India Under Ripon: A Private Diary

With regard to the actual amount of the assessment, I made what inquiries I was able, endeavouring, so far as possible, to ascertain what proportion it bore to the gross value of the crop, and, although I state it with all due diffidence, I think I am not wrong in putting it at 35 to 40 per cent. for the Deccan district. It may well be considerably more, but I think it can hardly be less. In any case, I feel quite certain that Dr. Hunter’s figures in his book (which, be it remembered, is the accepted handbook about India) are enormously wrong, where, quoting the Famine Commission, he states that “the land tax throughout British India is from 3 per cent. to 7 per cent. on the gross out-turn.” Seven per cent. would of course be a very light rent in any country, but 40 per cent. would be inordinately high, and I am quite sure that impartial inquiry would prove that, in the Deccan at least, my own figures are far more nearly correct. In Bengal, I know there are lands assessed as low as 1 per cent.; but Bengal is a prosperous country, nearly the only one in British India, and is precisely the exception which best proves the general rule by exemplifying the causes of agricultural poverty.

It is, however, not merely the amount of the assessment which weighs upon these Deccan ryots, nor merely the inelasticity of its collection. If the natives themselves are to be believed, there are other causes of poverty directly due to the British connection which have had a far more disastrous effect upon the prosperity of the country than any taxation has produced. The reason, these say, why the ryot of the present day is poorer than his predecessor of fifty years ago is this. Under the ancient system of native rule, and during the early days of the Company, the agricultural population was not wholly dependent on agriculture. It had certain home industries which employed its leisure during those seasons of the year when labour in the fields was useless. There was the carrying trade which could be engaged in with the bullocks used at other times for ploughing. There was peddling of ghee and other home-made wares; and above all there was the weaving industry, which employed the women, and the men too during their idle time, and helped them to pay their rent. But modern improvements and modern legislation have altered all this. The railroads have very much destroyed the carrying trade; native industries have been supplanted by foreign ones, and the introduction of machinery and of foreign cottons has broken up every hand-loom in the country. The ryot, therefore, is reduced to the simple labour of his fields, and this does not suffice him any longer to live and to pay his assessment – therefore he starves. This account of the matter has been very ably set before the English public by Sir William Wedderburn, and I do not propose to argue it out here. But I can testify that it is the account also given by the natives themselves, and that I have no doubt that it is strictly true.

The official account is different. According to apologists of the Strachey school, over-population caused by the security of our rule is the sufficient reason of all distress, and it is possible that this may be correct of Bengal and other districts enjoying more prosperous conditions than those of which I am now speaking. But as applied to the Deccan it is manifestly untrue. For nothing like the whole area of cultivable land is taken up, and the population is scanty rather than excessive. The causes of distress and famine must be looked for rather in the growing impoverishment of the existing population, than in its numerical excess – in its enforced idleness during part of the year, and in the disappearance of the whole class of large proprietors who in former times used to lay up stores of grain to keep their peasantry alive in the droughts. It is my opinion, in common with that of the most intelligent native economists, that a permanent settlement of the revenue, such as there is in Bengal, would do more by the creation of a wealthy class of landowners in the Deccan, towards mitigating the periodical famines there, than any other form of legislation could, or the covering of the country with a whole network of railroads.

Other modern grievances of the peasant are, first, the new Forest Laws. These were introduced some years ago in consequence of the growing famines which, it was argued, were caused by the irregularity of the monsoon rains, which in their turn were caused by the denudation of the forests. Admitting as true all that can be said of the necessity of strong measures to prevent destruction in these, and to increase the area of vegetation, the modus operandi seems to have been needlessly violent, and most injurious to the people. One would have supposed that so wide an object as the regulation of the rainfall would have been provided for out of Imperial funds. But this was only done in part. The bulk of the loss fell on individual peasants. Wherever I went in the Madras and Bombay presidencies I heard of common lands enclosed and rights of pasture withdrawn, and this without any compensation at all being given to the possessors. The plea seems to have been that, in the days of the Mohammedan Empire, the Mogul was lord of all uncultivated lands, and that therefore, although time and custom had intervened for generations, the land might be resumed. The effect in any case has been disastrous. The leaves of trees are largely used in India for manure, and the supply is now cut off. The pasture has been reduced and cattle are dying of hunger. Where wood had been free from time immemorial, so much a load now has to be paid. In the Ghauts of Bombay matters seem to have gone farther still, and after the great famine of 1877-78 Sir Richard Temple had whole districts enclosed, evicting the ryots and destroying their villages. The ryots in turn set fire to the forests, and but for his timely resignation of office it is said the whole country would have been morally and physically in a blaze. I know that the ill-feeling caused by his high-handed action – which reminds one of that attributed to William Rufus when he enclosed the New Forest – has left behind it memories bitter as those in Ireland to this day. Bad or good, necessary or unnecessary, the Forest Act has much to answer for in the present state of discontent among the peasantry.

