HC Deb 03 September 1895 vol 36 cc1646-72
MR. PHILIP STANHOPE (Burnley)

said, he was sorry to have to raise, at such a late period of the Session, and in such a small house, the question of the Import Duties on Indian Cotton, which was a question of the greatest importance to a large number of people in this country. If there was anything more patent than another in the late appeal to the Constituencies, it was the stern resolve of the people of Lancashire that this matter should not be allowed to sleep, but that it should be pressed again and again on the attention of Parliament if necessary. It would be remembered that, much to the surprise of the House of Commons, and certainly very much to the surprise of the Members for Lancashire, in the beginning of last year, it was announced that the right hon. Gentleman the Member for Wolverhampton, then Secretary for India, had yielded—he would not say to his better judgment—but to the representations made by the Indian Government, and decided, without carrying with him the sympathies of his colleagues in the Cabinet, to impose Import Duties on cotton sent to India. Unfortunately, owing to the Rules of the House, the representatives of those whose interests were affected had little or no opportunity of discussing the question until it was almost, to use the words of the right hon. Gentleman, "a closed question;" and the present Lord James, then the representative of an important Lancashire Constituency, had, on the 21st February, to move the adjournment of the House in order to call attention to it. An important and interesting Debate followed. He ventured to say that the arguments against the imposition of the Duties were not exhausted in that Debate, and that the eloquence and the admirable flights of patriotism in which the right hon. Gentleman the Member for Wolverhampton indulged, did not deal with the commercial aspects of the question. The Motion against the Duties was rejected, much to the disappointment of those who hoped the House of Commons would take a reasonable view of the matter. On May 27th following the Debate, a deputation from those interested in the cotton trade waited on the right hon. Gentleman the Member for Wolverhampton, and laid before the right hon. Gentleman, as he himself would admit, the objections to the Duties with great force and detail. Before the right hon. Gentleman could give his reply to the representatives of the deputation a General Election took place, a new Government came into office, and, much to his satisfaction and to the satisfaction of every Member for Lancashire, the noble Lord the Member for Ealing was appointed Secretary for India, because, on this question, the views of the noble Lord had been consistent and straightforward since 1876. The right hon. Gentleman has declared that the Import Duties on cotton goods was unjust to the consumers of India as well as to the producers of India; and that there was little or no hope of the countervailing Excess Duties fulfilling the purposes for which they were intended. Other Members of the present Government also spoke in the Debate of February 21st. The right hon Gentleman the Member for Preston, whom he was glad to see in his present position as Secretary to the Treasury, then used the argument that while self-governing Colonies, if they liked, might adopt the mistaken policy of imposing Import Duties, in the case of India, for whose finances this country was responsible, for the Indian Government to adopt a protective policy was inimical to the best interests of the people of India. He (Mr. Stanhope) maintained that we ought to adopt and maintain in India the policy we have adopted and maintained at home—namely, that while there might be Import Duties for Revenue purposes upon spirits, tobacco, wines, and other such articles, an article of vital necessity to the people of India like cotton—which was used in enormous quantities by the people of India, and was practically their only attire—should be left absolutely free. Unfortunately that view did not prevail with the right hon. Gentleman the Member for Wolverhampton. The right hon. Gentleman accepted the view of the Government of India that the Import Duties should be imposed on the understanding that there was an absolutely countervailing Excess Duty. He maintained that that Excess Duty was not absolutely countervailing. In the first place, it gave to the native manufacturers of India an absolute monopoly over all the lower qualities of cotton cloth. All kinds under 20 counts being absolutely free, the native manufacturers had an absolute monopoly in that production, and they were able to embark their capital with the knowledge that that monopoly could not be attacked under the present arrangements. But it was said by the Government of India that all counts under 20 were practically already a monopoly of the Indian manufacturers, and that Lancashire was unable to compete with them. That was a mistake. In an able pamphlet drawn up by Mr. Whittaker on behalf of the Joint Employers and Workers Committee, it was pointed out with great force that the low prices, and possibly lower prices of American cotton, made it possible for Lancashire to compete even in these lower counts, and that Lancashire, with the energy she generally shows in such matters, would probably embark on such competition, were it not that the present countervailing Cotton Duty practically created a monopoly for the Indian manufacturer. The next point was that there should be on the one hand a 5 per cent, ad valorem Duty on imported cloth, and, on the other hand, there should only be a 5 per cent. Duty on the yarn in India. It had been pointed out that the yarn was the only cost in the cloth. No doubt it formed, by far, the greater portion of the cost. Let them assume that the yarn was 70 per cent, of the actual cost of the cloth. That meant that the manufacturer in India practically only paid 70 per cent. of the Duty paid by his competitor in Lancashire. It was argued that they had to pay more for machinery and coal, and that, consequently, they ought to enjoy the advantage. But, on the other hand, the manufacturers in India had an enormous market for free labour, and they had not got Factory Bills, which, though he entirely approved of them, impeded the free working of the manufacturer. On these grounds the countervailing duty was not and would not be effective for the purpose which it was intended to serve. It was true that the Secretary of State had received representations sent by the Joint Committee, and that he proposed to await the answer of the Indian Government before giving a decisive reply; but from one quarter at all events he had already had his reply. In the Times a few days ago there was a significant telegram which was a quotation from the Pioneer—one of the leading Anglo-Indian papers. These are the words:— We are not concerned to claim undiluted unselfishness for Calcutta and Bombay, but we know a good deal more about the depth and strength of the agitation over the cotton duties than Lord George Hamilton, and if he imagines that it was the work merely of local coteries of interested merchants, he is totally and lamentably mistaken. Lord George, moreover, has apparently yet to learn the