The welfare of any people, we are wont to agree, must finally rest upon economic foundations. In the foregoing pages certain aspects of economic conditions in India have been indicated. To these indications I should like now to add a few more, disclaiming any pretense that they constitute a survey, and offering them merely for what they are worth as scattering observations made in the living field, entirely non-political both in character and in purpose.
The Indian, aside from his grievances earlier described, has other explanations of what he calls his depressed status, in large part covering them with the elastic title of "economic drains" upon the country. Compared with the matters already handled, these considerations seem superficial, serving mainly to befog the issue. The principal drains, as they appear to me, have been shown in the body of this book. But the Indian native politician's category comprises none of them. He speaks, instead, under such headings as cotton, tea, interest on Government bonds, export of grain, army maintenance, and the pay of British Civil Servants in India.
The attempt carefully to examine these or any comparable point with the Indian intelligentsia is likely to end in disappointment and a web of dialectics--for the reason that, as the question grows close, the Indian, as a rule, simply drops it and shifts to another ground where, for the moment, he has more elbow-room. To touch briefly on the items just enumerated will, however, illustrate his mode of thought.
Of cotton, his persistent statement is that the country's raw crop, selfishly cornered, is sent to England to give employment to Lancashire spinners, and then, brought back as cloth, is forced upon Indian purchasers.
The facts are: (a) The English market stands sixth on the list of purchasers of the Indian cotton crop.[1] (b) Indian cotton, being of poor quality, irregular, short of staple and persistently tampered with, to make weight, does not meet the requirements of English cotton cloth manufacturers, (c) The cotton for the looms of Lancashire is supplied from America and the Sudan, (d) The little Indian cotton used in the United Kingdom goes chiefly to making lamp-wicks, cleaning cloths and other low-grade fabrics.
[1. See Appendix III A.]
As affecting the present status of India's cotton import trade, two mutually countervailing influences must be mentioned: On the one hand stands the recent handling by Government of the old excise duty on Indian-milled cotton goods--an imposition which no Briton today defends; that excise duty is now wiped out, and its disappearance would naturally serve to diminish importations and to stimulate sales of home manufacture. On the other hand stand the facts that the people of India acquire, year by year, a little more money to spend and a little more habit of spending it 5 that they like fine cloths; and that the cloth from Indian mills is mostly coarse. Therefore, in spite of free markets, in spite of Japan's growing competition in fine goods, in spite of Mr. Gandhi's cottage spinning campaign and its rough product, India still chooses to indulge in a considerable amount of Lancashire's sheer fabrics.
Government, meantime, has been sparing no pains to improve the quality of the cotton crop. In the endeavor to induce the growers to put more intelligence into the work, experimental farms and model stations have been established in the cotton areas, inspectional teaching has been set up, and improved implements[2] and good seed[3] provided, with an active propaganda as to the feasibility of higher prices.
[2. Originally imported from America, but now made by Indian labor jn the Government agricultural stations.]
[3. From American stock.]
"India is actually a better cotton country than is the United States," an American authority has said, "but the people will not put their backs into the work, and the Swaraj politician does what he can to discourage improved production, on the ground that 'India must not help England by growing cotton that Lancashire will use.'"
Whether unaware or regardless of the facts just recounted, the foremost of Indian politicians repeatedly assured me that "England takes our raw cotton away tc give work to her own unemployed, brings the cloth back here and foists it upon us. So all the profit is hers and India is robbed. No country can stand such a drain."
"But America raises cotton, some of which England buys, makes into cloth and sells to America again. We gladly sell to our best bidders, and we buy where we find what we want. Also, we make some cloth ourselves. Where is the difference," I asked, "between your case and America's?"
"But consider the question of tea," replies the Indian economist quickly. "We raise great crops of tea, and almost the whole is swept out of India--another exhausting drain upon the country."
"Do you sell your tea, or give it away?"
