesmanship will

not rise to the occasion, and it depends on weather Indian problems are or are not handled with sympathy, withimagination, with broad minded perspicacity, that thatlegitimate unrest will die out or continue. It is the strongopinion o many who have given the subject thought thati the people o India were given a greater voice and powerin directions in which they have shown their tness weshould hear much less o unrest, agitation, and irresponsible criticism which is certainly gaining ground. Desperation would give way to patience, or India has con dencein word and good aith o England, and enemies o orderand good government would be oiled. Te unchangingEast is changing very rapidly and beyond conception.

(Report the Daily elegraph, London.)Te speech has evoked some pertinent comments

in British press. Te Daily elegraph remarks (April 25,1917):

Every one is aware that at the conclusion o war notonly India expects, but the majority o us at home alsolook orward to a considerable development along the lineo political re orm.

Te Prime Ministers Pronouncement. Te clearestpronouncement, however, is that o the prime Minister,who in the speech delivered at the Guildhall on April 27,said with re erence to India: I think I am entitled to ask that these loyal myriads should eel, not as i they were asubject race in the Empire, but partner with us. Tese areheartening words, says the London organ o the Indian


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Congress. It remains to ollow them by deeds. Unhap

pily, remarks the same paper (April 27), those who monopolise place and power in India have still to be converted. Tere is copious talk o the new angle o vision, butprecious little indication o any real intention to quickenthe rate o progress. It is idle, and also insincere to pro essanxiety to help Indians along the road to sel governmenti the whip hand is perpetually to be held over them.

Coming to the economic side o the question, weobserve that there is a great deal o hazy talk o the utureeconomic development o India. Most o the papers andUnder Secretary o State or India, still think o India as asupplier o raw materials to the Empire. In act, one paper(Te Contract Journal) hold out prospects o exploitationto British investor; on the other hand, Stock Exchange Gazette and Te Investorss Review are happy over the prospects o the development o Indian powers o sel government. Te most authoritative pronouncements, however,in the matter, are those o Mr. Austen Chamberlain, theSecretary o State or India. Speaking at a luncheon given

by chairman o East India section o the London Chambero Commerce, he said that the development o India wasnot only an economic, but a political necessity o the rstconsequence. Even more pronounced and signi cant isthe speech which is delivered at the Savoy Hotel on March22 in which he is reported to have said that India would

not remain and ought not to remain content to be a hewero wood and drawer o water or rest o the empire. It wasessential to her sound and healthy development that herown industries should progress! We hope Mr. Chamber


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lain is sincere and earnest.

It has since been given out that in uture an Indianwill represent India in the Imperial War Cabinet. An Indian nominated by the British Government, however, couldnot represent India in same sense as the premiers o thedominions would represent the latter. Te concessions,though important in appearance, are shadowy in e ect.

Similarly, the talk o rade Pre erence within the Empireis not likely to bene t India.

Says India, the organ o Indian Congress in London,Mr. Bonar Law in ormed the House o the Commons onFriday last that the Imperial War Cabinet had unanimously accepted the principle that each part o Empire, having

due regard to interest o our Allies, shall give specially a vourable treatment and acilities to the produce and manu actures o other parts o the Empire, that there is nointention whatever o making any change during the war.Mr. Lloyd George made a similar announcement in hisspeech in the city on the same day, a er the usual preliminary denunciation o the wickedness and olly o adherence to old party systems and policies.

Nevertheless, the Prime Minister may rest assuredthat India intend to have something to say on this matter. I she is to embark upon the career o commercial de velopment which is being so con dently marked out orher, she must have protection or her growing industries;and her most ormidable competitor is British manu acturer. Te application o the policy o Imperial Pre erence,which is now oreshadowed, will simply mean that India


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must take Lancashire goods and Lancashires prices, while

shutting out Japan and United States rom her markets.What, then, was object o the ourish o trumpets withwhich Mr. Chamberlain heralded the increase in the import duties on cotton goods? Here is a scal change madeduring war de ended on the ground that it is consonantwith Indian opinion, and marked already or a place onthe political dust heap when the war is over.

Are not the British past masters in art o taking away with le what they give by the right hand?

But India is now awake and will not be ooled as shehas been in past.

LAJPA RAI

May 25, 1917

New York City.


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CON EN S1. From the Publisher e2. PREFACE i3. POS SCRIP UM xi4. A HIS ORICAL RE ROSPEC

3India Once War Rich. 3Torntons Description o Ancient India. 4India Re orm Pamphlet. 6Te Observations o Mr. orrcns, M. P., comparing In

dia with Europe. 9India Under the Mohammedans. 11Raid o amerlane. 11From 1206 to 1526 A.D. 12Elphinstane on the General State o the Country. 13Carsar Frederic and Ibn Batuta. 13Abdurisag. 14Baber. 14Sher Shah. 14Akbar. 15Pietro del Valle. 16Shah Jehan. 16Aurangzeb and His Successors. 17Te Raid by Nadir Shah. 17Pre British Period. 18Principal Political Divisions o the Country. 18onjore and Arcot. 19Mysore. 24

Northern India. 27Bengal. 27Te Kingdom o Oude. 30

5. INDIA AND BRI ISH INDUS RIAL REVOLU ION


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44Be ore Plassy 44E ects o Plassy 53Te Second Administration o Lord Clive 61A er Clive 66

6. RIBU E OR DRAIN 72General Observations 72Drain: the Case Against England 73

Drain: the Case or England. 83Drain: Weighing the Evidence. 88Te Extent o the Drain 96

7. HOW INDIA HAS HELPED ENGLAND MAKEHER EMPIRE 112

India and Te Empire 112Lord Lansdowne on the Indian Army. 117

Lord Roberts on India as raining Ground or British Army. 118Sir Henry Brackenberry on Indian Army Expenditure.

