RESOLUTION.

HC Deb 10 July 1877 vol 235 cc1085-128

MR. BIRLEY

rose to call attention to the East Indian Tariff, particularly in relation to the duties upon Cotton Manufactures; and to move— That, in the opinion of this House, the duties now levied upon Cotton Manufactures imported into India, being protective in their nature, are contrary to sound commercial policy and ought to be repealed without delay. Notice taken, that 40 Members were not present; House counted, and 40 Members being found present,

MR. BIRLEY

said, that there was a great principle involved in the question which he had to submit to the consideration of the House. For the last 30 years free trade had been accepted in this country as the basis of our commercial legislation, and most thinking men now considered that it was the only policy which was worthy of a great commercial country. The question might, in fact, be taken as settled, so far as this country was concerned, and they lectured foreign countries and remonstrated with the Colonies, where they showed protectionist proclivities. But when they came to apply the principle of free trade to India they were met with the cry that they ought to legislate for the interests of India; but it would be difficult for those who took the protectionist view to prove that protection would conduce to the true interests of that country, or that the people of India should have the cost of clothing increased by a tax upon articles of clothing. He maintained that it would be well for this country to hold forth the standard of free trade, and not to have one policy for England and another for India, and so appear to justify foreign countries and the Colonies in upholding protective duties. There was no real antagonism between the two countries. Lancashire was the best customer that India had, and if Lancashire suffered India suffered also. The argument used by the upholders of the present system was twofold—first, that practically there was no protection in India; and, secondly, that the duties now levied on cotton imports could not possibly be spared. It was contended that India was pre-eminent in the production of coarse cotton goods, and that Lancashire excelled in those of finer quality, that each had its own sphere, and that the reasons for interfering with the present state of things were really too trifling to be taken into account. The fact, however, was that Lancashire exported a considerable quantity of coarse cotton goods to India 20 years ago; but those exports had been declining for some time in consequence, as he alleged, of those protective duties. Those goods were made mainly from Indian cotton, in which the Native manufacturer had considerable advantage over the English, in addition to the protective duty which turned the scale against the English manufacturer. Adam Smith, in his Wealth of Nations, said that in manufactures a very small advantage would enable the foreigner to undersell our own productions, even in the home market. Now, he maintained that 5 per cent was a very considerable enhancement of the cost of an article, and was not immaterial, as some people seemed to imagine. In the case of an ordinary piece of shirting, such as was usually exported to India, half the cost was due to the raw material, one-fourth to the wages of labour, and one-fourth to other expenses. The Indian mills had the advantage of near access to the raw material, together with a very great saving in the wages of labour, which in India were very low as compared with those paid in England. Moreover, the operatives in India worked very much longer hours than the operatives of Lancashire did, and also worked a greater number of days in the year. It might be said that the number of spindles in India was much smaller than that in Lancashire; but the proportion in India, as compared with Lancashire, was now, through competition, much larger than it was even two or three years ago. Again, the immense improvements which had been made in machinery could now be quickly introduced into India. It was argued that, though the coarse goods made in India might largely supersede those of the same kind made in England, yet the English manufacturer could rely on maintaining his pre-eminence in the manufacture of the finer kinds of yarn. That, however, he believed to be an entire fallacy; and as the Indian manufacturers could make the higher qualities of yarn they would, having already taken away a large part of the English trade, succeed in taking away also a half or a third of that which still remained. No one would question the immense importance of the trade between India and England, which was not to be measured by the mere export and import tables. All the different agencies, the carrying trade, the ramifications of various kinds connected with it, perhaps equalled in magnitude the direct traffic itself; and if we were to lose our trade with India we should lose a most important branch of our commerce. He now came to what was perhaps the most important point of all, the financial question. It was said that the financial equilibrium in India must be main- tained, and that they must not lay oppressive taxes on the people of India. His firm conviction was that it was not necessary to imperil the financial equilibrium of India, or impose oppressive taxes on the people. He had the honour of sitting for three or four years on the Indian Finance Committee of that House, and he then came to the conviction that, while they had reason to be grateful for the care taken to adjust the finances of India, still much remained to be done. They had seen also from the Budget speech of Sir John Strachey last March, and from the statement of the noble Lord (Lord George Hamilton), that the Indian Government was addressing itself resolutely to that question. The subject of the salt duties, especially with regard to distribution, deserved the attention of the Government. Our internal duties in India should be repealed; for how could we lecture Native States about their transit duties if we neglected to abolish our internal duties? He looked to improved means of transit for the prosperity of India. Railways would prove the means of vast improvement in India, and would enable them to cope with those terrible famines which arose from time to time. With regard to the depreciation of silver, there was great hope that the United States would adopt a double currency, and if they did so the difficulty with regard to silver would disappear. With respect to extraordinary works, they were henceforth to be enabled to see what they cost, the expenditure upon them being treated as capital laid out for the improvement of the country. Those works ought not to be undertaken unless they could be shown to be of pressing necessity or likely to yield a good return. Though much remained to be done to simplify and improve the finances of India, they ought not to take a gloomy view of those finances. Sir John Strachey had shown that the ordinary revenue of India had improved within the last five years by about £2,000,000. Then the ordinary expenditure was not increasing—a most favourable circumstance. Many might think that ordinary expenditure might be further reduced. That was a point on which he gave no opinion further than that the matter was one which required to be carefully and resolutely looked at every year and every month. The hon. and gallant Member for Kin- cardine (Sir George Balfour) had given Notice of an Amendment which seemed to imply that this country should, out of the Consolidated Fund, provide £2,000,000 per annum to enable the Indian Government to abolish its Custom duties, and also that that House should abolish the duty on tea and other products of India; but he (Mr. Birley) did not think that this was the time to ask the Chancellor of the Exchequer for such a sum. Then there was the Amendment of the hon. Member for Kirkcaldy (Sir George Campbell), which was that it was not possible, in the present condition of the finances of India, to abandon the greater part of the import duties without an extensive re-adjustment of the financial system, and a fair consideration of other claims to remission of taxation. Well, that was what he (Mr. Birley) ventured to controvert. This was a matter of pressing necessity, and it was not desirable to maintain a course of irritation between their manufacturing population and the people of India. The hon. Member for Hackney (Mr. Fawcett) proposed to get rid of the subject by moving the "Previous Question;" but they had a right to expect that the Government would give its opinion on this question. The Amendment of the noble Lord the Member for Middlesex (Lord George Hamilton) was the most reasonable of all that had been placed upon the Paper; but he (Mr. Birley) looked upon it with considerable suspicion, because, although it was reasonable enough in its terms, it appeared to give an opening to whoever might be the rulers of India to procrastinate. No one would expect, if the Motion were carried, that immediate directions would be given for the abolition of these duties; but the work, however difficult, was one that must be set about at once, and it should be understood both in this country and in India that the manufacturers of India were no longer to look for protection. The hon. Gentleman concluded by moving his Resolution.