"Ah, yes--but the tea, you perceive, is gone"
The third "drain" upon the country, as named above, is the interest upon Government's Public Utility bonds, paid to London. The caliber of the complaint may briefly be shown through the single instance of railways.
The first line of railway in India was finished in 1853. At the end of March, 1924, India had a total length of 38,039 miles of open system,[4] which in 1925 carried over four and a half times as many passengers per mile of steel as did the railways of the United States.
[4. Statistical Abstract, p. 413. See also Appendix III B.]
Taking the respective viewpoints of Americans and of Indians in the matter now in hand, we get further light on the Indian economist. When America built her railways, she had not sufficient means to do so without borrowing. Consequently she borrowed from Europe, largely from Great Britain, about half the money that built her railway system, well content to pay what it cost in view of benefits expected from the opening of the country. These costs, in the normal course, continued until about 1914. When India built her railways, she also failed to find the money at home; yet in her case not because money was lacking, but because Indian capitalists would lend only at huge rates of interest. Consequently India borrowed from her cheapest market, London, practically all the money that built her railways, paying from 2.5 to 5 per cent., with an average of 3.5 per cent, on the loans--the lowest rates that the world knows.
It is the payment of the annual interest on these loans that the Indian critic is constantly describing as an insupportable grievance, "a drain" of the country's resources.
But the net profits to the Government of India brought in by the railways after payment of interest, sinking funds, annuity charges, etc., were, in 1924-25, $58,736,000.[5]
[5. Statesman's Year Book, 1926, p. 139.]
Mr. Gandhi's views on railways, being a conspicuous feature of his anti-British propaganda, may be noticed here:[6]
[6. Indian Home Rule, pp. 45-8.]
Good travels at a snail's pace--it can, therefore, have little to do with the railways. Those who want to do good...are not in a hurry...But evil has wings...So the railways can become a distributing agency for the evil one only. It may be a debatable matter whether railways spread famines, but it is beyond dispute that they propagate evil...God set a limit to man's locomotive ambition in the construction of his body. Man immediately proceeded to discover means of over-riding the limit...Railways are a most dangerous institution.
Yet Mr. Gandhi himself sets the example of braving that danger, in his many political tours about the country. And, despite his doubts on the point, one effect of the existence of the railroads has certainly been to wipe out the mortal terror of famine in India. Whereas in the old days that threat hung always over the land, waiting only the failure of a monsoon to reap its human harvest, deaths from this cause are now almost unknown; because Government's systematized famine scheme is sustained by means to transport (a) men from famine areas to areas where labor is wanted, and (b) food and fodder whence both exist in plenty to places where, to save life, both are needed.
Beyond the railheads runs the British-built network of good highroads, speeding motor traffic where bullock carts alone used to creep and wallow.
"And every time I think of famine and the desperate work and the wholesale death it used to mean," said one old Deputy District Commissioner, "I say, 'God bless Henry Ford!'"
It is scarcely necessary to point out the further practical uses of the railways, whether in equalization of prices, in opening of markets, or in development of trade with its consequent increase of individual prosperity and of Government revenues.
Turning now to the fourth item listed for consideration, one finds Mr. Gandhi and other Indian critics pointing to the exportation of grain from a country where many regions are from time to time short of food, as an intolerable "drain" due to administrative ill will, greed, or mismanagement. However elaborately this idea is clothed, its bare bones tell a plain story.
No man sells grain today that he needs today to put into his mouth. If he sells grain, it is to get something that he holds more necessary or more desirable. Government, in the last thirty years, has created great areas of rich grain land where only desert existed before. Millions of Indians are raising on these lands quantities of grain far beyond their own consuming power or that of the regions in which they live. Roads, railways, and ships have brought the markets of the world to their doors. They sell to the highest bidder. If Government should clap an export duty on their produce to keep it at home, what shame would then be cried upon the despot whose jealous grip denied to labor the fruit of its toil! Grain travels to and from India as it does everywhere else--in obedience to the currents of world trade.
