468 REPORT—1905. 
works everywhere in the same way. The Classical Economists were inclined to 
limit their investigations to the areas and regions where free competition has been 
dominant, and thereby to exclude from consideration all those important problems 
which arise from the contact of individuals of two races, with different economic 
habits and ideals, upon the same soil. But even if the ages and areas of free com- 
petition could be cut off from the rest of the world, and we fixed our attention ex: 
clusively on this single plane, we should not find simplicity and uniformity 
throughout the whole region. The habits of business practice and labour organisa- 
tion differ in different lands: the banking system in Scotland is by no means the 
same as that in England, and a form of currency which finds favour in one is illegal 
in the other, There is also a want of complete conformity between the Hastern 
and the Western States in this matter; we cannot argue directly from the one to 
the other. When this is true about the medium of exchange, it is obvious that the 
differences between one highly advanced community and another in regard to the 
terms on which labour is carried on, or the method in which land is managed, will 
be even more striking. 
The great difference in the working of the mechanism of society, as we 
imow it in England and as we find it in other lands, was the chief impression 
which was left on my mind on the occasions when I have had the opportunity of 
travelling far afield. A quarter of a century ago it was my good fortune to spend 
a few months in India, and to get some insight into the extraordinary contrasts 
between Britain and her great Dependency. At that time many of the changes 
which had revolutionised English industry and internal traflic were beginning to 
make themselves felt throughout India. Railway communication was being 
opened up in all directions, and cotton spinning was carried on at mills in Bombay, 
and in Hyderabad in the Deccan. The results of the age of mechanical invention 
had begun to invade the changeless civilisation of the Hast. Still the persistence 
of the old order was also noticeable. ‘he village community, as an exclusive 
group, with the headman who supervised all transactions with the outer world, 
forced itself upon my attention when I attempted to hire a pony to visit the cave 
at Karli. I passed a granary in Kathiawar where the officials of a native State 
were measuriog out the crop and collecting the revenue in kind. The highly 
developed gild system at Ahmedabad was the very image of much that I had read 
of regulated industry in medizval towns. On every side it seemed as if the sur- 
vivals of the past had been preserved in the East, so as to make the story of 
bygone ages in the West alive before my eyes. On the other hand, the transition 
from the old to the new, which had gone on steadily in England for centuries, 
seemed to be ready to sweep over Iindustan like a flood, that would disintegrate 
existing institutions, while it showed little constructive power. And when I heard 
discussions on the incidence of taxation, the pressure of the salt tax, or the im- 
possibility of imposing an income tax, I at least realised that the conditions were 
strangely unlike those of which a Chancellor of the Exchequer would have to take 
account in England. The mechanism of society is entirely different; the ex- 
pedients which would make for convenience and equality and inexpensiveness in 
England would not necessarily be feasible in India at all. 
Five years ago [ had occasion to reside for some months in the United States, 
and once again 1 came away with a strong impression that the mechanism of 
society was very unlike that with which I am familiar in England—the differences 
were more subtle, but not less real, than those between Enclish and Indian economic 
life. Throughout the States there are few vestiges of past history ; the alleged relics 
of Norse invasion have disappeared under the solvent of critical investigation ; and 
though frontier life has been till lately an abiding factor in American civilisation, 
comparatively little influence has been exercised by the native races on the 
economy of America to-day. The English stock, with grafts of many kinds, has 
had a clear space in which to grow. In India the conflict of the past and the 
present seemed to be the dominating condition, but in America there had beev 
room for the development of a new country pure and simple, unhampered by the 
traditions and customs of bygone days, except in so far as their wisdom was con- 
firmed in present experience. Hence, on the other side of the Atlantic the 
