FOOTNOTES:
[94] Average price of corn for ten years ending 1845 = 57s. 10d.
[95] Taxes on commodities do not always fall on consumers, but sometimes on producers, and sometimes on the intermediate agent. When a duty is imposed on a foreign commodity, which the importing country has facilities for producing at home, in ordinary cases the duty falls, in the first instance, on the consumer; but when the duty has the effect of increasing competition, the tendency is to a reduction in price, and therefore to the ultimate benefit of the consumers. As the duty equalizes the conditions of production between the local and foreign producers, it enables an entirely new class of competitors to enter the field,—namely, the local producers; and as the circle of competition becomes extended, the rivalry among producers becomes keener, and prices become lower; for competition inevitably leads to this when it is genuine and not a monopoly in disguise, as is often the case. If the duty fails to increase competition, it goes direct into the treasury as revenue; if it fails partially as a revenue tax, owing to the local producer contributing part of the supply, and paying no duty, the competition between the local and foreign producers will cause a reduction in price to the consumer, so that the falling off in the revenue will in some measure be compensated for. If the revenue from duty fail altogether, owing to the local article taking the place of the imported and duty-paying article, a three-fold benefit will be secured. The consumer will gain by a reduction in the price of commodities; the public will gain by increased employment of labour and capital; and, lastly, the State will gain by increased revenue from the additional number of revenue-producing population, supported by the new industry. (David Syme. Fortnightly Review, April, 1873.)
So with the English shipping dues, which, as a matter of fact, are not paid by the merchants or consumers, but by the shipowners.
In answer to a deputation which waited on the Chancellor of the Exchequer recently, Mr. Lowe, adopting the popular view on the question, attempted to explain that the shipowners did not pay the dues out of their own pockets, that they only advanced the money to the merchant, that the merchant again indemnified himself by raising the price of goods to the consumer. But it appeared that in this particular case Mr. Lowe’s theory did not square with the facts, as the deputation, which consisted of the leading shipowners in England, positively assured him that no such transfer took place.
A tax may, under certain conditions, have the very opposite effect from that which it usually has, for instead of increasing the price of a commodity it may have the effect of diminishing it. (This has been the case with cotton in America, as shewn by the evidence given before the Select Committee of the House of Commons, in 1840.) (Fortnightly Review, 1873.)
[96] Competent authorities state, that the French navy alone will be far more powerful than that of England, when the ships now in course of construction have been completed, and the French navy can be much more concentrated than ours, which must be distributed over the whole world.
[97] The Mail, Decr. 19th, 1883.
[CHAPTER XXVI.]
THE PAGODA TREE.
What has become of the Pagoda tree? Is it a myth? Did it ever exist?
These are questions which you must have heard over and over again.
Have you ever tried to answer them? No!
Well! let me do so.
The Pagoda tree is no myth. It exists, but in a deplorably dilapidated condition, and bears but little fruit. Your car of Jugernāth has crushed its roots; your wheels have excoriated its bark; you have torn down its branches to cremate your victims. You have denied it water and manure. Its vitality has been sadly lowered, but it is not quite dead.
Only smash your detestable car of Jugernāth; send your false prophets adrift; and devote a little attention to the cultivation of the Pagoda tree; and it will flourish and bear more fruit than it has ever borne before.
Let us drop metaphor a little.
India has every requisite for the production of unbounded wealth—for the employment of untold capital. How is it then that, with all the advantages it possesses, its industries languish and struggle for bare existence, and in many cases die out altogether? How is it that, with all its material advantages, it does not enjoy unbounded prosperity? I have no doubt that you will point to the increased exports and imports of India, and claim this as an instance of unbounded prosperity due to Free Trade. I contend that it is wholly due to extension in railways, improvement in facilities of transport, and that with these improvements its prosperity ought to have been enormous. If it be prosperous, why do we have essays on the Poverty of India?[98] Why do Viceroys dwell on the subject of its poverty?[99] Why do its industries languish and die out?
India has untold wealth, and wonderful natural resources, whether agricultural, mineral, or industrial, but they are to a great extent dormant.