MR. JACOB BRIGHT,

in seconding the Motion, said, the question had been so much discussed both inside and outside of that House that those interested in the abolition of the duties were perfectly aware that they had many and powerful opponents. They were assailed in various ways. Some men denied that there was any importance attaching to the matter, and said that the supporters of this Motion were the victims of a delusion. If so, the delusion was one of a very unusual character, for, unlike other delusions, it grew by discussion; it took possession, not of the ignorant, but of men of every rank of life and of every degree of intelligence—from one of the ablest of Her Majesty's Secretaries of State down to the humblest artizans. There were others who admitted the importance of the question, but who told the abolitionists that they were pursuing a selfish object without regard to the interests of India. ["Hear, hear!"] Hon. Members cheered that statement; but the men of the Northern Counties who were interested in the question said they only asked for justice. They asked for a fair field and no favour. They were willing to bear with competition, not only with Indian manufactures, but with those of every other country, provided they were put on equal terms. They maintained that wherever the legislative authority of the British Government extended, there should be no protective duties, but that every manufacture should stand on its own merits, and they asserted that these duties were injurious and dangerous to England and India alike. He would ask, was there any hon. Member who would deny that these duties were injurious to England, or that they limited the work of the labouring man and affected his wages? They could not be raised except in the most wasteful way, because they imposed a double tax—a tax in favour of the Exchequer and another in favour of a protected class. If he represented in that House not a Lancashire constituency, but an Indian constituency, he should be quite as much opposed to these duties as he was at the present moment; and he should oppose them mainly on the ground that they went to create a protected class in India, a class essentially selfish, and whose interests were always opposed to those of the rest of the community. They had only to continue this protection long enough in order to make this class powerful; and they knew from experience that such a class often became so powerful that the Government itself was unable to prevail against it. How far the appetite for protection had already grown in India might be shown by a remark made by Lord Lawrence in the House of Lords last year. He said that these duties were not objected to by the people of India, but that on the other hand they would prefer that they should be quadrupled in the interests of their own manufactures. It was said that the official class in India—the Civil Service there—were already investing their spare money in the protected mills. This being so, it was evident that we might soon have a powerful body in India that would be most difficult to deal with. But he would here say a word as to the importance of English interests. Of our total exports of cotton, yarn, and cloth, we sent one-fourth to India; we sent, in fact, more to India than to the whole Continent of Europe. Was this a trade which was so secure that we could afford by deliberate legislation to assist in its decline? There were men outside that House like Mr. Jackson, of Blackburn, who had long studied the question, and who maintained that the advantages of India were so great that a time would come when she would to a large extent manufacture her own goods, leaving England with a losing trade. He found that in the five years ending 1874 we exported 60 per cent less goods to India than we did in the five years ending 1856—that in the Bombay Presidency there were, in 1871, only 11 factories, whilst in the year 1875 there were 41. In 1870 India imported from England machinery to the amount of £300,000, while in 1875 the value of the machinery so imported was £1,500,000. This showed how much the trade had extended in India, owing, in part, to the system of protection. But it would perhaps be said that although the export of coarse goods to India had very much declined the exports of the finer fabrics had greatly increased. This was true. In shirtings we had had a great increase of exports to India; but the manufacturers in India having succeeded so well in making the coarser fabrics we had been accustomed to send them, had now begun, we were told, successfully, to manufacture the finer fabrics. Well, if this went on long enough we should find that there would in time be the same falling off in the finer as there had been in the coarser fabrics. He asked the House to remember how cheap labour was in India. In that country there was no interference with the hours of labour. They might work seven days a-week if they liked, and for as many hours a day as they chose. Besides, India grew her own cotton, while in our case it had to come 5,000 miles in the first instance, then to go back the same distance, in order to get into the Indian market. Again, India imported her machinery free of duty. She had iron and coal of her own; and although it might be that the development of these products was only in its infancy, we knew what would come in this direction sooner or later. Some people were accustomed to say that the 5 per cent duty was a mere bagatelle; but it should be remembered that every factory in Lancashire or elsewhere which sent £100,000 worth of cotton goods to India every year had to pay £5,000 per annum before those goods could enter that country. Was this, he asked, a matter of no moment? His hon. Friend (Mr. Birley) had shown how a moderate duty was influential in retarding or expanding the mercantile trade of a country. The House should remember that we were now about to renew our Commercial Treaty with France. There was great hope on the part of the mercantile community that we might have a more favourable Treaty than the last. The Chambers of Commerce throughout the Kingdom would strain every nerve even to reduce the duties on goods going from this country to France by 5 per cent; and if Her Majesty'8 Government did not do all that lay in its power to aid them in procuring this result, it must expect to meet with the greatest condemnation. But it seemed to him to be a ludicrous thing, after all the effort that was being made here to reduce the duties on goods entering France, that we should be careless about the duty on goods entering India. Some men said this was simply an affair of the rich spinners of the North of England. He said it was much more the affair of the working men, for the rich spinners could transfer their capital, if need were, to India. Capital did not consider climate; but the workpeople had to consider that matter, and those who worked for wages in England could not follow the capital which had already gone, and which might go in still larger proportions in future to India. The question was sometimes asked—Of what good was the possession of India to this country? Well, first of all there was the glory of its possession; there was the occasion it gave of conveying to a lower, the benefits of a higher civilization; there was the fact that thousands of our people had been enabled to live in affluence in its Civil and Military Services, and there was a belief that our trade with India was more secure than it could be if India were in other hands. This last consideration had great weight with practical minds. The security of our commerce should not be treated with indifference by a House which represented a people, millions of whom could only live by the exchange of their pro-duets with other countries. It would be admitted that if the trade between this country and India were to decline, the bonds between the two greatest portions of our great Empire would be less strong. They were told that they should be just to India. He was there to assert that those whom he represented in the manufacturing districts of the North of England were as anxious to be just to India as any other portion of the Kingdom could be; but they should also be just to England. The operatives of the North had enough political intelligence to know that the possession of India implied some perils in the future, and was not unattended by pecuniary burdens upon the people. The Crimean War was understood to be fought for India. English interests, we heard so much of at the present time in the East of Europe, had reference to India; and when the Army and Navy Estimates showed a large increase year by year, and the Government was challenged on the subject, the Secretary of State for War stood up in his place, looked round the globe, and dwelt upon our great responsibilities and our vast Empire. Did anyone suppose that in his survey of this vast Empire India was left out of his consideration? With the inevitable burdens we demanded such advantages as could be had without injury to our Eastern fellow-subjects A little while ago we gave £4,000,000 for shares in the Suez Canal. What was the wisdom of giving a great amount with one hand to provide a safe channel to India, while, with the other, we pursued a policy that lessened the freightage which went through that channel? But we were asked, where was the money to come from for the remission of these duties? In answering that question he would not enter into the perplexing subject of Indian finance—a subject which seemed to become more obscure the more it was discussed, seeing that though it was a question of fact, men of equal authority in that House took the most opposite views in regard to it. The case before us was simply this. In a country with a revenue of over £50,000,000 we were in want of the comparatively trifling sum of £800,000. He thought that nothing was more likely to bring our statesmanship into contempt among the working class than to tell them that this sum could only be raised by a protective duty, which tended to starve the people at home, which was the most wasteful of all taxes, and which bred and sustained one of the greatest curses of modern times—namely, a protected class. If this House would by a decisive vote strengthen the hands of Lord Salisbury, he, with his great ability and energy, would soon find a way out of the difficulty. He would soon give free trade with regard to these goods between England and India, and a question of an irritating and unfortunate kind would at length be set at rest.

Motion made, and Question proposed, That, in the opinion of this House, the Duties now levied upon Cotton Manufactures imported into India, being protective in their nature, are contrary to sound commercial policy, and ought to be repealed without delay."—(Mr. Birley.)

SIR GEORGE CAMPBELL,

in rising to move the following Amendment:— That in the present condition of the finances of India, it is not possible to abandon the greater part of the Import Duties without an extensive re-adjustment of the financial system, and a fair consideration of other claims to remission of taxation, said, he felt that anyone who undertook to discuss the subject with a view of doing justice to India had a somewhat uphill task. The Government was very much pledged to the repeal of the cotton duties, and had thereby gained a great amount of popularity in Lancashire. And if he was rightly informed, those who represented the Opposition on the Front Bench, and who were now conspicuous by their absence, were also inclined to support that view of the case which would, meet with the approval of Lancashire. That being the case, he felt that anyone in his humble position who undertook to plead the view of cau- tion in this matter required somewhat of the indulgence of the House. By all means let them remove the duties if they could, but let them find the money before doing so. His hon. Friends who had spoken had said, in somewhat vague terms, that the money might be saved somehow; but they had not taken upon themselves to show how it was to be done. He did not believe any independent ruler of India, whether Native or European, would remit these duties. They were not in their origin of a protective character; like those imposed for avowedly protective purposes in the United States and several of our own Colonies. They were small in amount, in no case exceeding 5 per cent, and the small amount of protection they afforded was only incidental. They fell mainly not upon the poor, but upon the middle and upper classes of India. The question resolved itself into this—that not only were the cotton duties to be sacrificed, but the whole of the import duties would also have to be abandoned; because the cotton duties were two-thirds of the whole, and of the remainder many other articles had equal claims. If this Motion were agreed to we must necessarily have unrestricted free trade in India. They were asked to sacrifice these duties on the very highest free trade principles. He admitted that under certain circumstances free trade was a very good thing; but be must remind the House that the world was slow to admit the desirability of free trade in all circumstances, and that this was the only country which had thoroughly adopted it. We had done great things for India, and India owed us a great debt, and our rule in India was not a selfish rule. It was most desirable that we should not wound a large British interest in the tenderest point. Taking a practical view of the matter, he admitted the Government had pledged itself to a certain extent to a remission of those duties. No doubt the people of Lancashire felt very much aggrieved in this matter, and it was certainly hard that those who had created such a wonderful machinery should see another country cutting them out by the use of their own tools. He considered it in that view desirable that these duties should be given up, and if the Indian revenue was in such a position as to authorize their being given up they ought to be given up. But as the Indian finances would not admit of that sacrifice of revenue, if the Government held out a hope to the manufacturers of Lancashire that the proposed remission would be made, they must face the matter boldly, and state how the necessary money was to be obtained. He regretted that the Government of the late Viceroy of India had proposed to increase the salt duty. He considered the proposal to increase the salt duty a wicked one. That duty ranged from 600 to 2,000 per cent on one of the most indispensable articles of consumption, and amounted to an income tax of 6d. in the pound and upwards on every working man in that country. It was a duty which limited the use of articles of consumption, for it limited the consumption of fish and the supply to cattle, and was a very crying grievance. If the question of abandoning revenue came to be considered in India, it must be regarded not only with regard to the question of import duties, but with regard to the condition of the poorer classes. The question of the remission of the cotton duties involved the remission of the whole of the import and export duties, amounting to £2,500,000. The export duties stood on a different footing from the import duties; but it would be an anomaly that could scarcely be justified to give up the one and to maintain the other. If the Motion should be carried, it was clear that the import duties must give way, and then the export duties could not be justified. Taking a broad view of the financial situation, it must be remembered that such a loss of revenue as that involved in passing the Motion of the hon. Member for Manchester (Mr. Birley)—namely, of £2,500,000—must be accompanied by a concession to the poorer Natives of India of £1,500,000 or £2,000,000 of the salt duty. There must, therefore, be a surplus of £4,000,000 or £5,000,000 before this great financial operation could be undertaken. But had they this surplus? Certainly not. It was clear from the speech of the noble Lord on the Indian Budget that there was no existing surplus in India; and that, on the contrary, they were borrowing year after year to supply an ever-recurring deficit. They had been obliged to impose fresh taxation this year, and therefore they ought not to adopt the Resolution as it stood. The Government were bound, either to undertake a great financial operation or else to say to the Lancashire Members that they could not agree to their proposal. He could not sit down without saying that the observations which the hon. Member for Manchester (Mr. Jacob Bright) had made as regarded the Indian Civil Service were not justified. The accusation was, in his opinion, an unjust accusation. Whatever their faults, the fault had never been attributed to them of pecuniary corruption of any kind. Prom corruption they had held themselves aloof far more than the Civil Servants of this country; their reputation had been fair and unsullied in the past, and he trusted it would remain fair and unsullied to the end. The hon. Gentleman concluded by moving his Amendment.