118Sir Edwin Collen on the Apportionment o Expense. 119Lord Northbrook on Wars Outside India. 120Te First reaty with Persia 123

Other Nations o Asia 125Isle o France 126Te Muluccas 126Ceylon 126Eastern Archipelago; Strait: o Malacca and Singapore.

127Siam and Cochin China. 127

Burmah. 128Malacca. 128Te China Consular Representatives. 128Aden. 129


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Indias Greatest Industry 200Land ax 210Bengal 216Northern India 239Bombay 250Village Communities 250Changes Under the British Rule 253Te Punjab 261

Central Provinces 265Te Present Policy as to the Land ax 26612. ECONOMIC CONDI ION OF HE PEOPLE 271

Te Poverty o the Masses 271estimony o English Public Man 275Average Income o the People 277

13. FAMINES AND HEIR CAUSES 291

Famine: in the Past 291Mr. Digbys able 293Digbys Prosperous British India. 294Famines in the wentieth Century 296Famines During the British Period 297Causes o Famines 299Shortage o Rain all 300

Are the Famine: o India Due to Over Population ! 301Are Famines Due to Scarcity o Food! 305Is the Distress Due to the Extravagance o the Ryat on Occasions o Marriages and Funerals! 306Te rue Cause 307FAMINE RELIEF 308Building o Railways 310

Building o Canals and Irrigation Works 311Pressure on Land 312Te Opening o Agricultural Banks 313Special Agrarian Legislation. 313


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14. RAILWAYS AND IRRIGA ION 316Te Government Policy 316Te Beginning o Railway Policy 319Bene ts o Capital Investment 333Irrigation 334

15. EDUCA ION AND LI ERACY 336Early Conditions 336Law 339

Medicine 339Engineering 339Agriculture 340echnical and Industrial Education 341Commercial Schools 343Art Schools 343Education o Europeans 343

Education o Girls 34416. CER AIN FALLACIES ABOU HE PROSPERI YOF INDIA EXAMINED 34617. AXES AND EXPENDI URE 353

Abstract o Revenue and Expenditure 353Ingenious Way o Calculating the Burden o axation.

356

Te Growth o Amy Expenditure 357Te Growth o Expenditure on Education 35818. SUMMARY AND CONCLUSION 36019. APPENDIX A 38420. APPENDIX B 38521. APPENDIX C 387

How the Villager: Live in the Madras Presidency An

Article rom the ribune o Lahore o January 19, 1917.387

22. APPENDIX D 390WAGES IN INDIA 390


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23. APPENDIX E 400HE COS OF ADMINIS RA ION IN INDIA, JAPAN AND HE UNI ED S A ES OF AMERICA 400PROPOR ION OF INDIANS IN HIGHER SERVICES LA ES FIGURES 407

24. APPENDIX F 407Gold Value o Rupee 407


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PAR ONE


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ENGLANDS DEB O INDIA

A HIS ORICAL NARRA IVE OF BRI AINSFISCAL POLICY IN INDIA

CHAP ER IA HIS ORICAL RE ROSPEC

India Once War Rich.

It is almost universally acknowledged that India isa poor country, in the sense that the economic conditiono the Indian people is not good, their average incomebeing (according to o cial calculation made in 1904, during the viceroyalty o Lord Curzon) only 2, or $10.00 ayear. But such was not always their condition. Tere wasa time when India was rich immensely rich, rich in everything which makes a country great, glorious and noble.Her sons and daughters were distinguished in every walk o li e. She produced scholars, thinkers, divines,poets, andscientists, whose achievements in their respective sphereswere unique in their own times. Some o them remainunique even to day. Among her children were sculptors,

architects, and painters whose work compels admirationand exacts the praise o the most exacting art critics o the modern world. Her law makers, jurists, and sociolo


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4 ENGLANDS DEB O INDIA


gists have le behind them codes and ideas o justice in

erior to none produced under similar conditions. Undertheir own codes, the people o India were prosperous andhappy.

Torntons Description o Ancient India.Ere yet the Pyramids looked down upon the val

ley o the Nile, when Greece and Italy, those cradles o

European civilisation, nursed only the tenants o a wilderness, India was the seat o wealth and grandeur. Abusy population had covered the land with the marks o itsindustry; rich o the most coveted productions o Natureannually; rewarded the toil o husbandmen; skil ul artisans converted the rude produce o the soil into abrics o

unrivalled delicacy and beauty; and architects and sculptors joined in constructing works, the solidity o whichhas not, in some instances, been overcome by the evolution o thousands o years . . . . Te ancient state o Indiamust have been one o extraordinary magni cence.

