SWADESHI AND ECONOMIC PROGRESS.
Was it not Talleyrand who said that speech had been given to man in
order to enable him to disguise his thoughts? Indian politicians are no
Talleyrands, but they sometimes seem to have framed their vocabulary on
purpose to disguise political conceptions which most of them for various
reasons shrink from defining at present with decision. We have already
seen how elastic is the word _Swaraj_, self-government, or rather
self-rule. In the mouth of the "moderates" of the Indian National
Congress it means, we are assured, only a pious aspiration towards the
same position which our self-governing Colonies enjoy within the Empire.
For the "advanced" politician _Swaraj_ means a transition stage which he
hopes and believes must infallibly lead to a complete severance of the
ties that unite India to the Empire. For the "extremists" it means the
immediate and violent emancipation of India from British rule, and
absolute independence. So it is with the term _Swadeshi_, which means
anything from the perfectly legitimate and commendable encouragement of
Indian trade and industry to the complete exclusion of foreign, and
especially of British, goods by a "national" and often forcible
"boycott" as part of a political campaign against British rule.
Political _Swadeshi_ bases itself upon a Nationalist legend that a
"golden age" prevailed in India before we appeared on the scene, and
that British rule has deliberately drained India of her wealth. Even if
we have to, admit that Indian home industries have suffered heavily from
the old commercial policy of the East India Company and from the
formidable competition of the organized and scientific processes of
British industry, this legend hardly deserves to be treated seriously.
The _reductio ad absurdum_ of the argument has certainly been reached
when Mr. Keir Hardie alleges that Indian loans raised in England
constitute "a regular soaking drain upon India because the interest is
paid to bondholders in this country [England], and is not therefore
benefiting the people from whom it is taken." I can only commend this
sapient contention to our self-governing Colonies, who have all had
recourse in turn to British capital for the development of their
resources, and paid interest on their loans to British bondholders
without being apparently conscious of any "soaking drain." The supposed
"drain" is estimated in various ways, but a common method adopted is to
lay stress upon the excess of exports over imports[22]. Lord Curzon has
rightly pointed out that economically this test is quite fallacious; and
that in the richest country in the world, America, the value of the
exports exceeds the imports by over £100,000,000 per annum. Home charges
represent three-fourths of the "drain," and these may be calculated at
about £18,000,000 annually. Of this sum, £6,750,000 is paid in interest
on railway capital; but the railways are a source of profit, and the
payment comes from the railway passenger. Moreover, in course of time,
the Indian railways will become, and are becoming, a property of
enormous value to the State. The interest on India's public debt is
£3,000,000, but it has to be remembered how much India has benefited by
expenditure which has proved reproductive. Sir Bampfylde Fuller has
stated that the lowest estimate of the increase in produce obtained
through irrigation works alone is estimated at £30,000,000 annually. In
the last 50 years the total volume of Indian trade, imports and exports,
has increased from £40,000,000 to £200,000,000. The remaining items are
roughly, home military charges, £2,000,000; India Office, &c., £250,000;
leave allowances, £750,000; pensions, £4,000,000. A considerable part of
these pensions represent merely deferred pay. Moreover, unlike some
other countries, e.g., the United States, where £32,000,000 are spent
on pensions, mostly unearned, India has had good value, brimming over,
for her pensions. The private remittances to England, which must be
added to these sums, are not treated in any other country as an economic
loss. No American economist would so regard the enormous annual sums
remitted by immigrants to Ireland, Italy, and other European countries,
or the vast annual expenditure of American tourists in Europe. Indian
immigrants remit £400,000 annually to India from the Straits Settlements
and Malay States alone, and considerable sums must be sent from East and
South Africa and Ceylon, as well as smaller sums from Mauritius and the
West Indies. Yet these colonies do not apparently complain about a
"drain" to India.
What India is entitled to ask is whether Indian loans have been expended
for the benefit of the Indian people, and the answer is conclusive.