Amendment proposed, To leave out from the word "That" to the end of the Question, in order to add the words "in the present condition of the finances of India, it is not possible to abandon the greater part of the Import Duties without an extensive re-adjustment of the financial system, and a fair consideration of other claims to remission of taxation,"—(Sir George Campbell,) —instead thereof.

Question proposed, "That the words proposed to be left out stand part of the Question."

COLONEL WALKER

claimed the indulgence of the House as a new Member, and as the Representative of a large constituency (Salford), which was greatly interested in the cotton manufactures. The hon. Member who had just sat down opposed the Motion because he wished the Government to remain unfettered; but if the Government remained unfettered, the manufacturing interests of this country would remain fettered for a long time to come. It had been said that the manufacturers and Representatives of Lancashire were putting a pressure on the Government. But there was nothing political in the matter, because the Motion had been proposed by an hon. Gentleman on that side and seconded by an hon. Gentleman on the other side. For himself, living, as he did, in the centre of a large manufacturing county, he would say that they wanted no favour, but they did want fair play. This question had been spoken of as one that most concerned very large capitalists. Hon. Gentlemen who thought so laboured under a great delusion. Those who were most affected were small capitalists, who were struggling against a tax imposed upon English goods by an English Government. This was not a question of Party. The whole Empire ought to be governed for the good of all, and this country, its trades and manufactures, ought not to be made to pay the penalty of too small an income of any one of its Possessions. They had been told by the hon. Member (Sir George Campbell) that this 5 per cent duty was only a small duty. The hon. Member had, happily, no concern with trade or commerce, or he would know that a small duty might lead to a great injustice, and that small duty was an undoubted hardship upon the manufacturing trade of the Northern Counties. In Lancashire they were already suffering from hard times. They were ready to concede to India the advantages she already possessed—cheap labour, long hours, the staple on the spot, a market close at hand; all they asked for themselves and countrymen was fair play, and that they did not get at the present moment. We were told of the great and overwhelming difficulty of meeting this £800,000 if the duty was remitted. We all knew that you would not easily find shoulders ready to accept any burden, and when everybody was willing to be taxed, the duty of governing would be easier and more agreeable than it was at present. But all the supporters of this Motion asked was that this question should be looked at in an impartial manner, and they left the interests of our manufacturing counties in the hands of the House, in the full conviction that they would meet with the justice to which they believed they were entitled.