Such is the picture o ancient India drawn by a

British historian, by no means partial to India, in theopening paragraphs o his History o British India.Su ciency with Security and Independence the Golden Age. Tis estimate o the magni cence o ancient Indiais not merely rhetorical. Tat the India o ancient timeswas wealthy and prosperous is amply borne out by incontestable testimony. Whether the Golden Age o India isa historical act or a ; myth depends upon our individualconception o a golden age, but we do know that thepart o India included in the Empire o Darius (A ghani


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A HIS ORICAL RE ROSPEC 5


stan and the Northwestern Punjab) was the richest prov

ince o all his dominions.1

We know also, that certain cities in Northern India, described in the Hindu Epics, andcon rmed by accounts o the Greeks, were o great sizeand architectural magni cence. Lastly, as ar back as themiddle o the seventh century B.C., the villagers o Indiahad su ciency or their simple needs. Tere was security; there was independence, there were no landlordsand no paupers. 2 Te mass o the people held it degradation to which only dire mis ortune would drive them, towork or hire. 3 Add to these acts, that there was little, i any crime, and a picture o the Golden Age is completed.

So ar as the conditions o international trade areconcerned, we nd that, except under British rule, Indiahas always had more to sell and less to purchase, in manuactured goods, that the balance o trade was alwaysin her avour; that the Romans have le on record bittercomplaints o the constant drain o gold and silver romtheir country into India, a complaint repeated by Englishmen as late as the eighteenth century; and that, or

more than a century and a hal (1603 1757) the pro ts o the East India Company were made by the importationo Indian manu actures into England. During that time,England was the purchaser and India the vendor o manu acturedgoods, largely or cash.

General Condition o the People Under Hindu

1 Early History o India by V. R. Smith, 3rd ed.p.332 Buddhist India by Rhys Davids, London, 1903, p. 49.3 Ibid., p. 513 libd. p. 51


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and Mohammedan Rule. As to the general condition o

the people under Hindu and Mohammedan governmentsduring the twenty two centuries or which we have authentic historical data, beginning with the invasion o Alexander the Great, and ending with the British occupation o Indian provinces at di erent times rom 1757 to1858, ample testimony shows that the mass o the population had su cient to satis y their simple wants, except inperiods o amine; that the country had prosperous bankers, who loaned money to prince and peasant, negotiatedcommercial paper, and held all kinds o securities; andthat an extensive home and oreign trade was carried oncontinuously.

It has become the ashion or English publicists andhistorians to stress what they deem the superiority o British to native rule in India. Doubtless the ormer has itspeculiar merits, but to assert that the country has neverbe ore known such economic prosperity, or experiencedthe administration o such even handed justice as underBritish rule, is to disclose unjusti able mental bias or ig

norance. A number o just and air minded Englishmenhave deplored such utterances, and a service may be rendered to both England and India by transcribing a ew opinions on that point:

India Re orm Pamphlet.In a pamphlet on India Re orm (No. IX), published

in 1853 by the India Re orm Society o London, which hadthirty seven members o Parliament on its committee, thesubject was examined in the light o historical evidence.


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We ound the people o India, it is said, abject,

degraded, alse to the very core .... Te most indolent andsel sh o our own governors have been models o benevolence and bene cence when compared with the greatest o the native sovereigns. Te luxurious sel shness o the Moghul Emperors depressed and en eebled the people. Teirpredecessors were either unscrupulous tyrants or indolentdebauchees. . .

Having the command o the public press in thiscountry and the sympathy o the public mind with us, it isan easy task thus to exalt ourselves at the expense o ourpredecessors. We tell our own story and our testimony isunimpeachable; but i we nd anything avourable relatedo those who have preceded us,the accounts we pronounceto be suspicious. We contrast the Moghul conquest o theourteenth century with the victorious, mild and merci ulprogress o the British arms in the East in the nineteenthBut i our object was a air one, we should contrast theMussalman invasion o Hindusthan with the contemporaneous Norman invasion o England the characters

o the Mussalman sovereigns with their contemporariesin the West their Indian wars o the ourteenth century with our French wars or with the Crusades the e ecto the Mohammedan conquest upon the character o theHindu with the e ect o the Norman conquest upon theAnglo Saxon when to be called an Englishman was con

sidered as a reproach when those who were appointed to administer justice were the ountain o all iniquity when magistrates whose duty it was to pronounce righteous judgments were the most cruel tyrants and greater


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plunderers than common thieves and robbers; when the

great men were in amed with such a rage o money thatthey cared not by what means it was acquired whenthe licentiousness was so great that a princess o Scotlandound it necessary to wear a religious habit in order topreserve her person rom violation! (Henry o Huntington, Anglo Saxon Chronicle, and Eadmon.)

Te history o Mohammedan dynasty in India isull, it is said, o lamentable instances o cruelty and rapacity o the early conquerors, not without precedent in thecontemporary Christian history; or when jerusalem wastaken by the rst Crusaders, at the end o the eleventhcentury, the garrison, consisting o 40,000 men, was putto the sword without distinction; arms protected not thebrave, nor submission the timid; no age or sex receivedmercy; in ants perished by the same sword that piercedtheir mothers. Te streets o Jerusalem were covered withheaps o slain, and the shriek: o agony and despair resounded rom every house. When Louis the Seventh o France, in the twel h century, made himsel master o the

town o Vitri, he ordered it to be set on re. In England,at the same time, under our Stephen, war was carried onwith so much ury, that the land was le uncultivated, andthe instruments o husbandry were le or abandoned,and the result o our French wars in the ourteenth century, was a state o more horrible and destructive than

was ever experienced in any age or country. Te insatiablecruelty o the Mohammedan conquerors, it is said, standsrecorded upon more undeniable authority than the insatiable benevolence o the Mohammedan conquerors.