rudimentary lesson that, where questions of Indian finance are concerned, even the shrieking units of society in the Europeanised communities of Bombay and Calcutta have a far better claim to be heard than the shrieking units of Manchester and Oldham. It is a mere waste of power to ask the Government of India to draw up a fresh minute on this subject. Their views have been given in the fullest and clearest manner possible, and it would be wiser for Lord Salisbury's Ministry to make up their minds at once that the cotton duties must remain. If that was the view of Anglo-India, he was at one with that newspaper in saying that any representation we might make, by deputation or otherwise, might be ineffectual for achieving the object in view. It seemed to him that this question had yet to be fought out again and again, perhaps, in the House of Commons. It would have to be constantly debated and pressed on the attention of the House on every convenient occasion. Lancashire had been called selfish and greedy in respect of this agitation. Lancashire was nothing of the sort. Lancashire had a right to have its voice on trade questions that affected its interest so deeply. Lancashire raised this question in the interest of commercial freedom. It regarded import duties as restraints of trade, and it regarded these duties in particular as crippling a great industry. He hoped that in time Members of the Government might be inclined to take a more favourable view of the matter. He was aware that in this Government, as in all Governments, there were some skeletons in the cupboard. There was, for instance, the right hon. Gentleman the Member for St. George's, Hanover Square, who, in the Debate of the 21st February, did not share the view of the noble Lord, and who made a speech of the character which he did with such adroitness and skill—a speech of a character that might be called sitting on the fence in this matter. However, he hoped the Secretary of State and the Government would understand that in raising this question the opponents of the duty were only keeping the question alive, that they meant to keep the question alive, and they meant on every convenient occasion to push the matter to a division, and to show that in this question of trade, which had so much to do with the success of the Unionist Party at the General Election—that in the question of trade, at all events, there was some interest to be shown by the Unionist Party, that they would be expected to redeem their pledges upon it. He had occasion, in the course of the Election, to traverse Lancashire from end to end, and he averred that there was no place in Lancashire, county or borough, the walls of which were not plastered with enormous bills calling on the electors to vote for So-and-so and the repeal of the cotton duties. [A cry of "No."] He was sorry the hon. Member who cried "No," and who represented a seaside constituency, had not a few factory operatives in his constituency to awaken his conscience in the matter. He believed that Lancashire Members opposite, returned as they were very largely in consequence of the views they held on this matter, would assist him in keeping the Government up to the level, and in ensuring that the Government should not yield to the interested clique in India who were at the bottom of this agitation. It was said the agitation in India was purely and solely in the interest of the people of India. Towards the end of last Parliament a Report was sent containing the views of the various Chambers of Commerce in India upon the subject. The Upper India Chamber of Commerce at Cawnpore said:— Apart from the inconsistency and invidiousness of the Bill in excluding cotton goods when practically everything else consumed by the community is taxed, a further cogent argument lies in the fact that most of the articles liable to duty under the new Schedule form necessities of life to the classes who already suffer most from low exchange, and who bear the burden of the income tax and the direct and other cesses imposed by the Provincial Government. If, however, cotton goods are freed, the symmetry of the tax is at once destroyed, for these are the only commodities of foreign production used by the masses, and thus a very large section of the population would escape from contributing to the needs of the State. That was to say, the argument on behalf of these duties was that they would fall upon the poorer classes of India, and that it was they who should be taxed to supply the needs of the Exchequer. Then there was the Calcutta Trades Association, which, first of all, proposed the early abolition of the income tax, and then proceeded warmly to back up the cotton duties. With regard to the income tax, this Association said:— Pressing as it does chiefly upon Anglo-Indians, its retention is a perfection of cruelty. Another Chamber of Commerce advocated the cotton duties solely to relieve the official classes from the payment of Indian taxes. Next there were the mill companies, such as the Egerton Mills Company. This is what a Mr. Gilbert, said:— It is a far cry from Bombay to Calcutta, and it seems to me Bombay is being sacrificed At present we cannot work at a profit. The Government of India had far better say the Bombay mills should be dismantled and be honest. At present our mill interest has completely gone to ruin. From a careful analysis of ten of the largest cotton mills in India, he found that between the beginning of April of last year and the beginning of June of this year, the share capital of these companies had appreciated no less than 46 per cent. He did not know why the commercial community should at once have so hurriedly given an increased value of 46 per cent, to their shares if they did not believe that there was going to be established practically protection in the interests of the Indian millowner. Upon this subject at all events the Secretary of India was absolutely sound. He said on the 21st February of this year that— He agreed 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 to hear it. Those European 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 there was no country in the world where the shrinking units of society could make themselves so well heard, and where the millions were so quiescent as in India. It was because the millions of India were quiescent that so many of these questions were maltreated in that House. It was because we allowed the Government of India to embark in costly frontier policy, and to spend millions on extravagant military administration, that there was a deficit in the Indian Budget. He denied that this agitation was purely and solely in the interests of the people of India. These duties were not in the interests of India, and certainly they were not in the interest of England. The interest of both these countries was in the most complete commercial freedom, and the exchange of their commodities freely, openly, and without restraint. So long as the House of Commons continued, he would not say for interested motives, but under the claim of a forced patriotism, to insist on the imposition of duties inimical to that great principle, so long would he and his friends raise their voices against them, until this grievous injustice was removed.