Allied to this, and even more general in its pressure on the poor, stands, secondly, the Salt tax. Its oppressive character has been much disputed; but in the Madras Deccan and the poorer districts of Bombay there should be no doubt whatever upon the matter. It is the one great theme of complaint, the one that touches the people most nearly and is most injurious in proportion to the poverty of the sufferer by it. The comparatively well-to-do ryot of Bengal and North-Western India does not feel it and does not complain of it. But wherever there is real pinching in the necessities of life, there the salt monopoly raises a clamorous cry. It is only the very poor who are obliged to stint themselves in salt; but the very poor are, unfortunately, the rule in Southern India. In the Deccan, moreover, its pressure is more galling, because natural salt lies on the ground, and the people are therefore starved of it as it were in sight of plenty. In several villages which I passed the ryots told me that they had been reduced to driving their cattle by night to the places where salt is found, that they may lick it by stealth; but the guards impound them if thus caught infringing the law; and latterly orders have been given that the police should collect in heaps and destroy all salt whatever found in its natural state above ground. In other parts I heard of a kind of leprosy attacking persons deprived of this necessary article of diet; and especially on the sea-coast south of Bombay the disease was spoken of as prevalent. The fact of there being no complaint with regard to the salt tax at Calcutta or in Northern India, has caused the Indian Government to be callous in this matter, and I fear the fact that it brings six millions sterling to the revenue is an additional reason why it is likely still to be overlooked. But it is one that is nevertheless very urgent in the poorer districts, where it is causing real and increasing suffering, and where it is regarded with well-founded anger. The price of salt sold to the people by the Government is reckoned at from 1200 to 2000 per cent. on its cost value.

Lastly, and this is the case all over British India, the peasantry is deeply, hopelessly in debt. It is curious to find this prime cause of the Egyptian Revolution faithfully reproduced in India under our own paternal and enlightened rule, and through the same causes. Agricultural debt came into being in either case with European methods of finance; and, although the subject has been thoroughly threshed out by previous writers, I shall perhaps be pardoned if I once more briefly explain the process. In old times, as I understand the case, in Oriental lands money was practically unknown to the peasantry. Their dealings were in kind, and especially the land tax paid to the Government was paid not in coin but in corn. The whole of the peasants’ security, therefore, if they wanted to borrow, was their crop – and, if at sowing-time they needed seed, it was recoverable only at the harvest; at which time also the Government took its share – a tenth according to strict Mohammedan law, or it might be a fifth, or in times of grievous tyranny the half. Nothing more, however, than the crop of the year was forthcoming. No lender, therefore, would advance the impecunious cultivator more than his seed corn or the loan of a yoke of oxen, and there was no possibility on the Government’s part of anticipating the taxes. The economic law of ancient Asia was to do things parsimoniously, to spend according to the means in hand, and at most to store up wealth for rainy, or rather rainless, days.

But with European administration came other doctrines. Wealth, our economists affirmed, must not be idle; production must be increased; resources must be developed; capital must be thrown into the land. The revenue, above all things, must be made regular and secure. In order to effect this, payment in money was substituted for payment in kind, a regular tax for an irregular portion of the crop; – and, while the rate was nominally lowered, no loss from accidental circumstances was to be allowed to fall upon the Government. So much coin must be forthcoming every year as the tax on so many acres. In countries like England where the system is understood, where markets are at hand, and money plentiful, this is undoubtedly the best and most convenient form of levying the revenue. But in the East its introduction has always produced disorder. In the country districts of India, as in Egypt, corn could not be sold in the public market at its full market price, and, when the day came for payment of the Government dues, the peasant had the choice either of selling at a grievous loss or of borrowing the money. He generally borrowed. I believe it may be stated absolutely that the whole of peasant indebtedness in either country originally came from the necessity thus imposed of finding coin to pay the land tax.

The change, however, put immediate wealth into the hands of Government, by lessening the cost of collecting the revenue, and so was approved as a beneficial one; and by an inevitable process of financial reasoning borrowing was encouraged. It was argued that capital, if thrown into the land, would increase the wealth of the agriculturist along with the wealth of the revenue. But how induce the investment of that capital except by increasing its security? In order to enable the agriculturist to borrow, he must be able to give his debtor something of more value than the crop in his field. Then why not the field itself? The laws of mortgage and recovery of debt by safe and easy process were consequently introduced, and courts appointed for the protection of creditors. This completed the peasant’s ruin. Finding money suddenly at his disposal, he borrowed without scruple, not only to pay taxes and to improve his land, but also for his amusements. Whether I am right or wrong in the details of this history, it is an indisputable fact that at the present moment there is hardly a village in British India which is not deeply, hopelessly in debt. In the course of my inquiries I do not remember to have met with a single instance of a village clear of debt even in Bengal.