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We have abundant testimony o cruelty o contemporary

Christian conquerors, have we any evidence o theirbenevolence?

As attempts are thus systematically made, in bulky volumes, to run down the character o Native govenmentsand sovereigns, in order that we may have a air pretextor seizing upon their possessions, it becomes necessary

to show that we have a Christian Roland or every nativeOliver; that i the Mohammedan conquerors o India werecruel and rapacious, they were matched by their Christiancontemporaries. It is much our ashion to compare Indiain the eenth and sixteenth centuries with England inthe nineteenth, and to pique ourselves upon the result.When we compare other countries with England, said asagacious observer, 4 we usually speak o England as shenow is, we scarcely ever think o going back beyond theRe ormation, and we are apt to regard every oreign country as ignorant and uncivilised, whose state o improvement does not in some degree approximate to our own,even though it should be higher than our own was at no

distant period. It would be almost as air to compare Indiain the sixteenth with England in the nineteenth century,as it would be to compare the two countries in the rstcenturies o the Christian era, when India was at the topo civilisation, and England at the bottom.

Te Observations o Mr. orrcns, M. P., com-paring India with Europe.

Te matter has been discussed lucidly, orcibly and4 Sir Tomas Munro.


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airly by Mr. orrens, M.P., who points out that

Tere never was an error more groundless thanthat which represented the ancient systems o Indian ruleas decrepit or degrading despotism, untempered by publicopinion. It accords too well with the arrogance o nationalsel love and seems too easily to lull the conscience o aggrssion to pretend that those whom it has wronged were

superstitious slaves, and that they must have so remainedbut or the disinterested violence o oreign civilisation introduced by it, sword in hand. Tis pretentious theory iscon uted by the admissions o men whose knowledge cannot be disputed and whom authority cannot be denied. 5

As to the so called usurpations, in amies and anat

icism o Indian monarchs, he asks the reader to comparethem with the deeds and practices o the Borgias,LouisXI., Philip II., Richard III., Mary udor and the last o theStuarts, and to look back at the amily picture o misrulein Europe, rom Catherine de Medici to Louis le Grand, rom Philip the Cruel to Ferdinand the Fool, romJohn the Faithless to Charles the False, not orgettingthe parricide Peter o Muscovy and the Neapolitan Bourbons! It is no more true, he concludes, o Southern Asiathan Western Europe to say that the everyday habits o supreme or subordinate rule were semi barbarous, venal,sanguinary or rapacious.

It is generally assumed that Indian civilisationand prosperity attained its ood mark during the period which intervenes between the invasion o Alexander

5 orrens,Empire in Asia, London, p.100.


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(327 B.C.) and that o Mahmud o Ghazni (1000 A.D.).

When Mahmud invaded India, the country was over owing with wealth. o quote the language o Re orm Pamphlet No. 9: Writers, both Hindu and Mussulman, unitein bearing testimony to the state o prosperity in whichIndia was ound at the time o the rst Mohammedanconquest. Tey dwell with admiration on the extent andmagni cence o the capital o the Kingdom o Canauj, ando the inexhaustible riches o the emple o Somnath. Tewealth that Mahmud carried away rom India was insigni cant compared to what remained there. His raids werecon ned chie y to the northwestern provinces; only ortwo brie periods did he penetrate into the Doab betweenGanga and jamna, and only once in Gujrat, Kattiawar. Te

whole o Central India, which had or so long remainedthe centre o great political activities under the Nandas,the Mauryas and the Guptas; the whole o Eastern India,covering the rich and ertile tracts which comprise themodern provinces o Bengal and Assam; the whole o thesouth had remained untouched.

India Under the Mohammedans.Te rst Mohammedan dynasty began its rule at

Delhi in 1206 A. D., and rom that time on, the Mohammedan rulers o India spent whatever they acquired romIndia within the country itsel . From 1206 A.D. to themiddle o the eighteenth century, when the British began

to acquire rights o sovereignty in India, only twice wasthe country raided with any degree o success.

Raid o amerlane.


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Te rst o these two raiders was amerlane, who

sacked Delhi in 1398 A. D., and is said to have carriedo very great booty. amerlanes expedition also coveredonly a small part o the country invaded by him he neverwent beyond Delhi.

In 1526 A.D. came the Mogul invasion by Baber.Baber, however, came to stay and die in India.

From 1206 to 1526 A.D.During the centuries rom 1206 to 1526 A. D. the

country was, no doubt, in a state o constant unrest on account o the requent wars between the indigenous Hindupopulation and the oreign Mohammedan rulers. Sometimes even the latter ought among themselves out o ri valry, as was not in requently the case in the England o the same centuries. Tere was, however, no drain o wealthout o India, and the requent wars did not materially inter ere with the processes o production and the amassingo wealth. From the account o travellers who visited thecountry during these centuries, as well as rom the histories

o the period, we have enough material to judge o the general economic prosperity o the people. Elphinstone says:

Te condition o the people in ordinary timesdoes not appear to have borne the marks o oppression.Te historian o Feroz Shah (A. D. 1351 1394) expati

ates on the happy state o the ryots, the goodness o theirhouses and urniture, and the general use o gold and sil ver ornaments by their women. Elphinstone adds that although this writer is a panegyrist whose writings are


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not much to be trusted, still the mere mention o such

details as that every ryot has a good bedstead and a neatgarden shows a more minute attention to the com orts o the people than would be met with in a modern author.

