Indian Unrest

by Sir Valentine Chirol

Political Swadeshi bases itself upon a Nationalist legend that a "golden age" prevailed in India before we appeared on the scene, and that British rule has deliberately drained India of her wealth. Even if we have to, admit that Indian home industries have suffered heavily from the old commercial policy of the East India Company and from the formidable competition of the organized and scientific processes of British industry, this legend hardly deserves to be treated seriously. The reductio ad absurdum of the argument has certainly been reached when Mr. Keir Hardie alleges that Indian loans raised in England constitute "a regular soaking drain upon India because the interest is paid to bondholders in this country [England], and is not therefore benefiting the people from whom it is taken." I can only commend this sapient contention to our self-governing Colonies, who have all had recourse in turn to British capital for the development of their resources, and paid interest on their loans to British bondholders without being apparently conscious of any "soaking drain." The supposed "drain" is estimated in various ways, but a common method adopted is to lay stress upon the excess of exports over imports[22]. Lord Curzon has rightly pointed out that economically this test is quite fallacious; and that in the richest country in the world, America, the value of the exports exceeds the imports by over £100,000,000 per annum. Home charges represent three-fourths of the "drain," and these may be calculated at about £18,000,000 annually. Of this sum, £6,750,000 is paid in interest on railway capital; but the railways are a source of profit, and the payment comes from the railway passenger. Moreover, in course of time, the Indian railways will become, and are becoming, a property of enormous value to the State. The interest on India's public debt is £3,000,000, but it has to be remembered how much India has benefited by expenditure which has proved reproductive. Sir Bampfylde Fuller has stated that the lowest estimate of the increase in produce obtained through irrigation works alone is estimated at £30,000,000 annually. In the last 50 years the total volume of Indian trade, imports and exports, has increased from £40,000,000 to £200,000,000. The remaining items are roughly, home military charges, £2,000,000; India Office, &c., £250,000; leave allowances, £750,000; pensions, £4,000,000. A considerable part of these pensions represent merely deferred pay. Moreover, unlike some other countries, e.g., the United States, where £32,000,000 are spent on pensions, mostly unearned, India has had good value, brimming over, for her pensions. The private remittances to England, which must be added to these sums, are not treated in any other country as an economic loss. No American economist would so regard the enormous annual sums remitted by immigrants to Ireland, Italy, and other European countries, or the vast annual expenditure of American tourists in Europe. Indian immigrants remit £400,000 annually to India from the Straits Settlements and Malay States alone, and considerable sums must be sent from East and South Africa and Ceylon, as well as smaller sums from Mauritius and the West Indies. Yet these colonies do not apparently complain about a "drain" to India.

What India is entitled to ask is whether Indian loans have been expended for the benefit of the Indian people, and the answer is conclusive. India possesses to-day assets in the shape of railways, irrigation canals, and other public works which, as marketable properties, represent more than her total indebtedness, without even taking into account the enormous value of the "unearned increment" they have produced for the benefit of the people of India. If, therefore, we look at the Government of India for a moment as merely a board of directors conducting a great development business on behalf of the Indian people, they can certainly show an excellent balance-sheet. Let us admit that some of the "home charges" may be open to discussion, and I shall have a word or two or say about them later on. But taken altogether they may fairly be regarded as the not unreasonable cost of administering a concern which, if we wished to liquidate it and to retire from business to-morrow, would leave a handsome surplus to India after paying off the whole debt contracted in her name. The case was stated very fairly by the late Mr. Ranade, whose teachings all but the most "advanced" politicians still profess to reverence, when he delivered the inaugural address at the first Industrial Conference held just 20 years ago at Poona:—

There are some people who think that as long as we have a heavy tribute to pay to England which takes away nearly 20 crores of our surplus exports, we are doomed, and can do nothing to help ourselves. This is, however, hardly a fair or manly position to take up. A portion of the burden represents interest on moneys advanced to, or invested in, our country, and so far from complaining, we have reason to be thankful that we have a creditor who supplies our needs at such a low rate of interest. Another portion represents the value of stores supplied to us, the like of which we cannot produce here. The remainder is alleged to be more or less necessary for the purpose of administration, defence, and payment of pensions, and, though there is good cause for complaint that it is not all necessary, we should not forget the fact that we are enabled by reason of this British connexion to levy an equivalent tribute from China by our opium monopoly.