MR. BRIGGS

said: Mr. Speaker, we who advocate the repeal of these duties labour under one great disadvantage—that is, we get small, very small, sympathy from those who do not fully understand the question, and who are, therefore, unable to appreciate the magnitude of the interests at stake, and the damage which is being done to the great cotton industry of the North of England by the action of these obnoxious duties. There are, I fear, a great many people in this country, I hope I may say not in this House, who still regard the cotton manufacturers of Lancashire as being a very rough-and-ready sort of folk, with a very keen eye to their own interests and a happy and profound indifference to the interests of others; an uninteresting class on the whole, but having one great redeeming feature—namely, that their pockets are overflowing with the immensity of the superfluity of their wealth. The operatives again are trade harpies who, when the good things of commerce are put upon the capitalist's table, swoop down upon them and carry off the best of everything, understanding nothing of, and caring nothing for, the fluctuations and vicissitudes of commerce. Well, Sir, those who hold views regarding us such as those I have faintly outlined, might be pardoned for saying—?"Why do not you Lancashire manufacturers amongst you pay off this miserable sum of £800,000 a-year without making such a fuss about it—you are wealthy enough? And as for you operatives, you ought to be only too rejoiced at having the opportunity of extending to your coloured fellow-workman in a distant land an increased means of earning his means of subsistence, even although it may result in the curtailment of the means of earning your own. Ay! even although it may result in a lowering of your wages themselves." It may be, Mr. Speaker, that in Lancashire we are somewhat wanting in the full development of high-flown philanthropic sentiment; but certain it is, that neither the mill-owners nor the operatives of Lancashire can for one moment admit the propriety of either of these propositions. Now, I am speaking in the presence of many Lancashire commercial men who will correct me if I am wrong, and I would not mind being judged by the right hon. Gentleman the Home Secretary, of whom Lancashire is justly proud, who is, or was, a banker, and who, I hope, does not know to his cost that Lancashire manufacturers are not now-a-days in the majority of cases wealthy men; on the contrary, they are struggling men, often commencing their business life on borrowed capital which they are laboriously endeavouring to pay off. Besides, the conditions of our trade are almost altogether altered. There was a time, I'll grant ye, when a Lancashire manufacturer never stopped to consider whether he would make a profit or a loss; profit was certain, and the only question was how much money he would make? But that is a long time ago; that happened before I was born. At that time, what is technically called the turn-over of a mill was small, and the margin of profit was great. Now-a-days, Sir-thanks to the increased price of everything which we use in our manufacturing processes—thanks to increased competition at home and abroad—thanks to the limitation of hours imposed by this House, with which I do not quarrel, but which, on the contrary, I should like to see extended to India when hon. Members may be pained and shocked to learn children offender years and women with infants at the breast work thirteen and a half hours a-day, seven days to the week, and nobody lifts a finger to help them—there is, I venture to submit, a wide and noble field for the philanthropic endeavours of those noble Lords and hon. Gentlemen who have been lately having a newspaper discussion as to who has done most or least for the factory operatives of this country—well, thanks to those matters to which I have alluded and to others with which I will not weary the House, a Lancashire manufacturer is obliged at the present time to look for a remunerative return for his risk and capital outlay, not to a small turn-over and a large margin of profit, but to a large and rapid turnover and a small margin of profit. Now, whenever you have a larger turn-over you have an increased production, and this may serve to explain to hon. Members what might otherwise seem inexplicable—namely, how it is that there should be discontent in Lancashire at having to pay this tax co-existent with an increased exportation of cotton goods to India. This is a fact to which our Indian opponents point with an assumption of triumph. They say—"You grumble, but you send us more goods every year." Yes, Sir, but are these Gentlemen who pin their faith so firmly to statistics aware that during the past twelve months large quantities of cotton goods have been sent to this country from America, and sold here at prices that could not possibly be remunerative to the American manufacturer? Because there has been an increased exportation from the United States, does that prove that the cotton manufacturers of America are in a sound and satisfactory condition? The facts are noto- riously to the contrary; and if further proof were needed, I might tell the House that I know of many cotton operatives who, after emigrating to America with their wives and families, have been obliged to return home again, because they could not earn enough money in that country to keep themselves in comfort. No, Sir, increased exportation, taken by itself, is no safe criterion of the healthy condition of the trade with which I am connected; and, speaking generally on this part of the subject, before I leave it I may say that the larger your turnover is obliged to be, in order to secure a margin of profit, the smaller will that margin of profit be; and the House will therefore see for itself that the narrower the gulf which separates profit from loss, the greater will be the damage done by this obstructive rock of a 5 per cent duty. That is to some extent the millowners' view of the question. The Lancashire operative, Sir, believes that, by the action of these protective duties, the bread is being unfairly and unjustly taken out of his mouth; he is patient and uncomplaining as a rule. I have never seen men more patient and enduring than our cotton operatives when under the strokes with which Providence has at various times thought fit to visit our trade. Hon. Gentlemen, many of whom contributed nobly to the funds raised in aid of our suffering population during the late cotton famine, may perhaps remember some of the tales that were told by those who were disinterested enough and self-sacrificing enough to serve on the relief committees—how people apparently comfortably off, if you could judge from their attire, came and asked for help, and how the members of the committee looked at one another, and wondered if it could really be true that these people, who seemed to be in good circumstances, could be in actual need of the bread and the soup which were doled out by these centres of relief; but on going to the homes of these poor people what did they find—bare walls! naked floors! destitution and utter want. Their little bits of furniture had all gone, and their few ornaments, mean and paltry perhaps to the eyes of hon. Members, but treasured by these humble people because connected with memories of their simple past—everything had gone, and it was only when some loved child, or husband, or wife maybe, was stricken down for the want of those necessaries for which, poor folks, they would willingly have worked, if they had had the chance, that they were at last driven to seek relief. They were too independent to do so before—too proud, if you will. Do you blame them for it? Too fearful of being branded with the odious epithet of pauper. All through that fearful time not a murmur. Sir, they are as patient and as independent this day. And if they have sent up Petitions from every mill and workshop engaged in the trade; if they have sent up deputations to London on funds provided by the pence of the people, the House may take it as certain, and you, Sir, may be sure that in this matter of the India import duties the cotton operative of Lancashire feels and knows that his future well-being and comfort are at stake. Now, Sir, what is our plea in asking for the abolition of these duties? We ask for no bounty to aid us in our competition with our trade opponents; we cringe for no favour; all we ask for is justice. When have you heard us complain because our trade is hemmed in by factory legislation of the severest kind, because we are inspected at every turn, told whom we shall employ, how long we shall employ them, and the conditions under which they shall labour; when have you heard us complain—more than other people, at any rate—because the fruits of our industry are taxed; from all of which, I fear I must say, impediments to trade, our Indian rival goes free. No, Sir, we kiss the rod of Parliamentary discipline which many of us have heartily co-operated in framing for our own backs, and we, at least, honestly endeavour to believe that every out-come of the collective legislative wisdom of this House is for the benefit of us all, employers and employed alike; but the last straw which breaks the back of our patience is this—that after we have sent abroad the Mercantile Marine of this country thousands of miles to fetch us home the raw material, which we quickly turn by a costly process into cheap and useful clothing for the millions of India, and which we then quickly send to our great Eastern dependency, after thus triumphing to some extent over time and space, that we should be told—"No, your goods shall not enter into competition with ours, unless you will pay an entrance fee of 5 per cent." But the Hindoo purchaser? You ask—Has he no interest in this matter? The poor man whom you see going from stall to stall in the Native bazaar, endeavouring to cheapen his one poor article of clothing, has he no interest at stake? The answer is—"Oh! the poor purchaser must take care of himself; that is no concern of ours; what we the Government of India, what we the official classes and interested millowners have to look to is, that a rising Indian industry must, at all hazards, be fostered." Why, Sir, this is rank protection! Is the House willing that this state of things should be continued? If so, what a contradiction in practice of your loudly enunciated Free Trade principles; what an example to set the nations of Europe just at the moment when Treaties of Commerce are expiring! I may be told—"Yes, but if India were self-governing, you would have more duty to pay than you have now—look at Australia! look at Canada!" Sir, we are not answerable for the trade follies and fallacies of our self-governing Colonies. Experience is proverbially a commodity that cannot be bought, that cannot be handed over; it must be earned, and I very much fear that both Australia and Canada must earn for themselves the same bitter experience of the evils of protection that their Mother England has done in the past, and their Cousin America is earning now; but I respectfully submit to this House of Commons that, inasmuch as India is not a self-governing Colony, inasmuch as she is governed directly from this country, that it would be wrong, aye more, it would be criminal in us to allow her to pursue a course which we know from our own bitter experience to be a wrong and a false one. I trust the