in effect, now that the Indian Exchequer was in funds and the primary cause of the necessity for the imposition of the duties removed, to remove the duties altogether, but that if he could not now remit them, or if the necessities of India required them permanently, if he will not give other trades also the benefit of the countervailing duty, and thus remove the protective character of the duty from those other trades which has been removed from the trade of Lancashire? I think that that is a reasonable request, and in accordance with the principles of commercial equity. It may be that other trades exporting from the United Kingdom to India are not so large in amount as that of Lancashire, but some of them are growing, and I submit that it should be the policy of this country to encourage that growth. Reading a special article in The Times last year on India, I see that the American Consul at Bombay has pointed out that India is likely to be a fertile field for the extension of the boot and shoe trade, and recommends American manufacturers to sedulously cultivate it. Now, I represent a constituency which is said to be the capital town of the boot and shoe trade, and in and around it some 50,000 people are said to be employed in that industry. Besides this, many towns and large villages distributed over the Midland counties live almost entirely by this trade, with which India now very largely competes. There are large boot and shoe factories at Cawnpore and elsewhere in India, paying wages to their workmen of a few pence per day, men who, I am told, work the American machinery as well as Europeans. These factories not only compete in general trade in which they are protected by the duty, but large quantities of boots are purchased annually in India by the Government for the use of the Army. Boots for the manufacture of which plant was largely prepared in this country, and the orders having been placed in India instead, has caused much disappointment amongst the manufacturers of the Midland counties. Under these circumstances it will be seen that the duty-the protective duty imposed on boots and shoes imported from the United Kingdom into India inflicts a hardship on that trade, and I VOL. CXXVII. [FOURTH SERIES.] think I am not unreasonable in asking that the injury which the House thought should be removed from the trade of Lancashire, should also be removed from one of the chief trades of the Midland counties-a trade to which the Australasian market, at one time a good market, has been closed by tariffs, and a trade which, in the face of severe and intense competition, needs new markets and the removal of all disabilities which it is in the power of the Government to effect. In a speech at Cambridge, in March, 1895, the right hon. Member for East what possible justification there could be Fife well defined the position and asked for singling out a particular industry for exemption ? That question has never been answered. Get I must here anticipate a question which might be asked in India, which is this: "Why do you object to our getting duties on boots or shoes and other articles from Americans and Germans and other foreigners?" The answer to the plain and simple mind is obvious, and it is: "Get as much as you like from the foreigner, as long as you, inhabitants of our own Empire, do not get it out of us. them out of Germany or America if you like, but not out of Lancashire, Leicestershire or Northamptonshire." But that might lead to a controversy upon which it might not suit the convenience of the House to enter at this period. But it is the simple mind which will answer and settle these questions. The men who will settle them will never have heard of Adam Smith; they will be settled in the factories and workshops of this country-in the marts of commerce, rather than the lecture-rooms of schools. If not in this Budget, at least in future Budgets, I hope that this injustice to trades in this country will be removed and the duties abolished. We have heard a good deal about duties lately, and we are promised a great deal more; but I do hope-and I speak with great respect-I do hope that right hon. Gentlemen opposite may find it convenient to explain why they were so ready to put on duties all along the line for the purpose of filling the Exchequer of India, while they object so strongly to any duty imposed for the purpose of helping to fill our own. I think that we have a claim on hon. Members opposite for their support to this Motion, 2 U inasmuch as they were primarily re- of her time-honoured institution of the sponsible for these duties of which free coinage of silver, still remains to be complaint is made. It is true that they shown. This is indeed a great experiwere brought to read the old story of ment, and an experiment which every the silver debtor and the gold creditor economist of repute has pronunced as in a very ac te form, as the finances certain to be attended with grave of India were thereby approaching danger to any State that makes it. I collapse; but by their action in closing feel, however, Sir, that I cannot pursue the mints they commenced the legisla- that subject further to-day. I can only tion which has eventually restored the say that while India is satisfied with the equilibrium of exchange, and therefore results of these scientific experiments we might suppose that they would agree we here can only regard them with now to the abolition of the duties