For our fifth point: The cost of the army is always alleged to be monstrous in proportion to the country's revenue. "The army is too big," says the politician.
"Is it too big for the work it has to do in keeping your safety and peace?"
"I don't know. I have not looked into that," is the usual reply. "But anyway, it costs an outrageous percentage of India's revenue."
In presenting this view of the subject it is the custom to speak as of the Indian central budget only, which gives a figure of expenditure on defense amounting to about 59 per cent. of the total. To arrive at a just statement, the provincial budgets, which are en-tirely free from defense items, must be reckoned in; lit is then found that the proportion of governmental revenues assigned to defense is about 30 per cent.[7] The Indian peoples are taxed about $.58 per capita or the defense of their country.[8]
[7. Defence of India, "Arthur Vincent," Humphrey Milford, Oxford University Press, 1922, p. 04.]
[8. India in 1924-25, p. 31.]
The people of Great Britain pay about $13 per capita on that count, the people of America about $5; those of Japan pay for defense six times as much as the people of India, implying a per capita tax on that score of over $3.50.[9]
[9. The Statesman's Year Book, 1926, p. xix.]
India possesses 1,400 miles of constantly dangerous frontier, always actively threatened, and three times in the last century ablaze with open war. She also has an enormous and extremely vulnerable coast line, which without extra cost to her is defended by the British fleet. And finally, she has a population which, time and again, in its sudden outbursts of internecine fury, needs protection against itself. Taxes are light because the people are poor. Revenues are small because taxes are light. Costs of national defense look large because revenues are small. The maintenance of order and peace is the prime duty of Government. On that duty any Government must spend what it must. If the total revenue be small, the less is left for other activities. The obvious solution is to increase the revenue.[10]
[10. See Appendix III C]
But the great weakness in the Indian's reasoning that the costs of the army constitute a "drain" out of India of India's wealth lies in the fact that practically all the pay of the Army stays in India. The pay of the great body of troops, which is Indian, naturally does so. That part of British soldiers' pay that goes home to Britain is scarcely large enough to waste words upon. British Army officers in India in practically all cases are spending their private means there, over and above their pay. Equipment and stores, by order, are bought in India whenever Indian firms can provide them in suitable quality and at a reasonable competitive price. Otherwise they are bought abroad, by the High Commissioner for India stationed in London, who is himself an Indian. In this matter of governmental purchase of stores, in whatever department, a frequent disparity exists between the actual records and the statements of the Indian politicians who, as my own research proved, are wont to suit their allegations to their convenience rather than to the facts.
The sixth conspicuous channel of "drain" upon the country's resources is the pay of the British members of the Indian Civil Service. Here the relevant facts are that in the beginning it was necessary to offer good pay to get good men to take on the job; and that, with all the upward rush of prices in the last quarter century, no comparable increase has taken place in that pay. India, today, is a costly place to live in, as any sojourner will find. She is not a white man's country, in the sense that she frequently robs him of his health if not of his life. In committing himself to her service he must resign all home associations and privileges for long periods of time. If he marries he must part early with his children, and maintain them separated from their parents by a journey three weeks long. When he retires, after twenty-five to thirty-five years of active service, his pension of £1,000 per annum loses 25 per cent, by taxes; and, last but not least, the salaries paid to all but the few highest officials are large only from the point of view of the Indian, with his greatly differing standard of living which few white men would accept. The married British Civil Servant in India, if he has children to educate and no private resources on which to draw, must live with watchful economy to make both ends meet. And he can save little or nothing for a rainy day.
Nevertheless, the unhappy peoples of India, says Sir M. Visvesvaraya,[11] speaking as does many another prominent Indian, "have not only to feed and clothe themselves, but also to support one of the costliest administrations in the world."
[11. Reconstructing India, p. 7.]