If India must now forgo this tribute from China, it is not at any rate the fault of the Government of India that the whole cost of the awakening of the national conscience in England to the iniquity of the opium traffic is being thrown upon India.

The question is not whether we have done well, but whether we might not have done better, and whether the economic development of India, industrial, commercial, and agricultural, has kept pace with that of the rest of the world. If the answer in this case is more doubtful, we have to bear in mind the idiosyncrasies of the Indian people and especially of the educated classes. Indians have been as a rule disinclined to invest their money in commerce or industry or in scientific forms of agriculture. It is estimated that the hoarded wealth of India amounts, at a conservative calculation, to £300,000,000, and this probably represents gold alone. The annual absorption of gold by India is very great. Lord Rothschild remarked to the Currency Commission that none of the smooth gold bars sent to India ever came back. There is, in addition, an enormous sum hoarded in silver rupees and silver ornaments. It is no uncommon sight, in the cities of Upper India, to see a child wearing only one ragged, dirty garment, but loaded with massive silver ornaments. Indians who have money and do not merely hoard it prefer to lend it out, often at usurious rates of interest, to their needy or thriftless fellow-countrymen. Until quite recently the educated classes have held almost entirely aloof from any but the liberal professions. Science in any form has been rarely taken up by University students, and for every B.Sc. the honours lists have shown probably a hundred B.A.'s. The Indian National Congress itself, as it represented mainly those classes, naturally displayed the same tendencies, and for a long time it devoted its energies to so-called political problems rather than to practical economic questions. Hence the almost complete failure of the Western-educated Indian to achieve any marked success in commercial and industrial undertakings, and nowhere has that failure been more complete than in Bengal, where it would be difficult to quote more than one really brilliant exception. Hence also no doubt some of the political bitterness which those classes display. Within the last few years, however, the politician has realized that, whilst commercial and industrial development was steadily expanding and the demand for it was increasing on all sides, he was left standing on a barren shore. He has done his best, or rather his worst, to convert Swadeshi into a political weapon. His efforts have only been temporarily and partially successful. But we may rest assured that long after this spurious political Swadeshi has disappeared, the legitimate form of Swadeshi will endure—the Swadeshi that does not boycott imported goods merely because they come from England, but is bent on stimulating the production in India of articles of the same or of better quality which can be sold cheaper, and can, therefore, beat the imported goods in the Indian markets.

To this form of Swadeshi it is undoubtedly the duty and the interest of the Government of India to respond. We are bound as trustees for the people of India to promote Indian trade and industry by all the means in our power, and we are equally bound to help to open up new fields of activity for the young Indians whom our educational system has diverted from the old paths, and who no longer find for their rapidly increasing numbers any sufficient outlet in the public services and liberal professions which originally absorbed them. No reforms in our educational system can be permanently effective unless we check the growth of the intellectual proletariat, which plays so large a part in Indian unrest, by diverting the energies of young India into new and healthier channels. At the same time there can be no better material antidote to the spread of disaffection than the prosperity which would attend the expansion of trade and industry and give to increasing numbers amongst the Western-educated classes a direct interest in the maintenance of law and order. There are amongst those classes too many who, having little or nothing to lose, are naturally prone to fish in the troubled waters of sedition.

In regard to agriculture, which is, and is bound to remain, the greatest of all Indian industries, for it supports 70, and perhaps 80, per cent, of the whole population, the Government of India have no reason to be ashamed of their record. Famines can never be banished from a country where vast tracts are entirely dependent upon an extremely uncertain rainfall, and the population is equally dependent upon the fruits of the soil. But besides the scientific organization of famine relief, the public works policy of Government has been steadily and chiefly directed to the reduction of famine areas. Not only has the construction of a great system of railways facilitated the introduction of foodstuffs into remote famine-stricken districts, but irrigation works, devised on a scale and with a skill which have made India the premier school of irrigation for the rest of the world, have added enormously both to the area of cultivation and to that where cultivation is secured against failure of the rainfall. The arid valley of the Indus has been converted into a perennial granary, and in the Punjab alone irrigation canals have already added 8,000,000 acres of unusual fertility to the land under tillage, and have given to 5,000,000 acres more the protection against drought in years of deficient rainfall which they formerly lacked. Plantations of tea, coffee, cinchona, &c., and the cultivation of jute have added within the last 25 years some £30,000,000 a year to the value of Indian exports. Jute alone covers the whole of the so-called "drain."