interest and attention, but should it so imposed. Here the mere mention, the be that she should some day wake nerest suggestion, of fiscal change up to discover that by her abandonappears to agitate the country from ment of free coinage she has sacrificed end to end, and it is indeed remarkable 50 per cent. of the value of her that those in this country who pride hoards of silver bullion, for centuries themselves on being professors of econo- past the potential money of her people, mic orthodoxy should have passed over for the smaller advantage of making the in silence, and without comment, the payment of her gold debt to England establishment, within a period of seven easier; then, in that case, I hope, that years, of both protection and bimetallism she will find a sympathetic ear in the in free trade and monometallic India. Parliament of the paramount Power. But even if India remains satisfied with these experiments I must still protest that they should not be made at the expense of the constituencies of the United Kingdom, and the substance of this Motion is that in the first instance these duties were unjustifiable; but that now that the first cause for their imposition has disappeared, their maintenance is doubly so; and, further, I appeal to the House generally not to continue to sanction legislation which must show that parts of the country can squeeze privileges from it, which other parts, though equally entitled, are unable to obtain. India has indeed of late years been the country of economic experiments; the corpus of India seems like the living animal in the hands of the vivisector, who tries what effect the removal of some important organ or the shock of some violent operation has upon the system as a whole; the experiment of duties has been apparently successful; the consumers of India having stood the shock very well, and the revenues having been much benefited. I refer, of course, to the consumers of British India; the consumers of the native States do not like them so well as they do not share in the revenue, at least, directly. The experiment of bimetallism, or the circulation of both silver and gold as legal tender money, at a legally fixed ratio, seems also to have been in a measure successful as the fluctuations and uncertainties of exchange between India and England seem to have disappeared, although they are as acute as ever between both England and India and the Far East. The remedy is a purely local remedy, but still satisfactory as far as it goes. But whether India, although seemingly unaffected at present, suffering probably from the numbness which succeeds a violent operation, whether India can maintain a condition of permanent health and prosperity after the removal Sir John Rolleston. It is mere pedantry to contend that what is known as the Government of India is responsible. The Government of India is the Government of this country, and for the actions of the Governor-General and the Indian Council the Parliament of the United Kingdom is responsible. And in any inquiry into fiscal matters into which the Government are entering, or which they are contemplating, I hope that the system of India, both as regards tariffs and its tinkered currency, may occupy an im portant place: and further that that question of stupendous importance, exchange with the Far East, may also meet with consideration and attention. My excuse for taking part in this debate must be that I have seen India, and have been a landowner there: and the glimpses that I had in this way have the freedom of debate habitually accords induced me to follow with keen interest to Members of this House. I beg to Amendment proposed "To leave out from the word 'that,' to the the lines of its economy and administra-second. tion, and I must say that, although I think that mistakes have been made, yet I am not one of those who believe, nor do I share in any end of the Question, in order to add the words degree in the sentiment which is this House is of opinion that, in view of the frequently unfortunately expressed in satisfactory Indian Budgets in the current and this country, that the Government of recent years, the duties imposed in 1894-5 on India, though parental in form, is step-be abolished.""(Mr. Shackleton.) manufactured goods imported into India should fatherly in spirit, preferring the interests of the children of its own body to those of its step-children in India. On the contrary I believe that through all the turbulent scenes of their history, nothing more fortunate could have happened to that collection of States, geographically known as India, nothing could have occurred more likely to settle them in a condition of permanent peace and prosperity, than the establishment amongst them, of the Government, the absolute Government, of the British Crown. I believe that that Government is actuated by feelings of the utmost sympathy and goodwill for the welfare and the interests of its many millions of subjects without regard to colour, caste, or creed. It is, therefore, with reluctance that I even venture to criticise, and I certainly do not wish, by anything that might be said or done in this House, to increase in any way the difficulties of the administration of an Empire which is a duty already of stupendous responsibility, requiring a supreme degree of ability to efficiently discharge it. At the same time I cannot agree that the suppression of and the withdrawal of Indian affairs from the