India possesses to-day assets in the shape of railways, irrigation
canals, and other public works which, as marketable properties,
represent more than her total indebtedness, without even taking into
account the enormous value of the "unearned increment" they have
produced for the benefit of the people of India. If, therefore, we look
at the Government of India for a moment as merely a board of directors
conducting a great development business on behalf of the Indian people,
they can certainly show an excellent balance-sheet. Let us admit that
some of the "home charges" may be open to discussion, and I shall have a
word or two or say about them later on. But taken altogether they may
fairly be regarded as the not unreasonable cost of administering a
concern which, if we wished to liquidate it and to retire from business
to-morrow, would leave a handsome surplus to India after paying off the
whole debt contracted in her name. The case was stated very fairly by
the late Mr. Ranade, whose teachings all but the most "advanced"
politicians still profess to reverence, when he delivered the inaugural
address at the first Industrial Conference held just 20 years ago at
Poona:--
There are some people who think that as long as we have
a heavy tribute to pay to England which takes away nearly
20 crores of our surplus exports, we are doomed, and can
do nothing to help ourselves. This is, however, hardly a
fair or manly position to take up. A portion of the burden
represents interest on moneys advanced to, or invested in,
our country, and so far from complaining, we have reason
to be thankful that we have a creditor who supplies our needs
at such a low rate of interest. Another portion represents
the value of stores supplied to us, the like of which we cannot
produce here. The remainder is alleged to be more or less
necessary for the purpose of administration, defence, and
payment of pensions, and, though there is good cause for
complaint that it is not all necessary, we should not forget
the fact that we are enabled by reason of this British connexion
to levy an equivalent tribute from China by our opium
monopoly.
If India must now forgo this tribute from China, it is not at any rate
the fault of the Government of India that the whole cost of the
awakening of the national conscience in England to the iniquity of the
opium traffic is being thrown upon India.
The question is not whether we have done well, but whether we might not
have done better, and whether the economic development of India,
industrial, commercial, and agricultural, has kept pace with that of the
rest of the world. If the answer in this case is more doubtful, we have
to bear in mind the idiosyncrasies of the Indian people and especially
of the educated classes. Indians have been as a rule disinclined to
invest their money in commerce or industry or in scientific forms of
agriculture. It is estimated that the hoarded wealth of India amounts,
at a conservative calculation, to £300,000,000, and this probably
represents gold alone. The annual absorption of gold by India is very
great. Lord Rothschild remarked to the Currency Commission that none of
the smooth gold bars sent to India ever came back. There is, in
addition, an enormous sum hoarded in silver rupees and silver ornaments.
It is no uncommon sight, in the cities of Upper India, to see a child
wearing only one ragged, dirty garment, but loaded with massive silver
ornaments. Indians who have money and do not merely hoard it prefer to
lend it out, often at usurious rates of interest, to their needy or
thriftless fellow-countrymen. Until quite recently the educated classes
have held almost entirely aloof from any but the liberal professions.
Science in any form has been rarely taken up by University students, and
for every B.Sc. the honours lists have shown probably a hundred B.A.'s.
The Indian National Congress itself, as it represented mainly those
classes, naturally displayed the same tendencies, and for a long time it
devoted its energies to so-called political problems rather than to
practical economic questions. Hence the almost complete failure of the
Western-educated Indian to achieve any marked success in commercial and
industrial undertakings, and nowhere has that failure been more complete
than in Bengal, where it would be difficult to quote more than one
really brilliant exception. Hence also no doubt some of the political
bitterness which those classes display. Within the last few years,
however, the politician has realized that, whilst commercial and
industrial development was steadily expanding and the demand for it was
increasing on all sides, he was left standing on a barren shore. He has
done his best, or rather his worst, to convert _Swadeshi_ into a
political weapon. His efforts have only been temporarily and partially
successful. But we may rest assured that long after this spurious
political _Swadeshi_ has disappeared, the legitimate form of _Swadeshi_
will endure--the _Swadeshi_ that does not boycott imported goods merely
because they come from England, but is bent on stimulating the
production in India of articles of the same or of better quality which
can be sold cheaper, and can, therefore, beat the imported goods in the
Indian markets.
