THE INDIAN COTTON DUTIES.

HC Deb 21 February 1895 vol 30 cc1285-361

*SIR.H. JAMES (Bury, Lancashire)rose to move the Adjournment of the House, but before he addressed the Chair,—

SIR.D. H. MACFARLANE (Argyllshire)

interposed on a point of Order, and asked Mr. Speaker's ruling on the question whether the Motion of the right hon. and learned Member was in order.

*MR. SPEAKER

I have not heard the Motion yet.

*SIR H. JAMES

I rise, Sir, to ask permission to move the Adjournment of the House for the purpose of discussing a definite matter of urgent public importance—namely, the recent imposition of duties on the importation of cotton manufactures into India.

SIR D. MACFARLANE,

again rising to a point of Order, asked whether this Motion came within the scope of the Standing Order which permitted Motions for the Adjournment of the House on matters of urgent public importance. This question, he said, might have been discussed on the Address a week ago, and it was, he submitted, no more urgent now than then. What he thought the Standing Order contemplated was, the occurrence of some sudden emergency either in Home or Foreign Affairs, and in support of this view he called attention to a previous ruling of Mr. Speaker, in which it appoared to be laid down that Motions for the Adjournment of the House should be used only for the purpose of "bringing under notice some grievance demanding instant remedy."

*MR. SPEAKER

In my opinion, the ruling to which the hon. Member refers is entirely inapplicable to the present Motion. As I understand, this is an alleged grievance requiring instant remedy.

SIR D. MACFARLANE

Oh!

*MR. SPEAKER

Order, order! The hon. Member has asked for my opinion, and I hope he will listen to me with courtesy.

SIR D. MACFARLANE

I beg your pardon, Sir.

*MR. SPEAKER

The last words quoted by the hon. Member bring the case distinctly within the meaning of the point of Order I made formerly, namely,— Action which has been taken or not taken fur bringing under notice some grievance demanding instant remedy. The reason why I objected to the Motion on a former occasion was its vague character and wide scope; this relates to the recent imposition of a duty affecting a particular industry. I have very seldom interfered—only, I think, once. This is a matter alleged to be of urgent public importance. I cannot deny that it is of importance. I cannot deny it is of urgent importance; and, seeing that these duties have been recently imposed, I cannot deny that it is of recent occurrence. Upon all these grounds, therefore, I must say that the right hon. Gentleman is in order. As far as I am concerned, I cannot interfere to prevent his submitting the Motion to learn the pleasure of the House; the House, and the House alone, must judge.

[The pleasure of the House not having been signified, Mr. Speaker called on those Members who supported the Motion to rise in their places, and not less than 40 Members having accordingly risen]