notice of this House is in the interests of either the Government or the people of India. That the interests of this House, one of the Chambers of the paramount Parliament, should be aroused in Indian affairs is, in my opinion, desirable. That the actions of the Secretary of State and the Government of India should be discussed in this House is, I submit, as constitutional as that those of the Prime Minister and the Government of this country should be, and I hope that in the course of seconding the Motion proposed by the hon. Member for Clitheroe I have not transgressed in any way the privileges which Question proposed, That the words proposed to be left out stand part of the Question." *THE UNDER SECRETARY OF STATE FOR INDIA (Earl PERCY, Kensington, S.) said that as many Members desired to speak on other subjects, it would perhaps be convenient that he should state the reasons why the Government could not possibly accept the Motion. He felt both surprise and regret at this Motion being proposed. He was surprised because he thought the view put forward by the hon. Gentleman opposite had been very fully met and satisfied by the reply his noble friend gave to the deputation that waited on him from Lancashire. With regard to the pledges the noble Lord was said to have given, all that he said was that as soon as the finances of India were in a have to be dealt with. satisfactory condition these duties would. He had fully redeemed those pledges by the changes which he introduced into the tariff, by the abolition of the duty on imported yarn, and the assimilation of the lower duty of 3 instead of 5 on the im ported manufactured article to the Excise duty imposed on the manufactured article produced in India itself. Motions of the kind now under discussion were liable to give rise to misunderstanding, to increase suspicion, and to considerably diminish the respect and confidence the Indian people might otherwise feel in the House of Commons. Last year they discussed a Motion to put the salary of the Secretary of State on the Estimates, the object being to give this House more detailed control over the finances of India. They were finances to which the taxpayers of this country contributed nothing, and no Member of this House was representative of, or responsible to, a single Indian constituency. A Motion of that kind could only be justified on the assumption that in dealing with a purely Indian question this House was capable of looking at the matter from a somewhat broad standpoint, and capable of putting aside all prejudice and partiality. *SIR JOHN ROLLESTON said it was the abolition of the whole of the not merely an Indian question. *EARL PERCY said it was primarily an Indian question, and it seemed to him that the Motion now before them proved that some hon. Members, at any rate, of this House approached Indian questions rather more from the point of view of the British manufacturer than from the point of view of the Indian taxpayer. So far as it was an Indian question the hon. Member had admitted that the natives were not injured by the duty materially. They could not find in the whole of India any body of native opinion in favour of doing away with these import duties. The only opinion expressed at all by the native members of the Viceroy's Council was not in favour of doing away with import duties. but of retaining them, and abolishing the Excise duties. His hon. friend took the opposite view, for he suggested that if the Government could not assent to the abolition of the import duties they should extend the system of Excise, and impose that Excise on all manufactured goods which competed with British imports. That proposal was certainly not made in the interests of either the Indian producer or consumer. He proposed first of all to deal with the demand for the abolition of the whole of the Indian tariff. He did not stop to notice the suggestion made in the Motion of the hon. Gentleman opposite that they might abolish the Customs duties on manufactured articles while retaining the import duties on other goods. The duties on manufactured articles constituted by far the larger portion of the yield of the tariff, affected were to take off the duty on from the goods the tariff would not violent opertaining at all. Cotton maintain a 38 to 40 per cent. of health and prhe imports, and the Sir John Roll revenue derivel from duties on cotton represented one-sixth or one-seventh of the whole of the Customs revenue The suggestion of the hon. Member had been tried more than once in the past, and it had invariably failed. It was tried by Lord Lytton in 1878, when he abolished the duties on cotton, and in a very few years that was necessarily followed by Customs tariff. It was tried again in 1894, when the general import duties were re-imposed on articles other than cotton, and within a few months it was found impossible to maintain the exemption. Therefore, to propose the abolition of the duties on manufactured articles was practically to propose to abolish the whole import tariff. It meant asking India to sacrifice no less than £3,500,000 of revenue. India was unlike this country. We in England raised five-sixths of our total revenue from taxation. India only raised a quarter of her revenue in this way, and of that quarter the Customs revenue produced at least onesixth. Anybody who made the suggestion that India should sacrifice a revenue of £3,500,000 was bound to show one of two things-either