To this form of _Swadeshi_ it is undoubtedly the duty and the interest
of the Government of India to respond. We are bound as trustees for the
people of India to promote Indian trade and industry by all the means in
our power, and we are equally bound to help to open up new fields of
activity for the young Indians whom our educational system has diverted
from the old paths, and who no longer find for their rapidly increasing
numbers any sufficient outlet in the public services and liberal
professions which originally absorbed them. No reforms in our
educational system can be permanently effective unless we check the
growth of the intellectual proletariat, which plays so large a part in
Indian unrest, by diverting the energies of young India into new and
healthier channels. At the same time there can be no better material
antidote to the spread of disaffection than the prosperity which would
attend the expansion of trade and industry and give to increasing
numbers amongst the Western-educated classes a direct interest in the
maintenance of law and order. There are amongst those classes too many
who, having little or nothing to lose, are naturally prone to fish in
the troubled waters of sedition.
In regard to agriculture, which is, and is bound to remain, the greatest
of all Indian industries, for it supports 70, and perhaps 80, per cent,
of the whole population, the Government of India have no reason to be
ashamed of their record. Famines can never be banished from a country
where vast tracts are entirely dependent upon an extremely uncertain
rainfall, and the population is equally dependent upon the fruits of the
soil. But besides the scientific organization of famine relief, the
public works policy of Government has been steadily and chiefly directed
to the reduction of famine areas. Not only has the construction of a
great system of railways facilitated the introduction of foodstuffs into
remote famine-stricken districts, but irrigation works, devised on a
scale and with a skill which have made India the premier school of
irrigation for the rest of the world, have added enormously both to the
area of cultivation and to that where cultivation is secured against
failure of the rainfall. The arid valley of the Indus has been converted
into a perennial granary, and in the Punjab alone irrigation canals have
already added 8,000,000 acres of unusual fertility to the land under
tillage, and have given to 5,000,000 acres more the protection against
drought in years of deficient rainfall which they formerly lacked.
Plantations of tea, coffee, cinchona, &c., and the cultivation of jute
have added within the last 25 years some £30,000,000 a year to the value
of Indian exports. Jute alone covers the whole of the so-called "drain."
The fact, nevertheless, cannot be denied, though it is an unpleasant
admission, that a large proportion of the immense agricultural
population of India have remained miserably poor. Indian, politicians
ascribe this poverty to the crushing burden of the land revenue
collected by Government--a burden which has been shown to work out only
to about 1s. 8d. per acre of crop and is being steadily reduced in
relation to the gross revenue of the country--but they say nothing about
the exactions of the native landlord, who has, for instance in Bengal,
monopolized at the expense of the peasantry almost the whole benefit of
the Permanent Settlement. Some very significant facts with regard to
_rayatwari_ landlords were brought out in a debate this year in the
Legislative Council of Madras, when Mr. Atkinson, in reply to one of his
Hindu colleagues who had been denouncing the Government assessments in
certain villages, produced an overwhelming array of figures to show
that in those very villages the rents exacted by native landlords varied
between eight and eleven times the amount which they paid to Government.
Nor do Indian politicians say much about the native moneylender, who is
far more responsible than the tax-gatherer for the poverty of the
peasant. Still less do they say about the extravagance of native
customs, partly religious and partly social, which makes the peasant an
easy prey to the moneylender, to whom he is too often driven when he has
a child to marry or a parent to bury or a Brahman to entertain.
Indebtedness is the great curse of Indian agriculture, and the peasant's
chief necessity is cheap credit obtained on a system that will not cause
him to sink deeper into the mire. Here again it is not Indian
politicians, but the British rulers of India who have found a solution,
and it is of such importance and promise that it deserves more than mere
passing mention.