House will pardon my speaking at this length, but I represent a district which, although small in area, yet pays considerably over a fourth of the whole of these duties; but in any remarks that I may make I will endeavour to be as brief as possible; and to begin with, I will not waste the time of the House by entering into a long discussion on the protective nature of these duties, and, for one very simple reason, because it is unnecessary. The fact has been admitted by such authorities as Lord Lytton, Lord Salisbury, and, greatest authority of all, Sir Louis Mallet, and condemned by them on these very grounds! Why, even our Indian mill-owning opponents in India admit that there is a protective element in these duties; but they say "the area over which that protective element has power is a small one, being, as a matter of fact, confined to one-twentieth of the whole of your trade to India—namely, the small amount of coarse cotton goods, which class of cotton goods India mostly makes for herself. Therefore, your grievance being such a small one, your claim to the abolition of these duties falls to the ground." That is a very specious argument, Mr. Speaker; but, when you come to consider it, there is a refreshing hardihood about it which is well worth the consideration of hon. Members; for what are the facts? India, some years ago, for fiscal purposes, imposes a duty on cotton goods; an Indian cotton industry springs up. Through the action of these duties, now become protective, as we contend, and as we can prove, India ousts us from all but a microscopic portion of what used to be the easiest, the largest, the most profitable branch of our trade; and then, having done us this injury, and without giving us any guarantee for the future, India has the courage to turn round and twit us with the very small portion of goods of this character which we now export, and upon this to argue that therefore, being injured in so slight a degree, our claim to the abolition of these duties falls to the ground. Was there every such an extraordinary conclusion arrived at, built upon such licensed premises? Sir, we were compared last year, by a very high authority in India, to a man who cried out that his whole body was in danger because his little finger ached. The comparison would have been juster had we been likened to a man whose right arm was withered up by the action of a slow, insidious, but fatal poison, and who knew from his own symptoms and from the opinion of those upon whose advice he was wont to rely, that unless some powerful antidote, some strong counter-irritant were applied the whole of his body and the whole of his powers of resistance would fall a victim to its fatal influence. That is our position, Sir. We know that these duties have injured us in the past; we know that they are injuring us at the present time; we justly fear that they will hurt and injure us in the future. An hon. Gentleman who sits below me (Mr. Grant Duff) gave us some friendly advice last year, which I, as one of the Members who took part in the debate, accepted in the same friendly spirit in which it was given. The hon. Gentleman said—"You would have done better had you displayed a little more of the wisdom of the serpent, and argued this matter from an Indian rather than from an English point of view." Sir, I, for one, did not consider it necessary to pursue that serpentine line of procedure; we had such a palpable grievance, we had such a plain, unvarnished tale to tell. Besides, I did not forget then, as I do not forget now, that there are hon. Members of this House who take the Natives of India under their protection, and, if it is necessary, to fire their enthusiasm, if it is really needful, to screw their courage up to any particular sticking point, so as to become bold and enthusiastic colleagues with us in our endeavours to secure the repeal of these duties, I would remind them that, although we Lancashire manufacturers pay £800,000 a-year to the Indian Exchequer—a sum which appears on the Estimates, which everyone can see—yet there is another sum which does not appear—namely, a sum amounting to nearly £800,000, which is paid by the Hindoo purchaser to the protected millowner. Mr. Speaker, I should be but a sorry antagonist, I fear, for the poorest and meanest political economist in this House, and I therefore will trouble hon. Members with no crude ideas and theories of my own; but what said Professor Bonamy Price in a pamphlet which he wrote a short time ago? Talking of Protectionists he said— What is it they seek to accomplish? Nothing less than to raise a charity tax on the whole people for the "benefit of those employed in a few particular trades. Protection, under the plausible disguises of not throwing poor people out of work, and not allowing them to be trampled upon by foreign rivals, sends round a begging cap to all buyers of goods to make charitable contributions to particular individuals. Free traders are called hard-hearted; but what sort of feeling is it which inflicts impositions by force of law on every consumer for the advantage of some of their neighbours? And, again, The Times newspaper, in lecturing the silk manufacturers' deputation the other day, observes— It is a great pity, no doubt, that the silk trade of Coventry and Derby should be in such a bad way. We are very sorry for the distress of the weavers. But the gentlemen who waited on the Foreign Secretary made the mistake of supposing that nations exist for the sake of manufacturers instead of manufacturers for the sake of nations. Free trade is good because it is more profitable to benefit 10,000 persons than it is to benefit a single man. Sir, I claim not only Lord Derby, the Leader of the House of Lords, and The Times newspaper, the leader of public opinion, as enthusiastic Colleagues; but I also claim the co-operation of the learned Professor from whose writings I have quoted. Would that I could be as sure of the co-operation of another learned Professor in this House (Professor Fawcett). Mr. Speaker, I have talked over this matter of the Indian duties with many of our opponents, and they may be divided into two classes. There are, first, those who admit that these duties are bad ones, and ought to be abolished, but who declare that there are other Indian duties which press more heavily on the people of India, and to which they take an equal or worse exception. When pressed to name the particular duty which they have in their mind's eye, they generally say—"Oh! the salt duty." Well, Sir, I admit that the salt duties do press very heavily upon the people of India, and I would gladly see them abolished. But I was told on high authority that it would be impossible to deal with the salt duties for some time. Besides, Sir, consider what a drop in the great ocean of the salt duties would the abolition of £800,000 worth of duties be. Again, what difference can it make to the Hindoo whether a tax is taken from off his food or his clothing? Indeed, Sir, I sympathize very strongly with hon. Members who wish to secure the abolition of the salt duties, because there is a great similarity in some respect between the salt duties and the duties of which we Lancashire Members complain. Both are taxes on necessary commodities; both affect every man, woman, and child in India. [General Sir GEORGE BALFOUR: No, no!] Well, I beg the hon. and gallant Baronet's pardon as far as regards the children. The children in India do not wear anything for the first few years of their life. I was at- tempting to prove that these two duties were so far equal; but there is this radical difference between them—that whereas, on every pound of salt manufactured in the country or out of it a duty is paid, it is only on the cotton cloth manufactured out of India that this duty falls. The other class of opponents to whom I alluded are those who, while admitting that the cotton duties are worse than any other, and that they ought to be abolished, start back frighted and aghast before the great and fearful hiatus which the abolition of them would make in the poor, the mean, the insignificant revenues of India. When I was in India, just be-before the abolition of the income tax in that country, and at the time when I believe the hon. Baronet the Member for Kirkcaldy (Sir George Campbell) was convincing the Legislative Council of India with his oratory, I heard tales that made my blood curdle of the inequality of the incidence of that tax, of the difficulty of its collection, of the dreadful hindrance it caused to commercial enterprize and professional skill; but I never beard one word as to the financial difficulty which would ensue in the event of the income tax being abolished. That tax was abolished with the consent and approval of those very classes who now oppose the abolition of the duties of which in Lancashire we complain. Where there is a will, Sir, there is a way. Did not the noble Lord opposite (Lord George Hamilton) deal the financial pessimists of India a heavy blow the other day when he made his Financial Statement? Did not hon. Members go home with a greater conviction of the healthy condition of Indian finance? Must I remind the House that in 18 years the revenues of India have increased some 70 per cent? Is the House not aware that the revenues of India for seven years show a surplus of £2,000,000, after paying for £12,000,000 of famine expenditure, while the closed accounts for 1875–6 show a surplus of £1,668,000. Besides, enormous sums have been wasted in India in what may well be called extraordinary public works; ships chartered for Government purposes far higher than the market rate; railways guaranteed by Government, that seemed as if built on purpose to carefully avoid the centres of population; barracks that tumbled down before even a soldier crossed the threshold; canals dug for irrigation purposes that watered the land with salt water; and bridges that plunged, as if ashamed of their faulty construction, beneath the torrents they were meant to span. Sir, I do not mean to say that money has not been well spent in India on useful public works; I do not stop to ask whether remunerative or otherwise; I do not say that money has not been well spent in foiling that fearful foe of India—Famine; but I do contend, Sir, that it is wrong to make the present generation, which will probably benefit less than any other, bear the whole cost of carrying out useful public works; I respectfully submit that it is cruel to place on shoulders already weakened by famine, the whole burden of costs incurred in meeting that famine. Sir, if these charges be spread over a sufficient number of years, India, I will venture to say, will be able each year to show a surplus far more than enough to make up for the loss which would be incurred by the abolition of the duty on manufactured cotton goods. Sir, I thank the House for having so kindly listened to me, and would entreat Her Majesty's Government to disregard the sneers and taunts of mill-owning monopolists abroad, and noble Whig re-actionists at home, who would seem to wish us to believe that because Her Majesty's Government desire to take this burden from off the people of India, and at the same time to do an act of simple justice to Lancashire, that they are actuated by no higher motive than a desire to perform an act of political subserviency to Manchester, for the purpose—Heaven save the mark!—of winning a few borough elections.