To dissect this statement were, after one glance at the Tax Table, a waste of time. "One of the costliest administrations in the world" cannot be supported from such resources. Including land revenue, which is properly to be listed as rental rather than taxation, the total per capita tax paid by the inhabitants of British India in 1923-24 was five and a half rupees[12] or nearly $1.82 in United States currency at the then rate of exchange. The per capita taxation in the Philippines for the year 1923, as shown in the Annual Report of the Insular Auditor, was $3.50.
[12. Statistical Abstract, 1914-15 to 1923-24, p. 190.]
Even such a sum may seem large, in comparison with the general poverty of the Indian people. Costs of Government reduced to the irreducible are still high to a pauper. But observers are not wanting who believe that among the causes of India's poverty is this very lightness of taxation, which deprives the Administration of means with which to work.
Now, leaving matters of argument, let us face about and look at indisputable wastages of India's vital resources. The major channels have been shown in earlier pages, but these leave untouched a list of points only second in importance, such as caste marriage costs, the usurer, the hoarding of treasure, and mendicancy.
Caste laws strictly limit the range of possible marriages, sometimes even to the confines of half-a-dozen families, so that, despite his dread of sonlessness, a man may be forced to wait till he is old for the birth of a girl within the circle wherein he may marry,[13] and then may be forced to pay ruinously to secure her. Or again, there is such a scramble for husbands of right caste that, rather than sacrifice their own souls by leaving a girl unmarried, fathers strain their credit to the snapping point to secure eligible matches for their daughters.
[13. Reconstructing India, Visvesvaraya, p. 241.]
In Bengal, of late years, several cases have become public of girls committing suicide at the approach of puberty, to save their fathers the crushing burden of their marriage dowry.[14] And the chorus of praise evoked from Bengal youth by this act has stimulated further self-immolations. Nor do the father's finances greatly affect the case. Though a man prosper and take in much money, marriages in his family still pull him down to ruin, for the reason that pride and custom forever urge him ahead of his means.
[14. Legislative Assembly Debates, 1922, Vol. II, Part II, p. 1811.]
Marriage expenses and funeral expenses, love of litigation, thriftlessness and crop failures are among the chief roads that lead the Indian into debt. The Indian money-lender, or bania, is the same man as the usurer of the Philippines. And, exactly as in the Philippines, the average Indian having a little money laid by, even though he be not a bania by caste and calling, will, if he be minded to lend, lend to his neighbors at 33 per cent, and up, rather than to Government at a miserable 3.5 per cent, so that Government may build him a railway. Let the silly folk in London do that.
The bania is the man who, foreseeing a short crop, corners all the grain in his region, and at sowing-time sells seed-grain to his neighbors at 200 per cent, profit, taking the coming crop as security.
Once in debt to a bania, few escape. Clothing, oxen, and all purchased necessities are bought of the same wise old spider. Compound interest rolls up in the good old way as the years pass, and posterity limps under the load unto the third and fourth generation.
"The assumption that debt is due to poverty cannot be entertained. Debt is due to credit and credit depends upon prosperity and not poverty," writes Cal-vert. Credit, in India, is the creation of the British Government by the establishment of peace and security of property, coupled with public works that increase production and the value of land. The bania in his fullest glory is therefore a by-product of British rule. In the Punjab, rich among provinces, we find him in his paradise, 40,000 strong, collecting from the people annual interest equaling nearly three times the total sum that they annually pay to Government.[15]
[15. See Appendix III D.]
Everywhere, whether openly or covertly, the usurer opposes the education of the people, because a man who can read will not sign the sort of paper by which the bania holds his slave, and a man who can figure wilJ know when his debt is cleared. As two Indian members of the profession warmly told me, the bania, hates "this meddlesome and unsympathetic foreign government that has introduced a system of cooperative credit, which, wherever a Briton directs it, is ruining our good old indigenous banking business. Moreover, not content even with that mischief, it is pushing in night schools and adult-education schemes to upset the people's mind."