It has been found in the adaptation to Indian requirements of the
well-known Raffeisen system. Sir William Wedderburn was, I believe,
actually the earliest advocate of this movement, but the first practical
experiments were made in Madras as a result of exhaustive investigation
by Sir Frederick Nicholson and in the United Provinces when Sir Antony
(now Lord) MacDonnell was Lieutenant-Governor, and one of the many
measures passed by Lord Curzon for the benefit of the humbler classes in
India, with little or no support from the politicians and often in
despite of their vehement opposition, whilst Nationalist newspapers
jeered at "a scheme for extracting money from wealthy natives in order
that Government might make a show of benevolence at other people's
expense," was an Act giving legal sanction to the operations of a system
of co-operative banks and credit societies. It found a healthy basis
ready made in the Indian village system, and though it would never have
succeeded without the informing energy and integrity of "sun-dried
bureaucrats" and the countenance given to it by Government, it has had
the cordial support of many capable native gentlemen. It is now only
eight years old, but it has begun to spread with amazing rapidity. The
report of the Calcutta Conference of Registrars last winter showed that
the number of societies of all kinds had risen from 1,357 in the
preceding year to 2,008, and their aggregate working capital from 44
lakhs to nearly 81 (one lakh or Rs.100,000=£6,666). The new movement is,
of course, still only in its infancy, but it is full of promise. The
moneylender, who was at first bitterly hostile, is beginning to realize
that by providing capital for the co-operative banks he can get, on the
whole, an adequate return with much better security for his money than
in the old days of great gains and, also, great losses. One of the
healthiest features is that, notwithstanding the great expansion of the
system, during the last twelve months, the additional working capital
required was mainly provided by private individuals and only a very
small amount by Government. Another hopeful feature is that the money
saved to the peasant by the lower interest he has to pay on his debts
pending repayment is now going into modern machinery and improved
methods of agriculture. The new system appeals most strongly to poor and
heavily indebted villages, and in the Punjab, where the results are
really remarkable, especially in some of the backward Mahomedan
districts, it is hoped, that within a few years nearly half the peasant
indebtedness, estimated at 25 to 30 millions sterling, will have been
wiped off.
Practical education is, however, as urgently needed for Indian
agriculture as for any other form of Indian industry. The selection of
land and of seeds, the use of suitable manures, an intelligent rotation
of crops, the adoption of better methods and less antiquated implements
can only be brought about by practical education, and the demand for it
is one that Government will hear put forward with growing insistency by
the new Councils on which Indian landowners have been wisely granted
the special representation that the agricultural interests of India so
abundantly deserve.
It was the "sun-dried bureaucrat" again who in regard to Indian
industries as well as to Indian agriculture preached and practised sound
_Swadeshi_ before the word had ever been brought into vogue by the
Indian politician. The veteran Sir George Birdwood, Sir George Watt, Sir
Edward Buck, and many others have stood forth for years as the champions
of Indian art and Indian home industries. As far back as 1883, a
Resolution was passed by Government expressing its desire "to give the
utmost encouragement to every effort to substitute for articles now
obtained from Europe articles of _bona fide_ local manufacture or
indigenous origin." In 1886, a special Economic Department was created
to keep up the elaborate survey of the economic products of India which
Sir George Watt had just completed under State direction. But the most
important administrative measure was the creation under Lord Curzon of a
separate portfolio of Commerce and Industry in the Government of India,
to which a civilian, Sir John Hewett, was appointed with very
conspicuous success. It was also under Lord Curzon that the most
vigorous impulse was given to technical education of which the claims
had already been advocated by many distinguished Anglo-Indian officials,
such as Sir Antony MacDonnell and Sir Auckland Colvin. The results of an
exhaustive inquiry conducted throughout India by a Committee of
carefully selected officers were embodied in the Educational Resolution
of 1904. Particular stress was laid upon the importance of industrial,
commercial, and art and craft schools as the preparatory stages of
technical education, for which, in its higher forms, provision had
already been made in such institutions as the engineering colleges at
Sibpur, Rurki, Jubbulpore, and Madras, the College of Science at Poona,
and the Technical Institute of Bombay. Until then the record of
technical schools had too often resembled the description which Mr.
Butler, the new Minister of Education, tersely gave of that of the
Lucknow Industrial School--"a record of inconstant purpose with breaks
of unconcern." Not only did the question of technical education receive
more systematic treatment, but a special assignment of Rs.244,000 a year
was made in 1905 by the Government of India in aid of the provincial
revenues for its improvement and extension. It was not, however, until
the liberality of the late Mr. J.N. Tata and his sons, one of the best
known Parsee families of Bombay, recently placed a considerable income
for the purpose at the disposal of Government that steps have been taken
to establish an "Indian Institute of Science" worthy of the name, to
which the Mysore Government, who have given a site for it in Bangalore,
as well as the Government of India, have promised handsome financial
assistance.
