INDIAN COTTON DUTIES.

HC Deb 18 May 1896 vol 40 cc1572-97

* SIR WILLIAM WEDDERBURN

asked leave to move the adjournment of the House in order to call attention to a matter of definite and urgent public importance, viz., "The effect of the Indian cotton duties as recently rearranged, which are causing grave dissatisfaction in India by increasing the burden of taxation imposed upon the poorest classes of the consumers."

The pleasure of the House not having been signified, Mr. SPEAKER called on those Members who supported the Motion to rise in their places, whereupon nearly all the Members of the Opposition, save those on the Front Bench, rose in their places.

Leave was accordingly given.

MR. W. E. M. TOMLINSON (Preston)

inquired whether the hon. Member was entitled to move the adjournment, inasmuch as he had only a few moments ago given verbal notice of his intention to bring the question forward on an early day?

* MR. SPEAKER

said, in absolute strictness the hon. Member might seem to have disentitled himself to move the Adjournment by giving his notice, but if the hon. Member told him that in so doing he only referred to the Motion he now proposed to make he would not prevent the hon. Gentleman from proceeding.

* SIR W. WEDDERBURN

signified his assent, and then said, that very grave dissatisfaction existed in India because a new and uncalled for tax had been placed upon the necessaries of the poorest classes of the Indian consumers. The House was aware that the poorer classes in India already bore more than their fair share of taxation. ["Hear, hear!"] The great problem was to make the well-to-do bear a little larger share of taxation, and almost the only way to do that was to tax the finer classes of cloth, which were only worn by the richer people. The import duties upon the finer cloth was approved of by public opinion in India, but it appeared to be a very inopportune time to put a new tax of 10 lakhs of rupees upon the poorer classes when the taxes which fell upon the richer classes were being reduced by 50 lakhs. The sting of the thing to the people of India was that the new tax was quite unnecessary, and, in their opinion, was only imposed in order to give satisfaction to the Lancashire people. The people in India had been advised not to use Lancashire-made goods at all. Surely from a political point of view such a state of feeling as the giving of such advice exhibited ought not to be allowed to exist another day. There was no need of fresh legislation, because the noble Lord could, in his executive capacity, by a stroke of the pen, remove the grievance which was being felt throughout India. This Motion was in no sense a Party one. He made no attack upon the Government, and far less did he wish to make an attack upon the noble Lord, who he was convinced had given great attention to the subject and decided it in the way that appeared to him to be the best all round. But the noble Lord laboured under the great disadvantage that he had never been in India, and therefore could not appreciate the strength of the feeling which existed in that country on this question. All classes were united upon this matter, rich and poor, official and unofficial, Indian and Anglo-Indian. The noble Lord should not take comfort from thinking that the agitation had ceased. He would refer to the letter from a leading Maharajah, which Lord Roberts read with approval in another place. That letter said that when the people of India protested openly against any Measure it was a compliment to the British nation, because it showed they hoped to get justice. The Maharajah added:— If we had no faith in England and Englishmen all agitation would have ceased, and there would have been a death-like calmness, not perhaps a very desirable thing in the political world of India. The fact was that, if open agitation in this matter had ceased in India, it was not because the people had become indifferent, but rather because the grievance complained of had sunk deeply in their minds, and because they had become hopeless of receiving justice. It was not unfrequently the case that when outer symptoms of discontent were suppressed real danger began. He therefore begged the noble Lord to look into the real merits of the case and not to be deceived by mere outward appearances. The whole point of this controversy had reference to the question of Protection. When in 1895 Sir Henry James moved the adjournment of the House on the question of the Cotton Import Duties, the ground on which he did so was that Lancashire complained that the duties were Protective in their nature—that on the finer counts the Protection was partial, but that on the coarser counts, owing to the tariff of 1894, it was absolute. Under that tariff all cotton goods imported were made liable to an ad valorem duty of 5 per cent. and by way of countervailing duty the excise was placed on yarns above 20's. The argument of Lancashire was that this gave partial protection to the Indian mills as regarded the finer counts, because Lancashire paid upon the manufactured article, whereas the Indian mill owners only paid upon the raw material—namely, the yarns. Lancashire further argued that absolute protection was given with regard to the coarser goods of 20's and under, because there was no excise on the yarns of those counts. The right hon. Member for Wolverhampton, who was Secretary for India at that time, did not admit the plea of Protection, but he said that he was willing to make further inquiries, and that, if it was shown that Protection existed, he should be prepared to take measures to remove the injustice. The late Chancellor of the Exchequer concurred in that view, and therefore the only question really at issue was the point of Protection, and this was confirmed by the present Secretary for India, who at the time of the last Indian Budget promised to eliminate from the duties everything savouring of the nature of Protection. With the object of dealing with the question, two Bills had been brought in by the Government of India, but he complained that this legislation went far beyond the necessities of the case. It dealt with the alleged evil of Protection in regard to the complaint of Lancashire, but it went far beyond that and did an injustice to the people of India. It removed the excise duty from yarns and placed it upon woven goods—upon the manufactured article. The effect of this was to remove the grievance of Lancashire with regard to the finer counts, while it imposed a similar injustice on the Bombay millowners, because they had to pay twice over on the stores used in their mills. But the Government of India, without any necessity, went much further than this by reducing the duty on the finer counts from 5 per cent. to 3½ per cent., and thereby needlessly sacrificed a large amount of revenue. As to the coarser counts, also, there was the object of removing all Protective influence. That might be done by placing the Lancashire producer and the Bombay producer on the same level in either of two ways—by having neither import nor excise duty, or by having both import and excise duties on the coarser counts. The universal opinion in India had been in favour of having neither import nor excise duty on the coarser counts, so that no tax should be placed on such articles used by the poorer classes. But, without any sufficient reason, that wish was put aside, and an excise duty had been placed on the industries of India. This step had caused great indignation in India, and it was for this reason that he had brought the matter forward. The Government having gone, as he had said, beyond the necessities of the case, the responsibility rested upon them of showing to the House that they were justified in the course they had adopted. It had been stated that Custom-house arrangements made it impossible to carry out the wishes of the people of India in the matter; but that could hardly be the fact, for the Government of Bombay had declared that there