Intimately powerful as he is throughout the country, the bania exercises a strong undercurrent of influence in the Swarajist party, making it generally hostile to labor interests and currency reforms.
A third actual drain upon prosperity, seldom advertised, yet affecting not only India but the rest of the world, is India's disposition of bullion. Since the early days of the Roman Empire, western economists have been troubled over India's intake of precious metals, rather than of foreign goods, in payment for her produce. These metals she has always swallowed up.[16]
[16. See Appendix III E.]
In 1889 it was estimated that India held imprisoned "a stock of gold bullion wholly useless for commercial purpose and increasing at the rate of nearly 3 million sterling [$14,000,000] annually, of the value of not less than two hundred and seventy million pounds sterling [$1,312,000,000]."[17] This ever-accumulating treasure lies in the hands of all conditions and orders of men, from the poorest laborer to the most eminent prince.
[17. The Industrial Competition of Asia. An Inquiry into the Influence of Currency on the Commerce of the Empire in the East, Clar-mont John Daniell. Kegan Paul, Trench, Trubner and Co., Ltd., London, 1890, p. 249.]
In 1927, Mr. D. C. Bliss, American Trade Commissioner in Bombay, wrote of treasure in India:[18]
[18. The Bombay Bullion Market, Don C. Bliss, Jr., U. S. Bureau of Foreign and Domestic Commerce, Trade Information Bulletin No-457, pp. 5-6.]
Vast reserves have been accumulated,...estimated as amounting to more than five billion dollars--but they have been jealously hoarded in the form of unproductive precious metals. Put to productive uses, or loaned out in the world's money-markets, they would suffice to make India one of the powerful nations of the world. The traditional "wealth of the Indies" is there, but in such a form that it yields nothing to its possessors.
From time immemorial it has been considered improper for any great heir to draw upon his father's hoard of precious treasure and equally improper for him not to build up a hoard of his own. The late Nyzam of Hyderabad collected in his vaults jewels to immense values. The present prince is understood to prefer bullion, of which his own accumulations are said to reach to between 150 and 200 million dollars. Equally, every peasant in the land secretly buries silver in the earth, and loads it upon his women's necks and wrists and ankles, for safe-keeping. Forty per cent, of the world's total gold production, and 30 per cent, of the world's silver, is thus annually absorbed by India. None of this gold is coined or goes into currency, and, says Mr. Bliss, of silver: "All of the absorption is in response to the demand for bullion for...ornamental uses." "Undoubtedly," he adds, "an enormous quantity of bullion has been buried and forgotten." The man heavily in debt to the bania commonly possesses a store of hidden coin, yet continues borrowing. This custom rests on the idea of being prepared for the rainy day and on a profound distrust of the human element in any scheme of banking.
The tendency of the world's gold and silver to concentrate in India and there to disappear from action tells its own story. On the one hand, an essentially poor country could not bring such a thing about. On the other hand, no country that buries its wealth ana then lies down and. sleeps on the grave can be really prosperous.
Turning now to the drain incurred through robbing the soil: India, as we know, is preeminently an agricultural country, But she has never fertilized her soil. Continually taking from it, she puts nothing back--and yet laments the thinness of her crops. Having bu-. little firewood, she burns her cow-dung for fuel. And, being under religious taboo against the handling of dead animal substance, the Hindu majority will not use for bone-manure the cattle bones of which they have such store, but, instead, sell them to be exported to foreign parts. And they cultivate with a little wooden plow that barely scratches the surface of the ground.
Suppose that, still respecting the taboo, they used some of their idle buried cash, or the interest it would bring, put to work, to buy fertilizer and machinery; what far-reaching profit might not that one step effect, did but their general way of life permit enduring prosperity!
The fragmentation of property through the ancient laws of inheritance, until a man's holding is so split up into absurdly shaped and widely scattered splinters that its useful cultivation is impossible, is another formidable obstacle to the people's welfare. Those interested in the subject will find it well developed in Cal-vert's Wealth and Welfare of the Punjab, where also is treated the great restriction of potential revenue through lack of women's work.[19]
[19. See Appendix III F.]