MR. G. WHITELEY (Stockport)

desired, as a cotton spinner and manufacturer himself, to press home upon the House the all-importance of this subject, for it was a matter the weight and gravity of which could not possibly be exaggerated for the people of Lancashire. He did not abate by one jot or tittle the views he enunciated when this question was last before the House; rather he affirmed them with even more vigour and earnestness than ever. He entirely agreed with the views of the hon. Member for Burnley. There was no doubt whatever that in Lancashire this question of the imposition of Import Duties on cotton goods had a great effect in deciding the course of the elections in that country. It was, in fact, a bread-and-butter question for Lancashire. He should like cursorily to run over one or two of the arguments he advanced in the former Debate, He contended that there was protection in the way those duties were levied at the present time. Up to 20's there was absolute protection for the Indian spinner and manufacturer. In many quarters it was supposed that we did not, in this country, ever spin or manufacture goods out of 20's or under; but that opinion was entirely fallacious. At the present time there were in Lancashire three millons of spindles, producing annually 250 million pounds weight of yarn of 20's and under, and this must be compared with the number of spindles in India, producing 274 million pounds weight of yarn, or 10 per cent. over what we produced in this country. At the present time yarn was being shipped to India in 20's and under, capable of manufacturing 25 millions of yards of cloths. It was impossible, therefore, to deny that for 20's and under the duties now imposed were absolutely protective. Over 20's there was partial protection, the duty being levied on the full value of any cloth imported into India, whereas on native yarns it was only levied on 60 per cent. of the total value of the cloth. These were plain figures which could not be denied. A good deal of use had been made of the stores argument, that there was 85 per cent. duty paid by the Indian manufacturer on stores imported. That was an argument in which there was absolutely nothing. Apart from coal and oil, both of which were produced in India, the stores necessary in the manufacture of cloth were in India very small indeed. The fact that they had cotton at their own doors, wages very much lower, no cost of freight in bringing American cotton to this country and then taking it out to India, and likewise no Factory Acts—if cotton manufacturers could claim any rectification of the duty on the stores question, tenfold could Lancashire claim rectification in consequence of the heavy burdens under which their trade was carried on. This duty amounted to 5 per cent. on the turnover, and, as those acquainted with weaving concerns would know, this was sometimes three or four times the amount of the capital. The duty amounted to an impost of 15 or 20 per cent. against the English manufacturer. A good deal had been made of the fact that a great part of the Indian productions were of yarns of 20's or under, while the English imports were of over 20. It was agreed that it was impossible there could be competition between yarns counting under 20 and yarns over 20. But again he declared this to be a fallacious argument. He could understand that a trade in boots could not compete with a trade in hats, but he could not understand the argument that low-priced boots could not compete with high-priced boots. Neither could he understand the rationale of the contention that, because cloth of a coarser texture was woven in India it did not compete with the sale of finer English imports. As well say that, because New Zealand mutton was coarser and cheaper than the home production, it did not compete with English meat. It did compete with the English produce, and the latter would suffer much more if it had to bear an impost of 5 per cent. There was fierce competition between England and India in cotton manufactures, and while the trade at home was practically stagnant and flagging, in India the cotton industry was developing and progressive. Since these duties were imposed the shares in Indian mills had sprung up to the amount of Rx. 1,600,000 and he learnt from a director of two Indian companies that they were paying the one 12 and the other 22 per cent. on the capital. It was a monstrous injustice that a flagging training industry at home should be taxed to make good a deficiency which appeared in the finances of a country where a thriving trade was carried on scot free. The state of affairs in Lancashire had not improved since this subject was last debated in the House. There was the same stoppage of machinery, the same number, if not more, of operatives vainly seeking employment, and the prospect was equally black if not blacker than it was then. On this ground he, Unionist Member as he was, did not hesitate to record his opinion, and if this question came up on a Vote of confidence, and an all-important issue depended on the Vote of one Member, he should Vote against any Government, Unionist or Liberal, that had for its policy the maintenance of these duties. He believed that the maintenance of these duties struck at the root of the prosperity of the county in which he was engaged, and, sitting as he did for a commercial constituency, and believing that to this constituency this trade matter was of the primest importance, he would not hesitate to take the action he had described. He regretted that there was not a trade party in the House that would give precedence to trade above all other questions, defending them against the assaults of either party. Lancashire Members, however, were not wholly unreasonable. They recognised that the noble Lord had been in office only a few weeks, and that it was his bounden duty to hold the scales equally between contending interests. They did not expect the noble Lord to perform miracles on behalf of Lancashire, and he had the right to claim time for consideration. They recognised that the task of abolishing these duties was infinitely greater than that of preventing their imposition in the first instance. The noble Lord was in a very different position. He might issue his fiat and abolish the duties, and then he would disorder the finances of India, or he might allow them to remain a crying injustice to this country. There were two initial steps the noble Lord might take. Initial steps only he called them because Lancashire would never be contented until the total abolition of these duties was obtained. But two steps the noble Lord might take to remove the sting from the present position of affairs. The first would be to treat India and Lancashire exactly alike. There was reason in the claim that Lancashire and India should be put on the same footing. This might be done by putting a duty of 5 per cent. on all yarns imported into or manufactured in India, and on all cloth imported into India, the latter to be taxed on the yarn and not the manufactured article. Such a duty would not disorganise the finances of India, but would bring grist into the Indian mill. The second course which had been suggested by some of his friends was that the Indian Government should take a step Lord Beaconsfield's Government took 20 years ago, when all goods manufactured of yarns under 30'swereexempted from duty. Failing the adoption of the first expedient, which he preferred, the noble Lord might adopt the second. He would not enter into the question of the loss of revenue to India which the abolition of the duties might involve, for that was dealt fully with when the subject was last before the House, when it was pointed out that there were taxes in England which were not raised in India. It was said that the difficulty was a monetary one, arising out of the depreciation of silver, which the marvellously increasing supply of gold would make only temporary in its duration, and it was also suggested that the difficulty might be got over by the Indian Government resorting to the expedient of borrowing. Lancashire, as a community, had a greater stake in the well-being and welfare of India than any other community in Great Britain, and they would be attempting a suicidal policy were they to advocate any policy that would seriously hurt India. They asked the Government to be impartial, and, in the laudable desire not to render injustice to India, to take very great care they did not render injustice to this country. He hoped the Government would soon find a via media in this matter, as he believed they would endeavour to do once they fully appreciated the facts which Lancashire Members had laid before the House.