was no insuperable difficulty in remitting the duties on the coarser counts, and in 1878 greater difficulties of a similar character were successfully overcome. In 1878 the line tried to be drawn was at 30's, near the bulk of Manchester goods, so that the matter then was much more difficult to deal with, but it was grappled with successfully. Now the line proposed is 20' s, and there is much less practical difficulty. Then there was another important point. The sole declared object of the re-arrangement of the duties was to get rid of protection. But the result was to create protection on a large scale in favour of hand looms and mills in native States. These together consumed three-fifths of all the yarn used in India. He was a friend to hand loom weavers and to native States, but from an economic point of view he must say they should not be given an unfair advantage. His main objection, however, was that the re-arrangement relieved the richer and taxed the poorer. In the matter of food the poorer classes of India were very heavily taxed. There was no heavier tax known to the world than the Salt Tax, for the working man in India had to pay 40d. by way of duty for every one penny of value. Therefore he had to pay very heavily for his necessaries as regarded food, and it was not now the time to put a further tax upon his necessaries, that is, upon the wretched clothes he wore. It might be said that the amount was small, but then his means were small. The average income was 1½d. a day, and there was not much room for taxation out of that. Therefore he came back to his main contention, that, whereas the Government had taken off 50 lakhs from the taxation of the finer cloths worn by the richer, they had done very wrong in putting 10 lakhs on the coarser cloths worn by the poorer, and he appealed to the noble Lord by a stroke of the pen to remove that grievance, which would have a very beneficial effect throughout India. He believed the Secretary of India somewhat questioned the statement that the coarser cloths were worn exclusively by the poorer classes. He thought it stood to reason that the coarser and cheaper fabrics would be worn by the poorer classes, and that seemed to be the view taken by all the authorities. That was the opinion of the India Office when the right hon. Gentleman the Member for Wolverhampton was Secretary for India, and he did not know what further information had led the noble Lord to an alteration of that opinion. It was the basis of the whole complaint that the coarser cloths were worn by the poorer people. The Bombay Government, which he regarded as the highest authority on this matter, referred to the duty as a burden of taxation to be borne by the poorer classes, and that view was supported by the Native gentlemen in the Viceroy's Council. He thought it was a little fantastic to say that the poor people wore the more expensive and finer cloths. His contention was that this tax upon the poor was uncalled for, and that it was very injurious both to the people it affected and in the feeling it had produced throughout India. He had no wish that this should be a Party Motion at all, and he appealed to hon. Gentlemen on the other side who were acquainted with Indian matters. He regretted that his old friend Sir George Chesney was no longer in his place to raise his voice against this tax, as he did on a former occasion, but there were other Anglo-Indian Members still sitting in the House. There was his hon. Friend the Member for Bethnal Green, who was a direct representative of India, and the hon. Member for Cardiff, and, if he had been present he would have made his appeal to the hon. Baronet the Member for Manchester, who was for a long time Governor of Bombay, and also his hon. Friend the Member for Central Hackney, who had had a long experience in India. He felt confident that those hon. Members would be prepared to confirm what he said as to the strength of the feeling on this matter throughout India. Every representative association had put in its protest against what had been done. The Chambers of Commerce were at one with the Association of Millowners. It was a very remarkable thing that the Chamber of Commerce of Bombay should have taken this view so strongly, because it consisted entirely of gentlemen engaged in the import trade of cotton goods, and they pointed out that only two members of the body had any interest whatever in the Bombay mills. Public meetings had been held in different parts of India, and in every case the strongest possible protest had been sent in. He did not know what was the real feeling of the Government of India in this matter. They seemed to have changed a good deal from their original position, and he would like to ask the noble Lord if he would explain how that conversion came about. He had read the Blue-book with very great care, and there was a curious hiatus between the important Dispatch sent by the noble Lord on the 5th of September last and the telegram from the Government of India of the 16th of January, from which it appeared that the Government of India had found salvation from the Secretary of State's point of view. He should like to know if they could be favoured with the correspondence which took place between those dates. He thought he might also safely appeal to the Lancashire Members. He wished to make no attack whatever upon them for pressing their case as strongly as they could, but he would appeal to them to be satisfied with what they had got in this matter. They had received a very great concession in the remission of 1½ per cent. upon the import trade, and he would appeal to them not to oppose the proposal to remit the excise and import duties on the coarser counts. They now paid the same import as excise, and they had this advantage with regard to the double payment of taxation of stores. He really did not see why they should in any way oppose the removal of the import duties on the coarser fabrics. They had, too, at present a monopoly in drills, which were not made in India at all. Therefore this concession would actually be a benefit to them so far as drills were concerned. They had also pointed out that they were anxious to manufacture more of the coarser materials. If they were successful in doing so, it would also benefit them if the duty was taken off. If the Lancashire Members were agitating so strongly for the removal of these duties altogether, surely it was illogical for them to object to a portion of the duties being removed. He also wished to appeal to the sentiment that was so forcibly put by the First Lord of the Admiralty when he pointed out how very unfortunate it would be if India and Lancashire should come into collision upon this matter. He did not wish to dilate upon the question of boycotting or of any hostile measures that might be taken in India, but it was a matter, he thought, that Lancashire should consider carefully. When they remembered that Japan, China, and America were running this country very hard in the matter of finer fabrics, it would be very unfortunate if their customers in India were to take their custom to those countries instead of to the Lancashire mills. He did not think this would be any sacrifice at all, but even if it were, it would be worth making in order to remove the feeling of indignation and to draw more closely the bonds between the people of this country and of India. He would appeal to the whole House, and remind them of what the late Viceroy said upon this subject of the financial treatment of India. Speaking in another place, he said:— There was never a moment when it is more necessary to counteract the growing impression that our financial policy in India is dictated by selfish considerations. This was a matter in which the people of India were exceedingly interested, and they would watch eagerly what the decision of that House would be. He trusted that that decision would be in accordance with right and justice, and humanity. ["Hear, hear."]