MR. SIDEBOTTOM

Sir, I brought this subject under the consideration of the House last Session on the Indian Budget. The House upon that occasion did me the honour to listen to the observations and arguments I brought forward, but after the able and exhaustive speeches of the hon. Member for Manchester and other hon. Members to which we have listened to-night, I feel that it is unnecessary to occupy its attention at any great length. I may, perhaps, however, be permitted to say that these duties are, on the one hand, injurious to the great body of consumers in India by materially enhancing the price of their chief article of clothing, and unjust on the other hand to English cotton manufacturers by establishing a premium on the manufacture of goods in India against English goods. The Government, indeed, by promising to abolish them as soon as the state of the revenue permits, have practically admitted the truth of both these propositions; but, with the exception of the unfortunate English manufacturer, who is so seriously injured by their operation, probably few persons either in this House or the country have any adequate conception of their extremely onerous nature. The nominal amount levied is 5 per cent on the value of the goods, but it is in reality more than this, because the value of the goods is estimated at a certain fixed amount, and the duty levied upon that amount; whereas owing to the great depression in trade and the absence of demand from other markets, the value of cotton goods has sunk to such a low ebb as to be in reality below the fixed amount upon which the duty is levied, so that at the pesent moment the actual amount of the duty is more than 5 per cent; and it must be remembered that this is not on the profit of the manufacturer, if profit he is ever to have again, but on his whole turn-over—a most important and material distinction, to which I beg the earnest attention of the House. I can only say that, as an extensive cotton manufacturer and as representing one of the oldest and best-known firms in the trade, I would gladly compound for 5 per cent profit on my turn-over, and I think most other English manufacturers would also willingly do the same. This duty, in fact, amounts to half of the wages paid to our weavers for weaving the cloth, and constitutes a bonus of about 3s. per week to every single loom working in Bombay; so that I venture to think the House will be of opinion that it is really most serious and most onerous, and that even if now repealed such an impetus has already been given to the erection of mills in India that English manufacturers will be quite sufficiently handicapped in the race of competition in other ways. First, there is the great distance our goods have to traverse to reach the markets of India at all. We have to bring the raw cotton—if Indian or Surat cotton be used—all the way from India to England; manufacture it here in England, and then convey it back again to India, paying all the charges for packing, freight, merchants' commission, and the whole cost of transit both ways. Wages here, in England, are eight or 10 times as much as they are in India, and what is of great importance, there is practically no restriction—or, at all events, very little restriction—on the hours of labour there. Bombay mills are now working 12 hours a-day, and seven days a-week, or more than 80 hours, against an English mill, 56 hours. If this fact, indeed, stood alone, it would give an immense advantage to the Indian mill-owner, because the cost of a cotton mill is so great, and the fixed expenses so heavy, that the time worked and the production turned off is of very great importance indeed. Well, it would be an easy task to prove from statistical accounts which I hold in my hand, that with all these natural and artificial advantages, and under the fostering influence of these protective tariffs the produce of Indian mills is fast superseding that of ours in England in the Indian markets. This subject has, however, been so fully entered into by previous speakers that I will not weary the House by quoting a long array of figures, but simply remark that not the least serious feature in this Indian rivalry is its rapid progress within the last few years. The first cotton mill was built in Bombay in the year 1855; in the year 1861 there were only 11; in 1874 the number was 24, an increase of only 13 mills in 13 years; but about this time 18 new mills were projected to contain 531,000 spindles, which are now no doubt at work, and to show the House that the production of these mills is really superseding that of English mills, it appears that whilst out of a total of 389,000,000 yards of cotton cloth supplied to Bombay during the year 1861, 275,000,000 were imported from England, and 114,000,000 produced in Bombay. In the year 1876 out of a total of 698,000,000 yards supplied, only 318,000,000 were imported from England, 380,000,000 being produced in Bombay. These figures are, I think, sufficient to satisfy the House as to the serious nature of the competition to which English manufacturers are exposed by their competitors in India—and that, to say the least, these competitors are quite able to hold their own against us without being artificially protected by our own Government. I was very much struck with the statements in a letter which appeared in a London daily paper a short time ago. The writer stated that in a cotton mill of 1,000 looms, in England, making cloth for India, £7,500 a-year was paid for duty, £14,000 for charges of various kinds on the cloth, and £5,000 charges on the importation of the cotton—supposing it came from India—or a direct advantage of £26,500 per annum to an Indian mill of the same size, without taking into account the indirect advantages caused by working longer hours, and so dividing the fixed expenses over a greater production. Well, I have taken the trouble to examine some of these statements, and find them, if anything, under rather than over-stated, and I think the House will be of opinion that we need no longer be surprised at the rapid development of the cotton trade in India, nor at the uneasiness displayed by English manufacturers. I can speak feelingly on this subject. When I had the honour of bringing this subject under the attention of the House last Session, I stated that although my family had been engaged in the cotton trade from its earliest infancy for three generations, neither my grandfather, my father, nor myself had, so far as I know, ever made goods for India, being engaged in an entirely different branch of the trade. Since then, however, the stagnation in the cotton trade has been so universal, the absence of demand so general, the inability of all the other markets of the world to take off the production of our English mills so decided, and the stocks held of manufactured goods so enormous, that, driven well-nigh to our wits' end, many manufacturers, not previously accustomed to the Indian trade, have been obliged to resort to it, myself amongst the number. The greatest portion of my looms are the wrong width and not adapted; but it so happens that I have about the same number mentioned in this letter—that is, about 1,000 the right width—and during last autumn I set these to work, making goods for India. Well, I appeal to any hon. Member in this House, is it fair? is it reasonable? is it right? that in addition to the natural advantages of £19,000 a-year which a mill in India possesses over mine, I should also pay a tax of £7,500 for every 1,000 looms, and yet this is the real literal state of the case. My chief object, however, in alluding to this matter is to show the immense importance of the Indian markets to this country; but it may be said if, notwithstanding this tax, these markets take off such a large proportion of your goods, why do you complain? You have proved too much by half. The answer is the Indian markets constitute the chief outlet for our production. We have already lost our trade in the coarser goods, which can be supplied cheaper by Native manufacturers, and we see an industry springing up beneath the fostering influence of these protective tariffs and advancing with giant strides to deprive us of what is at this moment the very sheet anchor and mainstay of our trade—and threatening, unless checked in its career by the early and entire removal of these duties, to overwhelm at no distant day both employers and employed in one common destruction. The injustice and hardship inflicted upon English operatives indeed is quite as great as upon employers; because, however large an amount of capital is leaving England for the purpose of establishing mills in India, operatives cannot follow that capital. They possess no capital but their labour, and in the prospect of the stoppage of mills in England they see nothing but ruin, distress, and misery before them. And for whose benefit are these serious risks incurred? Who are our competitors? Who are the projectors, and who are the owners of these Indian mills? Are they poor struggling Natives, who ought to be assisted and encouraged in their efforts to develop Native industry, and to employ Native capital otherwise lying dormant by the aid of protective duties, however wrong in principle, however opposed to true and sound doctrines of finance, however contrary to the principles of free trade, however injurious and oppressive to the great body of Native consumers throughout India, and however unjust to English manufacturers at home? Nothing of the kind. But there is reason to believe that, at all events, some proportion—if not a considerable proportion of the mills in India—are owned by Anglo-Indian officials and by English capitalists, who, from the operation of restrictive laws at home, shorter hours of labour, high wages, and other causes into the consideration of which it is unnecesary now to enter, have taken their capital where they can receive a better return for it. Nor do we in the least complain of their doing so; but we do ask for fair play, and we do object to our goods being charged a heavy duty before they are allowed to enter India to compete with those of our rivals. Besides, a most injurious effect is also produced upon the trade of this country indirectly in other ways. There have lately been important negotiations in reference to a new Treaty of Commerce with our neighbours across the Channel; but how can we, with any show of consistence, advocate the doctrines of free trade? How can we ask France, or any other foreign nation, to remove duties from our goods so long as we allow an enormous duty to be levied upon them in our own Empire of India? Well, these duties being admitted to be vicious in principle, to have, as I think I have shown, such a bad effect in practice, and Her Majesty's Government having, in consequence, promised their repeal, why cannot this take place at once? Bis dat qui cito dat. A powerful argument for their immediate repeal is offered by the fact to which I have just alluded of English capital being transferred to India, because this process may be now going on; this capital may be being transferred at the present moment, and it cannot too soon be made clearly manifest that whilst there is no desire or intention to interfere in the slightest degree with the natural advantages Indian mills will ever possess over those at home, they certainly will not continue to be supported by enormous protective duties which every day they continue afford encouragement for the erection of new mills and for the creation of vested interests to oppose their repeal. I apprehend the most powerful argument against their immediate repeal is because it is thought that the present state of the Indian revenue will not allow it. Well, in the presence of Gentlemen on both sides of the House, who are such high authorities on Indian finance, I confess to approaching this part of the subject with considerable diffidence, but what are the facts? The Revenue of India at the present moment is about £52,000,000, whilst the Debt is £130,000,000, or nearly about 2½ times the amount of the Revenue. Well, is there here any primâ facie evidence of approaching bankruptcy, or of any undue strain upon the resources of the Empire? How does it compare with our own position in the United Kingdom at home? The Imperial Revenue is between £70,000,000 and £80,000,000 and the Debt about £725,000,000—that is, nearly 10 times the amount of Revenue—and yet I never heard that our credit was bad, or that we usually experienced much difficulty in raising funds when required. But this is not all, for we have in addition a very large debt connected with local taxation, amounting to about £105,000,000, with a revenue of £28,000,000, the Debt being thus about four times the amount of the Revenue. Our local bodies in England, again, borrow from £5,000,000 to £8,000,000 per annum, which they do not spend on railways, canals, gasworks, and other reproductive works, exclusively; but to a large extent on sanitary and other works of a similar character yielding no direct pecuniary return. The Revenue of India, therefore, compares very favourably with that of our own, and indeed with that of every solvent State in Europe, the debts of nine solvent European States being on the average six-and-a-half times the amount of their respective revenues; and when we consider in addition the very great expansion of which it is susceptible, when we call to mind that in the year 1840 it was only £20,000,000, whilst it is now upwards of £50,000,000, and that the whole amount raised by these duties is under £1,000,000. We cannot help thinking that such an unjust tax, raising only such a small amount of revenue, might be at once repealed. I said just now that we have lost our trade with India in the coarser goods, and yet though the duty has long since ceased to be productive it still remains, I presume for protective and prohibitory objects alone. Are we, then, still to wait patiently till our trade in the finer goods is also destroyed, so that when their importation has also ceased the Indian revenue, forsooth, may then bear the abolition of the duty. I say it is most monstrous that Lancashire should continue to pay these unfair imposts a single day longer. If it can be shown that we are bound to balance the Indian Budget, it would be preferable to pay the amount in hard cash by a direct tax upon our mills rather than in the present most objectionable form, and it would be far more reasonable, more equitable, and more just to place a duty of 3s. per week on every loom working in India, which, as I have shown, would still possess a great advantage over English looms, and a proportionate tax on every spindle, rather than to continue the present tax, or upon English machinery, which is of course allowed to enter India duty free, and of the advantages of which Indian manufacturers of course take care to avail themselves to the utmost. I do not, however, wish to be understood as advocating such a course further than to point out that if it can be shown that the revenues of India will not really bear the loss of £800,000 per annum raised by these duties, then it would be just and equitable to place a tax on machinery in India, in order to equalize the burden and cause Indian mills to bear their proper share along with English mills, for it cannot surely be maintained that one portion of the dominions of the Crown should be permanently placed under serious disadvantage, and saddled with onerous burdens for the direct benefit of another portion. We have heard a good deal about the demand for the repeal of these duties being "a Manchester delusion," and other unmerited and uncalled for taunts, but it is really a most serious question, which powerfully affects the cotton manufacturing industry of this country. This industry has £130,000,000 of capital invested in it. It affords direct employment to about 500,000 operatives, and there are altogether fully 2,000,000 of people dependent upon it. One-third of the entire exports of this country consists of cotton goods, and one-fifth of those cotton goods goes to India. Depend upon it, the repeal of these duties is fast becoming a great, a burning question, and if not accomplished before the next General Election I shall be greatly surprised if hon. Gentlemen are not then, at all events, made fully alive to its importance. The hon. and learned Gentleman the Member for the City of Oxford said at an earlier period of the Session that "the trade of this country was the very breath of its nostrils," and the right hon. Gentleman opposite the Member for the City of London favoured us some little time ago with a most interesting and graphic description of the disastrous condition at the present moment of wellnigh every trade and well- nigh every industry in this country, and there can, indeed, be no doubt that we are passing through a most grave and serious crisis, the effects of which will be felt by thousands for many long years to come. The dark thunder clouds also which have been so long clustering on the Eastern horizon have at last burst, the tempest is now raging there in all its fury, and such a storm cannot but be accompanied by great and widespread depression and disasters. But I have faith in the future of our country and in the revival of her trade. Only let us abolish these miserable remnants of protection, these exploded fallacies of a bygone age, and depend upon it there will be brighter days in store for us, and we shall again see that commerce prosper and that trade flourish, which have contributed in no small degree to the grandeur, the greatness, and the prosperity of England.