*MR. SPEAKER

thereafter called upon—

*SIR HENRY JAMES,

who said: I desire, in the first place, to remove a false impression which may possibly exist in relation to this Motion and its object. Some hon. Members may feel that the Motion is raised in the interests of a particular trade, and may, from that point of view, be regarded as hostile to the interests of our great dependency in the East. If such a view be entertained I will do all I can to dispel it. There is no one in the House who will not acknowledge that the House ought to be not only just, but even generous, with regard to the interests of our Indian fellow-subjects. As our Indian fellow-subjects are not directly represented in this House it is our duty to see that their interests are fully protected in any course which the Government or this House shall take. And if that be the view of hon. Members, still more strongly, I believe, is it the opinion entertained by those in whose interests I am speaking to-night— namely, the Lancashire trades, and especially the textile trades of Lancashire. The prosperity of India represents the prosperity of Lancashire. India is the greatest market of Lancashire, and anything which interferes unduly with the prosperity of our Indian Empire strikes more directly against Lancashire interests and trade than against any other portion of the home country. I can assure the House that those with whom I am associated feel most strongly that they would be acting not only a selfish, but an unpatriotic and suicidal, part if they desired other than full consideration for the interests of India. Lancashire has no desire to see the competition of India in the textile industry interfered with. For years the cotton industry of India has been happily growing to a position of prosperity, until it has become a serious competitor with the textile industries of this country. Lancashire has nothing to fear from that competition. It is perfectly willing to enter into the contest with our Indian fellow-subjects; all it asks is, that the race shall be run at level weights. I hope the House will allow me, in a few sentences, to state the position of the different cotton trades in this country and in India. There are three sources from which the raw material, cotton fibre, is derived. There is—firstly, the American cotton, which represents the finer descriptions of yarn. There is—secondly, the Indian cotton, which produces a coarse yarn, and which is used in Indian manufactures. A third market, the Egyptian, has come into existence, which, it is supposed, in the competition of finer goods, is about to play an important part. The House will hear this evening, phrases describing the measure between the finer and coarser description of goods. I am sure my right hon. Friend the Secretary for India, will use the terms below 20's and above 20's. That is represented by the number of hanks to the pound. When the cotton is spun off in hanks the coarser is the heavier, and there are fewer hanks to the pound. The coarser cotton is below 20; but the finer quality is lighter in weight, and runs as high as 60 or 70 hanks to the pound. The condition of the markets may be described very shortly. In early times Great Britain had no competitor in India, and it was not till 1855 that the first mill was opened in Bombay. But from that time to this there has been great progress in the course of the textile trade in India. There has been a growth of mills, spindles, and looms, and the result has been that India has taken almost the whole of the Japan and China trade in yarns from Great Britain, and also manufactures large quantities of piece goods from the yarn, principally for home consumption in India, but also partly for export purposes. I say again that Lancashire does not grudge that increase for a moment, if it is unweighted in the race and is allowed an open market in India. It is only when that free market is denied to the trade of Great Britain and when a specific advantage is given to a competitor, that the trade of Lancashire finds it necessary to make any complaint. This is not a mere matter of wayward complaint. It has always been the contention of Lancashire that the import duty is a dead weight upon its trade. It commenced to make that complaint long ago. I need not weary the House with any historical retrospect, therefore I do not trace the position of these duties. The system of Import Duties commenced under the old East India Company; they were felt to be a burden and they were combated by the veteran Free Traders in this House. The matter was brought to the attention of the House in 1877, when the House passed its condemnation upon these duties, principally because they were, in its opinion protective. The Resolution of July 1877 recited that the Import Duties upon cotton goods, being protective duties, were contrary to sound policy. An advance was made in the next two years. Between 1877–79 there was an alteration made in the levying of the duties. The line was drawn at 30 hanks to the pound, and no duty was imposed below 30. According to my right hon. Friend's view, that was no protective duty, because there was no competition in India above the 30's. India produced no cotton so fine as 30's, and, therefore, as the Indian merchant never came to the "30" market, there was no protective duty at all, it was argued. The House, in April 1879 passed this Resolution:— That the Indian Import Duties on cotton goods, being unjust alike to the Indian consumer and the English producer, ought to be abolished; and this House accepts the recent reduction of these duties as a step towards their total abolition, to which Her Majesty's Government are pledged. The House will forgive me if I do not occupy its time by discussing what the effect of a Resolution of the House of Commons may be. The merchants and operatives of Lancashire do not say that that Resolution is positively to determine their rights; they do not say that that Resolution effected a revolution; but—still it recorded a reform—they think that it was an expression of opinion of the House of Commons condemnatory of the duties under circumstances that, I believe the House will see, were much more favourable to their maintenance than those which exist at the present moment. Sir, with the Resolution upon the records of the House the commercial men of Lancashire believed that their position was safe, that no import duties would be imposed in face of it, and that all the perfumes of Araby would not get rid of its effects. I am sure my right hon. Friend shared that view, because in March of last year he said— I would here remark that, when Parliament had, after protracted discussion, arrived at a distinct Resolution as to the policy that ought to be pursued in respect of this duty in India, it would not be open to the Executive Government to take a step reversing that decision without the matter being discussed in this House. That was the view of my right hon. Friend. He knows full well that the policy which was declared by the Resolution of 1879 when no protection existed, has been reversed, and that without discussion in this House. This is the first time there has been an opportunity of discussing the matter. These duties were imposed during the Recess, they were never submitted to Parliament for its consideration, and their Policy has never been discussed in this House; and I may appeal to my hon. Friend below me (Sir D. Macfarlane), who objected to this Motion this evening, whether it is unreasonable to ask for a discussion of the Policy of the Government which has been the reversal of the opinion of the House. Approaching this question with the fullest consideration for the interests of India, will it not be better that the discussion should take place in the interests of the Government, and of the true and right position to be relatively occupied by the traders of this country and those of India? In 1882, in pursuance of the Policy declared by Parliament, the Duties were entirely abolished, the markets were opened, and under the Free Market system India progressed; her trade increased, driving Lancashire away from the markets of Japan and China; her spindle and looms increased, her yarns were produced in enormous quantities, coming within a fair reach of the trade in yarn carried on by this country. The trade of India all this time was flourishing and increasing, whilst the trade of this country has of late become depressed and each day less profitable; until not only is the position of the capitalist imperilled, but the employment of the operative become more precarious. This was the position when there came the necessity, which every one admitted, of dealing with an Indian deficit. It was not a great deficit, but it was one that it was the duty of the Indian Government to deal with. We had a deficit which, I think, may be almost traced to the fact that the Indian Government thought it right to consider one particular interest. The deplorable fall in the value of the rupee had caused the officials of the Indian Government, particularly those who had their families in this country, to suffer considerable loss of income. The Government had to make up that deficit, and the course taken by the officials was to look round and see how they could best find the means of persuading the Government that they could receive this addition to their superannuations, pensions, pay, and allowances. They had friends in the country. The Bombay industry had become very powerful. The Bombay Millowners' Association was at hand, and the Bombay Millowners' Association held out their hand to the Civil Servants of India and appealed to them for help to start this agitation in India to secure an import duty, and from that import duty to find the means of paying this increase to the superannuations, pensions, pay, and allowances to the Anglo-Indian officials. The right hon. Gentleman will probably tell you something of Indian opinion. It would be interesting to trace what is meant by that Indian opinion. It is impossible to suppose that a duty which is imposed for revenue purposes only—and which, according to my right hon. friend, will be borne by the consumers, the natives of India—will be borne by the consumers. Is it possible to suppose there could have been any enthusiasm on the part of the consumer, the native of India, that he should be taxed by means of this import duty which, it is said, he has to pay? Of course, nobody wishes to be taxed, and when we are told the natives of India agitated to be taxed in order to meet this deficit, I ask hon. Members to pause for a moment and ask themselves whether that is correct. In expressing this view I rely upon the tale as told very frankly at page 48 of the Blue-book on the Indian Tariff Act and the Cotton Duties. Mr. Mehta, a member of the Legislative Council, said:— But I would appeal to other hon. Members who are officials. The present financial exigency is owing not a little to the services having secured exchange compensation. They joined the Indians in agitation for the imposition of duties of cotton imports for the purpose of meeting the deficit largely due to exchange compensation. If after having secured such imposition they would refuse to support the moderate amendment of Mr. Fazulbhai— another native member of the Council— to succour a native industry from being harassed and burdened, they would be open to the suspicion that their coaxing tones to induce the natives to join in the agitation against Manchester were suspiciously akin to the interested seductions—made familiar by Dickens—of 'Codlins the friend, not Short.' I may be wrong, but as this statement has not, as far as I know, been contradicted, I assume it to be correct. Now, I ask any Member of this House, is it unreasonable that, when this agitation has been proceeding against Manchester, Manchester should ask at least to be heard here in the matter? This agitation has been carried on against Manchester, against the trade that has been lost by the fall in the value of the rupee more than any other interest of the country. But whilst this agitation has beer carried on against Manchester, are we to be told it would be unpatriotic on the part of Manchester to ask permission to state their case to the House? I am very much afraid my right hon. Friend the Secretary of State, with the very best intention in the world, has been misled by someone. He is the Indian Minister. He is surrounded by Indian officials, whose duty they may feel is to think only of the interest of India. My right hon. Friend has heard all the representations and numerous memorials from the Bombay mill-owners and the Chamber of Commerce of Bombay. He has listened to every one of the statements that could be brought before him on the part of those who agitated against Manchester. I may say the feeling on the part of Lancashire is that my right hon. Friend always bore in mind he was the Indian Minister only, and never thought he was a British Minister also, and a representative of British interests. The policy of imposing these duties came before the Minister in August of last year, and he gave his decision upon the subject in December. He had since these many representations received the report of Mr. Westland, the Minister who, when he obtained information, went to the mill-owners of Bombay and obtained the information that was to guide the Legislative Council of India, from the representatives of the Bombay trades. All these views my right hon. Friend had before him. They represented one view of the matter. Now, I ask my right hon. Friend, with whom did he take counsel on behalf of Lancashire? There has been a practice in these matters. Ministers in the position of my right hon. Friend have consulted such bodies as the Manchester Chamber of Commerce; they have consulted men on whose judgment they could well rely, and I now respectfully, if it is not unduly inquisitive, ask my right hon. Friend with whom did he consult and learn practically—for there is an immense amount of practical knowledge required—with whom did he consult in order to obtain information as to how far the course he was about to pursue would injure the Lancashire trade? Were those interests considered at all? They could not be considered practically or even theoretically by any Indian Minister without an appeal to practical men having practical knowledge of the subject. I must tell my right hon. Friend there is a feeling in Lancashire that he did not consult any one if those practical merchants or manufacturers with a knowledge of the subject, and there is a feeling at the present moment—a feeling which I hope will be removed by the statement of my right hon. Friend—that their interests were neglected, and that the agitation against Manchester proceeded without those interests ever being heard on their own behalf. If this be the case—I hope it is not—will not my right hon. Friend on reflection feel that it would have been well for him if he had taken advice from practical men and learned the effect of his policy upon the markets of this country? I see the Financial Secretary to the Treasury present. I wish my right hon. Friend had asked the Member for Oldham, in his capacity as the representative of that place, what he, with his great knowledge, thought of this matter. Did he consult the Financial Secretary to the Treasury? Did he consult any one in a similiar position, or did he not, as Lancashire thinks at the present moment, seek guidance alone from those who represent Indian interests without sufficiently considering the interests of this country? I hope it is not too much to say, on behalf of those who desire most strenuously to see Indian interests always considered, that it is not unreasonable that those interests should be considered with some regard to British interests also. There is no necessity why they should ever be opposed one to the other. Apparently that course has not been taken, hence the feeling which exists in Lancashire; a feeling which is of the strongest kind. I have now simply to point out to the House what it is my right hon. Friend has done. He has yielded to the Indian representations; the agitation against Manchester has succeeded. My right hon Friend, I quite admit, deducted somewhat from the demands made upon him, but if Mr. Mehta is correct, the Anglo Indians asked for a 5 per cent. Import Duty, and in that respect were comrades of the Bombay millowners. Now, all British yarns, British manufactured goods, go into India with an import duty of 5 per cent. upon them. I take that duty as if there were no competition or as if there were full countervailing duties against it. But an import duty alone is detrimental to trade, is an obstacle to trade, and there can be no one I should think, in this House who would feel that perhaps, more strongly than my right hon. Friend himself, and those supporters of his who are sincere free-traders. They have a desire to see markets opened, they have preached to the nations of the world the desirability that all markets should be open and there must be some amongst my right hon. Friend's own supporters who will feel with regret that our position when we appeal to protective countries is weakened by the act which has taken place. It may be an act of necessity, but when next we preach the doctrine to Germany or to France, or to our Colonies that Import Duties are an evil in themselves and ought not to be imposed, the answer will come to us— Why look at home; your Imperial Parliament has sanctioned an Import Duty; under these circumstances how can you preach to us the folly of protection and the virtue of free trade? There are some veterans in this House who have not forgotten the Free Trade struggles of 50 years ago, and they will recall the days when they fought for open markets. I think there may possibly be some to-night who will regret that this Import Duty has been imposed, but, Sir, I am not about to say that there is not the possibility of an Import Duty being justified under some circumstances. Yet, Sir, I hope I shall have the sanction of the House to the proposition that these Import Duties ought not to be imposed without their absolute necessity being proved to the very hilt. The imposition of Import Duties produces dislocation of trade and unsettlement of trade, and, of course, the burden must be borne by some one. My right hon. Friend will, no doubt, say that the Indian consumer will bear that burden; but in what sense will he bear it? The Indian consumer will not have more money to spend because you impose this Import Duty on British goods. He will have only the same amount of money to spend on cotton goods. Indeed, having this 5 per cent. duty to pay, or a charge of a farthing in the pound weight more on the goods, the Indian consumer will have less to spend. Therefore there will be so much the less in the volume of goods bought, and, the English manufacturer producing so much less and receiving so much less for what he produces, the burden falls on him. It may be said that prima facie the Indian consumer does pay the Import Duty. Of course the consignee of the English manufacturer has to pay the Import Duty, and he must try to get repayment in some way, and he may get some of it from the Indian consumer. But he may be beaten, as I will show later on, by his Indian competitor in the manufacture of the goods. At best the British producer stands only a chance of receiving the Import Duty back, and until he knows whether the market will bear an increased price or not the trade becomes an uncertain and unreliable trade to him. But my right hon. Friend, having been brought to his present state of mind, and having decided to impose those Duties in face of the Resolution of the House in 1879, and without consulting any person practically connected with the Lancashire trade, says — I will protect the Lancashire manufacturers themselves by putting an Excise Internal Duty upon the production of the Indian merchant; by putting this Excise Duty upon the product of the Indian merchant I will burden him as I have burdened the British importer. But those who have a practical knowledge of the subject say that this countervailing Duty is no protection to the British producer; that it fails entirely to counteract the Import Duty, and that, in consequence of the fallacy of my right hon. Friend, the British producer will have to trade under a system of protection—protection for the Indian producer and protection against the Lancashire producer. For the imposition of that Excise Duty my right hon. Friend selected 20's—that is 20 hanks to the pound—so he relieves the Indian producer from all Excise Duty on everything below 20's. But he has done more. He says to the Indian producer— I will put the tax, not on your produced goods; I will put it on the yarn. The yarn, of course, is spun into gray cloth, bleached, coloured, and printed. These different processes represent material and labour. The Import Duty is placed on the British goods as they are landed, and, therefore, all the processes I have mentioned are taxed. But in the case of the Indian competitor the yarn only is taxed, and the result of the system is—that the difference between the tax on the yarn, and the tax on the ultimate material, is as 60 to 100. Therefore, the Indian producer pays a 3 per cent. tax as compared with the tax of 5 per cent. on the Lancashire producer. That, surely, cannot be a countervailing duty. But I am aware any right hon. Friend will say that it would be inconvenient to put the Excise Tax on piece goods, because it was impossible to get any return of these goods from the Indian manufacturers. But the Government officials could go to the Indian manufacturers and say, "Give us an estimate of what you produce." You could then impose a 5 per cent. Excise Duty on that estimate, which would correspond with the 5 per cent. imported duty put on Lancashire goods. And this is what my right hon. Friend calls "perfect equality" as between the Indian and the Lancashire producer. The Indian manufacturer pays 3 per cent. duty as compared with the 5 per cent. duty paid by the British manufacturer. I have mentioned that Indian goods below 20's are free of this Excise Duty. The Indian manufacturer has therefore got, to use a well-known phrase "a pull" against the British manufacturer, and it is "a pull" of the most important character. I am told that if you manufacture goods at 20's and if you manufacture goods at 22's, no unskilled person can tell the difference. These two classes of goods can only be distinguished by persons possessed of the most expert knowledge of the trade. What then is the position of the two competitors in the market? The Indian producer is enabled to produce this 20's material at 3d. The British producer turns out 22's, say, at an equal price. It would be a fraction dearer. But he has to pay a farthing import duty on the pound, and it, therefore, costs him 3¼d. in the pound. The Indian producer therefore goes into the market and says:— I have here some goods; they are as good as any of the English goods; you cannot tell the difference between them; and if the English producer charges you 3¼d. a pound for his goods you can have these at 3d. or 3⅛d. a pound. If you increase the price of one quality of goods and lessen another, there is naturally protection for the cheaper. The English producer is therefore driven out of the market and has no chance of success. I ask the House, is not that a matter for consideration—a matter upon which my right hon. Friend should have allowed discussion by those practically interested before coming to a final decision? Of course my right hon. Friend says that these two duties are equal and corresponding. But I have been assured by those who have the most practical knowledge of the subject that there is this great difference between them, and that the great competition I have described will be certain to take place—always to the advantage of the untaxed competitor, always to the disadvantage of the taxed competitor. And if we fear at the present time, there is far greater fear for the future. There is this in connection with the markets which causes men engaged in the trade to fell the gravest anxiety. Our principal supplies of raw material come from America. British manufacturers pay low prices—far lower prices for that material than was formerly paid for them. I believe prices are lower than ever they were in the history of the trade. Where formerly India had no fine cotton at her disposal, she can now pay for the American cotton at a price which will enable her to compete in these finer qualities. She will therefore come into the market competing in these goods with a differential duty of 2 per cent., and she is laying out her mills for the purpose of using these qualities of cotton and competing with the British trade. It is no answer to say, "Oh, wait till competition develops itself." These Duties cannot be changed, and a fresh burden thrown on the consumer, lightly, they ought to be settled for good. The Government have made an exemption from the Import Duty so as to allow all machinery to go in free, and the organisation of Bombay millowners is erecting mills which will be able to produce the finer material from the American cotton, with an acknowledged advantage to the extent of the 2 per cent. duty. Hitherto it is quite true that the Lancashire manufacturer has not competed to a very great extent in cottons below 20's. But as prices have altered, and as his profits have been less and less every year, he has had to look after new markets, and he is producing them now, and, in a fair field, he can send them to compete in India. But goods above 20's are now being produced at many mills in India, and the Lancashire manufacturer will be driven out of the market by the 5 per cent. Duty. You ask me what effect I can show to have been produced. The time has been short yet, for Lancashire has made her protest as quickly as possible. India has been progressing and progressing with great power, and has arrived at a wonderful result. From the day when the first cotton mills were erected in Bombay (in 1855) mills have continued to spring into existence, till now there are 141cotton mills in India. In 1882 there were 1,550,000 spindles in India, and now there are 3,500,000 spindles. The result is that India is producing 170,000,000 lb. of yarn against the 40,000,000 lb. of British yarns which goes into India. Whilst India has been progressing, how has the British trade been prospering? According to the Chancellor of the Exchequer, you have only to look at the volume of trade, and not at the prices. I will not enter upon that question as a whole now, but I will ask my right hon. Friend to consider whether there is not a point beyond which a fall in prices becomes a calamity. You may say to the agriculturist that he is producing a necessary of which every man is a consumer, and that the consumer gets his produce cheaply is a fact to be gloried in. But does my right hon. Friend carry that doctrine to the full extent? This country is a great producing country, and its export trade represents about 200 millions of money. Would my right hon. Friend wish to see a fall in prices in all trades such as would reduce that 200 millions of trade to only 120 millions? In some trades there must be a line below which it is not desirable that prices should fall. The agriculturist is a passive sufferer. He must hold his land; he cannot shut it up even if he does not receive his rent, though in some cases the land has gone out of cultivation. But when the mill-owner is paying from £500 to £1,000 a week in wages, if he does not get that back you cannot expect him to carry on his mill. In respect of this export trade with foreign nations, my right hon. Friend's joy over falling prices is not shared by the capitalist who is losing his capital, and it is not shared by the men who are shrewd enough to know that if the fall continues it must mean the closing of the mills and a vast addition to the already swollen ranks of the unemployed. I have spoken with great satisfaction of the increasing prosperity of the textile trade in India. I wish I could speak in the same way of the textile trade in Lancashire. Say what you will, that trade was never so depressed as it is today. The volume of trade represents nothing to men who are selling their goods at a loss, and there is much astonishment at the speech of the hon, Member for the Leigh Division (Mr. Caleb Wright) the other day. The hon. Member said that Lancashire never was as prosperous as it is today, and that he had more money than he knew what to do with. I understand that he is or was engaged in a trade of a very peculiar character, and of a very high degree of fineness. He has no Indian trade, and he knows nothing about it. But there are people in Lancashire who have already suffered from the effect of this duty in India. There are some 20,000 looms in Blackburn idle at present on account of this policy, and what does that represent? It means 7,000 persons unemployed. Does the Chancellor of the Exchequer exult over that fact? This closing of mills is progressing, and Lancashire Members will tell you that the greatest alarm is spreading lest what has occurred in Blackburn should occur elsewhere. It is said that the mill-owners of Lancashire have not made any returns. But we have returns from some public companies. In the neighbourhood of Oldham there is a congeries of 93 mills of which we have the returns. They have a share capital of £3,874,000, and a loan capital of £3,330,000, and while the shareholders have been paying interest on the loan capital at 4½ per cent., the mills for the last three years have been working at a loss. In 1892 the loss was £101,000, in 1893 it was £72,767, but in 1894 the loss fell to £15,000; but that was in the early part of the year only, and since then the loss has been going on increasing. Where is this to end? Is this trade in a condition in which you can impose an artificial burden on it gratuitously? With these losses growing, and with this further burden, do not you think the time is coming when the mills will not be kept open? The Indian trade has shown us an example. That trade in yarns with China and Japan increased to an enormous extent. In the six years ending 1882 England had two-thirds of the trade with China, Hongkong, and Japan; but in the four years ending 1894 England has only one-fifth of that trade, and India has four-fifths. In the last year, 1893, that Indian trade fell off' from the large figure which it had reached, but the Indian traders would not bear that loss patiently. They asked for a benefit to recoup them for the fall in the rupee. The trade in Lancashire has taken no such step, but has borne the fall in the price of the rupee patiently. It has never been with them a matter of agitation, and now all they ask is that a reason should be given for this additional burden being placed on them. I hope that the House understands how the fall affects the English producer. There has been a fall in prices from two causes. The rupee value of goods fell in India partly on account of competition, and that could be borne by the producer. Then came the fall in exchange, aggravated by the fatal step of closing of the mints, and in a few years prices have diminished to the extent of 70 per cent. on piece goods and 59 per cent. on yarns. Some portion of that loss was recouped by the great fall in the price of raw material; but it was not enough to compensate the producer for the double loss. The question is whether he can bear it, and whether or not it is a Duty which will have the effect of bringing industrial enterprise to an end. It may be that my right hon. Friend will say—"What is the policy which you propose?" That is asking me to bear a grave responsibility. I do not put forward an alternative policy, because I do not know enough of India; but there are those connected with India who say that there are sources of taxation that might afford equally good results with less injustice than by the imposition of those Duties. In the first place, if India needs financial relief, this country as a whole should bear it. I appeal, however, to the Chancellor of the Exchequer, to note that there is many a rich man in India who bears less taxation than the rich man in this country. What, does my right hon. Friend say to a well regulated Income Tax? What a magnificent field there is for the Chancellor of the Exchequer to bring within the scope of his measures the wealthy Indian, with his hoards of silver and gold. What a fine scope there is for the application of the graduated Death Duties to those native Princes with their hoards of precious metals, and what an opportunity there is provided here to relieve the poor consumer in India of this taxation which we have imposed upon him by the Import Duties. I suggest these two points to the consideration of my right hon. Friend. I have had an important duty to face in representing this great interest in the House. It was the wish of those whom I and other hon. Gentlemen represent to have their view stated with the fullest moderation. I hope I have succeeded; at least, that has been the intention in my mind. On behalf of this great industry, I express the hope that the last words of my right hon. Friend have not been spoken. If, however, it should turn out that his last words have been spoken, then I must say that I am afraid the last words of Lancashire have not been spoken. There cannot be an end to this question as it remains at present. There must be many loyal supporters of the Government who know how deep and true is the feeling in Lancashire on this question: and they can tell the Secretary of State for India that the demands they make upon him this evening are not the demands if capital asking for the retention of inflated profits, or an attempt to secure great gains. On the contrary, they will tell him that this is a universal demand from the humblest men in Lancashire engaged in the trade whose prosperity is thus threatened, fearful of a time, perhaps not far remote, when the streets of busy Lancashire towns may be deserted, when mills may be closed and looms silent, and when they will search in vain for means to earn their daily bread. The right hon. Gentleman concluded by moving the Adjournment of the House.

*THE SECRETARY OF STATE FOR INDIA (MR. H. H. FOWLER,) Wolverhampton, E.

I agree with my right hon. Friend that it is for the public interest that this question should be brought under the consideration of the House. I think the time has arrived when a clear statement of the facts of the case should be made in the presence of what, after all, is the supreme tribunal of this country. Misrepresentation has been circulated not only in England, but also in India, and therefore on that account, while asking this House to deal with this question as a whole, I will not simply confine myself to that one aspect of the case which my right hon. Friend has submitted to the House. Before, however, I enter upon the further discussion of this question I should like to say one word in self-defence, and, what is far more important, a word in defence of those with whom I am associated in England and in India, and upon whom my right hon. Friend has poured what I may call his eloquent scorn. My right hon. Friend has spoken of the Anglo-Indian officials, some of the most distinguished servants of the Crown both in England and in India. He has spoken of agitators in India to whose blandishments I have succumbed. I shall tell the House before I finish what has been the part that has been taken in India on this question, but I cannot allow another moment to elapse without repudiating, and repudiating in the strongest terms, that there has been any agitation, any conspiracy, on behalf of any class in India in order to deal with this financial difficulty. You might as well charge the Chancellor of the Exchequer with entering into some combination—I care not on which side of the House the view is taken—with interested classes when he submits his financial proposals. Perhaps my right hon. Friend is not aware that the distinguished man who is at present Finance Minister in India is a man of the highest standing and of the most unblemished reputation, a man who has served the Crown for a long period of years, and who has received a signal mark of favour from the Crown for his great public services. My right hon. Friend described him as an agitator in combination with a certain class of officials who want to raise their own salaries, and that he has submitted proposals, not to me in England, but to the Legislative Council of India, while the Viceroy whom my right hon. Friend has chiefly attacked is Lord Lansdowne, who ruled India with such success for a period of five years. Are we to regard men of that character and class—men who have by their deeds shown that they take the deepest interest in the welfare of India—described as entering into a combination with Anglo-Indian Officials, agitating against Manchester, and bringing to bear certain influences on the Secretary of State in order to join in that conspiracy?

*SIR H. JAMES

I never said any thing of the sort. I read out the statement of Mr. Mehta to which reference was made; I quoted his words, on which alone I relied, but I never referred to Lord Lansdowne.