* SIR JOHN LENG (Dundee)

, in seconding the Motion, said, he could not claim to have spent the greater part of his life in India like his hon. Friend the Member for Banffshire, but he was very much struck with the words used by the late Secretary of State (Sir H. Fowler) on a memorable occasion when his right hon. Friend said that every Member in this House was a Member for India, and remembering those words he took occasion to spend the greater part of last winter in a visit to that great Dependency. No one could do so without being deeply impressed with sympathy for the teeming millions of the peaceful, patient Indus- trial classes of India, and with a desire to do whatever was possible in a Parliamentary capacity to promote their welfare. He must admit that in moving through India he was not a little struck with the strong Conservative—he might say Imperialist—sentiments of our countrymen in India among the mercantile and manufacturing classes, and even the official classes. But he found that their Conservative and Imperialistic views had been not a little shaken by the attitude taken by a number of leading politicians in this country when in Opposition, and subsequently when they acceded to power, with regard to this question of the cotton duties. Wherever he went he heard nothing but admiration expressed for the firm attitude taken by the late Secretary for India, and on the other hand he heard nothing but resentment and strong disapprobation with regard to the course taken by a number of other politicians in—what was considered in India—the placing of local and provincial before Imperial considerations. Three things, he thought, must have struck everyone who had had time to look through the Blue-book which they received on Saturday morning. Those who had read the speeches of the able Finance Minister, Sir James Westland, in introducing this Measure before the Council, must have felt that with him it was forced work, at all events, that he had very scanty respect for either the statements or the method of procedure adopted by those who took a leading part in the recent Lancashire agitation. Another impression which would be produced was that not only the non-official but that some of the most distinguished official members of the Indian Council were strongly opposed to the unsettlement of what they considered had been wisely settled in the time of the late Secretary of State. In the third place, they would find that it excited not only the opposition but the strong denunciation of the mercantile classes, and the public generally throughout our great Indian Dependency. There would be found in those papers telegram after telegram, message after message, resolution after resolution, representation after representation, from leading Chambers of Commerce in India supporting the views put forward by the Chamber of Commerce in Bombay, and it should he distinctly remembered that the members of those Chambers of Commerce, more particularly in Calcutta, were not identified with, nor interested in, the Indian cotton manufacturers in Bombay or other districts of India. They based their objections on solid and incontrovertible principles, and put forward statements of fact which, he thought, to every unprejudiced mind must be irresistible. In passing, he might observe that no stronger or more powerful statement was probably ever written on an Indian subject than that put forward by the Bombay Chamber of Commerce on these duties. During his visit to India he had many opportunities of meeting with commercial gentlemen, and he found that they were very strongly impressed with the view that those changes were not dictated by considerations for the interests of the people of India, but from political considerations in the home country. He would be glad if hon. Members would turn to the very able speech of the Hon. Patrick Fairplay. That gentleman was not a cotton manufacturer or cotton merchant, but was a most enlightened merchant in Calcutta, and on this and on other questions put forward most statesmanlike views. His contention was that if there was a surplus to be disposed of it would be better in the interests of the Manchester and Lancashire manufacturers that that surplus should be devoted to the construction of railways and the opening up of India for the distribution of the Manchester and Lancashire goods, rather than to be frittered away in the manner in which the Home Government had selected. Not only did the Hon. Mr. Playfair speak strongly on the matter, but three of the Native representatives of the provinces—the Hon. Sahib Balmant Rao, representing the Central Provinces; the Hon. Ananda Charlu, representing the Madras Presidency; besides the Hon. Mr. Stevens, all spoke equally strongly. He would not weary the House by many quotations, but he might be permitted for a minute or two to select a passage from one of these speeches, namely, the Hon. Ananda Charlu. That gentleman said:— I am deeply grieved to find—I say this far more in sorrow than in anger—that our Finance Minister and the Government of which he is the adviser have allowed themselves to be overpowered by the unreasoning outcry of Lancashire, and to be tempted and drawn out of their safe and incontrovertible stronghold. I beseech the responsible Ministers who have the power, if they possess the will, to see that our interests are not ruthlessly jeopardised. To my Anglo-Indian colleagues—my non-official colleagues in particular—I have a word of earnest prayer. I know that most of their class believe in a Conservative Ministry, and that they are demonstrably partial to it. I know also that many Conservative Members who constitute the bulwark of that Ministry have entered Parliament pledged to look after the interests of Lancashire in India, I mean no offence when I therefore say, what I cannot help feeling, that my Anglo-Indian colleagues would be in the last degree reluctant to impair the bulwark. But I shall beg of them to bear in mind that while India is safeguarded against foreign inroads by the strong arm of the British power, she is defenceless in matters where the English and the Indian interests clash, and where (as a Tamil saying puts it) the very fence begins to feed on the crop. In all vital matters relating to India, England holds the whip-hand, and men, sent out to us to watch those interests on the spot, are placed directly under that whip-hand. It requires preternatural strength of conviction and fortitude to withstand the flourish of the lash wielded by that whip-hand when the English and Indian interests stand mutually opposed. I am painfully conscious that I have spoken with considerable warmth, but I could not carry a smile on any lips or play the role of a soft-tongued courtier when I am face to face with a gross injury which is in store for the masses. Not only did these representatives of the Native provinces speak, but the Lieutenant Governor of Bengal, the Hon. Alexander M'Kenzie, also strongly protested. Sir Alex. M'Kenzie said that— Sir James Westland has not dealt with what to my mind is one of the principal objections to the Measure, that is the protection and favouritism shown to one special item of our import tariff while there are undoubtedly many other items in that tariff which have equal claims to consideration. As a Free Trader myself, I shall rejoice to see the day when we revert to Free Trade altogether, but as long as our finances require us to realise duties of this kind I can see no particular reason why cotton should be more favoured than woollen or other goods in the tariff. These were the remarks of an able and trusted servant of the Crown, and he referred to them particularly, because during his visits to India he had seen that other industries there, in consequence of the cheapness of labour and their having the raw material at their doors, were seriously affecting some of our home industries. There was the paper-making industry. The time was when almost every pound of paper used in India was exported from this country. Now there were several large and flourishing paper mills in India which had obtained almost the whole of the Government contracts, and were supplying the commercial classes with the whole of their paper. The consequence of this was that there had been a very large and serious reduction in the exports of paper from this country to India, and that was one of the causes why the paper industry in this country was now seriously depressed. Then there was another industry with which he was personally acquainted. It was that in which his own constituents were directly engaged. It had been for a number of years a very large and prosperous industry.

