

INDIA. 



365 



Cochin-China, being, like the opium revenue, 

 not one that the people of India pay, but the 

 Chinese and other foreign consumers. The defi- 

 cit in the year's accounts was mainly attributa- 

 ble to an increase of Rx 1,054,594 in the army 

 charges and losses on the state and guaranteed 

 railroads. In India there is a profit in the work- 

 ing of the railroads, but in the payment of gold 

 debentures in England the depreciation of the 

 rupee turned this into loss, and the loss grew 

 from Rx 315,864 in 1892 to Rx 1,531,188 in 1893. 



In the^budget for 1893-'94 the total receipts 

 were estimated at Rx 90,005,700, and expendi- 

 tures at Rx 91,600,800. In the revised estimates 

 the net revenue was Rx 50.253,100, and the net 

 expenditure Rx 51,792,800. 



For !894-'95 the net expenditure was estimated 

 at Rx 53,371,000, and a deficit of Rx 3,572,- 

 000 was foreseen which the Government sought 

 to avoid, while still increasing the military ex- 

 penditure, by diverting a part of the famine 

 fund to ordinary expenditure and taking Rx 

 450,000 from the provincial treasuries. The 

 famine fund was first established in 1881, when 

 the Government decided to set aside Rx 1,500.- 

 000 a year for the relief of famine or the con- 

 struction of works calculated to protect the 

 country against famine, or for the reduction or 

 avoidance of debt so as to form a fund to be 

 drawn upon when actual relief became necessary. 

 During fourteen years the sum actually expended 

 out of this fund for famine relief was Rx 304,409, 

 and for protective irrigation works Rx 1,776,863, 

 while Rx 5,482,943 was expended on the construc- 

 tion of railroads and charged to the fund on the 

 ground that they served as a protection against 

 famine, and Rx 3,186,902 were expended on reve- 

 nue railroads and charged to the famine fund as 

 expenditure for protection and insurance against 

 famine, and for reduction and avoidance of debt 

 Rx 5,327,299 were so charged, making the total 

 sum of Rx 16,078,416 appropriated to this fund. 

 In diverting the revenue pledged for this pur- 

 pose the Government argues that the fund does 

 not exist, that the protection against famine is 

 now ample, all the schemes that were thought 

 necessary having been carried out, and that the 

 famine appropriation is in its nature surplus 

 revenue, whereas there is now no surplus. The 

 people in India did not take this view, for special 

 taxes were assessed for the very purpose of pro- 

 viding this fund, and when it was instituted the 

 Government gave pledges in the name of the 

 Queen that they should be applied always to this 

 and no other purpose. These taxes in 1893 yielded 

 Rx 1,686,000. The budget reduces the expendi- 

 ture under this head to Rx 1,090,000. The total 

 expenditure for the year is reduced by Rx 2,075,- 

 000. and the estimated deficit to Rx 1,442,000, 

 which the Government proposed to reduce fur- 

 ther to Rx 302,000 by imposing a general im- 

 port duty of 5 per cent., excepting on cotton 

 goods. The reduction of expenditure was only 

 accomplished by the suspension of public works 

 required to maintain the resources and develop- 

 ment of the country and the starving of the pro- 

 vincial administrations ; and when the Govern- 

 ment announced that no duty would be imposed 

 on cotton goods, Indian and Anglo-Indian opin- 

 ion, already excited to indignation by the dicta- 

 tion by Lombard Street bankers of the currency 



policy, was incensed at the thought that the In- 

 dian customs tariff depended on the exigencies 

 of English party politics and was governed by 

 the interests of Manchester manufacturers. 



The reason given for exempting cotton goods 

 from the general tariff was, that a duty would 

 operate to protect the manufacturers of Bombay 

 from the manufacturers of Manchester. The 

 duty that was taken off in 1882 to please the 

 Manchester manufacturers was protective in its 

 effect, and so the new duties on iron manufac- 

 tures, chemicals, oils, dyes, leather, and woolens, 

 which are now produced in India by steam 

 power, are to a greater degree than the reim- 

 posed duty on cotton cloths would be, for Bom- 

 bay can not produce the fine goods made from 

 long-staple American cotton that are imported 

 into India from England, while Manchester has 

 long since retired from competition with Bom- 

 bay in weaving the coarse fabrics from native 

 cotton with which are clothed the common peo- 

 ple of India- and of other Asiatic countries. 

 Monster petitions were sent to England from 

 India, and all the public bodies uttered remon- 

 strances against the exemption of cotton goods 

 from the tariff, which was condemned by the 

 former Indian officials and not defended by those 

 in office. In December the Government, finding 

 that the budget was less likely to balance than 

 ever, introduced a bill imposing the 5-per-cent. 

 duty on cotton yarns and fabrics, and one plac- 

 ing a countervailing excise duty on Indian cot- 

 tons of the same grades that are imported from 

 England. As only 6 per cent, of the Indian 

 manufacture comes into competition with the 

 English imports, this excise duty was regarded 

 as an irritating tax that would produce no 

 revenue. The Indian National Congress pro- 

 tested against it as calculated to cripple the de- 

 velopment of the Indian cotton industry. The 

 Government submitted the bill to the Legisla- 

 tive Council with apologies, and urged its adop- 

 tion because the British Parliament made it the 

 condition of reimposing the import duty. 



The closing of the mint and the attempt to 

 hold the rupee currency at Is. 4d. had not the 

 effect that the Government expected. The im- 

 ports of silver into India were stimulated and an 

 immense number of rupees were coined in the 

 mints of the native states. The trade with China 

 and other silver-using countries was seriously 

 disturbed, and since all balances are adjusted by 

 triangular exchange between London, Shanghai, 

 and Bombay, and 40 per cent, of India's trade is 

 with the silver-using countries, the banks bought 

 rupee drafts in London in preference to the 

 Council bills. The Government could not dis- 

 pose of these at the rate originally fixed, nor in 

 a short time, after the rate was lowered to Is. 3d., 

 and was obliged to borrow gold in London to 

 discharge its current liabilities. The debt was 

 thus increased by 9,386,000 in 1893, of which 

 6,000,000 consisted of new 3-per-cent. stock, 

 1,386,000 of debentures, and the remainder of 

 advances on bills, while at the same time a bal- 

 ance of Rx 25,000,000 was accumulated in India. 

 The loss on exchange in Government transac- 

 tions, which in 1883 was Rx 3,000,000, had risen 

 in 1893 to Rx 12,523,100. Every decrease of Id. 

 in the value of the rupee means an additional 

 charge of Rx 2,400,000. The budget calculated 