*MR. H. H. FOWLER

There was, however, an expression which my right hon. Friend used with reference to myself. He did not mean it as a compliment, but I accept it as the greatest compliment. He told the House that I am only an Indian Minister. Yes, that is the post I fill. It is to India that I am responsible as well as to this House, and when my right hon. Friend charges me with sacrificing the interests of England to the interests of India, he will need very satisfactory proof. He has not given that proof in the course of his speech; but I will show my right hon. Friend that the censures upon me in India are quite as severe as the censures upon me in Lancashire. One of the leading organs of public opinion in Lancashire stated that— the conspiracy of the Indian Service, the Indian cotton trade, and Mr. Fowler had succeeded. About the same date there comes from India a statement that the sacrifice of Indian interests is the principle underlying this measure, and it is a principle to which a Radical Secretary of State has given his imprimatur. Further, I observe that it has been stated—not, perhaps, in a very influential quarter in India—that I should be called the Secretary of State for Lancashire, not the Secretary of State for India. That emboldens me to go on with my argument; for, having shown the House that I am attacked from two different points of the compass, it is impossible for both to be true; I cannot have sacrificed Lancashire to India, and I cannot at the same time have sacrificed India to Lancashire. I have endeavoured in dealing, not with my own financial proposals, but with the financial proposals of the Government of India, to steer an even keel and to do what I thought was fair justice to the interests of Lancashire and the interests of India. It is not possible to thoroughly understand this question without, in two or three sentences, considering its history. My right hon. Friend gave the House a short but an interesting account of the various stages through which this question had passed; but I think he omitted one or two points, to which it is my duty to call attention, in order that the House may quite understand that this is not a novel proposal on the part of the Government of India, but that Duties upon Cotton Imports have been imposed, with a short interval, not only during the time of the East India Company, but ever since the Government of India was handed over to the Crown. Originally these Duties were of a protective character, and were, as now,5 per cent.; they were raised at one time to 10 per cent; there were various reductions down to the period to which my right hon. Friend has alluded, when what I may call the agitation in this House against the Indian Cotton Duties commenced, which soon assumed a substantial and real form. These Duties were attacked entirely on the ground of their protective character. That was the ground taken by one of the ablest of Lancashire Cotton Spinners, who was subsequently Under Secretary for India, and whose death we all deplore—Mr. J. K. Cross. He made one of the earliest speeches on this question, and he attacked these Duties solely on the ground of there being no Excise Duties in India, but simply Import Duties on cotton goods imported. My right hon. Friend spoke of the part taken by stalwart Free Traders with reference to these Duties: but at that time there were differences of opinion about them amongst the most stalwart Free Traders. No one will question that the late Mr. Fawcett was one of the soundest and wisest of Free Traders who ever spoke on this subject; and he made in this House a speech which I may quote all the more readily because I have not pursued, and the Government are not pursuing the policy he recommended. I want this House to see how this question then affected the mind of a Member who had taken the deepest interest in Indian affairs, and who was himself a most pronounced Free Trader. He said— Frequent references have been made in this Debate to the principles of political economy. If the House were to take the abstract principles of that science and apply them cut and dried without considering the social and political circumstances of the case they would act more like pedants than politicians and might produce an amount of discontent in India which would seriously imperil the integrity of the Empire. This is the sentence I want to draw special attention to— Statesmen must consider, not merely whether a particular tax is theoretically bad, but whether it creates discontent amongst the people, and looking at the question in that light he asserted that there was no single tax levied in India which was so satisfactory to the people of that country as a revenue raised by Import Duties. My right hon. Friend alluded to the Debate of 1877, and to the Resolution then passed; but he was significantly silent with reference to an important Amendment to that Resolution which was proposed by the noble Lord the late First Lord of the Admiralty, who then represented the India Office in this House, the noble Lord the Member for Middlesex (Lord George Hamilton). The noble Lord would not accept that Resolution—namely— That the Duties were protective in their character, contrary to sound commercial policy, and ought to be repealed without delay. without this addition— as soon as the financial condition of India will permit. That is the crux of the situation; that was the condition on which the House passed the Resolution. The House did not then repeal the Duties. My right hon. Friend would have led anyone to assume that, in consequence of that Resolution, the Duties were forthwith repealed. He said that the merchants, manufacturers and mill-owners made their arrangements on the faith of that Resolution of the House. That is not the case. The Import Duties were not repealed till 1882; and they were not repealed because they were Duties upon cotton goods, but they were repealed, because at that time the financial condition of India allowed of the repeal of all Import Duties. The arguments used in that Debate had mainly reference to the coarser counts of which my right hon. Friend spoke. This is a point on which stress has to be aid, as it has a bearing upon the present condition of affairs: it was pressed in the Debate as it had been in Lord Salisbury's Despatches of 1874 and 1875 Mr. Sidebottom, who spoke for the cotton trade, said— We have already lost our trade in the coarser goods, which can be supplied more cheaply by Indian manufacturers. In a subsequent Debate Mr. Briggs stated that the coarser floods were once sent from this country, but that that trade had disappeared because the duties were repealed too late. The argument used in 1875, 1877, and 1879 was just the same argument my right hon. Friend has used to-night—namely, that the existence of that Duty had prevented Manchester or Lancashire from making the coarser counts, and that, if the Duties were repealed, the coarser counts would be manufactured and trade would revive. I will give statistics which will show how that view has been carried out. Fourteen years have elapsed since those Duties were repealed. The trade in the coarser counts has decreased, and decreased, and decreased, until it has reached the vanishing point; and there has been no protection on one side or the other, but there has been a free and open market. My right hon. Friend cited lugubrious figures as to the decrease of the cotton trade in India during the last few years. I can only tell him that in 1887–88 the value of British cotton piece goods imported into India was Rx.23,324,000; in 1892–3 it was Rx.22,127,000; and in 1893–4, which he has described as a period of unparalleled depression, it reached Rx.28,319,000. We then come to the period with which he has dealt, the period of the Budget of 1894, when the Government of India and the Government of Great Britain were face to face with what I have described as the financial condition of India. He asks, "Why had you to put these Duties on?" And he gave a certain explanation; I know where he got it from; he stated that salaries had been increased and that a deficit had been created in India which would not have existed under other circumstances. That is not the case. When the Budget of 1894–5 was under discussion the value of the rupee stood at 1s. 2d., and the year that has passed has reduced that value to something like 1s. 1d.—a difference in the financial position which was not contemplated 12 months ago. That fall in exchange will represent at the present time an addition of Rx.2,500,000 to the Indian expenditure. Take the figures we had before us when we came to consider the financial position. The net difference in the exchange value—that is, the net loss on exchange in respect to our sterling remittances as between the year 1878 and the year 1894—represents no less a sum than Rx. 10,253,000, and the loss this year is Rx. 12,753,000. Therefore the Government were face to face with a very difficult and serious financial question; and what was proposed? The Government of India estimated a deficit of Rx.3,000,000, and that deficit they proposed to meet by imposing Import Duties. I am not aware of any of the agitation spoken of, of any pressure brought to bear in India upon England. I know that Lord Kimberley was at the head of the Indian Office and Lord Lansdowne was Viceroy, and their communications took place by telegram. I have read these telegrams over and over again, and I can say that they had reference exclusively to the financial exigencies of the case. The Government of India asked for permission to impose Cotton Duties, and the Home Government provisionally declined. The result of that refusal was that the Famine Appropriation Fund was suspended, that grants to the provincial Governments were curtailed, and contributions were raised from the provincial rates; and ultimately the Finance Minister of India budgeted for a deficit of only Rx.300,000. What was said by Lord Kimberley in reply to the protestations of the Government of India against the refusal to sanction the putting of Import Duties upon Cotton? He said this:— If, after an interval, sufficient to judge of the financial position as affected by the Tariff Act, by the course of exchange, and by other circumstances, there was not an improvement, Her Majesty's Government would be prepared to receive further representations from the Government of India on the subject of imposing the Import Duties upon Cotton Manufactures. After Lord Kimberley left the India Office I had to face this question. My right hon. Friend has somewhat imputed to me a breach of faith with the House upon that point, and I am sensitive to any charge of that character. I stated my own view within 24 hours of my appointment, in reply to the hon. and gallant Gentleman opposite. I then said there was no Opposition to the imposition of these duties if they were met by corresponding Excise duties. But I added if there was anything of a proctective character involved I should not think them proper duties to be imposed without a preliminary discussion in the House of Commons. I wrote a despatch to the Government of India in which I clearly pointed out that we would not be parties to duties which were protective, but that if they could suggest a mode by which every element of protection could be removed we would accept their proposal. On July 27 one of the Members for Manchester put to me the question whether, in view of the Resolution passed on July 1, 1877, with reference to Indian import Duties on cotton goods, I could give an assurance that such duties would not be imposed without an opportunity being given to the House of expressing an opinion on the subject. I replied that the Resolution of the House to which the hon. Baronet (Sir W. H. Houldsworth) referred dealt with Duties that were protective in their nature, and I had already stated that in my opinion the Executive Government ought not to sanction steps that would reverse that decision without giving an opportunity for discussion in that House. The imposition of Duties which would not be protective in their character are not affected by that Resolution. That makes my own position perfectly clear. In the Indian Budget debate of 1894 I dwelt on the case at great length. I then made the distinct declaration that I was in favour of complying with the request of the Indian Council if the element of Protection could be removed.

SIR W. H. HOULDSWORTH (Manchester, N.W.)

I drew the right hon. Gentleman's attention later to a subsequent resolution passed in 1879.