* MR. FREDERICK CAWLEY (Lancashire, Prestwich)

believed that the import duties had had a very good educational effect upon the people of this country, and especially of Lancashire. Lancashire people were beginning to see that the question of exchange was not the only, or even the greatest cause of the deficit in the Indian Revenue. They were beginning to see that the Indian Empire was administered in an extravagant manner; and that this country did not bear her proper share of the Civil and Military charges. But, above and beyond all, it was, in his opinion and the opinion of Lancashire, this everlasting policy of the extension of Empire that had brought about the deficit in the Indian Revenue. He admitted that this policy had to some extent been sanctioned by the country at the last General Election, for hon. Members opposite were never tired of enlarging upon the merits of the extension of our Empire and the trade that followed our flag. If, however, the country wished this heroic policy, the country as a whole should pay for it, and the burden should not be cast upon either the poor consumer of India or upon the depressed cotton industry of Lancashire. The hon. Member for Hampshire (Mr. Jeffreys), speaking at the commencement of this Session on agricultural depression, talked of relieving the local burdens on agricultural land to the extent of three millions per annum. In Lancashire they wanted no subsidy and no charity; they merely wanted justice. They said that as neither the consumer in India nor the people engaged in the cotton trade in Lancashire were responsible for the ever-increasing expenditure, so neither the producer in Lancashire or the consumer in India should be called upon to make up the deficit in the Indian Revenue.

* MR. A. WYLIE (Dumbartonshire)