This is the last worst evil which English administration has brought upon the Indian peasantry, and when one considers all their poverty and the depth of their increasing liabilities one finds it difficult to have patience with the optimist views of men like Sir John Strachey, who see all that they have created in India and find it very good. That we have done much that is of advantage to agricultural India no one will deny, but have we not done it still more harm? We have given the ryot security from death by violence, but we have probably increased his danger of death by starvation. This is a doubt which is beginning to assert itself vividly in the minds of thoughtful Indians, and it is one that Englishmen too will do well, before it is too late, to entertain.

Admitting, then, the general fact of India’s growing agricultural poverty, what should be our remedy? I confess to being a little sceptical of the legislative nostrums partially applied and proposed to be applied by the Imperial Government to a patient manifestly in want of a complete change of treatment and a long period of financial rest. Nor do I see my way to accepting such alleviations as the Bengal Rent Bill, or the founding of agricultural banks, or even local self-government, though all these things may be good, as a sufficient check to the evils fast accumulating. At best they may succeed in shifting the burdens of the people a little on this side or on that. They will not lighten them really by a single pennyweight, nor restore the confidence of the people in the humane intentions of the Government, nor put off even for a year the trouble which on the present lines of policy must certainly ensue. I do not believe in legislative remedies for the starvation of the ryot or in the possibility of relieving his position except at the sacrifice of interests too strongly represented both at Calcutta and in London to be assailed with any chance of success. Finance, not legislature, is the cause of all the evil; and until that is put upon a sound footing, the rest is of no real value.

When I was at Calcutta, I constantly discussed this matter with the leading native economists, and I know, too, their ideas in other cities; and at Bombay it formed the chief subject of attention at the meeting specially convened to instruct me with regard to the wants of the Presidency. I know, therefore, what Indians think about Indian finance, and I believe their reasoning is sound. According to these, the vice of the Calcutta budgets lies in the fact that, whereas in every other country the finance Minister looks solely to the interests of the country he serves, in India he looks principally to the interests, not of India, but of England. Two English interests have to be served first, before any attention can be paid to the necessities of those who supply the revenue. First, the Anglo-Indian Administration must be maintained in full employment, in pay, allowances, and according to native ideas in luxuries; and secondly, every kind of advantage must be given to English trade. It is unnecessary for me to argue out the question of the excessive costliness of the civil and military establishments of India. These are notorious in the world as surpassing those of all other countries to which they can be fairly compared in the present time or the past. And, although they may also lay claim to be the most efficient, it does not prevent them from being a vast financial failure.

It is a perpetual astonishment to travellers to note the scale of living of every Englishman employed in India, in however mean a capacity. The enormous palaces of governors and lieutenant-governors, their country houses, their residences in the hills, their banquets and entertainments, their retinues of servants, their carriages and horses, their special trains on their journeyings, their tents, their armies of retainers and camp followers – these are only samples of the universal profusion; an equally noble hospitality reigns in every bungalow on the plains; and endless dinners of imported delicacies, with libations of imported wines, tempt night after night the inhabitants of the most solitary stations to forget the dismal fact that they are in Asia and far from their own land. No Collector’s wife will wear an article of Indian manufacture to save her soul from perdition, and all her furniture, even to her carpets, must be of English make.

I remember early in my travels having the good fortune to enjoy the hospitality of a country station-master on the Indian Peninsular Railway, and being astonished to find him living in better style, and in a house larger than most English rectories, while we were driven out after luncheon by his lady in a charming phaeton drawn by a pair of stepping ponies. There was no reason, however, for astonishment. He lived as all Englishmen in India do, that is to say, about five times as well as in his rank of life he possibly could do at home, and he was worthy of his good fortune. Only it must not be supposed that the natives starving outside are at all proportionately the better for the brave living of their rulers. I, an English traveller, profited as a guest, and I am half ashamed to say how sumptuously I fared. But the poor ryot was, in fact, my host – not the other – for it was he whose labour fed me, though he did not share the meal.

I say, a traveller cannot fail to be impressed, and, if he have any powers of reflection, disagreeably so, with this profusion. There is surely no country in the world where in the midst of such starvation there is so much waste; certainly none where the expense of it all is borne so wholly and directly by the poor. I wonder whether any one has calculated the number of miles of macadamized road in the various Anglo-Indian cantonments, not a yard of which has ever served any purpose beyond that of enabling the officers’ wives to pay each other visits in their carriages? I wonder whether any one has calculated the numbers of absolutely useless clock towers and Gothic memorials erected by Sir Richard Temples to Sir Bartle Freres, and Sir Bartle Freres to Sir Richard Temples in the various Presidencies? I wonder whether any one has calculated how many hogsheads of champagne the water-drinking ryot has paid for in the last half-century as an unaccounted item of his yearly budget? These things strike the imagination of the traveller. They do not strike the resident in India. They are not arguments, but impressions; and yet they mean something.