Elphinstane on the General State o the Coun-try.

Te general state o the country must no doubt havebeen ourishing. Nicolo de Conti, who travelled about1420 A.D. speaks highly o what he saw in Guzerat, andound the banks o the Ganges covered with towns amidstbeauti ul gardens and orchards, and passed our amouscities be ore he reached Maarazia, which he describes as a

power ul city lled with gold, silver and precious stones.His accounts are corroborated by those o Barbora andBartema, who travelled in the early part o the sixteenthcentury. 6

Carsar Frederic and Ibn Batuta.Caesar Frederic gives a similar account o Guzent,

and Ibn Batuta, who travelled during the anarchy and oppression o Mohammed uglaks reign, in the middle o the eenth century, when insurrections were raging inmost parts o the country, enumerates the large and populous towns and cities, and gives a high impression o thestate the country must have been in be ore it ell into dis

order7

6 Elphinston Vol. II, p. 2037 lbid., p. 206


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Abdurisag.

Abdurizag, an ambassador rom the grandson o amerlane, visited the South o India in 1442, and concurs with other observers in giving the impression o aprosperous country. Te Kingdom o Kandeish was at thistime in a high state o prosperity under its own kings; thenumerous stone embankments by which the streams were

rendered applicable to irrigation are equal to anything inIndia as works o industry and abi1ity. 8

Baber. Baber, the rst sovereign o the Moghul dynasty,

although he regards Hindusthan with the same dislikethat Europeans still eel, speaks o it as a rich and noblecountry, and expresses his astonishment at the swarmingpopulation and the innumerable workmen o every kindand description. Besides the ordinary business o his kingdom, he was constantly occupied with making aqueducts,reservoirs and other improvements, as well as introducingnew ruits, and other productions o remote countries. 9

Sher Shah.Babers son, Humayun, whose character was ree

rom vices and violent passions, was de eated, and obligedto ee rom Hindusthan, by Sher Shah, who is describedas a prince o consummate prudence and ability, whosemeasures were as wise as benevolent, and who, notwithstanding his constant activity in the eld, during a short

8 Elphinstone, Re orm Pamphlet No. 9, p. 10.9 lbid


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reign had brought his territories in the highest order, and

introduced many improvements into his civil government.

He made a high road extending or our months journey rom Bengal to the Western Rhotas near the Indus, with caravanserais at every stage, and wells at every mile and a hal . Tere was an Imam and Muczzin at every

mosque, and provisions or the poor at every caravanserai, with attendants o proper caste or Hindus as well asor Mussulmen. Te road was planted with rows o treesor shade, and in many places was in the state describedwhen the author saw it, a er it had stood or eighty twoyears. 10

Akbar.It is almost super uous to dwell upon the character

o the celebrated Akbar, who was equally great in the cabinet and in the eld, and renowned or his learning, toleration, liberality, clemency, courage, temperance, industry and largeness o mind. But it is to his internal policy that

Akbar owes his lace in that highest order o princes whosereigns have been a blessing to mankind. He orbade trialsby ordeal, and marriages be ore the age o puberty, andthe slaughter o animals or sacri ce. He employed hisHindu subjects equally with Mohammedans, abolishedthe capitation tax on in dels as well as all the taxes onpilgrims, and positively prohibited the making slaves o persons taken in war. He per ected the nancial re orms

10 Elphinstone, Vol. II, p. 151. Re orm Pamphlet No. 9, pp. 10 and 11.


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which had been commenced in those provinces by Sher

Shah. He remeasured all the lands capable o cultivationwithin the Empire; ascertained the produce o each bigah;determined the proportion to be paid to the public; andcommuted it or a xed money rent, giving the cultivatorthe option o paying in kind i he thought the money ratetoo high. He abolished, at the same time, a vast number o vexatious taxes and ees to o cers. Te result o these wisemeasures was to reduce the amount o public demandconsiderably. 11

Pietro del Valle.Te Italian traveller, Pietro del Valle, wrote in 1623,

generally all live much a er a genteel way and they do

it securely; as well because the king does not persecutehis subjects with alse accusations, nor deprive them o anything when he sees them live splendidly and with theappearance o riches! 12

Shah Jehan.But the reign o Shah Jehan, the grandson o Ak

bar, was the most glorious ever known in India. His owndominions enjoyed almost uninterrupted tranquillity and good government; and although Sir Tomas Roe wasstruck with astonishment at the pro usion o wealth whichwas displayed when he visited the Emperor in his camp in1615, in which at least two acres were covered with silk,

gold carpets and hangings, as rich as velvet, embossedwith gold and precious stones could make them, yet we11 Re orm Pamphlet No. 9, p. xx on the authority o Elphinstone, Vol. II.12 Quoted by.Re orm Pamphlet, p. 12,


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have the testimony o avernier that he who caused this

celebrated peacock throne to be constructed, who, at theestival o his accession, scattered amongst the bystanders money and precious things equal to is own weight,reigned not so much as a over his subjects, but rather asa ather over his amily.