* MR. SPEAKER

Order, order! The hon. Member must confine himself to the question of the cotton duties.

* SIR JOHN LENG

bowed at once to the ruling of the Speaker. He went on to say that it might not be out of order for him to allude to a question which he put some time ago to the Secretary for India, and in which he referred to one serious inequality in the competition between English and Indian industries. It was an industry where they were allowed in India by the Factory Act to work Saturday and Sunday, night and day all the year round. He appealed to the Secretary for India to use his influence in order that something like the Saturday and Sunday holidays which we had in this country might be established in that Indian industry; but the noble Lord relied simply on the legality of the Act, and gave no promise that he would interfere in the matter. The only other brief extract he would take from the Blue book was a telegram which summed up very much the whole of the case. It was a telegram from the Hon. P. M. Mehta, President of the Bombay Presidency Association, to the Secretary of the Government of India, and was as follows:— I am instructed by the Council of the Bombay Presidency Association to telegraph to you the following Resolution passed to-day: 'That the pending proposal with regard to Cotton Duties before the Council is calculated to cause serious discontent among people, inasmuch as, coming on top of various recent Measures, it leads people to firm conviction that their interests are being constantly sacrificed to those of a section of the British community; that it is a measure of grave political and economic impolicy to put an excise on coarse cloths worn by the poorest classes, especially when it is done after remitting a portion of duty paid by richer classes on finer cloths, and that avowedly for no existing substantial reason, but, as admitted by Finance Minister, solely for purpose of enabling Lancashire to make experiment; that intense and real excitement and indignation prevail among all classes of people at proposed legislation; and the Council venture to urge that such policy cannot fail to be extremely detrimental to the best interests of the Empire.' Large public meetings, with thousands attending them, had been held in all the great centres of population in India to protest against this alteration of the Cotton Duties. He felt interested in this question, because he was satisfied that the Lancashire agitation was based on a delusion, and was promoted by the cry that a great reduction of exports to India took place in the earlier months of 1895. Five months were a very limited period in the course of trade, and prominence was not given to the fact that in the year 1894 great speculation, great over-trading, and an excessive export of those cotton goods took place. The excess of exports to India in 1894 over the average of preceding years was not less than 357,000,000 yards, and in the first nine months of 1895 the reduction only amounted to 134,000,000, leaving an excess of 233,000,000 yards. He would like to bring another very striking fact before the House with regard to alleged Indian competition. Besides what the Bombay manufacturers sold for their own home market in India, they exported in 1893–4 about 54,000,000 yards of piece goods. That seemed a pretty large quantity, but there was imported from this country in the same period no less than 2,366,000,000 yards, chiefly from Lancashire. So that the Indian exports, which it was contended were to damage and ruin, the Lancashire trade, amounted to only one-fortieth of what they imported from Lancashire. He would detain the House no further than to read a communication which he had received that morning from a gentleman who had spent more than a quarter of a century in India, and who was very intimately acquainted with both its financial and commercial interests. That gentleman wrote:— It is very unfortunate that the British Parliament has ever felt called upon to dictate to the Government of India the way in which its revenue shall or shall not be raised. The people of India who pay the taxes have the first claim to decide how the taxes shall be levied, and what those taxes shall be. The British Parliament has been until very recently regarded by the people of India as their last resort in search of equity and justice. It has been looked up to as the palladium of their rights. Magistrates might go wrong—men are but human—those charged with the government of the country might be led astray—such things do occur, but it was felt that the pulse of the British Parliament beat strong to help the oppressed, to do justice in scorn of consequences, and that self-interest and greed for gain might be searched for vainly within its walls. I very much fear that the recent action of the Secretary of State, which has been echoed in Parliament, has gone some way to dispel this cherished illusion. It must be borne in mind that, not with standing its many millions, the average income of the people of India is extremely small. Therefore, if a tax is to touch these millions, it must be on articles of daily use by them. There is an extremely heavy tax on salt, and a duty of 3½ per cent. on all cotton piece goods, whether imported into or manufactured in India by power-looms. Government by mandate, which is the name now given to the interference of the Secretary, is not calculated to cement dependencies to the mother country, and it has certainly not tended to increase the loyalty of Her Majesty's Indian subjects, than whom it would be difficult to find a more peaceable. law-abiding, and orderly people. ["Hear, hear!"]