said, that when the Indian Tariff Act was passed, imposing duties upon goods imported into India, cotton goods were expressly excluded from the operation of the measure, because it was recognised that there had grown up in India a great and increasing cotton industry, which, if duties were imposed on cotton goods of home manufacture, would be protected against the competition of Lancashire. When recently the Indian Government proposed to include cotton goods within the operation of the Tariff Act, the right hon. Member for Wolverhampton, then Secretary for India, laid down the principle, which has been repeatedly affirmed by this House, that, in connection with Indian Import Duties there must be no protection. In his Dispatch of 13th of December to the Indian Government he said:— It will be understood that Her Majesty's Government are precluded by the pledges quoted from sanctioning the imposition of Import Duties on cotton goods unless under such conditions as will ensure beyond question that the duties thus imposed will have no protective effect. Acting in accordance with those instructions the Government of India devised a scheme of excise duties for the purpose of eliminating the element of protection from the import duties, and the Home Government, misguided by the information which they received, believed that the element of protection had been eliminated and sanctioned the imposition of the cotton duties. He proposed to take first dyed yarns and dyed and printed cloth, as showing in the most direct and aggravated form how serious an amount of protection was still caused by the Indian Import Duties. One special item of information supplied to the Government at home was that there was no competition between India and Lancashire in coarse yarns, viz., 20's and under, because the Lancashire yarns had been driven out of the market by the native manufactures. The Secretary for India, on February 21st, stated clearly that the Lancashire trade in coarse yarns had decreased until it had nearly reached vanishing point. But six days afterwards a deputation representing the dyers of the west of Scotland waited upon the right hon. Member and convinced him that, instead of there being no competition in coarse yarns between Lancashire and India, the Scotch dyers were importing such goods into British Burmah to a large extent. The result of these representations was that an Order in Council was passed reducing the duty on coarse dyed yarns going into British Burmah from 5 per cent. to ½ per cent. He would ask the Secretary of State for India why even this ½ per cent, duty was allowed to remain on those coarse yarns. A clear case of protection having been proved, the duty ought to have been removed altogether. Why, again, was not a rebate granted to the Scotch dyers, who had had to pay the 5 per cent, duty, as is done every other day to the Indian manufacturers in the case of yarns exported to China and elsewhere? He found that a general impression existed that the injustice to the dyers was removed almost completely with the exception of this ½ per cent., but he wished to point out that it was only on a very small part of their production that the injustice was removed. A very large percentage, no less than nine-tenths of their production, was still affected by a 5 per cent, duty, which acted almost entirely as protection to the Indian competitors. He would give two instances to prove this. The other portion of their trade with Burmah consisted principally of 24's. The Bombay dyers—quite as much an alien race to the Burmese as the British—could send dyed 24's to Burmah, paying 5 per cent, on only 7 annas per pound, whilst the British dyer paid on 15 annas, being over 100 per cent. more. Take the other case. The British dyer imported a bale of 400 1bs. grey 40's from Lancashire, for which he paid duty on a value of only about £11. When the same yarn was dyed here and sent to Bombay, it paid duty on about double that amount; and when it was woven into cloth on this side, dyed and printed, the duty was trebled, quadrupled, and in some cases even quintupled (as compared with their Indian competitors), according to the labour bestowed upon it. This duty was principally on British labour. These two instances showed, in a very clear and accentuated form, the truth of some of the leading objections put forward by the Lancashire manufacturers, in their admirable memorial to the Secretary for India, viz. :— (1.) That the Excise Duty secures an immunity from competition in the Indian markets by England in counts 20's and below. He had already proved that there was still a considerable trade. With American cotton at 3d. per 1b., it would be a large trade if left duty free. (2.) That the Import Duty imposed on goods exported from this country, made from 20's and below, without any countervailing Excise Duty being imposed on goods made from similar counts in India, is absolutely protective in its character. Indian manufacturers were taxed only on spinning costs; British on both spinning and weaving. (3.) That the 5 per cent. Import Duty charged on the ad valorem value of our manufactured goods is not completely countervailed by the fl per cent. Excise Duty charged on the yarn value of goods made in India from counts above 20's, and that, so far as any portion of the value of these goods is not chargeable with Excise Duty, the Import Duty becomes protective to that extent. That this was the case he thought he had completely proved, in dealing with dyed and printed yarns and cloths. (4.) That the exemption from Excise Duty of yarns 20's and below will encourage the manufacture of duty-free cloths, as such exemption enables the Indian manufacturer to avoid the Excise Duty altogether, by substituting in the manufacture of cloth non-excisable yarns for excisable yarns. There could be no stronger confirmation of this objection than the fact that, when yarns and goods of no higher numbers than 30's were admitted into India duty free, the exports of yarn above 32's fell from 26¼ per cent. to 18¼ per cent. of our total exports in five years ending 1883, and when the duty was repealed, they advanced again to 27 per cent. in the five years ending 1893. (5.) That it is impossible to place a dividing line between the manufacturers of Lancashire and India, whereby a duty levied on one, unless completely countervailed, will not afford a protective incidence to one to the consequent injury of the other. This would be clearly seen from the previous arguments. (6.) That the imposition of these duties has inflicted serious injury to our trade, and will continue to do so unless completely countervailed. He thought that strong evidence of the protective character of these Indian Cotton Duties was to be found in the first place, in the