A er de raying the expenses o his great expedition

to Candahar and wars in Balk, Shah jehan le a treasureo about 24,000,000, in coins and vast accumulations o wrought gold, silver and jewels. 13

Aurangzeb and His Successors.Notwithstanding the misgovernment o Aurangzeb

and the reign o a series o weak and wicked princes, together with the invasion o Nadir Shah, who carried away enormous wealth when he quitted Delhi in 1739, thecountry was still in a comparatively prosperous condition.14

Te Raid by Nadir Shah.Te raid by Nadir Shah was the second one which

took place between 1206 A. D. and 1757 A.D. He carriedenormous wealth, but how enormous could it have beenwhen one considers that even he did not go beyond Delhi,leaving the rest o the north, the greater part o the west,and the entire east and south o India una ected and untouched? Troughout the Mohammedan dominance,large parts o India remained under Hindu rule, and the13 Re orm Pamphlet on the authority o Elphinstone, Vol II, pp. 293 29914 Re orm Pamphlet No. 9, p. 16.


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historians are agreed that in the territories o the Hindu

princes general prosperity prevailed. Some o them aresaid to have attained to a pitch o power and splendourwhich had not been surpassed by their ancestors.

Pre-British Period.We are, however, more directly concerned with the

economic condition o India in the period immediately

preceding the establishment o British power. We havesome vivid glimpses preserved or us in the accounts o the contemporary European travellers and Anglo Indianadministrators, writers o the type o Malcolm, Elphinstone, Monroe, Orme, and odd.

Principal Political Divisions o the Country.Te country was then divided into several political

divisions. Te rulers were practically independent masterso their respective territories, though some acknowledgeda nominal suzerainty o the Grand Mogul. In the north,Bengal, Behar, and Orissa were ruled by the Nawab o Bengal, with his seat in Murshidabad. Oude was administeredby the Nawab Vizir who had several eudatories, including the Rajah o Benares. Te Mahrattas were practically supreme in Delhi where the Grand Mogul still maintainedthe shadow o his glory, also in Rajputana, Central Indiaand the Westem Ghauts. Te South was divided betweenthe Nawab o Hyderabad, with the Nawab o Arcot and

the Rajah o anjore under him, and the principality o Mysore, with a Hindu prince as sovereign and a Mohammedan minister as ruler. Te North west, comprising the


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land o the Five Rivers and the territory between the Sutlej

and the jamna, were still nominally under the Mogul. By the time, however,that the British established themselvesat Delhi, it had completely passed into the hands o theSikhs, and it was rom them that the British nally took it.Scindh was under the Amirs.

We will now brie y narrate the means whereby Brit

ain acquired these territories, with a statement o theireconomic condition be ore and a er British occupation.

onjore and Arcot.Let us begin with the South. Te small Hindu prin

cipality o anjore, o the coast o Coromandel, was therst victim o British aggression. For several centuries thisstate had enjoyed the rights o sovereignty; and in 1741,Pratap Singh succeeded to the throne as a result o a domestic revolution with which the English had nothing todo. Te latter acknowledged him unhesitatingly as ruler,and established a kind o riendship with him against their,rivals, the French. Te brother o Pratap Singh, one Sahu

jee, subsequently approached the British with an o er o the ort and jagir o Devikotah as the price o their help toput him on the throne. Te British despatched an army to dethrone Pratap Singh. 15 Te expedition ailed, and asecond was resolved on. Devikotah was taken, and they entered into negotiations with Pratap Singh agreed todesist rom urther hostilities to abandon him or whomthey pretended to have ought, but engaged to secure hisperson and to receive a xed sum or his maintenance, on

15 orrens, pp. 20 21; Mill, Bk. IV, p. 91


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condition o being su ered to remain undisputed masters

o Devikotah and the circumjacent territory. Tis was thebeginning o the conquest o Hindustan.

Te principality o anjore was included in the dominions o the Nawab o Carnatic, who in his turn, wasconsidered to be under the Subab o Deccan. Te desireor the possession o Devikotah on the part o the British

had its origin in their rivalry with the French. When, in1754, the English and the French made peace, and signeda treaty, mutually renouncing any urther designs o territorial aggression in India, and agreeing to inter ere nomore in the a airs o the local governments, it might havebeen expected that the troubles o the people o Carnaticwere over.

Muhammad Ali, the riend o the English, had beenacknowledged the Nawab o Carnatic. Te ink on thiscompact was scarcely dry when the British entered intonegotiations to reduce certain other Hindu principalities included in the Nawabs dominions which the latterasserted owed large sums o tribute money to him. TeFrench authorities at Pondicherry protested without result. Eventually they were drawn into hostilities and worsted. Te rst treaty with the Nawab o Carnatic was madein 1763, in which he acknowledged his liability to the EastIndia Company or all the expenses they had incurred inthe war with the French, and undertook to pay them o

by annual instalments o 28 lacs o rupees, i.e., 280,000.In the course o time, the Nawab was asked to bestow agrant o lands, the rents and revenues o which should be


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credited to the debt. Tis had, o course, to be conceded.