* THE SECRETARY OF STATE FOR INDIA (Lord GEORGE HAMILTON, Middlesex, Ealing)

said, he did not question the right of the hon. Baronet to make use of the forms of the House to call attention to this matter, but thought it was unfortunate that he had done so. It was, in his opinion, one of the most difficult and, perhaps, one of the most dangerous questions that Parliament could be called upon to deal with. The hon. Baronet had alluded to the political danger of a collision between the public opinion of this country and of India. So far as he knew, Lancashire had never objected to the Indian Government's having complete control over its taxation. What Lancashire contended for was the principle of perfect equality of treatment, and that, if India was to remain a part of the Empire, perfect equality of treatment was what Englishmen had a right to demand. So long as taxation was imposed on that principle, the political danger would disappear; but the moment it was attempted to differentiate between the industry of one country and the other, both were brought into collision. So long as the principle of perfect equality was established, there was no fear of any wide difference of opinion between those who lived in these islands and those who lived in India. His predecessor in office, in giving his assent to the tariff of taxes of 1894, deemed that he had established that perfect equality of treatment, and declared, in most unmistakable terms, that, if it could be shown that these duties were in any way unequal in their application or protective in their character, he was bound to consider any such representation with the view and desire of eliminating from the duties any vestige of Protection. ["Hear, hear!"] That was the attitude the right hon. Gentleman took up, and he was bound to say that he had endeavoured honourably to fulfil his pledges. ["Hear, hear!"] The previous duty which was in force was a 5 per cent. Customs duty upon all cloth goods and yarns imported into India; but the duty supposed to be equivalent to the Customs duties raised by the Excise was 5 per cent., not on the finished value of the cloth, but on the initial value of the yarn before it was woven into cloth, and all yarn below 20 counts was exempted from taxation; consequently it was demonstrably clear that all English goods which went to India under 20 counts paid a 5 per cent. duty from which similar goods made in India were exempt. All cloth above 20 counts paid on the finished value of the cloth against the excise levied on the initial value of the yarn alone. He did not say that the difference was very substantial, but theoretically there was a case of Protection. Anyone who looked at the able statement drawn up on behalf of Lancashire would see that the case was unanswerable—namely, that the duties as imposed did not comply with the sole condition which accompanied their imposition. In these circumstances the attention of the Indian Government was called to the fact, and they were asked to reconsider the tariff with a view to bring it into harmony with the Parliamentary condition on which alone it was sanctioned? The hon. Gentleman had referred to the hiatus which occurred between his letter of the 5th of September, and the telegram of the Indian Government of the 16th of January, and wanted to know what was done in the interval? The Government of India were acting, as far as they could, on the instructions contained in his letter, and were endeavouring to ascertain how they could possibly amend the tariff so as to bring it into conformity with the distinct pledge given to Parliament; and they were forced, after exhausting every conceivable method, to come to the conclusion that the only possible way to maintain these Cotton Duties in accordance with that pledge was to adopt the system which the hon. Baronet now condemned. The hon. Member said that he did not ask for very much. The hon. Gentleman only asked that a line should be drawn across cotton goods, and that the Government should say that, inasmuch as there was but little competition between England and India in the lower counts, all those counts should be free, and that taxation should be imposed on cloth above a certain standard. The first reason why they should not adopt that course was that it was not in the interests of the poor consumer that they should do so; and the second was that this tariff which they had sent out was, in his judgment, calculated to impose a greater burden upon the poor consumer than the tariff which it succeeded. The hon. Gentleman seemed to think that all economical and industrial forces were stationary, and that if they drew a hard-and-fast line and put a tax upon one side, that tax would leave things much as they were before. But all these forces were moving, and if they introduced merely a comparatively slight change they would cause a disturbance out of all proportion in gravity to the change. If they drew a hard-and-fast line, as had been proved over and over again, over a great mass of commodities, and said that all above a certain quality should be taxed, that would cause a rise in the price of all commodities to which that taxation applied. But they could not exempt those on the other side of the line from rising in price also. ["Hear, hear!"] They rose in sympathy. The primary object of these duties was that the Government should obtain as much as possible of the enhanced price, but the whole of the enhanced price of the yarn and cloths below 20's, which would be paid by the consumers under the proposal of the hon. Baronet, would go into the pockets of the producers. ["Hear, hear!"] The hon. Baronet was unconsciously advocating, not the interests of the poor consumer, but of the Bombay producer. Economically, his proposal was altogether unsound. As long as there was a duty on yarns it was possible to distinguish between the qualities of the yarns. Many of his hon. Friends had been connected all their lives with the cotton trade, but he did not believe that one of them would say that when yarns were woven into cloth that they could as accurately discriminate between what was above and what was below a certain line. The moment they attempted to draw such a line they would land themselves in endless difficulties. If they put a tax upon any particular article, it was essential that they should put a tax upon any substitute for it. The experiment was tried in India in 1878, and it had absolutely broken down. An exemption was made on certain classes of cotton goods, and the result was so extraordinary that he almost hesitated to quote the figures. He, however, had tested their accuracy. Before the slight alteration was made, the free goods imported from England amounted to 9,000,000 yards, the amount of duty-paid