And here, too, though at cost of repetition, must be recalled the enormous dead loss incurred by the country through the maintenance of its seventy-odd millions of unprofitable cattle, which, because of religious inhibitions, may but rarely contribute even hides and bones to the country's profit.
Last on our list of draughts upon the wealth of India, we find the item of mendicancy.
The Brahmanic code commends renunciation of active life and the taking up of a life of contemplation and beggary as the proper terminal half of man's earthly career. At the same time it teaches that he who gives to the beggar is in reality a debtor to that beggar, in that he who receives affords the giver a priceless opportunity to establish credit in the life to come.
Therefore neither shame nor gratitude attaches to the beggar's part.[20]
[20. See Appendix III G.]
In the Indian Legislative Assembly, on February 2, 1926, Sir Hari Singh Gour said:[2l]
[21. Legislative Assembly Debates, Vol. VII, No. 8.]
In the last Census Report...we find recorded as beggars, vagrants, witches and wizards ...altogether 58 lakhs [5,800,000]...But in point of fact their number is still greater as to that class must be added saints and fakirs who live by beggary.
Government's estimate of 1921 put the saints and fakirs then living by beggary at 1,452,174.
Now and again these privileged ones gather in groups of hundreds and stream, across country feeding off the populace as they go. The disciple that follows each holy man holds out his master's begging bowl. And rarely is he denied. One sees their encampments in moving about the country. One meets them on the road, almost or quite naked except for their coat of ashes, their enormous mops of long snarled hair bleached to the color of ginger, their eyes reddened with drugs. At great fairs they turn out in multitudes. A competent witness informed me that at the latest twelfth-year fair of Madras, the two and a half miles of road from the city to the bathing place was lined on both sides with religious beggars sitting shoulder to shoulder, each with an attendant squatting in front, calling out his master's claims to alms.
And now we come to a more obscure question, that of the present economic status of the peoples in comparison with their condition in past eras. Mr. Gandhi and his school affirm that the peoples of India have been growing steadily poorer and more miserable, as a result of British rule. To form a close surmise of the facts is difficult indeed. The masses have, as a whole, little ambition to raise or to change actual living conditions. Their minds as a rule do not turn to the accumulation of things. They are content with their mud huts. Given windows and chimneys, they stop them up. Given ample space, they crowd in a closet. Rather than keep the house in repair, they let the rains wash it away, building a new one when the old is gone. Rather than work harder for more food, they prefer their ancient measure of leisure and just enough food for the day.[22]
[22. Census of 1921, Vol. I, Part I, p. 54.]
But their margin of safety is indubitably greater, their power of resistance to calamity increased, and, allegations to the contrary notwithstanding, means of enlarging their income lie at all times, now, within their hands. In just such measure as desire for material advance awakens, one sees this demonstrated in individual lives.[23] The question whether or not such desire is good underlies one of the prime differences between eastern and western thought and practice.
[23. See Appendix III H.]
Now in assigning value to these factors, one must remember that the soil of India is today supporting the pressure of over 54,000,000 more human beings than it sustained fifty years ago, plus an increase of 20 per cent.[24]
[24. Census of India, 1921, pp. 7, 48. These figures of increase are reached after allowing for the factor of population added by annex' tion of territory.]
This, again, is a result of freedom from wars and disorders and from killing famines; of the checking of epidemics; and of the multiplied production of food--all elements bound to produce ever greater effect as essential features of an established government. And the prospects it unfolds, of sheer volume of humanity piling up as the decades pass, is staggering. For, deprived of infanticide, of suttee, and of her other native escape-valves, yet still clinging to early marriage and unlimited propagation, India stands today at that point of social development where population is controlled by disease, and disease only.[25]
[25. Ibid., Vol. I, Part I, p. 49.]