GENERAL SIR GEORGE BALFOUR

stated that he had an Amendment on the Paper in succession to the Motion of the hon. Member for Manchester, who proposed to reduce the duties levied in India on English cotton manufactures. But as that Amendment was not to be pressed, he proposed to be brief, out of consideration for the many hon. Gentlemen who desired to express their views on this important Motion. He had given way to the wishes of his hon. Friends the Members for Kirkcaldy (Sir George Campbell) and Hackney (Mr. Fawcett) to allow their Amendments to be pressed, if deemed advisable. He hoped that before the Government meddled with these cotton import duties, they would consider what the consequences would be if the duties on imports of that class of goods were abolished. The whole value of imports from foreign countries into India subject to duty, exclusive of salt, amounted to a fraction under £33,000,000 in the year ending 31st March, 1876. That was the highest value of imports paying duty in any year of the last 10 years; it was £2,250,000 higher than in the previous year. Now the value of the cotton manufactures imported into India during 1876 was nearly £250,000 below the value in 1875, but higher than in any one year of the nine preceding years. Even that value might have been diminished by lower rates of values in the new tariff, on which the ad valorem duties were now struck. Even if profits were nil on the trade to India in cotton goods, yet it could not be said that the trade of India in Manchester manufactures had fallen off during the last year. If these cotton manufactures were placed on the Free List, the value of imports subject to duty would be less than £13,750,000. If the Government relieved the manufacturers from the import duty on cotton goods, they would cut down the Indian revenue by nearly £900,000. That would bring down the Indian import duties to less than £900,000. The total duties now collected from all duty-paying articles amounted in the year ending 31st March, 1876, to £1,776,896, being less than the collections on all imports (exclusive of salt) in the previous year, and in two other years of the previous 10 years. Now, out of last year's collections, the cotton manufactures paid duties to the amount of £872,146, thus leaving £904,750 for all other articles, excluding duties on salt. It might then be asked, was it wise, or would it be possible, to maintain the import duties at all, when they were brought down to so low a figure? He had already strongly urged the giving up of all import and export duties, not only on the articles of ordinary trade and manufacture, but also on salt, and not alone on salt imported into India from foreign countries, but further the Excise or monopoly taxes raised from the salt, the growth or yield of India. He fully believed that this thorough free trade policy was not only commercially right, but also wise and prudent in a political and military point of view. He could therefore add that even if the salt duties were not now meddled with, he wished all duties on other articles of trade were removed for the good both of England and India. But if the Government relieved the cotton goods of Manchester from import duties, how could they in fairness refuse to relieve the metal and other trades? The metal interests had no representatives to bring their grievances before that House, but all the traders of England ought to be placed on the same footing, and if the Government gave freedom to one particular branch of trade, they were bound to treat the rest similarly. His hon. Friend the Member for Kirkcaldy had also urged this claim for equal treatment to all industries. The metal trade of imports into India in the last year showed a higher value than in the five preceding years, but not so high as in the three first years of the decade. Then the English manufacturers of flax, of woollens, and leather also deserved the same fair treatment as that asked for cotton fabrics. But if all these articles were placed on the Free List of the Indian tariff, then the imports into India subject to duty would be reduced to a value a little above £8,000,000. The duties on this value, measured by collections in 1876, would then amount to about £632,371. But the duties on imported ales, wines, and spirits, amounting to £311,408 out of that sum, were levied on a value of imports of nearly £1,400,000. These duties being levied in connection with the Excise on spirits, could be retained and collected as an Excise, thus practically reducing the imposts on all other articles to less than a third of a million. But from this sum must be deducted the charges of collection. These could not be less than £250,000. This amount must, however, include many more charges than the finance accounts at present showed, and thereby increase the charges of collection to an amount equal to the sum collected. If, then, any tariff changes were made to favour the one industry—that of cotton manufactures—the Government could not stop there, other industries equally deserving must be equally attended to. The question of competing industries in India with like industries at home was quite as applicable to those already named as to the cotton manufactures of Lancashire. But there were the claims of other nations and of other countries to be considered. The produce of the Islands in the Indian Ocean, mainly dependent on India, that of the coasts of the Persian Gulf, of Zanzibar, of Arabia, of Africa, ought to be cared for. The freedom of commerce between India and those places was politically of far more value than the amount of duties now collected on their commerce. On this plea there was an urgent inducement to allow free trade with those coasts and ports, and necessarily diminishing the duties collected in India on imports. Then with regard to Europe, it would be found that England was more favoured in regard to freedom of trade with India than any other nation. French goods were much more heavily taxed all round; and if England wanted to negotiate a Commercial Treaty with France on favourable terms, all she had to do was to take off the duties on French produce imported into India. France was a valuable ally of India, for the imports from France into India were small, but almost all subject to duty; whereas the exports from India to France were nearly 10 times the value of the goods taken by India, and, unfortunately, from their nature, heavily taxed by our Indian export tariff. An examination of the commercial legislation of England towards India in former years would put an end to the further plea of a community of interests between Egland and India, because it would bring to light the unjust treatment of the trade of India by England. He could carry his remarks back to the beginning of this century, especially to the year 1814, when the trade to India was first thrown open to the general public, but he would confine himself to the year 1840, when a Select Committee on Indian commerce inquired into a Petition of the East India Company against the burdens, in the form of heavy Customs duties, imposed in England on Indian products. On that Committee sat the father of his hon. and gallant Friend the Chairman of the Metropolitan Board of Works. Well, the inquiries of that Committee exposed the manner in which Indian products had been virtually prohibited, or their export hindered by heavy differential duties. The cotton manufactures of India, so famed for fine quality, were thus destroyed, and the wealth and industries of the people of India depressed, in order to foster and encourage English industries. At one time heavy duties were levied in this country on the import of the staple products of India, whereas Colonial products of the same kind were admitted into England at considerably lower rates; and no one could study our former commercial relations with India without forming the sad conclusion that our commercial legislation affecting India was one of the greatest blots in the history of our relations with that country. History showed that protection to English industries was an avowed object, and next the Colonial interests, for the products of the Colonies had been admitted into this country at nominal duties compared with those levied on the products of India. Then in recent years the favouring of English salt had been and was still prevalent, for the trade in the superabundant salt of India was and is paralyzed, with the object of fostering the salt trade of Cheshire. This salt trade was a good illustration of the protectionist policy of England. The bountiful Creator had bestowed on India ample stores of salt. The coasts of Bombay, of Madras, the Central Indian Lake of salt, the Punjab mines of salt, were given to be used by the people of India as a condiment for their vegetable diet. But man, by artificial measures, had prevented the abundant use of that necessary article which Nature had bestowed. The natural product of Cheshire required an outlet, and politicians devised a double kind of taxation on Indian salt, in order to create an import of salt into India; so that the salt of the Madras coast, which was in prior years sent to Bengal at one-tenth of the cost of Cheshire salt, was now stopped by the protecting duties levied in Bengal and the monopoly charges at Madras. No one could study the Papers relating to the salt trade of India without forming the conclusion that without these unfair duties Cheshire salt could not be sold in India. The yearly increasing deficits of India and its increasing expenditure demanded their earnest attention. If the duties on English cotton manufactures were reduced or abolished, then, in justice to India, corresponding relief ought to be afforded in respect to the duties which they imposed on the Indian products of tea and coffee. There were vast tracts of land in India admirably adapted for raising tea and coffee, from which, if the resources were developed, additional revenue might be derived by India; and he trusted that these products would be largely developed under proper encouragement, and other measures resorted to before the suggestions made in the Resolution and during the debate were adopted, of depriving India of a revenue from the duties levied on English manufactures. The Amendment which he had put on the Paper made two proposals for the protection of Indian revenues—one that in return for freeing Lancashire cotton goods from duties when imported into India, this country should admit the coffee and tea of India free of duty—the amount now collected from these two products being nearly the same as the amount of the duties levied in India on the Lancashire goods. The second proposal was, that England should buy up all the Customs of India by paying to the Indian Government the sum of £2,000,000 annually, and thus free the coasts of India from all charges on goods and ships. By this thorough free trade the influence and prestige of the superior power of England would be extended, and the commercial relations so widely established with Asiatic Governments as to serve as a complete counteraction to the monopolizing and exclusive spirit which so markedly characterized the Russian races.

MR. FAWCETT

said, if this were simply an abstract question between free trade and protection, no one would more cordially support the Motion than he should; but, under the present circumstances, he regarded the proposal of the hon. Member for Manchester (Mr. Birley) as inopportune and hopelessly impracticable. It was not an abstract question of political economy, but involved questions of finance and policy of the utmost importance. The noble Lord the Under Secretary for India had informed them the other day that such were the financial necessities of that country that the Government must take authority to borrow in one year a sum of no less than £8,500,000, and so entirely had they exhausted all their sources of taxation that not a single penny could be added to the Imperial revenues of India by additional taxes. This meant that in a single year there would be an amount of interest to be borne by India for this loan equal to one-half of what the cotton duties would yield; and yet that was the moment when the hon. Member for Manchester and his Friends came down to that House, and, without offering a suggestion worthy of a moment's consideration as to how the money was to be obtained, asked them to sacrifice £1,000,000 of the revenue of India. That fact was alone sufficient to condemn the proposition. If the Amendment of the Under Secretary of State for India was carried the sting would be taken out of the Motion of the hon. Member for Manchester, and he would recommend the hon. Member for Kirkcaldy (Sir George Campbell) not to press his Amendment to a division. The words of the noble Lord's Amendment, "so soon as the financial condition of India will permit," would deprive the original Motion of its chance of doing mischief and at the same time exhibit to the world its utter impracticability. If the Motion in its original form was passed it would appear to say—We care not at what cost, we care not for the consequences, we care not how great the financial embarrassment may be, Lancashire demands it, and because Lancashire demands it £1,000,000 of Indian revenue must be sacrificed. He was anxious that nothing should be done which would tie the hands of any future Secretary of State on this question. He could not presume to say what interpretation the Government would place on the words "so soon as the financial condition of India will permit;" but it seemed to him that the words were very elastic, and capable of a wide interpretation. Frequent reference had been made in that debate to the principles of political economy; but if the House were to take the abstract principles of that science and apply them cut and dry, without considering the social and political circumstances of the case, they would act more like pedants than like politicians, and might produce an amount of discontent in India which would seriously imperil the integrity of the Empire. Statesmen must consider not merely whether a particular tax was theoretically bad, but whether it created discontent or otherwise among the people; and, looking at the question in that light, he asserted that there was not a single tax levied in India which was so satisfactory to the people of that country as the revenue raised by those import duties. The supporters of the Motion of the hon. Member for Manchester had not quoted one tittle of Native opinion in favour of the abolition of those duties. Again, in selecting a tax for repeal they ought to consider the advantages and disadvantages of remitting it as compared with other taxes; and, applying that rule to the present case, he said that even if, instead of having to raise £8,500,000 upon loans they had a surplus of £1,000,000 in the Indian Exchequer, those import duties were not the part of their fiscal system which had the first claim to consideration with a view to their remission. With respect to the salt duty, he would ask what could he worse than a system of taxation which deprived millions of people throughout the greater part of India of one of the prime necessaries of life? But the mischief did not stop there, for it exercised a baleful influence on agriculture. That being the case, whenever the day came when India should possess a surplus revenue it would be necessary to consider, not simply the trade of Lancashire, but to consider also to what purposes the remission of revenue could be devoted so as to benefit the whole population of India. Between 1850 and 1855 the value of cotton goods exported from this country was £5,600,000. In the next 10 years the amount was £10,200,000, and the next 10 years it had grown to £18,600,000, and in 1874–5 the largest amount on record was sent out. He thought the Lancashire Members and the Lancashire people should consider something else with regard to the future of the cotton trade than the repeal of the import duty on cotton goods. The Secretary of the Department of Agriculture and Commerce stated that the trade was suffering on account of the deterioration in the quality of the articles sent out, and that great complaints existed both in India and China with respect to the amount of size used in the manufacture of Manchester goods. And with respect to the duty, it should be borne in mind that it was not paid by the manufacturers any more than the duty on malt was paid by the maltster, or that on beer by the brewer. The consumer paid in the long run. Reference had been made to the speech delivered by the Marquess of Salisbury at Manchester a short time ago. In that speech the noble Marquess did not absolutely promise that the import duties should be repealed, but stated that their repeal depended upon the financial exigencies of India. What practically then could be done? The passing of any number of abstract Resolutions would not justify the Government in sacrificing £1,000,000 of Indian revenue. They were nothing but an expression of opinion. But the Chancellor of the Exchequer told the House that "what Lancashire thought to-day England would think to-morrow; "and if Lancashire would declare that in its opinion it was the duty of the House of Commons to change its attitude with re- gard to Indian finance, England would see that that attitude was changed. We had hitherto always treated India as if it were a rich country, whereas it was really the poorest country in the world. Let Lancashire say that less money must be spent by the Government in India; and if that were done here these duties might easily be repealed and other fiscal reforms carried out.