Whilst the encouragement given to Indian technical education has until
quite lately proceeded far more from the British rulers of India than
from any native quarter, it has been also until quite lately British
capital and British enterprise that have contributed mostly to the
development of Indian industry and commerce. The amount of British
capital invested in India for its commercial and industrial development
has been estimated at £350,000,000, and this capital incidentally
furnishes employment for large numbers of Indians. Half a million are
employed, on the railways alone. Another half million work on the tea
estates. The Bombay and Ahmedabad cotton mills represent at the present
day the only important and successful application of Indian capital and
Indian enterprise to industrial development. The woollen, cotton, and
leather industries of Cawnpore, which has become one of the chief
manufacturing centres of India, and the great jute industry of Bengal
were promoted almost exclusively by British, and not by indigenous
effort. Real _Swadeshi_, stimulated by British teaching and by British
enterprise, was thus already in full swing when the Indian politician
took up the cry and too often perverted it to criminal purposes, and,
though he may have helped to rouse his sluggish fellow countrymen to
healthy as well as to mischievous activity, it may be doubted whether
any good he has done has not been more than counterbalanced by the
injurious effect upon capital of a violent and often openly seditious
agitation. Mr. Gokhale himself seems to have awakened to this danger,
when in an eloquent speech delivered by him at Lucknow, in support of
_Swadeshi_ in 1907, he protested, rather late in the day, against the
"narrow, exclusive, and intolerant spirit" in which some advocates of
the cause were seeking to promote it, and laid stress upon the
importance of capital as well as of enterprise and skill as an
indispensable factor of success. British investments are large, but not
so large as they might and should be, and the reluctance to invest in
India grows with the uneasiness caused by political unrest.
That an immense field lies open in India for industrial development need
scarcely be argued. It has been explored with great knowledge and
ability in a very instructive article contributed last January to the
_Asiatic Quarterly Review_ by Mr. A.C. Chatterjee, an Indian member of
the Civil Service. Amongst the many instances he gives of industries
clamouring for the benefits of applied science, I will quote only the
treatment of oil seeds, the manufacture of paper from wood pulp and wood
meal, the development of leather factories and tanneries, as well as of
both vegetable and chemical dyes, the sugar industry, and metal
work--all of which, if properly instructed and directed, would enable
India to convert her own raw materials with profit into finished
products either for home consumption or for exportation abroad. It is at
least equally important for India to save her home industries, and
especially her hand-weaving industry, the wholesale destruction of
which under the pressure of the Lancashire power loom has thrown so
many poor people on to the already over-crowded land. Here, as Mr.
Chatterjee wisely remarks, combination and organization are badly
needed, for "the hand industry has the greatest chances of survival when
it adopts the methods of the power industry without actual resort to
power machinery." The articles on the Indian industrial problem in
_Science Progress_ for April and July, by Mr. Alfred Chatterton,
Director of Industries, Madras, are also worth careful attention. He
remarks quite truly that her inexhaustible supplies of cheap labour are
"India's greatest asset"; but he too wisely holds that the factory
system of the West should only be guardedly extended and under careful
precautions. The Government of India have at present under consideration
important legislative measures for preventing the undue exploitation of
both child and adult labour--measures which are already being denounced
by the native Press as "restrictive" legislation devised by the "English
cotton kings" in order to "stifle the indigenous industries of India in
their infancy"!
What Government can do for the pioneering of new industries is shown by
the success of the State dairies in Northern India and of Mr.
Chatterton's experiments in the manufacturing of aluminium in Madras.
There is an urgent demand at present for industrial research
laboratories and experimental work all over India, and above all for
better and more practical education. But it would seem that, in this
direction, the impetus given by Lord Curzon has somewhat slackened under
Lord Minto's administration, owing, doubtless, to the absorbing claims
of the political situation and of political reforms.
In speaking in the Calcutta Council on a resolution for the
establishment of a great Polytechnic College, the Home Member was able
to point to a fairly long list of measures taken at no small cost by the
State to promote technical education in all parts of India, and he
rightly urged that there would be little use in creating a sort of
technical University until a larger proportion of students had qualified
for it by taking advantage of the more elementary courses already
provided for them. His answer would, however, have been more convincing
could he have shown that existing institutions are always adequately
equipped and that considered schemes which have the support of the best
Indian as well as of the best official opinion are not subjected to
merely dilatory objections at headquarters. Three years ago, after the
Naini Tal Industrial Conference, the most representative ever perhaps
held in India, Sir John Hewett, who had been made Lieutenant-Governor of
the United Provinces after having been the first to hold the new
portfolio of Commerce and Industry, developed a scheme for the creation
of a Technological College at Cawnpore, which met with unanimous
approval. Nothing has yet been done to give effect to it, and it was not
only the Indian but many of the European members, official as well as
unofficial, of the Viceroy's Legislative Council who sympathized with
Mr. Mudholkar's protest when he asked with some bitterness what must be
the impression produced in India by the shelving of a scheme that was
supported by men of local experiences by the head of the Provincial
Government, and by the Government of India, because people living 6,000
miles away did not consider it to be absolutely flawless.