*MR. H. H. FOWLER

Yes, but a good deal happened during the course of last Session. There was a very interesting discussion on this question in the House of Lords, when there were present two ex-Viceroys of India, an ex-Secretary of State, and a distinguished soldier who had spent 40 years of his life in India, and who had been Commander of the Forces there for a long time. These noble Lords called attention to a point which my right hon. Friend has not alluded to to-night, a point which no Government can ignore and which I am sure this House will not ignore—namely, the political difficulty which has arisen in India with reference to this question. Lord Lansdowne, who is not an Anglo-Indian Official agitator, said:— There has never been a moment when it was more necessary to counteract the impression that our financial policy in India is dictated by selfish considerations. I am not one of those who regard with exaggerated alarm every bazaar rumour which may be telegraphed over to this country from India, but it is idle to conceal from ourselves that many causes are at work which should make us pause before we do anything to shake the confidence of the people of India in the absolute disinterestedness of our rule. Western ideas arc spreading with rapidity in the minds of an Eastern population not yet by any means fitted to receive them. The Government must make up its mind to be misrepresented, and may in ordinary cases console itself with the hope that the truth will prevail. But it should think twice before it supplies the party the agitation with a real grievance and the materials for an indictment to which no reply has been made because no reply in possible. It is a gross libel to say that either of the great political parties in this country will, for the sake of a passing advantage, deny to the people of India the fair play which they expect. Lord Roberts approached this subject not as a financier, for he did not pretend to be one, but as a man who knew something of the political condition of India, and no Government could disregard warnings from a quarter like that. He said:— While as a soldier he believed that the prosperity of India depended on the maintenance of our naval and military supremacy, he would say, as an Englishman who had lived more than 40 years in that country, that he knew it depended to even a greater extent on the contentment of the people and their belief in the advantages of British rule. The extraordinary position we occupied in India was mainly due to the Natives' firm reliance on our integrity and honesty of purpose, and determination to do what was right and best for them. If this feeling were once destroyed the consequences would be disastrous. But there was a still more important speech, from a political point of view, delivered in the House of Lords by one whom we all recollect as a Member of this House for many years, and as a Lancashire Member, too, who had himself been secretary of state for India for six years. What did Lord Cross say—and, Mr. Speaker, this is the last public deliverance of an official leader of the Conservative party on this question? He said:— All I desire to add, and I have always said so, with regard to the affairs of India, is that this is no party question whatever. It is a question that must be decided by the Government of the day. It is for them to say whether the course hitherto adopted should be persisted in or not. They have the information to enable them to judge. Do the Government believe that without reimposing these Duties the Indian finances could not be properly balanced? If they do, there is an end to the question. If not, are the Duties not to be reimposed simply because of some kind of fad about Free Trade which ought not to enter into the discussion between England and India. If the Government can see no other way of balancing the finances of India, they must at the proper time reconsider the question of reimposing the Duties on cotton. Now, I have cleared the way as to what I said to the House I was prepared to do if the protective element could be destroyed—because we do not share that opinion about it being a fad about Free Trade—we believe it to be a reality and a principle to which we are prepared to adhere. We put ourselves in communication with the Government of India. My right hon. Friend has not quoted or in any way replied to the very able minute of Sir James Westland, the bulk of which I have laid on the Table. But I will sum up what that minute says. Sir James Westland says that the Indian cotton mills do not spin yarns of a higher count than 30's. My right hon. Friend has practically admitted this limit, though he thinks it may be extended in the future. At any rate, at present they do not extend it, and that is proved by these facts. There are 141 mills in India, and 140 of these mills furnish statistics to the Finance Minister. Those mills spun last year 373 million pounds of yarn, of which 215 millions were spun at Bombay, which justifies one in regarding that city as the chief seat of the Indian cotton trade. Close on 20 per cent. were 10s, and 59.63 were above 10's and under 20's. Therefore you have 79½ per cent. of the whole goods spun in the Indian mills under 20's. Above 20's and under 30's there was 19 per cent. Therefore you have, very much bearing out what was stated by Sir James Westland, 98½ per cent. of goods spun in India under 30's and only a small quantity above 30's—that small quantity on which this competition is going to arise—namely, 1½ per cent. Why do the Indian mills spin the coarser counts; The reason, according to Sir J. Westland, is the Indian cotton does not give a sufficient length of fibre for the higher counts; and the accuracy of these statements is confirmed by statistics furnished by the Collector of Customs at Bombay, who says, that the export from Bombay of Indian spun yarn above 24's is not ½ per cent. of the whole amount. Therefore Sir J. Westland was justified in maintaining that the industry of India is chiefly concerned with the coarser qualities and that of Lancashire with the finer qualities, and that unless they approach something like overlapping lines there is nothing like a competition between them. What becomes of the imported yarns? They are used for hand-loom weaving; the mills take none of them. I wonder if my right hon. Friend is aware that an enormous number of looms which in India weave yarns for piece goods are in cottage homes. The idea of imposing an Excise Duty on cottage industries throughout the length and breadth of India is utterly impracticable. What is the position of these yarns? The House has already been told that the consumption is 373,000,000, of which 170,000,000 was exported, no doubt forming a part of the trade to which my right hon. Friend has alluded, but all in the coarser counts. No duty affects them; no competition arises there; and on Lancashire no duty is imposed. There are 129,000,000 used for this hand-loom weaving of the coarser quality for the benefit of the native population of the poorest character, and only 74,000,000 is used by the mills. I have means of communicating with quite as competent advisers in Lancashire, perhaps, as my right hon. Friend the Member for Bury has. [Sir H. JAMES: "Name!"] I am not going to disclose the Gentlemen's names. My right hon. Friend is surely not the man to make a demand of that kind. Did he think it was fair game to suggest that I, an ignorant man, knowing nothing of the cotton trade, would dare proceed to deal with this difficult and delicate question in an autocratic spirit without consulting anybody? That is not the way in which I discharge the duty of my post. I have information—it may be sound or unsound; but, at all events, I have been guided by that information. The result of the position was that when the Indian Government proposed an Import Duty of 3½ per cent. on yarns and 5 per cent. on piece goods, my advisers were of opinion that we must have a uniform duty both on yarns and piece goods; and it is a very singular thing that the Indian argument was exactly the converse of that used by my right hon. Friend. His argument is, that the duty you impose is only 3 per cent. on the Indian manufacturer, whereas you impose a duty of 5 per cent. on the Lancashire manufacturer. What the Indian people said was, that to put a uniform duty of 5 per cent. was practically charging them with 1½ per cent. more than the Lancashire manufacturer. At any rate, that is the ground they took up. They gave reasons for that ground—namely, the position of their mills, the cost of the machinery, the cost of imported coal, and the duty they paid upon imported stores and materials. I did not accept that position, but I required that there should be a uniform duty of 5 per cent. all round, which, I think is a sound, financial principle. I need not trouble the House with any statement of the effect produced in India in reference to this modified proposal. I do not know whether hon. Gentlemen have read the Debates in the Indian Legislative Council upon this question. My right hon. Friend quoted some criticisms of a Member of the Council, but he did not quote the replies to those criticisms from other Members, nor did he quote the very able arguments used by distinguished Anglo-Indians and more distinguished natives against the imposition of Excise Duties at all. The Excise Duty they were willing to accept was down at a limit of 24's, but I stood to my guns and put the limit at 20's, and that wan carried by a majority of one. Having taken a view of the whole position, I will now endeavour to deal with the three main objections which were set forth in my right hon. Friend's speech, and which I gathered to be the objections that Lancashire takes on this question. The first objection is, that we have violated the principles of Free Trade; the second objection is, that we have imposed a heavy burden on Lancashire; and the third, that the Excise Duty is inadequate for the purposes of preventing protection. On the other hand, my Indian friends say to me that it is far below the limit at which any effective competition begins, and, so far as they are concerned, is too oppressive. It is said that we have violated the principles of Free Trade. My right hon. Friend the Member for Bury made in his speech an attack upon the Government with reference to our preaching to foreign nations, but he very dexterously inserted into his argument a change of one of the factors. He said "Import Duties," but Import Duties and Protective Duties are not the same thing, they are totally distinct. There is no principle of free trade which has been violated by the imposition of an Import Duty unless protection accompanies it. The abolition of a Customs Duty may be very desirable or not, but we have never recommended foreign countries to abolish Customs Duties; we have recommended foreign countries to abolish protective duties, which is quite a different thing. What did Cobden himself say? Surely my Lancashire Friends will accept what Cobden said as to free trade. Cobden asked: "What is free trade?"—and this in, perhaps, one of the most marvellous speeches he ever delivered during the Corn Law agitation—''not the pulling down of custom-houses; by free trade we mean the abolition of all protective duties." Mr. Laing, the Finance Minister of India, a Free Trader himself, in dealing with this very question of cotton duties, said:— Free Trade does not mean that there shall be no taxes, but that taxes shall be levied solely with a view to revenue, and not partly with a view to revenue and partly to protection. That is the position which the Government take. I think every Member of this House will admit that this is a Free Trade country. Even the Member for Sheffield will not question that. But, none the less, we raise 20 millions of our revenue out of our Customs Duties. Is it any violation of Free Trade principles to raise money by taxes on tea, while we produce no tea in this country, where we raise it for purely revenue purposes? Or is it a violation of free trade to raise money on spirits? No; because we levy a corresponding Excise Duty on spirits made at home, and that is the principle which regulates the whole of our Free Trade policy. And, bear in mind, the consumer pays. Of course, if, as in America, you allow the native manufacturer to produce the same article and do not charge him an Excise Duty, whilst you impose an Import Duty, he raises his price accordingly, and puts the money in his own pocket. But there is no room for that in connection with the system which we adopt. The next charge against me is, that I have imposed a heavy burden on Lancashire, and my right hon. Friend drew a picture of the distress there which caused me much regret. It must not be supposed that the Government have no sympathy with the state of trade in that county, but he asserted that the depression was aggravated by the imposition of a heavy burden on the industry of Lancashire. I deny that proposition altogether. Who pays the tax? We are levying an Import Duty on a large product of Indian tea; last year the duty on tea grown in India was within a fraction of £3,000,000 in this country. Is that a tax upon the people of India? No, Sir, that is a tax upon the consumers in this country; and if my right hon. Friend the Chancellor of the Exchequer were to ask the House to double the Duties on tea, or to take them off altogether, the effect would be seen in every grocer's shop next morning; the price would go up or come down according to which of these proposals was accepted. The tax would be paid by the people, as all Import Duties are paid by the consumer. I quite admit that excessive duties so raise prices as to discourage and diminish consumption; but I do not think that the question of ½d. in 10d., the Duty now proposed, will affect the consumption of cotton goods of the highest quality and most costly description: and even if it did, the Indian Government would have the remedy in its own hands. There would be no revenue; it would decrease and decrease. The whole basis of the argument and foundation of the situation is, that these Customs Duties shall be paid into the Indian Exchequer. With reference to the third objection—the inadequacy of the Excise Duties—we do not levy this Excise Duty on the coarser counts. Why? Because we say there is practically no importation of those coarser counts. The importation of grey yarns below 24s. dwindled down to an infinitesimal figure 14 years ago, and has gone down and down ever since. Some time ago, of these coarser counts of grey yarns under 24s., we sent to Bombay 1,890,000 lbs.; in 1872, the exports went down to 234,000 lbs.; in 1879 to 160,000 lbs., in 1884, when the duties were taken off and no shadow of protection existed and the Lancashire spinners had the opportunity of pushing the trade if they had wished it, they went down to 55,804 lbs.; last year they went down to 8,500 lbs. It is said in India that between 20's and 24's competition does not begin. I have already said that— if you can prove that the 20 limit is too low and should be raised to 24, power is reserved to the Indian Government, with the consent of the Secretary of State, to alter that figure. I say that the same principle applies to my Lancashire friends. If they can show that this limit works injustice to them, and is in any way protective, I am equally pledged to remedy the evil. Our principle has been all through that there shall not be Protection. No one will say that it is possible, in the imposition of any new tax, especially a complicated Excise Tax, to deal at the first moment with all the possibilities of the case, or to strike off a measure which will not require amendment. I say frankly and openly to the Lancashire manufacturers, as I already have said to the Scottish manufacturers in dealing with dyed yarns— If you will prove that there is any injustice done to you. I will do my best to remedy that injustice. This is purely a question for inquiry, and for inquiry alone. It is impossible to discuss it on the floor of this House. Given the evil and injustice, we will endeavour to find a remedy. What are the reasons for imposing these duties? First of all, financial necessity. You may ask, Why are we in this financial difficulty? It arises from two causes—first, our increasing expenditure. It is a matter of history than ten years ago we added 30,000 soldiers to our Indian Army, 10,000 of whom were British and 20,000 were native troops. During the same period Nature has added 23,000,000 to the Indian population, and it is clear that you cannot govern that extra number of people without additional cost. There is a rise in all Government expenditure, but the great evil is the constant fall of exchange. [Opposition Cheers.] The Hon. Member for Sleaford cheers that statement. The fact is, that week by week and day by day the cost of governing India is increasing as the value of the rupee falls. If these Duties were abolished in the past, it was because financial conditions admitted of it, and they are imposed now because financial reasons require them. Is my right hon. Friend prepared to say that Import Duties should be placed on everything else, and that Cotton Duties should be left out? If we remove all the Import Duties it will be a question of millions. On what principle can you justify the exemption of any particular class of goods? You would say to India:— you must pay on this and not on that, because we have a great interest in that commodity. An hon. Member suggest Machinery. I ask: Is there any tax on machinery in Lancashire? Can you not buy your engines and machinery at the lowest price and in the cheapest market? Why should not the people of India do the same? They have great interest in this matter. They have to pay the freight, the insurance, and the enormous depreciation, which is necessarily rapid in their climate, and they also put their machinery up at much greater cost than we do. Beyond this we must remember that India is not a self-governing country, and we must therefore watch with the greatest eagerness the public opinion of India on these questions. We cannot expect India to ignore what are our arrangements with our self-governing dependencies. What is the position of the Cotton Duties in other parts of the British Empire? Take the great Dominion of Canada. The Duty on yarns below 40's there is 25 per cent., while on woven goods it is 22½ per cent., on bleached goods it is 25 per cent., and on dyed and coloured goods it is 30 per cent. At the Cape of Good Hope there is a uniform duty all round of 12 per cent., and in New Zealand a Duty of 20 per cent. except on sewing cottons or yarns, and 10 per cent. with certain exceptions on woven goods. You cannot explain to the people of India as you can to those of this country all the distinctions between the fiscal arrangements of our self-governing dependencies and ourselves. We believe it is to the interest of India not to have a protective system, which, in the long run, would be injurious to the manufacturers of that country. It is beyond all question that the imposition of these Duties is popular in India, and if the Imperial Government had taken the course my right hon. Friend suggests, it would have had a very grave and serious political effect. The right hon. Gentleman talks about agitation on the part of Anglo-Indians. I tell him that every authority, every expression of public opinion, and every class in India are united as they have never been before on this question. You have not only the Council at home, but you have also the Viceroy, the Legislative Council, the whole of the European community, all classes of natives, the public Press, and every section of society who believe that the exemption of cotton from Import Duties was an act of injustice to India. At all events, I say that the deliberate conclusion at which the Government have arrived is that a widespread feeling of dissatisfaction and of danger would be created if the wishes of India were disregarded on this question. You ought not to defy public opinion on this question. You may try to educate and improve it, but we have to deal with the facts as they are. I have only to say further that as in 1894, my noble Friend Lord Kimberley, in the exercise of constitutional power, refused to sanction these Duties, I equally in the exercise of constitutional power have sanctioned them. I am prepared at the proper time and place to argue that there has been nothing oppressive, unprecedented, or illegal in what has been done. This is the way in which the financial policy of India has been regulated, and in a day or two I will lay on the Table of the House the most masterly dispatches of two distinguished men who have held my office—the Duke of Argyll and the Marquess of Salisbury—who have dealt with this point of the relationship between the home Government and that of India on general and financial policy: and when I have done so I am sure the House will be satisfied that, whether the course now being taken be right or wrong, it is strictly in accordance with precedent. Our case in one word is this—the state of the finances of India necessitated additional taxation; the opinion of the Indian Government and people was unanimous in favour of Customs Duties on imports; the home Government could not permanently compel the people of India to exempt their largest imports from these Duties; we were compelled both in the interests of India and of our own manufacturing population to require that these Import Duties should not be protective whenever goods were imported from abroad and were in competition with similar goods manufactured in India; and we required that an equivalent in Excise Duties should be imposed on competing goods manufactured in India. We say in explanation of this that there is not, and has not been for many years, any effective competition between India and foreign countries in respect of the coarser cotton goods, which, we allege, are consumed in India by the very poorest class of the population; that to tax these goods would be a grievous and an oppressive direct tax on the poorest part of the natives, for which there is no justification. We say that the goods of a finer quality are not produced to any extent in India, but that Lancashire has a monopoly of them, and, I believe, will continue to have it. We further say that, if it should appear on clear evidence that the Government have drawn the line too high, or that it will not remove any and every protective character, her Majesty's Government will, in concert with that of India, consider the matter with a view to carry out loyally their declared intention to avoid protective injustice. That is the policy of her Majesty's Government, and that is the policy which I have endeavoured, feebly and imperfectly perhaps, to pursue during the time I have been in office. I believe I have tried to do my duty to India as Indian Secretary, and that I have not neglected the interests of the people of Lancashire. I and my colleagues are, of course, responsible to this House, which is the ultimate tribunal on all these questions. We know the consequences that will follow if this House should censure the administrative acts of the Government. We shall not shrink from accepting that responsibility if that censure is inflicted. But I would also say respectfully and firmly that if the Government is responsible to this House, the House is responsible to the country. My right hon. Friend has said that India has no representative in this House. I deny the accuracy of that allegation. The Representatives of India in this House are not one or two individuals, not even the section of Members who are thought to be experts on the one hand, or those men who have a profound, a deep, and a special interest in Indian affairs on the other. Every Member of this House, whether elected by an English, or by a Scotch, or by an Irish constituency, is a Member for India. All the interests of India—personal, political, commercial, financial, and social—are committed to the individual and collective responsibility of the House of Commons. I ask the House to discharge that gigantic trust, uninfluenced by any selfish or Party feeling, but with wisdom, and justice, and generosity.

*SIR G. T. CHESNEY (Oxford)

asked to be allowed, as one who was particularly interested in India, very earnestly to bear his testimony to the powerful arguments of the Secretary of State, and to urge upon the House not to take any step calculated to have an injurious effect on the people of India. The right hon. Gentleman had pointed out the injustice and the illogical nature of dealing out to the people of India high-handed measures which would not be inflicted upon any self-governing colony. It was said that India had not free institutions, and that, therefore, Parliament had a more immediate right to interfere directly in Indian affairs. But it might be pleaded that if India was not self-governing, at least it was self-supporting, and it would be extremely unjust for Parliament, while having no responsibility for the expenditure of India, to dictate to the Government of India in what way their taxes were to be levied and what their fiscal arrangements should be. The direct action and interference suggested by the Motion was a new departure. He would remind the House that about 35 years ago, when the finances of India were placed in a state of embarrassment owing to the great outlay of the Mutiny and the loss of revenue that followed it, the Government of India at that time put enormous Duties—as much as 20 per cent.—upon almost every article imported into India. Mr. Wilson, who had held the position of Secretary to the Treasury, was sent to India, as Finance Minister, and he reduced these duties to 10 per cent., not because he questioned the right or propriety of the Indian Government to impose them, but because he found they were so excessive as to be destroying the import trade. But not a word of remonstrance upon the action of the Government of India was ever raised in this country. It was felt that in a great emergency it was the duty of the Government of India on their own responsibility to take whatever measures were necessary to restore the financial equilibrium. The Duties were gradually reduced to 7½ per cent. and afterwards to 5 per cent. In 1882 they were taken off altogether, not in deference to any definite maxim or any specific declaration of coming from this country, but because the improved financial position of the Government of India permitted of their remission without the raising of any countervailing taxation. Now an entirely different state of things had arisen, and nothing that had occurred in the past prevented the Indian Government from again raising these Duties to meet a financial emergency. The House must also bear in mind that the present difficulty had arisen almost entirely owing to the fall in silver, and that not only had the action of the Government of this country prevented any readjustment or rehabilitation of silver, but they had also prevented the question from being even discussed in a rational and sympathetic way. The Home Government and Parliament were therefore under a great responsibility to the Government of India in this matter. The Secretary of State had referred to the different degrees of reciprocity in practice in England and in India. A great cry was now raised by an English industry because a 5 per cent. duty was to be levied on a certain class of goods at present exempt. But we taxed the commoner kinds of Indian tea to the extent of 100 per cent., and cigars which could be purchased in India at 1s. a thousand paid a Duty of something like 1,000 per cent. In face of these facts, could this country with any sort of conscience or reason complain if, in the interest of a harassed revenue, a duty of 5 per cent. was put upon a certain class of goods imported into India. They had been told of the enormous importance of this 5 per cent. duty to Lancashire trade, but no branch of trade with India could flourish unless the people of that country were contented and prosperous. There were latent forces in India ready at any moment to make themselves felt on the surface of society, and it was necessary that the Indian people should feel not only that they were governed justly, but that they were governed in their own interest. If we did not, a feeling would sooner or later arise, which would produce distrust and disbelief in the honesty of England, and serious consequences would inevitably follow. The situation would then become one of great gravity, and he begged the House, before coming to a decision, to balance well the statements made by the right hon. Gentleman the Member for Bury on the one side, and those of the Secretary for India on the other. He would have been glad if the former right hon. Gentleman had refrained from his unworthy insinuation against what he termed the Anglo-Indian Officials. The impression which he gave the House by his speech was that these Duties were imposed in order to obtain funds for paying those Officials larger salaries and pensions. The Officials concerned in dealing with this matter had absolutely no interest in these "compensation allowances," as they were called, which were granted only as being absolutely necessary for the poorer class of European servants of the State whose incomes had been cut down to nearly one-half by the decline in the value of the rupee. The right hon. Gentleman's insinuation was an unfortunate one, and that was the first time that the motives of the Indian Officials had been impugned. Their judgment might be called into question, and their conduct too, but never before had their honesty of motive been questioned.