falling-off in British manufactures since the duties were imposed. In the five months which had elapsed since the duties were imposed, there had been a falling-off in British manufactures of something like 267,000,000 yards, or 25 per cent. But even a stronger illustration was to be found in the enormous increase in the value of Indian mill stocks. The Indian mill stocks had increased by Rx. 1,600,000, which was Rx. 250,000 more than the whole of the cotton duties would provide. He thought it had been proved that there was a very strong protective element in these duties, and therefore it was right that the attention of Her Majesty's Government and of the Government of India should be called to the question. They had now in this country a Government which sympathised with the manufacturers and, he hoped that they would be impressed by the strong case that had been made out in their behalf. They were glad to know that the Secretary for India shared the feelings of his Chief in this matter. He thought it was much more necessary to direct the attention of the Indian Government to the real state of the case, as he believed a great deal of their information had been derived from ex parte statements. India might say she had as much right to protect her manufactures by Import Duties as any of our colonies. He hoped the day was not far distant when, by a wise federal system, the trade between the mother country and her colonies would be as free as the winds of heaven. But India was in a different position. India had been called into existence by an enormous expenditure of British blood and treasure. India could not exist for a day if British influence were withdrawn. Lord Roberts once asked a distinguished native what he thought would be the effect of the withdrawal of the British army from India, and the reply was that it would have the same effect as the opening of the doors of a menagarie—there would be indiscriminate carnage. India must learn that, under these circumstances, she would not be allowed to close her doors against the manufactures of this country. India might say that her financial position was such that it was imperatively necessary that those duties should be imposed, but Lord Kimberley and his successor did not admit that the finances of India were in an unsatisfactory state; and it is doubted whether any European State could show that its finances were in a more satisfactory state than those of India. India might say that she had no other source from which to raise her revenue. The Hon. W. R. Macdonell, on 27th February last, said:— There is no other civilised country in the world in which the public burdens are so light as in India. And in this most lightly-burdened of all countries the wealthy native classes are pre-eminently the most lightly taxed of all. India may say that after all a 5 per cent. duty is but a light tax on a wealthy country like this; but it would enable the Indian manufacturer to work at a profit of 2½ per cent., whilst his British competitor is working at a loss of 2½per cent. Finally, India might say that the imposition of these duties was sanctioned by a large majority of the House of Commons. Several causes contributed to that decision, apart from the merits of the question. But the principal reason why there was such a large majority was, because the Indian Secretary had affirmed that the element of protection had been entirely eliminated from these duties. But he had shewn that a large amount of direct protection still existed, and also an enormous amount of indirect protection. It was quite evident that the information which overlooked such an important fact as an existing competition of this country with India in coarse yarns had, to the extent of two million pounds, entirely overlooked the more abstruse questions of indirect protection of which the people of Lancashire so justly complained. He thought if the question had come before even the late House of Commons clearly and distinctly on its merits, there would not have been a majority in favour of the Indian Import Duties. But the present House of Commons was of a very different description; the vast majority of the Members from Lancashire and the districts surrounding had been returned pledged to oppose the cotton duties. It was true that a great many of these had the disadvantage of being new Members, a disadvantage of which some hon. Friends on the opposite Benches had not failed frequently to remind them. But he might hint to these Gentlemen that they had now quite sufficiently impressed them with the enormous superiority which attached to themselves from the fact of their being old Members. But even the new Members from Lancashire possessed a practical knowledge of this difficult question of the Indian Import Duties which was not exceeded by that of the oldest Members of the House, and they would be prepared to give a steady and most influential vote in favour of Free Trade. Not only in Lancashire, but in the West of Scotland also, there had been a change in the representation, which had been to a certain extent influenced by this question. He thought he might say that he represented a very large section of the commercial community of Glasgow, and, in conjunction with one of the largest East Indian Merchants, Mr. Donald Graham, who had had great experience in India, he had carried a motion unanimously in the Glasgow Chamber of Commerce for the entire repeal of all the Import Duties. He believed that a measure for their entire repeal would be supported in the House, not only by the Members from Lancashire and the surrounding districts, but by those who were in favour of Free Trade, and those who took an interest in the condition of the unemployed, as well as by the public opinion in the country. There had been great education of public opinion since the time of the last Debate on the subject, principally at the time of the General Election, and the people of the country now saw that Lancashire, instead of being actuated by a spirit of greed, wished only to have fair play. It was now recognised that owing to the imposition of these duties, that part of the country had been passing through the gravest crisis in the history of her trade since the great cotton famine, and, that the masters and men had borne this infliction with that great heroism which had characterised them at the time of their still greater distress. The Indian Government should take early steps, in conjunction with the Home Government, to abolish these duties. If they were not abolished, as he hoped they would be, during the Recess, he believed that, when Parliament met again, motions would be brought forward for their abolition, and that both sides of the House would combine in seeing that all these duties were swept away.