Te Jagirdar, however, was soon to become the master.Be ore the century was over, the Nawab o Carnatic,

the rst patron o the British, when they landed riendless and shelterless on the coast o Coromandel, latertheir ally in the war with the French, became reducedto the position o the mere creature o the honourable

company, and wholly at the mercy o its servants. By thetime Lord Wellesley came to make a resh treaty with theNawab, Te Carnatic had been inmeshed in the net o our riendship and the noose o our protection. 16 By thetreaty made by Lord Wellesley, it was declared that ourhs o the revenue o the principality, the management

o which had already passed into the hands o the company, was orever vested in the company, and the remaining one h appropriated or the support o the Nawab.Tese emoluments, along with the dignity and prestigeo the nawabship, were enjoyed by the last scion o theamily till 1853, when Lord Dalhousie thought the timehad arrived to let the curtain all upon the arce o grati

tude to Arcot. Te cabinet o Lord Aberdeen, the Court o Directors assenting, he orbade Azimshah, the successoro the last nawab, to assume the title, and re used to pay him the stipulated h o the revenues, which he claimedas undisputed heir, upon the ground that when treatiesare made orever, the suzerain is not bound longer than

the sense o expediency lasts.17

In commenting upon what16 Arnold, Dalhousies Administration o British India, London. Vol. II,p. 171.17 orrens, pp. 378 79.


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took place in 1792, at the time o the death o the Nawab

who rst entered into relations with the British, JamesMill in his History o British India says:

A act is here orcibly urged upon our attention,o which it is important to nd the true explanation. Under their dependence upon the British Government, it hasbeen seen that the people o Oude and Karnatic, two o

the noblest provinces o India, were, by mis government,plunge into a state o wretchedness with which no otherpart o India, hardly any part o earth, had anything tocompare. In what manner did the dependence o the native states upon the English, tend to produce these horride ects? 18

Tis question may best be answered in the wordso the Duke o Wellington, who as an historian o the administration o his brother, the Marquis o Wellesley, says,speaking o the treaty made with the Nawab in 1792:

One o the great evils in this alliance, or in all thoseo this description ormed in India, was that it provided

that the Company should not inter ere in the internalconcerns o the Nawabs government. At the same timethe inter erence o Company in every possible case wasabsolutely necessary or the support o the Native Government, and was practised on every occasion. Another evilwhich a ected this, as well as every alliance o the samedescription, was. . . that the Nawab was obliged to borrowmoney at large interest in order to make his payment atthe stipulated periods and . . . the laws were made by the

18 Book VI, pp. 51 52.


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quence, together with the measures about to be adopted

in Carnatic. He re used to accept the situation o ered himunder the new arrangement. 20 It was resolved to set asidethe young Nawab and set up another man, the brother tothe deceased, on the throne, on condition he agreed to theproposed terms. Tis was accordingly done.

Mysore.

Hyder Ali o Mysore was a person o humble origin.By dint o his courage, ability, enterprise and resource ulness, he rose to a position which enabled him to usurp thepowers o state, setting aside the right ul Hindu prince,and reducing him to the position o pensioner. Te BritishGovernment entered into treaty relations with him, rec

ognising him as the ruler. His rst quarrel with the Britishwas due to their seizure o Baramahal, a port o the Kingdom o Mysore. Hyder retaliated, and under the walls o Madras, dictated a new treaty with the company, whichwas to urnish him with seven battalions o sepoysin caseany oreign enemy attacked his dominions. When, in1778, the British, at war with the French, took possessiono Pondicherry, they attacked Mahe, a small town in oneo the provinces o Mysore. Hyder protested, and uponbeing disregarded, invaded the English possessions inCarnatic and exacted retribution. Te great historian o Anglo India, Mill, remarks: Hyder was less detested asa destroyer than hailed as a deliverer . . . and the Eng

lish commander himsel testi es in an o cial letter thatTere is no doubt that Hyder has greatly attached the in

20 Muir, Te Making o British India, p. 219.


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habitants to him. orrens remarks that later, when Pettah

and Arcot were taken by Hyder, he treated the inhabitantswith humanity; no plundering or license was allowed;every one was continued in the enjoyment o his ortune,and all who held places under the Nawab retained them;to the English o cers, Hyder gave money to provide ortheir necessities conduct which places his barbarityin avourable contrast with the civilisation o the English, when later they sacked his capital.

In the winter o 1782, be ore the war with the Englishhad terminated, Hyder died, and his adversaries made anew treaty o peace with his son ipu. Te delity o Hyders Brahmin minister has been handed down in history he it was who concealed the death o his prince untilipu reached the camp and claimed his inheritance.

Colonel Fullartons View o the Interests o Indiacontains an estimate o the character o Hyder and conditions during his reign. Te writer o the Re orm Pamphletremarks:

Although most constantly engaged in war, the improvement o his country and strictest executive administration ormed his constant care. Manu acturer andmerchant prospered . . . cultivation increased, new manuactures were established, wealth owed into the kingdom. . . the slightest de alcation the o cers o revenue wassummarily punished. He had his eye upon every corner o his own dominions and every court in India. . . . Toughunable to write himsel , he dictated in ew words the substance o his correspondence to secretaries . . . he united


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minuteness o detail with the utmost latitude o thought

and enterprise .... He bequeathed to his son, ipu Sultan,an over owing treasury, a power ul empire, an army o 300,000 men . . . and great territories.

Te ollowing is the substance o Moores estimate o ipus administration.

When a person, travelling through a strange coun

try, nds it well cultivated, populous with industrioushabitants, cities newly ounded, commerce extending,towns increasing, and everything ourishing so as to indicate happiness, he naturally concludes the orm o government congenial to the people. Tis is a picture o ipusgovernment . . . we have reason to suppose his subjects

to be happy as those o any other sovereign . . . no murmurings or complaints were heard against him, thoughthe enemies o ipu were in power, and would have beengrati ed by any aspersions o his character . . . but the inhabitants o the conquered countries . . . so soon as anopportunity o ered, scouted their new master, and gladly returned to their loyalty again. 21

Dirom, another writer pays an equally high tributeto the prosperity o ipus country. 22

All this prosperity was not created entirely by Hyder or his son, whose sway did not last hal a century.For the oundation o these ourishing conditions we

must look to the ancient Hindu dynasty they were the21 Moores Narrative o War with ipu Sultan, p. 201 quoted in the Reorm Pamphlet.22 Diroms Narrative, p. 249.