goods being 358,000,000 yards. In the first six months of the next year, the duty-paid goods fell to 323,000,000 yards, and the duty-free goods rose to 99,000,000 yards; while in the subsequent year the duty-paid goods fell to 164,000,000 yards, and the duty-free goods rose to 360,000,000 yards. Sir James Westland, in his statement contained in the Blue-book, said that he had received a letter from one of the import merchants of Calcutta, in which the writer said:— As regards, however, practically the whole of what is technically called 'grey goods,' of which the bulk of the Lancashire imports consist, they are used by the same class of consumers as take the production of the Indian mills, and if they can, owing to their passing free of duty, obtain the latter on more favourable terms than the former, then unquestionably the tendency will be towards a decrease in the demand for those least favourably situated. Further on Sir James Westland said:— Another document which I only received last night comes from Manchester. It says, after referring to the argument which the Manchester merchants put forward, in which they asserted that the relief of goods under 20's, was sure to react in the form of restricting the demand for goods over 20's. On Tuesday I had a very remarkable confirmation of my opinion in the shape of two pieces manufactured by one of the Petit group of mills at Bombay from 20's yarns, which have totally supplanted an English-made cloth, the yarns being 28's in the twist (the 'reed' threads) and 32's in the weft (the 'pick' threads) The remarkable feature of this case is the wide difference in the yarns and the 'reed' and 'pick' of the substituted and supplanted cloths. That 20's should be substituted for 22's or 24's and 12 or 13 threads per quarter inch for 14 or 15 we were quite prepared for, but that substitution should have at once gone so far we did not expect. These are two pieces of further evidence received since the Bill was introduced, and confirm the view the Government of India has taken in this matter, and on which it has based its policy, that there is no permanent solution of the difficulty in any system which will leave a dividing line at any point, and tax the cloth which is above that line, and exempt from the tax the cloth which is below it. The moment differential treatment was attempted difficulties arose. The one thing which trade was afraid of, and which paralysed it, was a fear of legislation which would alter existing terms of competition. So long as taxation was to be on perfectly equitable terms, whether the tax was raised or whether it was lowered, did not very much matter to the competitors, because both could compete on perfectly equal terms. But the moment they differentiated by legislation, the result was to bring the two competing industries directly into conflict with each other. That had been one of the troubles in the past, and, warned by the past, the Government had, after looking into this question from the Imperial and broadest point of view, felt that they must not have recourse to legislation which would bring two great industrial communities not only into trade competition, but into political competition with one another. ["Hear, hear!"] Then the hon. Baronet said that he brought forward this Motion in the interests of the poor; but, if they looked for the source of such proposals, they could often be traced to the Bombay millowners. He, for one, had not the least objection to the case of the Bombay millowners, or any other millowners, being properly represented before that House, and they were entitled to perfect justice and equality of treatment; but it should not be said that their case was put forward in the interests of the poor. Had the hon. Baronet ever attempted to find out what proportions of cloth the power-looms in India supplied to the population? If not, he would be surprised to hear how small the proportion was. He had some figures showing the proportions of yarn consumed by the power-looms and by the hand-looms, which he would lay before the House. The power looms, it was estimated, consumed 78, 000,000 lbs. of yarn, and the hand-looms consumed 311,000,000 lbs. of yarn. It was further estimated that the imports from Lancashire amounted to no less than 308,000,000 lbs. of yarn; and, therefore, out of nearly 700,000,000 lbs. of yarn woven into cloth, the power-looms of India absorbed only 78,000,000 lbs., and if exported cloth be deducted, they scarcely supplied 10 per cent. of the cloth which was consumed in India. It was quite a mistake to assume, as the hon. Baronet did, that the coarser cloths were worn by the poor, who, whether for reasons of cost or of greater durability, bought the cloths imported from England. The tariff which had been introduced reduced the burden of taxation upon the consumer, the tax upon imported goods having been reduced by 3½ per cent. He had not a reliable statement of what proportion of imported cloth was consumed by the poor of India, but he was perfectly certain that more than half of it was bought by them. The enormous mass of yarn utilised by hand-looms was free from taxation, and consequently its products were cheaper than they had been. ["Hear, hear!"] He thought he had shown that the proposal of the hon. Baronet was one to which the House could not assent. He owned that he felt great satisfaction at having been able to bring about an arrangement that put an end to the agitation which previously existed, and he believed that arrangement was a perfectly fair one. The hon. Gentleman who spoke second told them that a great many people in India objected to it, but he did not tell them what their arguments were. It was the misfortune of these trade disputes that the natural sympathies of those residing in the localities where the industry was situated were always in favour of that industry. It was a matter of sentiment rather than of argument, and that had in the past constituted the main danger of this question. So far as he knew the agitation had absolutely quieted down. It was seen now that they had made a just and fair settlement, and the proposal of the hon. Baronet, though a small one in itself, would in reality knock away the keystone of the system which had superseded that which was previously in force. For these reasons he hoped that the House would not only reject the proposal which the hon. Baronet had made, but, inasmuch as he had brought forward no arguments in support of it, that they would not consider it necessary to continue the Debate at any length. In supporting the Government the House would endorse the view that they had contrived to bring about an equitable and judicial solution of as contentious a matter as could be brought before any Government. [Cheers.]