* LORD GEORGE HAMILTON

I think it will be agreeable to the majority of the House that I should reply to the points which have been thus far raised in the discussion. An abstract discussion such as this should not be unduly pressed. Most of the preceding speakers have alluded to a speech I made in February last on the question of the imposition of these cotton duties. I did not make that speech with a view to the elections or to the interests of any section of the community. I spoke of the agitation and disturbance which had been caused by the cotton duties which were in existence some years ago. I believe that I am the only person in the House who has an official experience of what those duties meant. When I spoke in February, I endeavoured to do so from a high national, Imperial standpoint. The views which I then expressed I still hold. I had learnt them, when I was at the India Office in 1874, from men like the present Prime Minister, then Secretary of State for India, from Sir Henry Maine, from Sir Louis Mallet, and from others, and, knowing what they thought, I spoke with reluctance and with some trepidation on this question. I think that of all questions which the House of Commons has had to deal with in my experience none requires more delicate handling and none contains more germs of danger. The moment these cotton duties are imposed you array at once the great industries of this country one against another. You have in Lancashire the largest population of any county in the United Kingdom, and they are practically united on this one point, that they consider the cotton duties imposed in India as unjust in principle and injurious to their interests, and, unfortunately, that great cotton industry is not in a flourishing condition. Both masters and mill hands believe that their difficulty and misfortune are in some way connected with these cotton duties. On the other hand, you have in India a most powerful and increasing industry, united together by sentiment and race, who are strongly in favour of these duties. They have control of the English and native Press; and thus, by the very fact of imposing these duties, you have that which every politician would try to avoid; you bring two distant points of the Empire into direct collision one with the other. As these rival interests grow and develop, so does the bitterness and intensity of the controversy between them increase. That is a serious position, and when I spoke in February, I spoke entirely from that point of view, and from that point of view alone. I felt at the time that nothing but extreme financial exigency could justify the re-imposition of those cotton duties. But my predecessor persuaded the House that such financial exigencies did exist, and, whatever they were, the military operations since sanctioned have widened the margin between Income and Expenditure for this year. To-morrow I think I shall be able to show my hon. Friends that there are fallacies in their arguments so far as the control over Expenditure now exercised by the Indian Government and recourse to new taxation are concerned. The Indian Government are not extravagant; on the contrary, no other country in the world is so economically managed. But it is easy to understand that, no matter how ably and how well the Indian Government may perform their work, they have the greatest difficulty in making both ends meet. Year by year the loss on transmitting funds to meet their gold obligations has so increased that this year it shows no less than 27 per cent. of their total net available income. The hon. Member for Burnley, by his Motion, has invited the Indian Government to pledge itself to the early repeal of the Import Duties upon goods, but, speaking as Secretary for India, I am bound to see fair play between the contending parties, and to see that justice is done, having regard to the present conditions of Indian finance. Under present conditions it would be impossible in any way to pledge myself, but, even if it were within the bounds of possibility, I doubt whether it would be a proper course to pursue. If I were now to pledge myself to adopt the course suggested by the Motion it would naturally render every subsequent act of mine open to suspicion in India: I should be making promises which I might not afterwards be able to perform. ["Hear, hear!"] The old duties on cotton were imposed originally subject to no conditions as to protection: but after they had been in operation some time they were objected to on the ground that they were protective, and Resolutions were passed by successive Parliaments protesting against the policy of protective duties in India, and finally they were removed. The right hon. Gentleman, when the duties were re-imposed last year, undertook, if any duties were imposed which were protective, to submit them to the House of Commons before he assented to them. He was attacked, and it was alleged that he had not complied with his promise. But I think his defence was adequate and straightforward—that the duties he sanctioned were found to be not protective, and that he would prevent them from being protective in their effect. The pledge given by the right hon. Gentleman in connection with the duties was agreed to by the Indian Government, and since those duties have been in operation a deputation waited on my predecessor which pointed out that in Burmah certain yarns from Scotland undoubtedly competed with local yarns protected by the duty. The right hon. Gentleman wrote to the Indian Government and they at once repealed the duties and reduced them from 5 to ½ per cent. The only reason that the ½ per cent. remains is that by Executive action the Indian Government cannot repeal duties imposed by legislation. Since then—on May 27th last—the right hon. Gentleman received a deputation of Lancashire and Scotch mill-owners, who put some important points before him. At the close of his interview with the deputation, he said:— Now the point is, is that Excise Duty countervailing in the true sense of the word, or is it not? They say it is not only countervailing, but it is so excessively countervailing that you have inflicted—'you' being, as somebody called me, 'the Secretary of State for Lancashire,' not for India—'you have inflicted a great injury upon us.' You gentlemen come here to-day and you say, 'On the contrary, we dissent from that in toto; you have imposed an Excise Duty which is not a countervailing Excise Duty, but omit a great many points and which exposes us to an unfair competition.' Now, then, what I ask you gentlemen is to send me an argument based upon that, and upon nothing else. Let us have no other issues; that is the issue at stake. I promise you that that shall be not only considered here, but shall be sent to India, and we shall then know what they have got to say to it. That was the position of affairs. A change of Government took place. The memorial which the right hon. Gentleman asked them to send him was sent to me, and it has been sent to the Indian Government. Now, to the position hitherto maintained by those responsible for the Government of India, that the duties are not to be protective, I adhere. It seems to me that from the time the re-imposition of the duties was contemplated there has been a common understanding to which, with the exception of a Member here and a Member there, the whole House are more or less a party, on that side (the Opposition side) as well as this. I will put myself into communication with the Indian Government, and I will do all in my power to eliminate anything savouring of protection from the duties. In the Debate that has taken place hon. Members have spoken with the greatest moderation. Whether you agreed with Lancashire, or with Indian millowners, hon. Members had all spoken with the moderation becoming the treatment of a grave and serious question. Nothing more illustrates the difficulty of the situation than the fact stated by the right hon. Gentleman last year, that he had done his best to be just to both sides and he had been equally abused by both sides. It is clear what my attitude is. If trade does revive, and if the Indian revenues permit these duties to be dispensed with, we shall be able once more to leave the English millowners and the Indian millowners in a natural and healthy condition of unbiassed competition in regard to the supply of cotton goods to the people of India.