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constructors o those magni cent canals which intersect

Mysore and insure the people prodigal returns rom theertile soil.

In 1789 occurred the third war with Mysore, resulting in a peace in 1792 whereby ipu was orced to pay aheavy indemnity and cede hal his territories. It was reserved or the Marquis o Wellesley to wipe out the House

o Hyder completely, by annexing a large part o his remaining lands, and restoring the superseded Hindu dynasty to a raction o its ormer domain under the title o the Raja o the state o Mysore.

Northern India.From the south, we may now turn to the north to ex

amine conditions preceding British occupation. o avoidall suspicion o political or racial bias, we will let the English writers o the Re orm Pamphlet speak.

Bengal.In the gear that Hyder established his sway over

Mysore, engal, the brightest jewel in the ImperialCrown o the Moguls, came into British possession. Clivedescribed the new acquisition as a country o inexhaustible riches and one that could not ail to make its new masters the richest corporation in the world. Bengal wasknown to the East as the Garden o Eden, the rich kingdom. Says Mr. Holwell: Here the property, as well as theliberty, o the people, are inviolate. Te traveller, with orwithout merchandise, becomes the immediate care o theGovernment, which allots him guards, without any ex


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pense, to conduct him rom stage to stage .... I . . . a bag o

money or valuables is lost in this district, the person whonds it hangs it on a tree and gives notice to the nearestguard .... 23

Te rich province o Dacca was cultivated in every part . . .justice was administered impartially . . .JeswuntRoy . . . had been educated in purity, integrity and inde

atigable attention to business, and studied to render thegovernment o his province conducive to the general easeand happiness o his people he abolished all monopolies and the imposts upon grain. 24

Such was the state o Bengal when Alivardy Khan .. . assumed its government. Under his rule . . .the coun

try was improved; merit and good conduct were the only passports to his avour. He placed Hindus on an equality with Mussalmen, in choosing Ministers, and nominatingthem to high military and civil command. Te revenues,instead o being drawn to the distant treasury o Delhiwere spent on the spot. 25

But in less than ten years a er Bengal had becomesubject to British rule, a great and sudden change cameover the land. Every ship, Mr. Macaulay tells us, or sometime, had brought alarming tidings rom Bengal. Te internal misgovernment o the province had eached such apitch that it could go no urther.

23 HowelIs racts upon India, Re orm Pamphlet No. 9. p. 2124 Stewsrts History o Bengal, p. 430, quoted in the Pamphlet No. 9, p. 2225 Stewarts History o Bengal, quoted in the Re orm Pamphlet No. 9, p.22.


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What indeed, was to be expected rom a body o

public servants exposed to temptation such as Clive oncesaid, esh and blood could not bear it, armed with irresistible power, and responsible only to the corrupt, turbulent, distracted, ill in ormed Company, situated at such adistance that the average interval between the sending o a despatch and the receipt o an answer was above a yearand a hal . Accordingly the ve years which ollowed thedeparture o Clive rom Bengal saw the misgovernmento the English carried to such a point as seemed incompatible with the existence o society. Te Roman proconsul, who, in a year or two, squeezed out o a province themeans o rearing marble palaces and baths on the shoreso Campania, o drinking rom amber and easting on

singing birds, o exhibiting armies o gladiators and ockso camelopards; the Spanish viceroy, who, leaving behindhim the curses o Mexico or Lima, entered Madrid with along train o gilded coaches, and sumpter horses trappedand shod with silver, were now outdone .... Te servantso the Company obtained or themselves a monopoly o

almost the whole internal trade. Tey orced the nativesto buy dear and sell cheap. Tey insulted with impunity the tribunals, the police and scal authorities . . . every servant o a British actor was armed with all the powero the Company ....Enormous ortunes were thus rapidly accumulated at Calcutta, while thirty millions o humanbeings were reduced to an extremity o wretchedness ....Under their old masters, . . . when evil became insupportable, the people rose and pulled down the government.But the English Government was not to be shaken o .


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Tat Government, oppressive as the most oppressive orm

o barbarian despotism, was strong with all the strength o civilisation. 26

Te Kingdom o Oude.Te same testimony regarding the East India Com

panys destructive and rapacious misrule applies to Oude.While Mr. Warren Hastings was still vested with supreme

rule over India, he describes a condition which he himsel was instrumental in producing.

I ear that our encroaching spirit, and the insolencewith which it has been exerted, has caused our alliance tobe as much dreaded by all the powers o Hindustan as ourarms. Our encroaching spirit, and the uncontrolled andeven protected licentiousness o individuals, has done in jury to our national reputation. . . . Every person in Indiadreads a connection with us. 27

Be ore dealings with the English commenced, Oudewas in a high state o prosperity, yielding, without pressure on the people, an income o three millions, clear. By quartering upon the Nawab an army o soldiers, as wellas a host o civilians, he was soon redced to a state o bitterest distress and his country with poverty, his incomebeing reduced in a ew years to hal

Englands Debt to India

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