The fact, nevertheless, cannot be denied, though it is an unpleasant admission, that a large proportion of the immense agricultural population of India have remained miserably poor. Indian, politicians ascribe this poverty to the crushing burden of the land revenue collected by Government—a burden which has been shown to work out only to about 1s. 8d. per acre of crop and is being steadily reduced in relation to the gross revenue of the country—but they say nothing about the exactions of the native landlord, who has, for instance in Bengal, monopolized at the expense of the peasantry almost the whole benefit of the Permanent Settlement. Some very significant facts with regard to rayatwari landlords were brought out in a debate this year in the Legislative Council of Madras, when Mr. Atkinson, in reply to one of his Hindu colleagues who had been denouncing the Government assessments in certain villages, produced an overwhelming array of figures to show that in those very villages the rents exacted by native landlords varied between eight and eleven times the amount which they paid to Government. Nor do Indian politicians say much about the native moneylender, who is far more responsible than the tax-gatherer for the poverty of the peasant. Still less do they say about the extravagance of native customs, partly religious and partly social, which makes the peasant an easy prey to the moneylender, to whom he is too often driven when he has a child to marry or a parent to bury or a Brahman to entertain. Indebtedness is the great curse of Indian agriculture, and the peasant's chief necessity is cheap credit obtained on a system that will not cause him to sink deeper into the mire. Here again it is not Indian politicians, but the British rulers of India who have found a solution, and it is of such importance and promise that it deserves more than mere passing mention.

It has been found in the adaptation to Indian requirements of the well-known Raffeisen system. Sir William Wedderburn was, I believe, actually the earliest advocate of this movement, but the first practical experiments were made in Madras as a result of exhaustive investigation by Sir Frederick Nicholson and in the United Provinces when Sir Antony (now Lord) MacDonnell was Lieutenant-Governor, and one of the many measures passed by Lord Curzon for the benefit of the humbler classes in India, with little or no support from the politicians and often in despite of their vehement opposition, whilst Nationalist newspapers jeered at "a scheme for extracting money from wealthy natives in order that Government might make a show of benevolence at other people's expense," was an Act giving legal sanction to the operations of a system of co-operative banks and credit societies. It found a healthy basis ready made in the Indian village system, and though it would never have succeeded without the informing energy and integrity of "sun-dried bureaucrats" and the countenance given to it by Government, it has had the cordial support of many capable native gentlemen. It is now only eight years old, but it has begun to spread with amazing rapidity. The report of the Calcutta Conference of Registrars last winter showed that the number of societies of all kinds had risen from 1,357 in the preceding year to 2,008, and their aggregate working capital from 44 lakhs to nearly 81 (one lakh or Rs.100,000=£6,666). The new movement is, of course, still only in its infancy, but it is full of promise. The moneylender, who was at first bitterly hostile, is beginning to realize that by providing capital for the co-operative banks he can get, on the whole, an adequate return with much better security for his money than in the old days of great gains and, also, great losses. One of the healthiest features is that, notwithstanding the great expansion of the system, during the last twelve months, the additional working capital required was mainly provided by private individuals and only a very small amount by Government. Another hopeful feature is that the money saved to the peasant by the lower interest he has to pay on his debts pending repayment is now going into modern machinery and improved methods of agriculture. The new system appeals most strongly to poor and heavily indebted villages, and in the Punjab, where the results are really remarkable, especially in some of the backward Mahomedan districts, it is hoped, that within a few years nearly half the peasant indebtedness, estimated at 25 to 30 millions sterling, will have been wiped off.

Practical education is, however, as urgently needed for Indian agriculture as for any other form of Indian industry. The selection of land and of seeds, the use of suitable manures, an intelligent rotation of crops, the adoption of better methods and less antiquated implements can only be brought about by practical education, and the demand for it is one that Government will hear put forward with growing insistency by the new Councils on which Indian landowners have been wisely granted the special representation that the agricultural interests of India so abundantly deserve.