MR. J. E. BARLOW (Somerset, Frome)

said, he had been engaged for some years in a business which was affected by the proposals of the Government—namely, in the exportation of Lancashire cotton goods to India and other places in the East; but, not being a spinner or a manufacturer, he naturally did not approach this subject with any predilections in favour of the moderate Duty on cotton goods going into India. One of the Blue-books on this matter showed that during the last 25 years, the importation of British cotton goods into India had increased steadily, while during the last 15 years the output of the Indian cotton mills had increased enormously; and the facts further showed that not only had the Lancashire cotton trade increased in export to India, but that when there was a duty, and when there was no duty, the manufacture of cotton goods in India itself had increased to a very large extent. India had many disadvantages to cope with, chief among them being the heavy cost of machinery, but notwithstanding the difficulties, the output of Indian cotton goods had steadily improved, and the manufacture of jute was entering into close competition with Dundee. The Government had done right to recognise the fact that India had managed, in spite of the opposition of Lancashire, to hold her own; and they were well advised in exempting the coarser yarns, because the production of those yarns had been wrested from Lancashire for consumption, not only in India, but in China and Japan. Cotton goods, however, were the last things upon which the Duty had been placed, and he did not see why such an exception should have been made for the benefit of Lancashire. There ought to be equality of treatment, and there was no reason why this industry should have any advantage over others in this country. He could bear testimony to the fact that, much as this matter was disliked in Lancashire, the action of the Government was quite as much disliked in India, with reference to countervailing duties. And he received by every Indian mail complaints loud, deep, and bitter, that the English Parliament was sacrificing India for the interests of Lancashire, and the votes which that county brought. The position was one of great difficulty and delicacy, but, bearing in mind all the circumstances, he thought the Government had dealt with it in a way which was a credit to them. They should have at heart the interests of India, with its vast population, just as much as those of Lancashire, and he hoped that Indian affairs would not get into such a state that it might be said, as was said in regard to Ireland, that she was a mere pawn, to be kicked, together with her financial policy, across the floor of that House. He was unwilling to support a policy which would show India and our other dependencies that they were to be governed merely for our own advantage. Such a policy would be unworthy of Englishmen and unworthy of the Empire, and would in the end meet with deserved disaster.

Mr. R. W. HANBURY (Preston)

said, he was unable to enter into a good many of the technicalities raised by this question, but there were one or two broader considerations which were well worth the attention of the House. Nobody could echo more thoroughly than he did the feelings and sentiments contained in the eloquent speech of the right hon. Gentleman, the Secretary for India, as to the necessity of complete justice to India. He, for one, cordially sympathised with the right hon. Gentleman in that. He thought that, after all, the fact that India was unrepresented except by the Members of the House, imposed on everyone of them, whether they came from Lancashire or not, the absolute necessity, while protecting the interests of his own constituency, of not losing sight of the interests of India. Of all counties, Lancashire seemed to him the best able to take this view, because Lancashire was most interested in the peace and contentment of India. He thought this was a wider question than a mere Lancashire question. It raised important considerations for the whole of England, for it was a serious thing when agriculture was in its present condition, that the next greatest industry in the country should be in any way crippled. Therefore, on that score this could not be considered merely a question for Lancashire. The cotton industry was concentrated almost in one county. No doubt if damage was done to any industry diffused over the country at large, the people affected might find other employment around them; but in Lancashire there was no other outlet. The contention on the other side of the House was, that India had a perfect right, in regard to her finance, to consider her own interest alone. To that contention he gave an empathic denial. He thought that the interests of the Mother-country were also fairly entitled to consideration. What was the tendency and thought at this time in regard to self-governing colonies? Was it not to try to make arrangements by which their tariffis should be reduced? Therefore, if India were a self-governing colony there would be pretty much the same objection raised to this proceeding. England was not responsible for the credit and finance of self-governing colonies as it was for that of India. By the way in which the House had constantly interfered with Indian finance, they had made themselves responsible for it. That was the broad distinction between India and the self-governing colonies. One consideration had certainly not yet been stated to the House. He asked himself, as a Lancashire Member, How was it that a deficit came about? His view of the case was this, that if this Imperial Parliament did its duty to India there would be no deficit at all. It was unjust that, because England as a whole did not take her fair share of the military and home charges, the deficit should fall almost wholly on Lancashire. He would point out how that arose, at any rate from his point of view. He objected that Lancashire should be made so largely responsible for the fads thrust upon India, which went to create the deficit. Take the Opium Commission. That was no doubt a small matter, but it was most unjust that one half of the charge should fall upon India. Why in the world should India pay half? The whole of the people of India of every class were opposed to it, and surely the evidence already produced was enough to convince every fair-minded man that it was unjust to make India pay for it. If they were to adopt the principle that Lancashire was to be made responsible for these deficits, they would have to keep a much greater check on the faddists in the House of Commons. There was no doubt that the enforcement of the Cantonments Acts was entirely against Indian opinion. What would be the case of India if the Acts were enforced? Sir George White told them that the English army would hardly be able to carry on its work in time of War, that it would be rotten by disease, and that we should have to add largely to it. Was it fair that the charges for that should fall upon India? Then, he thought, that the cost of the India Office was out of all proportion to the work it had to do, and it was to be remembered that it was not in any way under the control of the House. A Royal Commission had inquired into the condition of every other Department of the State, but they were not allowed to look at the India Office. What was the cost of it? He would not have thought that, with a Government in India, the India Office would have cost anything like what the Foreign and Colonial Offices cost. But what was the fact; While the Colonial Office cost only £40,000 a year, and the Foreign Office £60,000, the India Office cost £120,000. There at any rate was £60,000 a year which might well be saved. He took another point. There was a long discussion in the House of Lords, and what was their opinion with regard to home charges. They were about unanimous; and there could be no doubt that the military charges were grossly unjust. If India were self-governing, like, the colonies, they would not dare to impose these charges upon it. What were the facts? India paid the whole of the charges for all the troops in India, the passage of the troops out and home again. In addition to this, in the Estimates of the year there was a sum of £600,000, which India was called upon to pay for the training of the troops in England. He said that was a perfectly monstrous thing. Even when Indian troops were employed out of India, as at Suakim, every penny came out of the Indian funds. Even when a few men came over to figure at the opening of the Indian Institute, India had to pay. Those were charges which ought to be borne by the Imperial Parliament, and not placed on the shoulders of Lancashire alone. Was the right hon. Gentleman quite sure those Duties would not be protective? He should like to hear on the point the hon. Member for Oldham, who had said that he deeply regretted that it was necessary to impose import duties of any kind, for they were not in harmony with Free Trade. Why did he say they were going to be protective? Because countervailing Excise Duties were so illogical that it was impossible they could last. While the Import Duties would remain he did not believe the Excise Duties would last. Why make an exception as to these Excise Duties? He believed that the cost of the collection of these Excise Duties would be almost as great as the amount they would produce. Could a system like that continue? Another point was—Had any arrangement been made with the Indian native states? If not they were no good at all; indeed they might prove a serious detriment to India itself. These native states formed a very large portion of India. He thought that whereas the portion of India under British control was something like 800,000 square miles, the territory of the native states was about 600,000 square miles. With regard to this enormous territory they made no provision as to Excise Duties. If they made an exception to Manchester, why should not other trades complain? Why should not the worsted trade of Bradford complain? And if they extended these Excise Duties generally, they would do a great injustice to India, and they would do a great deal to crush the rising industries on which the prosperity of India depended. The right hon. Gentleman said that these Duties would fall not upon the producer in Lancashire but on the consumer in India. He quoted the Tea Duties, but the difference was—England was a rich country, while India was a remarkably poor country, so poor that the consumer could not afford to pay the extra price. For that reason they in Lancashire feared that it would fall on them. But they might he told that, after all, the goods which Lancashire supplied were to a great extent sold to the rich of India and not to the poor. He did not know how that could be the case. When he considered the enormous amount of goods sent to India by Lancashire—£28,000,000 a year—he was not persuaded that these goods were bought by the rich. There were very few rich people in India, and there could be little doubt that in the mass these goods were sold, not to the rich, but to the poor. With regard to these Excise Duties, he was sure they would have another unfortunate effect upon the English producer, and it was this: if the Excise Duty were paid on charges over 20's, naturally the result would be that the coarser goods made in India would be bought because they escaped the Excise Duty. Already the great proportion of the Indian trade was in coarse goods, and when the Excise Duties only touched those above 20's, there would be a larger demand for the coarser goods. If the demand for other goods ceased, they would kill the Lancashire trade. The result of the Excise Duties in India, would be as disastrous as the Import Duties themselves. The demand for goods under 20's would be increased in India. Then, it might be asked, Why should not Lancashire weave more goods of that class for export to India. The answer was, that it would not be profitable to do so as long as an Import Duty was levied upon such goods, and as long as no countervailing Excise Duty was imposed on the Indian-made article. The complaint of Lancashire was not so much against the Indian Government, which, after all, had a deficit to make good, as against the Government at home. India and Lancashire were united in maintaining that a number of the present Indian home charges ought to be borne by the Imperial Treasury. These charges ought to fall neither on Lancashire alone nor on India alone. It was monstrous that Lancashire should be expected to pay for the costly experiments of faddists, through whose action expenses had been incurred which helped to increase substantially the Indian deficit.

CAPTAIN J. SINCLAIR (Dumbartonshire)

said, there was no necessity to discuss upon this subject the general question of our Indian policy, or of the various points of criticism which the Indian Government might be open to in other respects than in regard to the Import Duties; nor did it seem necessary to discuss even the question of the Import Duty. They must accept at the present time as inevitable the imposition of Import Duties, with the hope, hope, however, that they might soon be able to remove them. Anyone who listened to the speech of the Secretary of State for India must agree that it was necessary to take a wide view of the subject. One point they might recollect with advantage was, that this Import Duty had been decided upon and established on the initiative of the Legislative Council. That brought them to the further consideration, in which they must all acquiesce, that, as the Legislative Council was the organ of the British authority in India, it would be a very serious thing to deal any blow to that authority; and it would not be a matter in which those who sat on his side of the House could, as Radicals, find anything congenial to their principles in other respects. His object in rising was to mention certain interests which were vitally involved in this question, namely, the interests of the dyers of Scotland, who were large exporters to India and British Burmah of goods which would be affected by this new Import Duty and new Tariff Act. The policy was this—that an Import Duty was to be levied on these materials of all counts, and under the Tariff Act an Excise Duty was to be levied only on such counts as were 20's and under. Scottish manufacturers acquiesced in this Import Duty; they recognised that it was necessary to take a broad and liberal view of the necessities of the situation, but they desired to draw attention to the effect of the Excise Duty upon their exports to India. It was mentioned by the Secretary of State for India that the total imports into India of materials of these low counts had fallen last year in Bombay to 8,500 lb. But there were exported from this country of these dyed yarns of low counts considerable quantities to British Burmah, for the last four years, approximating to 4,000,000 lb. per annum, large portions of which would come under the Import Duty, whilst they would not be protected or countervailed by an equivalent Excise Duty on Indian manufactures. In this part of the trade, therefore, there was direct competition to this extent on the part of the Scottish manufacturers with the trade in India. But whilst these counts of 21 and under, dyed in India, would be landed duty free in that country, similar yarns dyed in this country would be subject to an Import Duty of 5 per cent. There was the further point, that Indian yarns above 20's, which were subject to Excise Duty, were subject to this Duty in their grey state, whereas British yarns were made liable to Import Duty in their dyed state. To sum up, the situation as it affected Scottish manufacturers was this: that the Indian dyer paid no duty on 21's and under, and less than one-half the duty paid by the British dyer on yarns over 21. He thanked the right hon. Gentleman the Secretary for India for his courtesy in consenting to receive a deputation on the subject, and to discuss the points involved in the ensuing week. It would be a great satisfaction to those who were so deeply interested in this question that the right hon. Gentleman had repeated the assurance that it was the intention of the Government to deprive these duties of all protective character. Those for whom he spoke did not ask for any special advantage or any unfair treatment, but they simply asked for equal justice between them and the Indian dyer.

MR.T. H. SIDEBOTTOM (Stalybridge)

said, he certainly did not expect to have to reopen the question of Free Trade versus Protection at this time. The system of Protection inaugurated by these duties ought to be condemned alike by the House and by the country. He used the word Protection advisedly, because the Secretary of State, in his very able speech, gave the whole case away when he said the bulk of the yarns sent to India was consumed by hand looms. It was absolutely impossible to collect the Excise Duty from hand looms, and, therefore, what became of the argument as to a countervailing duty? A five per cent. duty undoubtedly increased the price of cotton goods in India, greatly handicapped English manufacturers, hampered our trade with India, and encouraged the use of cotton mills in India to an undue and unfair extent. Some hon. Members might think that five per cent. was not, after all, a very heavy duty, and that it could not make much difference; but he reminded them that the charge against the English manufacturer was not on his profit, if profit he had. but on his whole turn-over. He thought most English manufacturers, if they could be assured of five per cent. profit on their turn-over, would be quite willing to accept it and undertake not to apply for anything more. It seemed to him that from a purely Indian point of view these duties were utterly indefensible, The Secretary of State had told them that the people of India were in favour of the duty. But who were the people of India? They did not consist exclusively of the Government officials or of the shareholders in Indian mills. If it were possible to consult the great body of the consumers in India would they be found in favour of the Duty? He thought they were far too 'cute, and too alive to their own interest to be in favour of any tax upon what constituted their chief article of clothing. Lord Salisbury, in one of his able despatches, said this duty was maintained at the expense of consumers, principally the poorer classes, upon whom it told with particular hardship.

MR. H. H. FOWLER

That was the old Duty; before the exemption.