In one direction at any rate, India can rightly demand that Government
should be left an entirely free hand--namely, in regard to the very
large orders which have to be placed every year by the great spending
departments. It has now been laid down by the Secretary of State that
Indian industry should supply the needs of Government in respect of all
articles that are, in whole or in part, locally manufactured. But Indian
industry would be able to supply much more if the Government of India
were in a position to give it more assured support. The case of the
Bengal Iron and Steel Company has been quoted to me, which was
compelled to close down its steel works and to reduce the number of its
iron furnaces in blast from four to two because the promises of support
received from Government when the company took over the works proved to
be largely and quite inexcusably illusory. For works of this kind cannot
be run at present in India unless they can depend upon the hearty
support of Government, which, through the Railways and Public Works
Department, is the main, and, indeed, the only, consumer on a large
scale.
At the present moment, Messrs. Tata are making a truly gigantic
endeavour to acclimatize the iron and steel industry in India by the
erection of immense works at Sakti in Bengal, where they have within
easy reach a practically unlimited supply of the four necessary raw
materials iron ore, coking coal, flux, and manganese ore. To utilize
these, plant is being set up of a yearly capacity of 120,000 tons of
foundry iron, rails, shapes, and merchant bars, and plans have been
drawn out for an industrial city of 20,000 inhabitants. The enterprise
is entirely in Indian hands with an initial share capital of £1,545,000
administered by an Indian board of directors, who have engaged American
experts to organize the works. Government has granted various railway
facilities to the company and has placed with them an order for 200,000
tons of rails for periodical delivery. Upon the future of these works
will probably depend for many years to come the success of the
metallurgical and other kindred industries of India, and it is to be
hoped that Government will be allowed to give them all reasonable
assistance without interference from home. Another purely Indian
enterprise--also under the auspices of Messrs. Tata--is a great scheme
for catching the rainfall of the Western Ghats and creating a
hydro-electric supply of power which will, amongst other uses, drive
most of the Bombay mills.
In regard to minor Indian industries, hints have, I am assured, too
frequently been sent out from England that the claims of British
industry to Government support must not be forgotten. Even now no change
has been made in the regulations which compel the Government of India to
purchase all articles not wholly or partly manufactured in India through
the Stores Department of the India Office. The delay thus caused in
itself represents a serious loss, for it appears to take an average of
nine months for any order through that Department to be carried out, and
further delays arise whenever some modification in the original indent
is required. Nowadays merchants in India keep for ordinary purposes of
trade such large collections of samples that in nine cases out of ten
Government Departments could settle at once upon what they want and
their orders would be carried out both more quickly and more cheaply.
The maintenance of these antiquated regulations, which are very
injurious to Indian trade, is attributed by Indians mainly to the
influence of powerful vested interests in England.
The time would also seem to, have arrived when, with the development of
Indian trade and industry, private contracts might with advantage be
substituted for the more expensive and slower activities of the Public
Works Department. Work done by that Department is bound to be more
expensive, for its enormous establishment has to be maintained on the
same footing whether financial conditions allow or do not allow
Government to embark on large public works expenditure, and when they do
not, the proportion of establishment charges to the actual cost of works
is ruinous. When the Calcutta Port Trust and other institutions of the
same character put out to contract immense works running every year into
millions, why, it is asked, should not Government do the same? Some
works like irrigation works may properly be reserved for the Public
Works Department, but to mobilize the Department whenever a bungalow has
to be built or a road made by Government, is surely ridiculous.
Indian opinion is at present just in the mood when reasonable
concessions of this kind would make an excellent impression; and, if
they are not made spontaneously, the enlarged Indian Councils will soon
exert pressure to obtain them.