SIR HENRY FOWLER (Wolverhampton, E.)

said, the three speeches which had been delivered had severally illustrated the extreme inconvenience of the mode in which this question had been brought before the House. There had been no notice upon the Paper, and there had been no intimation, except a rumour in the Press, that possibly this question might be brought forward within 48 hours.

* SIR W. WEDDERBURN

said that he had sent an intimation to the Leader of the Opposition.

SIR H. FOWLER

said, the right hon. Gentleman only received that intimation that morning, and he did not conceive that to be an intimation to the House, which was entitled to have full notice. This question, the gravity of which it was impossible to exaggerate, had been brought before them in a manner which he thought prejudiced it, and which would tend to produce an unfortunate effect in India. He should be prepared, at the proper time and under proper circumstances, to defend his own action, and also to criticise what had been done since he held office; but hon. Members had not had this Blue-book in their hands many hours, and for his own part he candidly confessed that he had not had time to carefully read it. He knew nothing of the correspondence which had passed between the noble Lord opposite and the Government of India; he was only aware that certain proposals had been adopted which really carried out in their main character his own original proposal. The old controversy had been raised between Lancashire and India, and the question as to the limit of the amount of the Excise Duty which had been levied by the Government had also been raised. He wished to point out to the House that these were grave questions which ought to be discussed in a regular manner, so that the House could arrive at a decision which would carry some weight with it. They were asked to vote upon the question "That this House do now adjourn"; but could any body undertake to explain to the people of India what that meant? Practically it was a vote of censure upon the Government for the action they had taken, and which had received the approval of the Legislative Council of India. It was suggested that the noble Lord should withhold his assent from this Bill, which, no doubt, originally emanated to a great extent from himself, or had his full approval. He had no doubt the noble Lord had followed what Lord Salisbury laid down in his celebrated Dispatch as to the relative positions of the Legislative Council and the Secretary of State, and the great mischief which would accrue to the public interests, and especially to commercial interests, if there was any collision between these two powers. No doubt the Legislative Council fully understood what the noble Lord was going to do. They could not suppose that the noble Lord was going to upset the work of his own hands, or that the Legislative Council was going to repeal what it had just passed. If the noble Lord were to adopt the suggestion that he should arbitrarily annul what he had presumably assented to only within the last three months, that would be a course deserving the censure of the House, and would be without precedent and incapable of defence. ["Hear, hear!"] He deprecated this premature, immature, and inconclusive Debate. He was, he believed as strong a Party fighting-man as any man on that side of the House, but he never would consent to, throw India into the vortex of our Party politics. At this moment, when they had a fight with the Government on a question in regard to which strong Party feeling was aroused, and when they were on the eve of another Party political fight of perhaps greater magnitude, there was no pressing necessity to throw this question into the cauldron of political strife, and if it were done it would, he Relieved, produce a very unfortunate effect. He hoped his hon. Friend would not go to a Division, but if he did the result would be that the House, without any opportunity of fairly and fully discussing the Papers, would commit itself to an approval of the action of the Secretary of State. The hon. Baronet said that the action of the noble Lord was very much disapproved in India; he knew nothing at all about that, but if that were so, how important was it that their decision upon this question should not be arrived at in a hurry? The discussion of this question ought not to have a Party aspect. He should decline to defend his own action, or censure that of the Party opposite. He hoped they should not have a revival of the controversy between Manchester and India, until they had an opportunity first of seeing and reading what Lancashire wants, and what was the reply of the Chambers of Commerce, and especially of India, as to the case put forward by Manchester. Lancashire Members had a right to be heard. Reference had been made to the admirable speech of the Finance Minister of India, and by chance he had come upon this passage:— I have heard it argued, and it has been argued to-day, that they are in some respects precisely the classes who ought to contribute to present necessities; inasmuch as the same fall in the rupee which has rendered it necessary for us to enlarge our revenue has been to them a source of advantage. To them it means higher prices for their agricultural produce, and more active trade in carrying it away to the markets. Those who argue about oppressiveness of taxation and the inability of these classes to meet the demand, altogether forget, it seems to me, the figures with which they are dealing. The whole tax which we intend to obtain by cotton duties is put down at 105 lakhs of rupees; the number of people who pay it—for nearly every soul in India wears cotton cloths—is something like 287,000,000; and the result of these two figures is to show that the average contribution of each person to the tax is about seven pies, a little over half an anna. It is a tax which by the nature of its application is to some extent graduated according to the means of the payer, and we may safely say that the vast mass of the population to which I have referred will not be called on to pay on the average more than half an anna, and that the poorest classes—those who cannot afford to indulge in even such luxuries as a good dhuti—will not have to pay, even if they used taxed cloth, more than a quarter as much, or, say, one pie and a half. To talk of this as oppressive taxation is a misuse of words. ["Hear, hear!"] He was sorry to have interposed in that Debate, but he thought it due to the House to make these few remarks. ["Hear, hear!"] The changes made by the noble Lord were of great gravity, and they could not be properly discussed on a Motion for the Adjournment. ["Hear, hear!"]