MR. T. H. SIDEBOTTOM

That was disputed. Those were true and wise words. It was undoubtedly the duty of the British Government to do everything in their power to develop the internal resources of India; but surely it could not be their duty to tax the many for the benefit of the few, or to assist English and other capitalists in amassing enormous fortunes by developing cotton spinning and cotton manufacture in India to the exclusion and ruin of manufacturers here. Although the poorer classes in India were very heavily taxed, many of the landowners, and the higher classes generally, possessed fabulous wealth, and probably were the lightest taxed class in the country. He thought that by an Income Tax or some other means, relief might be found without making such a retrograde step as the re-imposition of this protective and obnoxious Duty. Apart altogether from the direct interests of India, the effect of the duty upon the great cotton trade of this country could not be ignored. The cotton trade here was in a state of partial collapse. Never before in its history was the cotton trade more depressed, and it was greatly to be feared matters would get worse. Many mills were now being worked solely and wholly for the sake of operatives, and many concerns had for long been unable to sell a quarter of their production. The duty was of the most oppressive and onerous character. It was calculated, with, he believed, perfect accuracy, that a cotton mill of 1,000 looms in England, making cotton for India out of Indian cotton was placed at a disadvantage of £15,000 a year compared with the mills in India of the same size.

MR. H. H. FOWLER

Out of Indian cotton?

MR. T. H. SIDEBOTTOM

Yes.

MR. H. H. FOWLER

None comes here now.

MR. T. H. SIDEBOTTOM

The figures were really very much larger, but he had reduced them for fear of being thought guilty of exaggeration. A further tax was placed upon that 1,000 looms, by this duty, of at the very least £5,000 a year, so that a tax of upwards of £20,000 a year was placed upon a mill of 1,000 looms weaving in this country. Lancashire did not object to the advantages of cheap wages, cheap cotton, markets close at hand, and, above all, in the longer hours of work possessed by India; but they did object to have their trade torn from them by their own Government, by the aid of a Protective Duty. It was the inherent right of all the subjects of the Queen to trade on equal terms within the Dominions subject to the control of the British Parliament. It was well known that the imposition of this Duty was entirely owing to the exigencies of the Indian Government, and it was notorious that India, at the present moment, was suffering from the great fall in exchange, owing to the depression in silver, But, great as was the loss to the Government of India, the loss to the British manufacturers was as great or greater. They had been told by the right hon. Gentleman of ery large exports to India. The statement was literally true, but the argument founded upon it was fallacious, and the deductions and conclusions drawn from it were absolutely erroneous. The heavy shipments had, to a great extent, been caused by the anticipation of the Duty; the goods had been sent to India in the forlorn hope that something might happen to enable them to be sold. We had a fierce competition waged against us by foreign nations, owing to their longer hours, lower rate of wages, and hostile tariffs; and we found it every day more and more difficult to carry on our trade successfully. He, however, did not despair. He believed in the energy of our race and in the revival of our trade. If only we discarded this policy of bygone days we should have brighter days in store, and we should surmount the present crisis as we had surmounted many others.

*MR. P. J. STANHOPE (Burnley)

said, that speaking as the representative of one of the largest centres of the cotton industry, he could say for his constituents that they were not animated in this matter by any unworthy jealousy of the manufacturers of India, or by a disregard, in the slightest degree, of the interests of the people of India as a whole. The people of Burnley had this peculiarity, that, while one large section was engaged in weaving cloth, which happily went all over the world, another large section was engaged in the manufacture of looms which were sent to those very Indian manufacturers who were the cause of the imposition of the very Import Duty about which all this agitation had arisen. He could, therefore, say that his constituents did not regard the matter from a purely selfish standpoint. Indeed, he could go further, and say that the people of Lancashire, as a whole, were animated in their action by no selfish considerations. They had heard a great deal in the course of recent Debates in the House, of the selfish and sectional interest of the people of Lancashire. That same cry was raised when Lancashire 50 years ago led the way in the agitation for the Repeal of the Corn Laws; and as the people of Lancashire were then the foremost champions of Free Trade they were to-day the foremost supporters of Free Trade. The Secretary of State for India had made from the point of view of the Department which he represented, a very able and powerful speech. But the right hon. Gentleman had missed some of the points on which the Motion was made; and though he had made by the concession he had offered a considerable departure from the position he originally took up, the right hon. Gentleman did not altogether meet the objections which had been raised by the industrial interests of Lancashire. The right hon. Gentleman commenced his speech with a very warm advocacy of the merits of the Anglo-India Civil Servants. The right hon. Gentleman the Member for Bury had, however, said nothing whatever derogatory of Mr. Westland, or of any of the other able men who served the State with such distinction in India. But he was bound to say, that while he recognised the merits of the Civil Service of India, it was a service that had so large a representation in the Government of India, that the interests of the natives of India had comparatively an inferior hearing in that House and in this country. The right hon. Gentleman also entered at great length into what he was pleased to call "the financial necessities of India." But not once, either directly or indirectly, did the right hon. Gentleman dispute the demands of the Indian Government for additional revenue, which every one knew was needed solely in order to make up the loss entailed by the officials of that Government owing to the depreciation of the rupee; and not once did the right hon. Gentleman suggest the possibility of meeting the deficit by a reduction in expenditure, but throughout his entire speech insisted absolutely on the production by some form of taxation of this additional revenue required by the Indian Government. He believed, and in that belief he was supported by a large section of Indian opinion, that there were great possibilities of economy in both the military and civil charges of India. The right hon. Gentleman had said that public opinion in India was entirely in favour of those Duties. He would like to know how the right hon. Gentleman arrived at his knowledge of the public opinion in India. There were two branches of public opinion in India. There was the public opinion that was purely official, which it would seem had alone guided the right hon. Gentleman in the judgment at which he had arrived. But there was another public opinion which was solely interested in the welfare of the people of India, and which insisted that if due economy were exercised in the public charges of India, justice would be done to the natives of India, and at the same time Indian finance would be settled on a satisfactory basis. The right hon. Gentleman quoted for the House the opinion of Lord Lansdowne on those Duties. But he forgot to give the House the opinion of one of his most eminent colleagues in the Government, Lord Kimberley, the Secretary for Foreign Affairs, who, when approached only last year on this very subject, by a Deputation of the Blackburn Chamber of Commerce, said— There remains only one considerable source of revenue, and I mention it at once with a thrill of horror—Import Duties. I need hardly say that that is not within our contemplation. I do not suppose that anybody would attribute to me a heresy of that kind, and I only mention it for the purpose of dismissing it. He did not know whether the noble Lord had been converted by the Secretary for India to views which only last year he looked upon as heresy; but, at all events, the people of India had reason to complain that the Government of which the noble Lord was a distinguished Member, should without any sufficient justification for the change of position, sanction the imposition of Import Duties, which, in his opinion, was a serious departure from ancient Liberal traditions. He was glad to hear that the right hon. Gentleman was prepared to reconsider the arrangement with regard to the countervailing Duties; but though he accepted it as a good augur for the feature, he did not think it would justify the Government in the new departure they had made. Every Import Duty in India, of whatever nature, must be a tax on the consumers of India; and it should be remembered that cotton cloth was one of the primary necessities of the natives of India. The right hon. Gentleman seemed to assume that it was only a small question of the number of counts, and that if he changed the particular count to 15 or to 25, as the case might be, it would meet the difficulties of the situation. But it would do nothing of the sort. What the right hon. Gentleman had done was to authorise an Excise Duty upon yarn alone, and it was because it was on yarn alone, that the opponents of the policy said that no matter what the right hon. Gentleman might do in regard to the change of count, the Duty would still act as a protective Duty. The grey cloth imported into India represented 9,997,000 lbs., and was valued at l.77d. per lb. Upon that there was a duty of 5 per cent. The bleached, printed, dyed and coloured cloth represented 8,020,000 lbs., but in consequence of the superior processes applied to it, it cost as much as 2.06d. per lb. It was obvious that this duty, when compared with the duty paid by the importer on the superior qualities, must be absolutely inadequate to create a countervailing duty; therefore, unless the Secretary of State for India was prepared to go further and make this duty a countervailing duty all round, and absolutely protect the English importer against protective duties, the right hon. Gentleman's concession was insufficient for its purpose. He had shown that, as far as Lancashire was concerned, it had some right to have its case heard. Inasmuch as twenty years ago the whole country was agitated to obtain the repeal of these duties; inasmuch as in 1879 a resolution, which the Secretary for India had carefully avoided quoting, was passed by the House of Commons condemning these duties as unjust to the Indian consumer; and inasmuch as the result of a long period of agitation the duties were repealed, it must not be supposed that Lancashire would now be induced, by small concessions of detail, to consent to the reimposition of the duties. They would rightly continue to agitate for their repeal, and for a return to the sound financial doctrines which import duties could never represent. They accepted with great satisfaction such concessions as the Secretary for India had already made; but if the right hon. Member for Bury went to a division, he should vote with him in order to place on record his protest against these duties.

SIR J. LEIGH (Stockport)

said, that his constituency was suffering very much from the depression at the present time, and he thought that no more inopportune occasion than the present could have arisen for the disturbance of the Lancashire trade. Lancashire would never rest as long as these import duties remained. But the speech of the Secretary for India, and particularly that portion of it which promised a consideration of any suggestions for correcting the protective character of the import duties, had commended itself to him. He thought that Lancashire men ought now to turn their attention to bringing before the Secretary for India all the suggestions they could; because the right hon. Member for Bury had conclusively proved that under the present proposals the Indian weaver would be protected to a very serious extent; and that if, owing to the cheapness of American cotton, Lancashire could compete with India in the coarser kind of goods, these import duties would prevent that competition. In bringing pressure to remove that protective element, Lancashire Members would be doing their duty to their constituents. He was gratified that they had received larger concessions from the Government than he had expected. But for those concessions he should have thought it his duty to vote in favour of the motion.

MR. E. W. BECKETT (York, N. R., Whitby)

said, that no one could complain of the discussion being raised, and least of all the Government, to whom it had afforded an opportunity of expounding their policy in a manner which must be convincing to everyone. He thought it would be a mistake to divide, because there was no justification for turning the Government out on this issue. Those who had spoken in favour of the Motion did not seem to have really faced the difficulty. There was in India a deficit which must be met immediately, and the only means of meeting it was by an increase of revenue. No one had pointed out any other method of increasing the revenue than by these Import Duties, and until they did that, the supporters of the Motion had no case. The voice of Lancashire had never been backward in making itself heard on any political question; but now hon. Members tried to defend Lancashire from the charge of selfishness. If Lancashire had not selfish motives, what were they? Members of the House of Commons were responsible for the Empire at large, and were bound to consider the interests of India as much as the interests of Lancashire. In this matter Lancashire had undoubtedly been treated with great consideration, and every attention had been paid to her wishes. These duties had been imposed only as a last resort, and for long the cotton trade had enjoyed special exemption. He did not see any ground for further exemption. In other ways Lancashire interests had been guarded by the imposition of a countervailing Excise Duty. It was usual to levy this Excise Duty at a lower rate than the Customs Duty; but in this case, for the advantage of Lancashire, it was fixed at the same rate. If England were entitled to demand free entry of her goods into India, India was equally entitled to demand free entry of her goods into England. Would the hon. Members who denounced the imposition of the Cotton Duties in India defend the imposition of a Tea Duty in England? It was urged that Lancashire was being taxed for the sake of India. In regard to tea, India might say that she was being taxed for the sake of England. The Import Duties were an evil; but the question was whether they were not a necessary evil. If they were not, what was there to serve their purpose? The right hon. Member for Bury made a serio-comic suggestion about graduated Death Duties for India; but it was well known that direct taxation in India was almost impossible. The hon. Member for Burnley talked about economy and the reduction of expenditure. It was always easy to talk about economy, but not so easy to say where exactly it was to be effected. Besides, India's case was urgent, and; must be dealt with immediately. It was not enough to say that these Duties were imposed in consequence of the continuous fall in the price of silver, unless it would be shown how that fall could be prevented. He thought that Bi-metallism would crop up in this Debate; and he believed that the Motion had a veiled, as well as an ostensible, object. The latter was to save Lancashire from competition; but the former was to help on Bi-metallism. This agitation had been started and supported by the Bi-metallists; and that fact made him look on it with some suspicion. Again, if the difficulty were the result of the fall in the exchange, yet, that fall cut both ways. Why should India be denied the right which was exercised by all our self-governing colonies? The mere fact that India was not represented in the House ought to make hon. Members more careful, and more tender of her interests, and more anxious to give all weight and authority to the opinions expressed by India. As a matter of fact, when the hon. Member for Preston said that there would be an outcry if a self-governing colony imposed a duty of this kind, he could not help noticing, with surprise, that when Mr. Rhodes proposed the imposition of a 12½ per cent. duty all over Africa, it was received with hearty approval even by some of those now objecting to these Duties in India. He thought it was a somewhat unfortunate circumstance that the Opposition should attempt to turn out the Government on this question. If the Opposition voted for the Motion of the right hon. Member for Bury, they would certainly be voting to turn out the Government; and he said that, if they had to choose between the solvency of India, on the one hand, and a slight and, he believed, temporary reduction of the profits of the cotton spinners of Lancashire, on the other hand, he did not think that any patriotic man could hesitate which course of conduct he ought to adopt. He maintained that, in supporting this Motion, hon. Members were taking a narrow view of their Imperial duties and Imperial responsibilities; and it would certainly be an ill-omened thing if the Unionist Party were to defeat the Government on an issue in which personally interested motives were to be allowed to override the interests connected with the welfare of one of our most important dependencies.

MR. G. WHITELEY (Stockport)

said, he wished to deal with the impolicy of imposing these Duties on Lancashire cotton goods. He had been associated with the trade nearly all his life, and, on the principle of ab uno disce omnes, he thought that the House would be able to judge from the effect of the duties on one branch of industry what was the effect generally on the whole of the industries of the country. This question was of vital importance to Lancashire—indeed, it was of great gravity; the far-reaching effect of the step could not be exaggerated or magnified. The Government, in permitting the imposition of these duties, had dealt a cruel blow to Lancashire. They had hoped, at any rate, that in the House, once for all, the great question of Import Cotton Duties on goods entering India had been, not only debated, but decided. They had imagined, indeed, that if there was one doctrine which, above all others, had been adopted by a Liberal Ministry, it was the policy of Free Trade as taught by Cobden and Bright. In that belief, they found justification in the declarations of policy by Her Majesty's Ministers from time to time throughout the last twelve months. It was indeed, very difficult to reconcile the policy and the action of the Government with the last Resolution that remained on the records of the House of Commons. That Resolution was a broad and comprehensive one to the effect that— The duties on cotton goods are unjust alike to the consumer and to the producer, and that they ought to be repealed. The Secretary of State for India alleged that those duties were not protective, that they did not violate this Resolution, and that the principle of Free Trade had not been violated. In this view he did not concur. They had often been taunted with the question as to how it was they had never discovered the enormity and the wickedness of the Import Duties on products entering India until Lancashire began to feel their effects. There were various answers to that question; but he might retort that Lancashire was not the custodian of the whole of the interests of the trading communities of this country. They argued, besides, that there was no parallel or analogy between the question of Import Duties on cotton goods and other products entering India. In the cotton industry there was a great competition between India and England which did not exist in other elements of trade. The export of cotton goods from this country was so enormous in the total exports of the British Isles as to far exceed the products of other industries entering India. In 1893 the Board of Trade Returns showed that the total amount of British exports for that year from this country amounted to £28,776,000; English yarns and goods amounted to £17,864,000, or 62 per cent. In metals, including all sorts of manufactured iron and steel, the amount was £3,012,000, or 10 per cent. There was, therefore, no competition whatever between India and England in the iron and steel industry, for the reason that there only existed in India one iron work, which had unfortunately passed through the hands of two companies before it reached its present owners. In machinery the exports from this country amounted to £2,000,000, or 7 per cent. Neither in the woollen, silk, or other branches of trade was there any competition between this country and India; but in cotton there was certainly great competition between India and England at the present time. India had 3,000,000 spindles, whereas 10 years ago there were only 1,600,000, the increase being 100 per cent. The increase in looms was 73 per cent.; but the increase in Great Britain was only 5 per cent., on the Continent 19 per cent., and in the United States 20 per cent. It was proved to demonstration that the cotton industry in India was at the present time a thriving and progressive one, whereas in Lancashire, taking the whole of the Limited Liability Companies in the South, it was not a progressive, but rather a declining industry. Speaking as a Lancashire manufacturer, he said that they largely attributed the tariff, whatever the right hon. Gentleman might say to the contrary, to the representations made by the Bombay mill-owners during last year. In consequence of the fact that competition had sprung up largely between Japan, China, and India pressure had been brought to bear on the Authorities in India to impose those dtties, and the consequence was that a wall of protection had been built round the Indian industry which it was impossible for Lancashire to get over. He maintained that up to 20's there was absolute protection; and if he could not convince the Secretary for India of that he would almost go so far as to say he would resign his seat. [Cries of "No, no," and laughter.] Well, it would be a misfortune if he were to do it. In the able report before them there wore significant words to the effect that it would obviously never do for Manchester manufacturers to use up American cotton at 4d. a pound in making a class of goods which the Indian competitors can make up as well out of cotton which costs 3d. a pound. On that text the whole contention was based. If the statement were true the converse was true, and, if American cotton were 3d. a pound, it would be competent for Manchester products to compete with those of Bombay. The remark was a most unfortunate one for Mr. Westland to make. Would the House believe that at the present time American cotton was 3d. a pound?