MR. GRANT DUFF

said, he sympathized very much with the views of those who thought that the finance of India would not be in a sound condition until they had got rid of all Customs duties whatever, import as well as export. That, however, could not be done all at once. The utmost they could ask was that advantage should be taken of every opportunity to draw nearer and nearer to the only system suited to the circumstances of India—a system of perfect free trade. One of these opportunities he saw in the strong feeling against the import duties on cotton goods which now prevailed in Lancashire. He did not care to discuss at any length whether there were still any duties in India more undesirable even than these cotton duties; but he thought that the abolition of the salt line and the internal sugar duties were even more pressing. He understood, however, that the Government of India had been long engaged in the negotiations with Native States which must complete the admirable work begun by Lord Northbrook in doing away with a part of the salt line, and he considered that it would be quite unfair to press them to do more in that matter than they were doing. But these cotton duties had this peculiar evil attached to them—that the mischiefs connected with them went on spreading and complicating. Every year more capital was sunk in Indian mills, and more false hopes were raised that a solid industry was going to be built on a protective basis. India should take warning from the example of America, where manufacturing industry began by trusting only to the incidental protection of revenue duties, but went on to demand the ruinous system of Protection, which was now so great a calamity even to that land of unequalled resources. What, then, ought to be done? He admitted that the cotton duties could hardly be abolished at once. That would be far too violent a measure; but why, even at the risk of a small deficit, might they not be reduced next year to 3½ per cent, and then gradually abolished altogether—so much being taken off each year, irrespective of financial prospects? If this were done, by wise economy, and by the stimulus which healthy financial measures ever gave to trade, sometimes in ways that could not be foreseen and could not even easily be traced, no great amount of loss would be experienced at the end of the period over which the abolition might be extended. If in 1881 it was clear that the loss of this revenue from the cotton duties was the cause of a deficit, Indian financiers would have to take into their serious consideration whether it was either just or expedient to attempt to build up a permanent system of taxation without again having recourse to the income tax or something like it, either for Imperial or provincial purposes. The House had been told that night, as it had often been told before, that the income tax was unpopular. So it was to some extent. Uneducated people would always prefer being cheated out of their money through something that did not look like taxation to paying it away; but that was a mischief which tended to decrease as they got more intelligent and became accustomed to the payment. It was most proper to govern, as far as possible, in accordance with the ideas of the governed, but the line must be drawn somewhere. It would surely not be wise to govern in accordance with the idea that two and two made five, however much that idea might commend itself to the governed. It was very questionable how far, in governing India, we ought to ignore our own dearly-bought experience in financial and fiscal matters. To do so was really to govern on the principle that two and two made five.

LORD GEORGE HAMILTON,

in reply, said, that he rose to state the views of the Secretary of State for India on this question. Of all the questions which might come under the notice of the House there were none which should receive more impartial and unbiassed consideration than those which affect the interests of our Colonies and Dependencies. Nothing could be more impolitic or likely to injure the integrity of our Empire than to let the impression get abroad that because the local interests of a particular part of England were strongly represented in Parliament, the interests so represented should be held to be superior to those of our great Dependency, which did not happen to be represented in Parliament at all. He would address the House on the subject before them from an Indian point of view alone. The real questions they had to consider were—was it for the benefit of India that these duties should be repealed, and, if the answer was in the negative, then to consider how it would be possible to get rid of them without imposing additional and, it might be, more burdensome taxation? They had existed from the earliest time of our rule, and they had been re-adjusted by Mr. Wilson when he commenced his reforms to establish an equilibrium between expenditure and revenue. Lord Salisbury had never thought that the growth of cotton mills in Bombay was primarily due to duties, or that their repeal would injuriously affect this industry. India annually consumed more cotton, and the Indian manufacturers in Bombay continually supplied more, and as undoubtedly these duties enhanced the price of cotton goods in India, year by year India was paying more for the cotton goods she consumed, and these duties were in proportion bringing in less revenue. Lord Salisbury felt that these duties ought to be done away with as soon as possible, and sent out two despatches to India in 1875, in the first of which he expressed his regret that the revenue of India was not in a such a position as to enable the Government to carry out such fiscal reforms as were urgently needed, and in the second he gave his reasons for advocating a repeal of the import cotton duties. Since then there had been a great fall in the price of silver and last year a dreadful famine broke out in Bombay and Madras, and it was therefore impossible at present to touch the import duties. The Secretary of State still, however, adhered to the opinions which he had expressed, which were, that those duties were duties which called for reduction, and that as soon as the state of the revenue permitted the Indian Government must take measures to reduce them. There was a proposal to lay an Excise duty on the work of Indian looms, but that would lead to so vast amount of inconvenience, and would require a direct supervision of every handloom throughout India. It was, therefore, not for the advantage of either the Indian producer or the Indian consumer that these taxes should he continued. But it was asked by the hon. Member for Kirkcaldy (Sir George Campbell) how if the import duties on cotton were repealed the loss of revenue thus incurred could be made good? Well, he could only reply that the whole of the railroads in one sense belonged to the Government of India, and that if we were to reduce the Customs' duties on one article which was largely consumed, not only would the Customs' revenue be benefited by the increased consumption, but we should have the advantage resulting from the additional traffic on the railways. He was therefore sanguine enough to believe that if next year there was a surplus of revenue over expenditure, so as to enable the Indian Government to deal with the cotton duties and also with the salt duties, although there might be a temporary loss of revenue, there would be such an increase in the receipts from railway traffic as to compensate for that loss. The latter article was a necessary of life, and the tax operated hardly upon the poorer people of India; and as to the former article, there could be no doubt that the import duty interfered a good deal with the cotton trade of Lancashire. The Amendment which he had placed on the Paper—namely, to add to the Motion the words "so soon as the financial condition of India will permit"—expressed, he might add, the views on the subject which the Secretary of State had over and over again enunciated when he said that he would not impose additional taxation or incur the risk of a deficit, but that as soon as the revenues of India permitted he would deem it right to direct that the cotton duties should be reduced.

MR. LAING

wished that they were in a condition, so far as India was concerned, to reduce the entire of the duties the subject of debate. A difficulty, however, arose from the depreciation of silver and other causes; and if they swept away the duties now sought to be abolished, they would lose all that could be secured by that most unpopular impost, the income tax. He contended that there ought to be no new taxation in India.

Amendment proposed, To add, at the end of the Question, the words "so soon as the financial condition of India will permit."—(Lord George Hamilton.)

SIR GEORGE CAMPBELL

said, he would withdraw his Amendment in favour of the Amendment of the noble Lord the Under Secretary of State for India.

Amendment, by leave, withdrawn.

Question, "That those words be there added," put, and agreed to.

MR. BIRLEY

preferred his Motion without the addition of the Amendment, but would accept it so that the House might appear to the people of India to be unanimous on the subject.

Main Question, as amended, put.

Resolved, That, in the opinion of this House, the Duties now levied upon Cotton Manufactures imported into India, being protective in their nature, are contrary to sound commercial policy, and ought to he repealed without delay, so soon as the financial condition of India will permit.