If, however, the ryot must maintain the luxury of his English administrators before his own wants can be supplied, so, too, must he maintain the English trader to the ruin of his own trade. I am repeating native arguments when I complain that the necessity of considering the advantage of Manchester capitalists stands seriously in the way of an honest framer of the Indian Budget, and that, whereas the Finance Minister of every English colony is at liberty to raise money by import duties and generally does so, the Indian Minister is precluded from that source of revenue. I have argued the matter of Free Trade out with the native economists, and they seem to me perfectly to understand it. They know that as applied to England, a manufacturing country which imports its food, Free Trade is considered a necessity of financial life. But they deny that the doctrine applies with equal cogency to India. India, they say, is a produce-exporting country like the United States or the Australian colonies. It imports no single article of prime necessity, iron and coal perhaps excepted, and the cotton and other manufactured goods consumed there are luxuries only used by the rich, and especially by the Europeans. It is certain that no ryot in all India wears any cotton clothing of foreign make, or has his means of existence made one wit cheaper for him by Free Trade. Import duties, then, would tax the rich only, and the rich in India are hardly taxed at all. Yet, because Free Trade is of advantage to England, India must forgo her own advantage. This, the natives say, may be a political necessity, but it is not ruling India financially for India’s good. I confess I do not see where the flaw in their argument lies.

They say, moreover, that Free Trade in manufactured goods has destroyed the native industries and given nothing in their stead. When the hand-looms a hundred years ago were ruined in the English counties, the rural population migrated to the towns and found work in the great factories. But in India this has hardly at all happened. The ryot who used to weave is left without labour of any sort during his spare time, for distances are great and there is little demand for labour in the towns, and he remains of necessity idle, so that it is difficult to avoid the conclusion that a present of his labour has been made by Anglo-Indian finance to his English rival. The doctrine of advantage from buying in the cheapest market does not help him, for he buys nothing cheaper; and if the English manufacturer shares the advantage with any one in India, it is with the town consumer, not with the ryot. Every native economist, therefore, whom I have spoken with on the subject, would impose import duties on manufactured articles except machinery. Thus, they say, a tax would be levied upon the rich; and if it acted as a protection and stimulus to home manufactures, why, so much the better. With protection, factories could be established in the Indian country towns in which the surplus labour of the ryot would find employment, and so the injury done him be in part redressed. If this doctrine is unsound, I shall be glad to hear in what manner; for at present it seems to me to have not a little reason.15

I was surprised to find, in an assemblage mainly of rich men, that most of those who composed the Bombay meeting already alluded to were in favour of some form of income tax. Not that they altogether denied its general unpopularity, but from the necessity they recognized of taxing wealth. They said that in one shape or other incomes had always till recently been taxed in India, and that, though there were great difficulties in the way of collecting any sort of income tax fairly, it had always been accepted. The present licence tax, they assured me, was much more hateful and far less profitable than any true tax on income, and seemed framed on purpose to distribute its pressure most unfairly. It seemed hardly credible, but according to present regulations the keeper of a small shop in the native quarter was taxed as highly for his trade as the richest English banker on ’Change; all the charge upon the latter’s income, though he might deal in millions, being twenty pounds per annum in the form of a trade licence. The present system was, in fact, only another advantage given by the framers of Indian budgets to English trade; and they assured me that the people who really prevented a proper income tax from being imposed in India were not the native tradesmen, but the English officials whose salaries would be directly touched by it. If it were possible to levy import duties and a tax on incomes, the agricultural poor might be relieved, but hardly in any other way. I offer these suggestions for what they may be considered worth.

The prime measure, however, of agricultural reform, on which all native India seems agreed, is the granting of a permanent revenue settlement to every province, such as was ninety years ago granted to Bengal, and limiting thereby the preposterous claim of the Government to all ownership in land. This right of State ownership has worked everywhere, or nearly everywhere, its full natural result of impoverishment and disaffection; and Bengal, which has been exempted from its action, has alone remained prosperous. I do not propose to argue out this great question here. But I intend to return to it on a future occasion; and it will be sufficient for me now to say, that the value placed by native opinion on a fixed revenue settlement is the cause of the strong agitation actually in progress against the Bengal Rent Bill. This measure, in spite of Lord Ripon’s immense popularity, is decidedly unpopular, and native politicians see in it a first blow struck at the prosperity of the only province which has hitherto escaped the universal drain of wealth into the Imperial coffers; nor am I without reason to believe that so it was intended, not by Lord Ripon, but by some of his advisers. At present, however, I only state the fact that a permanent settlement of the land revenue is urgently demanded by all India.16