MR. A. J. MUNDELLA (Sheffield, Brightside)

What is the price of Surat?

MR. WHITELEY

said, that it was about 2¾d.; but it would pay the Indian millowner at the present price of American cotton to import it and to make it up rather than to use Surat. He had mills, and he could manufacture out of American cotton at 3d. a pound, 20's and under, but he could not compete on favourable terms with any Indian manufacturer or spinner; and he could not do it for the reason that the right hon. Gentleman had environed this business with a wall of protection which he could not climb. So long as that 5 per cent. was upon 20's and under, so long was it out of the power of Lancashire, whatever the price of cotton might be, to compete with India. In the qualities over 20's there was partial protection. The yarn value of cloth was only 60 per cent. of the total value of it. The Indian producer was taxed upon the yarn value, whereas the same goods, made out of the same qualities of yarn and sent to India from England, were taxed upon the full value. Between the yarn and the cloth there are five expensive processes. If he sent to India cloth of the value of 100 pence, it would be taxed 5d., but similar cloth made of Indian spun yarn would be taxed upon 60 pence, so that there was a differential protective duty of 2 per cent. in favour of the Indian manufacturer. The Secretary for India would have avoided many difficulties if he had consulted the Lancashire manufacturers. The right hon. Gentleman said that as a rule the richer classes in India used the finer qualities of cloth, and the poor used the coarser qualities. From careful observation in India he should say that the finer qualities were used in the turban, medium qualities were worn round the loins, and coarser qualittes were used in the home. The right hon. Gentleman spoke of the "voice of India," but it was not expressed by any public assembly like the House of Commons. What did our Chancellor of the Exchequer do when he wanted to raise money with the sanction of this House? Did he impose taxes on the food or clothing of the people? No; he levied the required increase on the accumulations of the rich and the trades that were doing well, He denied that the possibilities of taxation in India had been exhausted. During the last few years the Income Tax had been reduced 35 per cent., and all incomes from 200 to 500 rupees had been exempted. Sir John Strachey in 1888 wrote that the tendency of the Indian authorities was by indirect taxation rather to levy burdens on the poor than by direct taxation to obtain supplies from the rich. The land tax was simply a rent of the land, and was only 1–5th of the letting value and only 1–24th of the total profits. This was a fact which the agriculturalists of this country might well ponder over. The Excise Duties were also considerably lower than ours, and, according to Sir Charles Bernard, of the India Office, and Sir Griffith Evans, one of the most prominent members of the Indian Council, death duties were not only possible but desirable in India, and would be an additional source of revenue. In this country when the Government wanted revenue they taxed a prosperous industry. This was done by the Chancellor of the Exchequer in his last Budget, but in India it was the very reverse, and the consequence was the Government taxed the cotton industry, although they must, or ought to have known, that it deserved every protection. It was said that in this matter Lancashire was greedy. He rebutted that charge with indignation. The Lancashire Members were not fighting for themselves, but for the millions of Lancashire operatives. At the present time in Blackburn and North-east Lancashire there were 35,000 looms idle in the various districts, and charitable organisations were distributing food and doing what they could to prevent the populace from starving. The unemployed of Lancashire did not want relief, but a permanent extention of markets and openings for their goods in all parts of the world. The interests of Lancashire were indissolubly bound up with the interests of India. It would be a short-sighted and suicidal policy for Lancashire to attempt to injure India, but although India suffered from the fall in the exchange there was no reason why Lancashire should pay for the deficit which the Indian Exchequer suffered from at present. Lancashire Members would continue to agitate against these Duties in season and out of season. They had no wish to be unreasonable, but they must look after the interests of their own people. They urged that the duties should be equalised and assimilated, and that India should be taxed in exactly the same manner as Lancashire.

*MR. G. J. GOSCHEN (St. George's, Hanover Square)

In the few observations with which I shall trouble the House I do not wish to pledge a single Member who sits in any quarter of the House; I speak merely in my individual capacity. I deeply regret that we are deprived to-night of the presence of my right hon. Friend the Member for East Manchester, who, had he been present, would have been able to place before the House, with his convincing power, the views on this matter which he expressed with great ability and moderation at Manchester not very long ago. Although I wish to emphasise the fact that I am speaking merely for myself, I must say that I speak from a very strong conviction indeed. It is much to be regretted that the course of Indian Legislation should have brought us to this point. We see on the one side a very decided opinion in India, and on the other side a very decided opinion in Lancashire. We have, on the one hand, India in financial straits, seeking how to make both ends meet, believing that there are few other sources of taxation left to her, and very jealous as to the manner in which this Assembly will conduct her interests; on the other hand we see an industry in Lancashire depressed, finding it difficult to hold its own at the present time, and entitled to the greatest regard of this House. My right hon. Friend the Member for Bury was not only justified, but was, I think, doing good to his constituents in bringing this important matter before the House, and, though there are differences of opinion on both sides of the House, nevertheless it is best that this matter should be argued out upon the floor of the House, and that neither in Lancashire nor in India should there be any doubt as to the spirit in which we approach this question. In what spirit do we approach it? For my own part, I must say that I felt deeply the appeal that was made to us by the Secretary of State for India when he reminded us that we were not only representatives of our own constituents, but that this House was the trustee for that great Empire of India, for the prosperity of which we shall be held responsible. That is a responsibility which up to this time, I hope, we have discharged in the face of the world with disinterestedness. and it would be a thousand pities if on some question of importance—but still not one of paramount importance—we should give the impression either to our Indian fellow-subjects or to the world that those principles of disinterestedness which have been at the foundation of our rule in India are no longer to be the guiding principle of the Government of this country. I know how a question of this kind would be decided by other countries; there are some countries who, when they found themselves face to face with a question which interested their fellow-subjects at home and their colonists abroad, would decide very quickly on the selfish course. This country, I hope, will act in a different spirit. The Secretary of State for India has quoted from the Debate that took place in the Lords, and in which, as he said, there spoke ex-Viceroys of India, ex-Secretaries of State for India, and Lord Roberts, who was thoroughly competent to judge of Indian matters, and he produced evidence which, had he not produced, it would have been my duty to place before the House, that questions of this kind deeply interested the masses of India, and that these feelings cannot be brushed aside by any statements that this is an agitation got up simply by a limited class in India. The right hon. Member for Bury stated the case with the greatest possible moderation, but I admit that I regret one passage of his speech, based, I think, on some observations which I myself had seen in a pamphlet which has been circulated, to the effect that it was the Anglo-Indian feeling in India which was hostile to Lancashire. The pamphlet went a little further—it seemed to convey the impression that those men in India, upon whose capacity and upon whose impartiality and honesty our rule depends, had either been deceived, or cajoled, or influenced by a small class of Bombay millowners. I should be sorry that this House should feel that a charge like that should lie against those to whom we confide the interests of our fellow-subjects. We have to show to the world that the men we send to govern India are straightforward men. We try to send to India from this country the best Administrators we can select, men who are superior to prejudice and who will have a judgment of their own. Yet a doubt has been thrown upon a class but for whom we should not be able to hold India. We hold India just because we send out our best men to govern her. I am not one of those who believe that you can give European Institutions to India—such assemblies as we have here. I do not believe the Indian mind is constituted like ours, and hon. Members opposite might imagine that I and others who think with me are belated in our views as to how India should be governed. But in proportion as I hold that India is not fit for such representative institutions I feel strongly that we are bound in duty to listen to the voice of the Indian people on questions affecting their interests. We have on the one side, powerful representations which deserve the most respectful consideration; and, on the other hand, we have representations from India. How ought we to treat the representation from India? Surely not simply as those of officials? In a question of this kind the voice of India must be heard. We cannot do otherwise in this House than listen carefully to those whom we send to that country with the very object of representing Indian opinion and interests to us, and we ought to extend to their advice the greatest respect. The Council of India are against the exemption of these Cotton Duties, and we cannot altogether push aside their advice because we have constituted that Council in order to be guided by them. The Secretary of State for India has said that he is bound to look mainly after the interests of India, and that he has also considered the interests of Lancashire. But it is not only the Secretary of State for India who is responsible, the whole Cabinet are responsible, for they might have over-ruled, or attempted to over-rule, the right hon. Gentleman if they thought that the question had not been sufficiently considered. There are two aspects in which this question might be regarded. In one respect, it is one of the largest questions that can be brought before this House, and in another respect, it may be shown to be a small question. The large question is the effect which an adverse Vote of this House to-night might have. One expression has been used by the Secretary of State for India to-night which I do not think he was entitled to use, unless he was deeply convinced that he ought to use it. He spoke of danger. It was a very serious thing for the right hon. Gentleman to say that the adoption of a particular course towards India—a course which many of the right hon. Gentleman's own Party are prepared to support—would involve danger to that Empire, and it is a statement that cannot be ignored. I am not at all sure but what the speeches made by Lord Lansdowne, Lord Northbrook, and Lord Roberts—I do not say Lord Kimberley, because he is a colleague of the right hon. Gentleman—were of a character to support that declaration. It is not, therefore, a question of confidence in the Government, or a question of Party. When we are told that any particular involves danger to India, danger to Lancashire and its industries, danger to every industry in this country, danger to our power, we should sink every consideration of Party, every consideration of particular interests, and should range ourselves boldly on the side of the Executive Government. Now, let me look at it from the smaller aspect. What is the exact point of my right hon. Friend? What is it that we should vote against if the opportunity were given us of voting against any particular proposal? Is it against the imposition of these Import Duties at all, or is it against the particular form in which the Government have arranged the Excise? Is it that the Government have arranged the Excise Duties on an unsatisfactory basis, and that, therefore, while they are strongly committed against any protective system that, nevertheless, a protective system will be established? Is that the main grievance of the Members from Manchester, because we have not got it perfectly clear? One thing is to condemn those Import Duties altogether; a second is to condemn Import Duties on cotton goods; and a third is not to condemn Import Duties on cotton goods alone, but because that is imperfectly rectified by the Excise system introduced by the right hon. Gentleman. I know that many of my Friends consider that the right hon. Gentleman, notwithstanding the able speech which he made, inadequately satisfied them on that particular point. There are questions of detail connected with yarns in which it is thought that the Excise, which he has established, does not really meet the case. Then, what ought to be done? There ought to be a conference of all those who are interested to endeavour to remove this difficulty. Are such great national powers, I might almost say, as Lancashire and India, to be put in antagonism because they cannot agree on the details of a tariff? I gathered that the right hon. Gentleman was prepared to make it absolutely clear to the representatives of Manchester that he has carried out the policy, to which his Government is absolutely pledged, that there should be no protective influence whatever in these Duties. I feel that there has not been sufficient co-operation between Indian finance and English finance in the past. I might have been tempted on an occasion such as this, if the Motion had been cast in a different character, to say that we were entitled to ask from Her Majesty's Government that they should never have brought us to the present position of antagonism between Lancashire and India. The right hon. Gentleman has had a good many months in which to deal with this question. He must have known the feeling in Lancashire. I cannot deny the courage of the right hon. Gentleman. I think he took a courageous view. But what he has not done is this—he has not brought the contending parties sufficiently together. Now, I should have wished that even at this last moment it would have been possible to effect, I will not say a compromise, but something in the nature of an armistice, for the sake of negotiations which should be carried on. Is it really beyond the limits of the statesmanship of India and this country combined to find no other alternative than these Import Duties; and should it not be possible to deal otherwise with Indian finance than by bringing about this serious antagonism which we all so much regret. Whatever may be the result of the division to-night—whether the Government succeed or whether they do not—I think that this Debate ought to be followed by an endeavour on the part of the Government to see whether they cannot bring Indian opinion and Manchester opinion closer together. But what is to be the effect of the present vote? If it was simply that the Government Excise is unsatisfactory and that it ought to be remedied, I think I should vote with the right hon. Member for Bury, in order to bring them to a better understanding of their position. But I look upon it that this vote is not simply a vote as to the tariff. We must look to the effect on India, when the decision of the House has been telegraphed there. If we were to treat this simply as voting against the Government because we consider that the Excise is imperfect, I think, speaking for myself, that that vote would be misinterpreted in India. So far as I am concerned, I would not risk, as a representative for India as well as the representative of St. George's, Hanover Square, that my vote should be so misinterpreted. India has an overwhelming feeling on this point, and in these circumstances I cannot think I should be doing my duty if I gave a silent vote upon this occasion. Every Member in every part of the House will feel what he considers to be his duty in the circumstances. The Government will do wrong if they look upon this simply as a vote regarding their own conduct and administration. They would do wrong if they were to take advantage of the feeling of those who think so much of the sentiment of India, and if they were simply to construe it as an expression of confidence in themselves. I care not how my vote is interpreted one way or the other as regards Party. What I want is that India should thoroughly understand that in this House, on both sides, there is a determination that Indian feeling should be considered as much as the feeling of any part of the country.