MR. R. ASCROFT (Oldham)

, in addressing the House for the first time, said, there were in Lancashire large mills well equipped with machinery actually closed, and others in which looms were standing idle. For a long time capital had been gradually dwindling away, and at last it had come to be felt that this question of the Indian Import Duties, small as it might appear to be, might be the means of ruining one of the greatest industries in the country. He had listened with satisfaction to what had fallen from the Secretary of State for India, and Lancashire Members would feel that the raising of the question would encourage operatives and employers to struggle on till these duties could be dealt with. He congratulated the Secretary for India on the happier position in which he had placed the question of the duties. He did not know whether the noble Lord had seen a speech recently delivered by the President of the Bombay Millowners' Association, one of the bodies whose previous arguments were placed before the late Secretary for India when he decided the course to be taken. The President of that Association said:— I think it would be sound policy for the Government of India to remove the slightest shred of complaint by notifying that all 20s yarn and under, and cloth made from 20s yarn and under, imported from Great Britain, should be duty free. A simple notification, as has been done with Glasgow dyed yarn imported into Rangoon, would be sufficient. If there is no import of goods made from 20s yarn, then there can be no loss of revenue. If, on the other hand, there is a limited quantity of such goods imported, it is only just, however small the quantity, that they should come in duty free. My own impression is that no goods made of 20s yarn and under are imported, and certainly no 20s yarn. As your chairman, I would like it to go forth that while we, in common with other citizens, supported the reimposition of the Import Duties for purposes of revenue, we are as much opposed to Protection in any form as the most ardent Free Trader in England. After such an expression of opinion, it could no longer be said that Lancashire was pursuing a selfish policy. It was not a Lancashire policy, but it was one by which both England and India would be benefited, and a part of the policy promised by the present Government, and which he now asked should be carried out, as it affected the commercial industries of the country. The policy on which the Government came into office was a policy of advancing the national prosperity of the country; of opening new markets; of increasing the field of employment. Lancashire, therefore, made no selfish appeal in her own interest. What she asked for was that the Government should carry out the policy on which they came into office; and it would be a national calamity for the country if one of its chief industries, like the cotton industry of Lancashire, were destroyed.

* MR. H. J. WHITELEY (Ashton-under-Lyne)

, in a maiden speech, said he was afraid the statement of the noble Lord, the Secretary for India, would be read with some disappointment in Lancashire. No Member of the House was suffering as he was suffering in his trade relations owing to those Import Duties, but he did not plead for himself; he pleaded on behalf of the 400 workpeople in his employment, who since the imposition of those duties had not had two consecutive weeks' full work, with the result that they had to endure much suffering and want, and this was a case illustrative of many other firms in Lancashire. It was said that it was not the manufacturer in Lancashire, but the consumer in India who would pay this duty. He declared without fear of contradiction that it was the Lancashire manufacturers who would pay the duty, and who would have to continue to pay it so long as the native manufacturers enjoyed their present favoured position as compared with their competitors in England. Lancashire did not desire to be selfish in this matter. If it were proved that owing to the financial difficulties in India this course was inevitable they would acquiesce; but they asked that they should be put on an equality with India. and that if they were to make this sacrifice they should be assured that it was not for the benefit of manufacturers in India, but for our mighty Empire as a whole. [Cheers.]

Question put, and agreed to.

Considered in Committee:—

(In the Committee),

Motion made and Question proposed— That it appears, by the Accounts laid before this House, that the total Revenue of India for the year ending the 31st day of March 1894, was Rx.90,565,214; that the total Expenditure in India and in England charged against the Revenue was Rx.92,112,212; and there was an Excess of Expenditure over Revenue of Rx.1,546,988, and that the Capital Outlay on Railways and Irrigation Works was Rx.3,621,252."—(Lord George Hamilton).

THE FIRST LORD OF THE TREASURY (Mr. A. J. BALFOUR,) Manchester, E.

said, that as it was too late for his noble Friend the Secretary for India, to make his financial statement, he moved to report progress. The statement would be made by his noble Friend at Twelve o'clock to-morrow.

Committee report Progress; to sit again on Wednesday.