that India could dispense with that revenue altogether, or be able to suggest some other source of revenue which would provide a similar amount without imposing a greater burden on the Indian people. The hon. Gentlemen, who moved and seconded the Motion, had both selected the first alternative. They pointed to the prosperous Budgets of the last few years, and proceeded to draw the inference that, in view of this prosperity, India could dispense with that source of revenue. The satisfaction with which we regarded these prosperity Budgets must be qualified by several considerations which he would refer to shortly. But even if that were not so, it seemed to him that the inference the hon. Gentlemen drew was manifestly absurd. The fact that there had been for the last four years Budgets which showed a net surplus of £11,000,000 was clearly no argument for a further abandonment of revenue of £3,500,000 when all these Budget sur pluses had been already allocated to the reduction of taxation, or to increased expenditure, and were, therefore, no longer available for a further reduction. Of course it might be said that a succession of surpluses of this kind for a number of years was an argument that there would be a similar succession of surpluses in future. He hoped that might be so, but it was clearly not an hypothesis which they were justified in reckoning upon. It was rather an extraordinary hypothesis for hon. Members to put forward seeing that only a few years ago they were pressing this House to make a large grant in aid of the Indian revenue. His noble friend had reminded the House that the revenue of India was subject to great variations and fluctuation, and that the calls on that revenue were very great. He might add that they could hardly make the assumption that these surpluses would continue, without casting somewhat of a reflec tion on the capacity of the Finance Minister in India implying that he was budgeting for a smaller surplus than he was likely to get, and that we were maintaining the taxation of the Indian people at a higher level than was justified by the exigencies and necessities of Indian finance. He did not deny that these Budgets constituted a very satisfactory feature. They proved the recuperative power of the country, they were evidence of the soundness of the basis of our financial system and they proved the elasticity of the revenue. The inference which he should draw from these facts was that we ought to be careful how we disturbed the basis of a system which had only recently been settled, and which had yielded such very surprising and satisfactory results, that we ought to think twice before we rashly surrendered any source of revenue which showed a capacity for expansion,and that in determining reductions of that taxation we ought to select those which would give the maximum of relief to the taxpayers and involve the minimum of loss to the revenue. That was the principle the Government had followed in the last Budget. They had not abandoned any single head of revenue. They had given relief where they believed it would be most felt-namely, in respect of the salt tax, income tax, and land tax, and by the remission of the interest on their He Even if that debt to the small and impoverished States. He did not know that anybody in the House would contend that anything like the same relief would have been given by the abolition of the Customs duties. To abolish the Customs duties would have been to surrender a large and expanding source of revenue, but the modification of the salt duty only meant the temporary surrender of a revenue which was already stationary, and would, we hoped, expand in consequence of an increase of consumption. The reduction of the salt duty and the remission of land revenue were forms of relief which touched practically the whole of the very poorest classes in India. A relief of the Customs duty would do nothing of the kind. observed that Sir Edward Law, the Finance Minister, in his speech in the course of the Indian Budget, estimated that the proportion of Customs duty which was paid by the very poor only amounted to 20 per cent. had not been sufficient to permit of an were not so, the surpluses at their disposal entire surrender of the Customs revenue. Out of the whole £11,000,000 of surpluses which they had had during the last four towards the relief of taxation a sum of a years they had only been able to give little over £2,000,000. That was to say, it was more than £1,000,000 less than they would have to surrender if they did away with the Customs tariff. The reason why they had been able to devote so small a share of the surpluses to the relief of taxation was partly that the surpluses were, in themselves, to a certain extent, artificial. These surpluses had been due to the proceeds of the countervailing duty on sugar-a new form of taxation which had only recently been. tried, and which had been brilliantly successful-and to the large savings which India had derived from the employment of a great portion of her military forces in South Africa and China. These were temporary in character, and neither of them would have justified a large and permanent remission of revenue. The second reason why they had devoted so small a portion to the relief of taxation was the same cause with which they were all familiar in this country-namely, that the growth of revenue had been more than counterbalanced by the increase in expenditure. |