It has coal of an excellent character, and inexhaustible in quantity; it has fine petroleum, large supplies of timber and charcoal; it has iron, of a purity that would make an English iron-master’s mouth water, spread wholesale all over the country,—in most places to be had by light quarrying or collection from the surface; it has chrome iron capable of making the finest Damascus blades; manganiferous ore; splendid hematites in profusion. It has gold, silver, antimony, tin, copper, plumbago, lime, kaolin, gypsum, precious stones, asbestos. Soft wheat, equal to the finest Australian; hard wheat, equal to the finest kabanka.[100] It has food grains of every description: oilseeds, tobacco, tea, coffee, cocoa, sugar, spices, lac, dyes, cotton, jute, hemp, flax, coir, fibres of every description; in fact, products too numerous to mention. Its inhabitants are frugal, thrifty, industrious, capable of great physical exertion, docile, easily taught, skilful in any work requiring delicate manipulation. Labour is absurdly cheap; the soil for the most part wonderfully productive, and capable of producing crop after crop without any symptoms of exhaustion.
The present yield of wheat is about 26,500,000 quarters, or about 9,500,000 quarters in excess of the total imports of wheat into England; and in the Punjab alone there is cultivable waste land sufficient to produce 12,000,000 quarters, besides enormous parts in Burmah and other parts of India, only requiring irrigation or population to bring them under the plough.[101]
England imports annually commodities to the value of about £148,500,000 under six heads alone,[102] a large portion of which might be diverted to India by simply adopting a preferential tariff slightly favorable to her dependencies. Take, for example, wheat. If England be determined to persist in the endeavour to ruin its agricultural industry for a political whim, a slight tax on American and Russian wheat would suffice to turn the whole of the wheat import trade to India and Australia. Such a tax would, I believe, tend to lower, rather than raise, the price of wheat, because India would steadily go in for the production of wheat, if its calculations were not liable to be disturbed by a slight fall in the price of wheat in America or Russia, which may throw back a quantity of wheat on the hands of the Indian producers or dealers.[103]
Again, India suffers from a tax which prevents the export of rice except on a tariff which is sometimes as high as 14½ per cent. on the value of the rice. This not only handicaps India in its exports when compared with other countries, but it drives the natives to grow less remunerative crops of oilseeds for export, and the result of this is that, when famine arises, there is no surplus food which might be retained from exports, and thus prevent the painful scenes of starvation and distress that India has witnessed of late years. To take off the tax would prevent depletion, for no foreign country could compete with the demand which failure of crops in any part of India would inevitably cause.
There is about £32,000,000 of English capital invested in Indian manufacturing industries, of which £18,000,000, or more than one-half, is invested in indigo, tea, coffee, jute, cotton, sugar, coal and iron industries, and how are these thriving? Everywhere throughout Bengal you see the ruins of English Indigo factories.
Coffee and tea are struggling hard for existence. Planters are ruined, and their estates bought at depreciated rates in times of depression. This enables the industries to survive with some show of prosperity in good times. Agricultural industries, such as coffee or tea, draw off surplus population, and employ them on land that would otherwise be uncultivated. Coal is doing fairly, but not nearly so well as it might do if our manufacturing industries prospered.
Cotton manufacture sprung up under a protective tariff, and appeared to be prospering; but selfish Manchester called aloud for the sacrifice of the industry. The tariff was removed, and the industry is left to struggle for life, or perish, as it may. Several capitalists who have embarked capital in cotton manufacture on the faith of this tariff, have lost their money. Everywhere in India, you may see evidences of native iron manufacture crushed out by Free Trade, with nothing but slag heaps remaining to testify to former prosperity. The splendid native iron being superseded by cheap worthless iron of English manufacture. Many attempts have been made by English capitalists to revive, or start, fresh iron industries, but they have one and all been crushed out for want of a little fostering protection. The latest attempt nearly succeeded, but the modest request for a little help was sternly refused:—What!!! Foster your industry? What sacrilege to advocate the violation of every principle of Jugernāth!!! and so the helpless babe was thrown under the relentless wheels of Jugernāth. There was a crunch,—a faint moan from the ruined shareholders,—and then all was over. Hurrah for Jugernāth!! Pereat India!!!