Trade and the Flag 53 



India, nevertheless, is becoming a more and more formidable 

 rival to Lancashire. During the past twenty-five years she has 

 been passing through the first stages of an industrial revolution. 

 The construction of railways and the resultant opening up of the 

 interior, the removal of export duties and the improvement of 

 ocean navigation have greatly increased the production and ex- 

 portation of cotton yarn and calico. Although Indian labor is 

 inefficient, this is off-set by its cheapness. To-day " Bombay is 

 no longer merely the gate of the golden East, the land of gems, 

 drugs and spices: she is a busy manufacturing city, bristling with 

 smoky chimneys." 182 In 1907 the first attempt was made to es- 

 tablish iron and steel works in British India. The enterprise, 

 with a capital of $7,725,000, was supported by a rich firm in 

 Bombay, aided by other wealthy individuals, and by the Govern- 

 ment of India. 183 



An imperialistic policy involves economic loss to a country in 

 that the collision of national interests resulting makes it more 

 difficult than it would otherwise be for the countries concerned 

 to enter into friendly trade or other relations with foreign nations. 

 It is the British occupation of Egypt that has made the disputes 



An agitation was immediately set on foot by the Lancashire mill interest, 

 as was only natural, in England, where the ultimate political power with 

 respect to India rests. It was asserted that unless the countervailing 

 excise was imposed, a sort of bounty would be created in favour of the 

 Indian mills as against Lancashire, which would be against the declared 

 policy of free trade pursued by the Government. The countervailing excise 

 duties were therefore imposed, but they do not apply to the hand-weaving 

 industry. Now it is contended by the Indian mill interest . . . that the 

 Indian mills do not really compete with the Lancashire mills in the classes 

 of goods produced. It is estimated that only one-fifth to one-sixth of the 

 yarn produced in Indian mills is of counts above the ' twenties,' while only 

 one-eightieth of the yarn imported from the United Kingdom was ' twen- 

 ties ' and under. Thus the products of the Lancashire mills and the Indian 

 mills do not compete to any great extent. ... In such matters, however, 

 the hands of the Indian Government are tied by the influences that rule 

 in the political atmosphere in the centre of the Empire." Yusuf-Ali, Life 

 and Labour in India, 169-170. 



183 Kirkpatrick, op. cit., 283. 



183 U. S. Monthly Consular Reports, December, 1907, 156-157. 



229 