MR. GEORGE WHITELEY (Stockport)

agreed as to the great inconvenience that must ensue if this subject was to be sprung upon the House in this manner. The Motion appeared to be based upon the argument that the consequence of the alteration of the duties would be an increase of taxation upon the poor of India. He should like to know at what percentage the hon. Baronet fixed the poor of India? He did not think he should be over-stating the facts if he were to put it at 80 per cent. or 90 per cent., and yet the noble Lord had pointed out that the amount of duty-free goods consumed in India previous to the alteration of the duties was only one-tenth of the total consumption. Unless the hon. Baronet was prepared to argue that the poor classes of India were not more than one-tenth of the whole population, the superstructure he had raised was entirely dissipated. ["Hear, hear!"] At present all the people of India were called upon to pay was 3½ per cent. additional taxation upon one-tenth of their consumption, whereas they were relieved to the extent of 1½ per cent. upon nine-tenths of their consumption. The position of Lancashire was clear. They had pointed to the increasing and fierce competition taking place between India and Lancashire. They had showed that, whilst they in Lancashire had a retrogressive and stagnant trade, in India there was a developing and progressive trade. They had stated that, while in Lancashire millions of spindles were stopped, in India the cotton factories were paying dividends of from 10 per cent. to 25 per cent., and that during the year subsequent to the imposition of these duties the shares of the Bombay mills increased in value to the extent of 1,600,000 tens of rupees. Taking those facts into consideration, it could not be argued that India was suffering. It had been contended and proved that the duties were protective. Up to 20's counts they were absolutely protective. The hon. Member gave an example of the way in which an inferior article made in India was made to pass as of Lancashire manufacture, but said he would not enlarge upon this matter, as it would be brought out if a Debate rose upon the question. They had got what they claimed and asked for. They had asked that their position should be rendered identical with that of the Indian manufacturer, and that there should be an equalisation of duties. In granting them that, he thought the noble Lord had removed the bone of contention between Lancashire and India—["hear, hear!"]—and they now joined hands with the Indian manufacturers in an attempt to get the whole of the duties abolished. The imposition of the duties in India had been referred to as costly and vexatious. It had also been said that this was protection in favour of the handloom manufacturer against the power loom manufacturer. A duty of 3½ per cent, was protective, in the mind of the hon. Baronet, when it came between the power loom manufacturer and the handloom manufacturer, but, according to his contention, and that of many hon. Members on the same side of the House, a five per cent, duty was not protective when it was imposed upon Lancashire goods against Indian goods. ["Hear, hear!"] Agitation and excitement had, no doubt, taken place in India, but he believed, from representations he had had, that they had died down. They also took place in Lancashire when the people felt they were being treated in a distinctly unfair manner. ["Hear hear!"] He believed the present arrangement was one agreeable to the manufacturers of both Lancashire and India. Whether the duties rose or fell was a matter of no importance to Lancashire manufacturers so long as they were not placed at a disadvantage in competition with Indian manufacturers in the Indian markets, and they all paid alike. [Cheers.]

MR. PHILIP STANHOPE

suggested to the hon. Baronet the propriety of withdrawing his Motion, as he considered that the time of introducing it was not judiciously selected. He agreed with the hon. Member for Stockport as to the reasonable measure of contentment resulting from the action of the Government in altering the duties, but he still hoped to see them entirely removed, as altogether undesirable. That question had best be discussed, however, when the financial affairs of India were debated, and he hoped that that time would be early. The hon. Baronet the Member for Dundee, a little exercised in his mind by what had taken place in the House last summer, took a trip to Bombay last winter, dined with a number of gentlemen connected with the trade of Bombay, and came back impressed with the notion that the Lancashire people were most selfish. On that point he must have some better evidence than that supplied by the hon. Baronet.

THE FIRST LORD OF THE TREASURY rose in his place, and claimed to move, "That the Question be now put."

* MR. SPEAKER

I hope it will not be necessary to put such a Motion after the appeals which have been made from both sides of the House.

MR. T. LOUGH (Islington, W.)

thought his hon. Friend would act wisely if he withdrew his Motion, but he hoped the Leader of the House would give them a promise that the Indian Budget should be brought on at a time when this subject could be adequately discussed.

THE FIRST LORD OF THE TREASURY

said, that no one was more anxious than he that the Indian Budget should come on at a time when Indian matters could be adequately discussed; but he was not the obstacle to the progress of business. He felt that this was not a time when this subject could be properly discussed, and, therefore, he hoped the House would dispose of the Motion without a Division. ["Hear, hear!"]

* SIR W. WEDDERBURN

understood the right hon. Gentleman would do his utmost to bring on the Indian Budget on an early day, and, therefore, asked leave to withdraw his Motion.

Motion, by leave, withdrawn.