INDIA. 



339 



the British Empire in other countries has always 

 seemed to Indians a rank injustice and in some 

 cases these charges have been contested by the 

 Indian Government. After an investigation by a 

 royal commission on Indian expenditure and a 

 long discussion between the Indian Government 

 and the British treasury officials, an arrangement 

 was come to recognizing that India has sole in- 

 terest in punitive expeditions on her borders, a 

 direct and substantial interest in questions affect- 

 ing Afghanistan and adjacent parts of central 

 Asia, in questions affecting Siam, in questions af- 

 fecting Persia and the coasts and islands of Arabia 

 and the Persian Gulf, and in the security of the 

 Suez Canal and the maintenance of established 

 government in Egypt as affecting that security, 

 and the interest in keeping open the Suez Canal 

 might extend to the coasts of the Red Sea, but not 

 to the Soudan or the upper Nile. In East Africa 

 there may be a modified interest, and there is in 

 questions affecting China and the Malay penin- 

 sula. In Japan or islands east and south of 

 China, in the African coast south of Zanzibar or 

 any part of Africa west of the Cape of Good Hope, 

 or in Europe as a rule India has no direct or 

 substantial interest in the employment of forces, 

 and if cases arise in which the two governments 

 do not agree no contribution shall be made by 

 India until the sanction of Parliament is obtained. 

 When disputes arise as to the interpretation of the 

 agreement, or minor points of difference, the Lord 

 Chief Justice, Lord Alverstone, will for the next 

 three years be the arbitrator. By recommenda- 

 tion of the commission an annual charge of 260,- 

 000 has been transferred from the Indian to the 

 imperial treasury. 



The Indian revenue prospered even in the famine 

 year ending March 31, 1901, when instead of the 

 expected deficit of 826,000, there was a surplus 

 of 1,670,000, not counting 3,100,000 of profits 

 from the enormous coinage of rupees. The budget 

 for 1902 figured out a surplus of 690,000, but 

 owing to the withdrawal of troops for South 

 Africa and China the actual surplus reached 4,- 

 900,000. The money saved was spent in rearming 

 the Indian army. For 1903 it was decided to re- 

 mit taxes and make grants for the relief of prov- 

 inces that had suffered from drought and for the 

 promotion of industries to the total extent of 

 1,500,000, leaving still an estimated surplus of 

 837,000, which was increased in the revised 

 estimate to 1,700.000. Notwithstanding the dis- 

 bursements to meet famine distress, the accounts 

 for the three years show a surplus of 8,300,000, 

 and during the same period the Government has 

 spent 20,000,000 on railroads and 2,000,000 on 

 irrigation. Moreover, a special gold fund was 

 established, including the investment of 3.600,- 

 000 in British consols, for the purpose of giving 

 stability to exchange. The Government looks for 

 an increase of income under the main heads of 

 revenue except opium, but makes no remission of 

 taxes for 1903 except arrears of the land tax where 

 there were no crops on account of the drought. 

 The customs revenue promises to increase with the 

 steady growth of external trade, which advanced 

 from 150,000,000 in 1891 to 163,000,000 in 1901. 

 The customs duties are levied mainly on articles 

 consumed by the poorer classes, whose friends ask 

 not merely for a reduction of the salt duty, but 

 remissions on other necessaries, ad especially the 

 abolition of the excise duty on domestic cotton 

 cloth, imposed for the benefit of the Lancashire 

 manufacturers. The railroads, on which there was 

 a loss in 1891 of 458,000 on 17,300 miles costing 

 151,000,000, returned a profit of 795,000 to the 

 Government in 1901, when there were 25,300 miles 



open and 235,000,000 invested. In the mean- 

 time the state has acquired the guaranteed rail- 

 roads, worth 80,000,000, giving annuities run- 

 ning fifty years, and these annuities are paid out 

 of ordinary revenue. The capital of the produc- 

 tive debt has been largely increased, but whereas 

 the investments entailed a loss of 1,550,000 in 

 1891, they returned a profit of 800,000 in 1901, 

 while in the same period the service of the non- 

 productive debt diminished from 2,450,000 to 

 1,487,000, so that the annual debt charge has 

 been reduced 3,323,000 in ten years. The rev- 

 enue from opium fell in ten years from 8,000,- 

 000 to 4,000,000, and in 1902 to 2,600,000. The 

 area of poppy culture has been increased, and the 

 Indian Government is accused df trying by in- 

 creasing production to make up for the lessened 

 profit due to Chinese competition. After the In- 

 dian Government had in 1889 reduced the area 

 under poppy cultivation on account of overpro- 

 duction, the British Government in 1891 gave a 

 qualified pledge to gradually reduce opium pro- 

 duction, and in 1893 Parliament passed a resolu- 

 tion in that sense and authorized the appointment 

 of a commission to study the question. The com- 

 mission adopted the view of the Indian Government 

 that the large revenue then obtained from opium 

 could not be replaced and reported against a 

 policy of prohibition or any action tending to the 

 destruction, unasked by China, of the export trade 

 in opium. The annual product of Bengal opium, 

 owing to bad years and consequent reduction of 

 area, averaged only 40,500 chests between 1890 

 and 1898, but in 1899, a good year with increased 

 area, gave 51,700 chests, and in 1900 the manu- 

 factured product was 52,400 chests, equal to the 

 average for the ten years preceding the report of 

 the Opium Commission in 1893. The Government 

 has reduced the export to China, and this with 

 increased demand elsewhere has kept up the price, 

 which averaged 1,361 rupees a chest in 1901, 

 compared with the 1,037 rupees for 1891, when 

 57,000 chests were sold. The Government now re- 

 stricts cultivation to an area sufficient to produce 

 for export not more than an average of 48,000 

 chests a year. The salt revenue has been disap- 

 pointing because improved facilities for trans- 

 portation have not increased consumption. The 

 deduction is that the tax keeps consumption 

 down, and the Government contemplates making 

 a large reduction in the tax if financial condi- 

 tions continue to be favorable, not for the rea- 

 sons advanced by the Indians, that it is an unjust 

 tax on an article of prime necessity for the 

 health and comfort of the people, but with the 

 object of making the consumption of salt general, 

 so that the tax may be reimposed when fiscal 

 needs require it. The tax of 2 rupees per maund 

 of 82 pounds imposed in 1882 was increased in 

 1888 to 24 rupees, but the increase was described 

 as temporary. The proceeds of the tax in ten 

 years increased only from 5,500,000 to 5,800,- 

 000. The consumption per capita remained sta- 

 tionary, though it increased when the tax was 

 lower. The civil and military estimates and gen- 

 eral administration increased only 3,500,000, or 

 from 32,000,000 to 35,500,000, in ten years, 

 and when 3,300,000 saved in the debt charge is 

 reckoned the increase to the taxpayer was only 

 200,000. Increased expenditure is contemplated 

 in connection with education and police and al- 

 lotments to provincial governments, and expendi- 

 ture on the army, instead of being diminished, 

 will be increased. The British garrison is to be 

 augmented. The British soldiers will receive 2d. 

 more a day. As to paying the extra Qd. to reen- 

 listed men the Indian Government demurred, and 