THE CHANCELLOR OF THE EXCHEQUER (Sir W. HARCOURT,) Derby

I should have been disposed to rise later had it not been for the gravity of the speech of the right hon. Gentleman. I hope there never will be wanting in this country men responsible for the prosperity of this great Empire, of which India, perhaps, forms the greatest part, who will be wanting in courage to take that line which in their deepest conviction is necessary for the security of both. The right hon. Gentleman deserves all the credit that can be given for the language he has used. He may depend upon it that he shall hear from us nothing that will in any respect prevent that reconciliation of the great interests of this country and of India of which he has expressed himself so ardently desirous. I must be permitted to claim also for Her Majesty's Government that it is in that spirit that we have acted. Sometimes in the heat of Party debate it has been contended that the Government are actuated only by electioneering designs, with the object of catching votes, and to secure their political and Party position. Do you suppose that when the Cabinet came to a decision on this momentous subject that they were actuated by such considerations? Do you think that they were not fully aware of the difficulties they would create in Lancashire? Do you think that they did not know that they were placing many of their supporters in a very difficult position, that they were risking many votes which might be of importance at the next General Election? But this I will say, that the Government never hesitated for one single moment in taking that decision which they believed was necessary for the interests of India, whatever effect that decision might have upon their Party and political future. I am not disposed to go at length into this subject, which has been dealt with in full, I may say splendidly, by my right hon. Friend, who has shown himself worthy of holding one of the highest positions that can be held by an English statesman. I can only repeat what he has said as to his anxiety to consider any representations that may be made as to the protective effect of the countervailing Duties. If the feeling in Lancashire is as bitter as the right hon. Gentleman, the Member for Bury, has described, there must have been a great falling off in the tone of the county. But I hold in my hand a speech which is worthier of Lancashire than that of the right hon. Gentleman. It is a speech in which the President of the Manchester Chamber of Commerce says that there has been very great exaggeration as to the effect of those Duties on the trade of Lancashire, and urges that there should be no continuance of an agitation unworthy of that county. He had seen in a newspaper what he regarded as a very exaggerated statement as to the effect of this Duty upon the Lancashire trade, and he then goes on to mention especially the question of a continuous agitation in Lancashire, and I call attention to these words because I think they are worthy of the President of the Chamber of Commerce. He said:— He had heard it stated that there was to be continuous agitation against these Duties, and that they objected to them in toto. He did not pretend to think that any word he could say would have any influence outside, but no word he could say would be strong enough to express his desire to persuade those who were responsible for the agitation to cease. It was not worthy of the great fame of Lancashire, of its self-reliance, its stateliness, its stability, or its solidness. What was the use of continuing an agitation which could not possibly be fruitful of good, and might possibly be productive of serious harm, for it could not fail to cause irritation and annoyance in our great dependency—a dependency to which Lancashire owed so much of her prosperity during the last 20 years, to which she owed so much now, and to which she would owe much for centuries to come. I venture to say that language like this, coming from a leading representative of Lancashire, is worthy of that great county and the great industries in it. The Government are quite ready to meet this issue. If it should be their fate to fall, there is no cause in which a Government could more worthily fall; but I should most deeply regret if the vote of the House of Commons was to establish a feeling of irritation between Lancashire and India, and should leave upon the mind of that great population, for whose welfare we are responsible, a lasting sense that justice is not to be expected from the English House of Commons.

*LORD GEORGE HAMILTON (Middlesex, Ealing)

said, that about 20 years ago, when the agitation commenced for the repeal of the Cotton Duties, he was the representative of the Indian Department and the exponent of the policy of the Government of that day in this House, and, therefore, he hoped the House would excuse him if he occupied its attention for a few minutes before the Debate came to a close. The right hon. Gentleman, the Secretary of State, had reversed the policy which the House of Commons, 20 years ago deliberately adopted. He was about to embark in troubles and disturbance of which he had little conception. Now, the views which he himself held 20 years ago as to the impolicy of imposing Cotton Duties upon English goods he held still, and the distinguished Chief under whom he then had the honour of serving, Lord Salisbury, held the same views still. When the former agitation went on against these Duties, and deputation after deputation of Members of Parliament came to the India Office to urge the injustice of the taxation to which they and their constituents were subjected, those responsible at the India Office looked most carefully into the situation, and found they could not meet the objectors in argument. The present Secretary of State for India was an able and distinguished man, but he must recollect that the two men who determined upon the abolition of the Indian Cotton Duties were men of the very highest distinction and authority in their respective spheres both of thought and of action—namely, Sir Louis Mallet and Lord Salisbury. The Secretary of State had quoted the name of Cobden, but the name of Mallet in this matter stood higher than that of Cobden. Sir L. Mallet, who during the earlier part of his life successfully devoted himself to breaking down the hostile tariffs of foreign countries, during the latter part of it no less successfully devoted himself to establishing a unity of interest in this question between England and her great dependency. Now, the grounds upon which at that time they arrived at the absolute necessity of abolishing these Duties were twofold. First, the tax was an unfair tax as far as Lancashire was concerned, and that was part of the question to which Sir Louis Mallet specially devoted his attention. Lord Salisbury looked at the question from another aspect altogether. He arrived at the conclusion that these Duties ought to be abolished on the ground that their imposition was a subject of dangerous contention—dangerous to the stability of our Government in India. It was in that view that they induced the House of Commons to assent to their policy. The agitation was bitterly fought. The Duke of Argyll, then one of the leaders of the Liberal Party, and the late Mr. Fawcett fought stubbornly against their policy, but the upshot was, so conclusive was the argument, that the Government of the day were able to pass a Resolution with the unanimous assent of this House, for the abolition of the Cotton Duties. Two years after that a Resolution was assented to by the House of Commons, from which all mention of Protection was obliterated, showing that it was the intention that these Import Duties should be abolished. A change of Government took place. The Member for Midlothian came into Office. In the meantime, all Duties which were in any sense protective had been removed. They had arrived at a higher quality of cotton goods. The last relic of those Import Duties was abolished. That was the policy deliberately arrived at after long consideration; and now, in the middle of a dull Recess, without giving that House an opportunity of discussion, without consulting any Representatives from Lancashire, and contrary to what he believed was the understanding these Duties were suddenly imposed. What was the plea? There was danger. Well, he recollected a year ago, when there was an Indian Loan Bill before the House, the Chancellor of the Exchequer informed them that if the Bill did not pass India would be bankrupt. He had been long connected with the administration of India, and he knew something about India. He agreed that they should listen sympathetically to the voice of India, but if they wanted to hear the view of India, Bombay and Calcutta were not the places where they would hear it. Those Europeanised cities did not represent India, and the peculiarity of modern India was, that certain sections of those two capitals, having adopted Western ideas, had developed with singular skill the methods of agitation. The result was, that there was no country on the face of the world where the shrinking units of society could make themselves so well heard, and where the millions were so quiescent as in India. He knew the gentlemen who got up the agitation. Let the right hon. Gentleman propose an Income Tax, and he would very soon find out that there was much more danger in the Income Tax than in dealing with cotton. They were always opposed to any taxation of any sort that touched themselves, and when there was any difficulty, the remedy was to tax cotton or raise the Salt Duty. The most important part of the speech of the right hon. Gentleman was that in which he gave his reasons for the necessity of these Duties. The deficiency which existed last year had been increased by the fall in exchange from 1s. 2d. to 1s. 1d. The Government had resolutely refused to listen to any suggestion made from any quarter for the reform of the currency. Lancashire and India were opposed to the Cotton Duties. They were united on the currency question, but their united appeals had been in vain. The Government, having refused the proposals of the Indian Government for a Conference, resorted to the remedy of closing the Mints to the manufacture of silver, by which they attempted to give an artificial value to the rupee for purposes of exchange. For that purpose the Mints were closed, and the closing of the Mints was a quack remedy which reduced the price of silver all over the world. The merit claimed for it was that it would insure the rupee's remaining at 1s. 3d. for purposes of exchange; but the rupee had fallen to 1s. 1d., and in consequence of that fall the Government were now imposing Duties upon cotton goods imported into India. Was this the only remedy open to them? If it was, and if silver should continue to fall, then this 5 per cent. duty would not be sufficient to meet the deficiency, and the Government would have to keep on increasing the Duty. It was, therefore, necessary at the outset of this policy to protest strongly against a measure which must result in the erection of a heavy hostile barrier against the importation of cotton goods into India. The Secretary of State for India had made a very candid and conciliatory speech, and he understood the right hon. Gentleman to undertake to eliminate from his plan anything approaching or resembling protection. The right hon. Gentleman had also said that he had safeguarded the interests of Lancashire by the imposition of an Excise Duty. But had he really done what he thought? For his part, he disbelieved altogether in the efficiency of an Excise Duty for the purpose. The opinion of those who considered this question 20 years ago was that the imposition of Excise Duties in India could not be viewed as a satisfactory method of taxation, and the reason was that in India there was not a reliable official machinery for the purposes of investigation and taxation. Judging from the experience supplied by the past, he held that there was very little likelihood of this proposed Excise Duty being enforced and fulfilling the purpose for which it was intended. He would test the right hon. Gentleman's undertaking to reconsider any part of his scheme which could be shown to savour of protection. The foundation of the legislation of the right hon. Gentleman was that the price of American cotton was 4d. a pound, or a penny above the price of Indian cotton. But supposing that it could be purchased at 3d., the coarse goods manufactured out of it could compete with the coarser goods made in India. If this should prove to be the case, would the right hon. Gentleman put an Excise Duty on the coarse goods in India so that the Lancashire goods might not be handicapped by the import duty? Then, why was Excise Duty to be levied upon yarn and Customs Duty upon cloth? Surely, considering the difference in value between yarn and cloth, that amounted to Protection. The right hon. Gentleman, the Secretary for India, adopted a very high doctrine when he said we ought to pay very special attention to the wishes of India. He agreed that they should not ignore India's rights and claims, but if they were always to pay attention to the wishes of India the position would be a very difficult one. The right hon. Gentleman asked if they would attempt to deal with any great self-governing Colony on the same principle as it was proposed to apply to India. There was no point of resemblance between India and a self-governing Colony. Self-governing Colonies were self-supporting and self-maintaining. The Government of India was neither the one nor the other, and only lived on the moral and material support which it derived from England. If they deprived the Indian Government of the financial, material and military assistance it derived from England it would fall into a state of inanition and collapse. England had paid a heavy tax, both in blood and in money, for having set up that Government. She had to maintain a military establishment enormously in excess of what would otherwise be required. She had to keep 60,000 or 70,000 young English soldiers in India, and the difference between the death-rate which occurred amongst them and those quartered in this country was some indication of the price in blood she had to pay. He did not contend that England should make a selfish use of her rights; but, at the same time, hon. Members had a right to maintain, inasmuch as the Government of India was supported and maintained by England, that the Government of this country should take care that India did not setup a fiscal system hostile to vast interests in this country, and which could not be tolerated in this country. Therefore, he considered they had a perfect right to express their opinion upon this new course the Government of India had taken, and to impress both upon the House and the country the injustice of the Duties thus suddenly imposed. He sincerely hoped that by means other than agitation these Duties might be either amended or repealed, for he should much regret if they were carried simply by political agitation, either inside or outside the House, and so create that feeling of annoyance and agitation in India which it was so desirable to prevent, and by which the foundation of our Government in India might be seriously shaken. He did not know whether the right hon. Gentleman who moved the Motion for the Adjournment would be satisfied with the statement made by the Secretary of State for India, but if he decided to divide on the question, then he should be happy to vote with him. The Secretary for India and the Chancellor of the Exchequer seemed to think that a great Party vote was to be taken, and that on this question of Cotton Duties an attempt was to be made to turn out the Government. The speeches from the Opposition side of the House, he thought, must have effectually disposed of any such notion. Twelve years ago they abolished Cotton Duties, and now they had been reimposed. He regretted this, and if a Division was taken, he should vote with the right hon. Gentleman who had moved the Adjournment as a protest against the inaction of the Government upon the currency question, which had led to hasty action as regarded the imposition of the Cotton Duties, and also as a protest against the unwisdom and unfairness of putting the whole burden of sustaining the solvency of the Indian Government upon the shoulders of an already very depressed industry.

MR. D. NAOROJI (Finsbury, Central)

said, that some of the speakers had stated that this country incurred great expense in the maintenance of a large army for India. But did England spend a single farthing in connection with India? For hon. Gentlemen to stand up and say they were maintaining the Indian Empire was something extraordinary. For the two hundred years during which she had been connected with India, this country had not spent a single farthing either in the acquisition or the maintenance of that Empire. Were he a rebel at heart, he should welcome this Motion with delight. Motions such as this would increase the feelings of dissatisfaction and irritation among the Indian people. Hon. Gentlemen on the other side of the House called themselves Unionists, but if they allowed this Motion to pass, they would intensify the feeling of irritation and dissatisfaction which, after all, was the greatest weakness of their British rule in India. They might have a stronger and a larger army at India's expense—but the stability of their Government depended entirely upon the satisfaction of the people and the justice shown towards them. However just they might be, still in regard to India, this country was like a stepmother. Children might submit to any amount of oppression from their own mother, but from a stepmother they would demand always the strictest justice, the slightest departure from which would deprive her of their affection. England was, after all, an alien country, ruling over great masses of people in the Indian Empire, and if they did not consult the feelings of these people, a very grave mistake would be committed. He would appeal to the Home Rulers and ask them if they did not mean Home Rule to be on the basis of the integrity of the Empire, and not the disruption of the Empire. He could not conceive a more Separatist Motion than this. He could count, he was sure, on the votes of the Home Rulers, and he expected the support of the Unionists if they were really true to Unionism. If this Motion were passed, it was within the bounds of possibility that hon. Members would wake up some morning and find a terrible state of affairs in India, similar to that of 1857. From the bottom of his heart he desired that British rule in India might last a longtime; but hon. Gentlemen must recollect they were dealing with 300 millions of people. He begged them not to so act to-night that a telegram would go to India to-morrow morning saying that this Motion had been passed. The feeling of injustice in India was very strong, however much hon. Members might make light of the opinions of the Indian people. India's leading men were regarded as agitators. What were the occupants of the Treasury Bench? Did they not go up and down the country endeavouring to educate the people, or to disseminate their own opinions? It was by peaceful agitation that British India was to be preserved. This was too grave an occasion on which to indulge in any taunt, or else be might show how this was not the first time that Lancashire had tried to force the hands of the Government to do things which were most irritating to the Indian people. In 1700 an Act was passed against Indian goods coming here; and when Lancashire began to produce goods, similar to those of India, they stopped the sale here of Indian goods altogether. People talked of the enormous Manchester trade with India. There was no such enormous trade, unless it could be said that a trade amounting to 1s. 6d. per head of the Indian people was an enormous trade. He appealed to the House not to let a telegram go to India in the morning to the effect that this Motion had been passed, as the effect on the people would be most irritating. The Secretary of State had promised that he would do all he could to relieve the duty of any protective character. With that assurance hon. Members ought to be satisfied.

SIR FREDERICK MILNER (Notts, Bassetlaw)

said, he believed that if the Motion were carried it would have a most injurious effect, and therefore as he had never given a dishonest vote in the House, he felt constrained to support the Government on this occasion. It had been laid down on behalf of the Government in the course of the Debate on the Address, that to vote with a political party, different from the Party to which one belonged, meant to associate oneself with that Party. Now, he should very much dislike it to be supposed that because he went into the Lobby with the Government, he was in any sense a supporter of the Government. He looked upon the Government as a most pernicious Government, politically, and he disclaimed altogether the notion, that because he was going to support them now, he was in any way condoning their Separatist intentions.

Motion made, and Question put—"That the House do now adjourn:"—(Sir Henry James.)

The House divided:—Ayes, 109, Nos. 304. (Division No. 10.)