HL Deb 13 March 1905 vol 142 cc1131-64

who had given notice "To call attention to the statement of the Secretary of State for India at Shere, as reported in The Times of 14th December last, that 'They got infinitely more consideration from foreign countries for Indian products than we did for British products. The reason for that was that our hands were tied here, and that they were untied in India; and to ask His Majesty's Government— (1) In what sense the hands of the British Government are less tied in India than at home; (2) whether as a matter of fact there is any country that admits any Indian products on a lower tariff than the corresponding British products, if so, what country and what products; and (3) whether India enjoys in the French market the full privilege of most-favoured-nation treatment which the United Kingdom enjoys, and if not, why not," said: My Lords, in calling your Lordships' attention to the speech of the Secretary of State for India I would point out that I have put down on the Paper only a part of what the right hon. Gentleman said relative to this subject; it would, perhaps, be fairer to him that I should read to your Lordships the context. The Secretary of State for India, speaking at Guildford, made use of this language. He said— They had got a revenue tax on all imports in India; they had got the power in India to put on any tax they pleased on any imports, and what was the result? They got infinitely more consideration from foreign countries for Indian products than we got for British products. The reason for that was that our hands were tied here and they were untied in India. The Secretary of State asked that this country should be allowed to arm itself and untie its hands. That speech, I would remind your Lordships, came at rather a curious psychological political moment. Another sort of political kite had been started of putting a regular tax on all imports in conjunction with Mr. Chamberlain's proposal. Upon the top of that the Secretary of State for India went down to address his constituents at Shere, and if his speech meant anything at all or had any political significance at all—and, of course, a speech by the Secretary of State for India one would suppose to have political significance when relating to India—it is clear that the Indian case was alluded to as a case which we ought to follow, and the taxation of imports in India was held up as being not a necessary evil in order to obtain money, but a great advantage to India and a policy which in itself was most desirable for India and one which we ought to follow. The right hon Gentleman went on to say— Were we so hide-bound by tradition that we were to say what is good for this country? It seems to me only fair that some reference should be made to what has occurred in the past in regard to the question of taxes upon imports, because I think I shall be able to show your Lordships that it has been the policy not of the Liberal Party only, but of the Conservative Party, to look upon the taxation of imports as not desirable in itself, but only from time to time to be resorted to in order to meet the exigencies of Indian finance. I shall not occupy your Lordships' time long on this point, although it is one which might be discussed at considerable length; but having gone into the matter very carefully I think I can bring before your Lordships a few facts which will place the situation clearly before you and explain exactly what has happened in the past.

From 1860 to 1875 there existed in India a 10 per cent, ad valorem duty on all imports. In 1875 the Government of Lord Northbrook reduced the duty to a general average duty of 5 per cent.; but at that time there arose a very considerable agitation in Lancashire against this 5 per cent, duty upon imports which the Secretary of State for India would lead the country to suppose has been for some time generally accepted as a great advantage to India and to this country. I should like to call your Lordships' attention to a despatch written by the late Lord Salisbury to the Governor-General of India on May 31st, 1876. Those were the days, of course, when the Conservative Party were not a protectionist Party. I venture to quote that despatch, because I think the authority of Lord Salisbury on this matter will be generally accepted. As I have said, a considerable agitation arose in Lancashire because it was said that this 5 per cent. duty upon English cotton imports had the effect of giving the Indian manufacturers an artificial advantage over Lancashire manufacturers. Lord Salisbury, in the despatch to which I have referred, used this language— The influences to which I have been referring are the natural advantages which Indian industry possesses— The advantages of having manufactures on the spot, cheaper labour, and a home market— and with which no other advantages can permanently compete. It is true that in their presence the effect of the 5 per cent. duty is probably insignificant, but this is usually true in the case of all protective duties. They may be an important constituent in the prosperity of an industry whose existence is artificial, but an industry like the cotton manufacture of India, which has a real and independent vitality, receives little or no benefit from a protective duty. In such cases the consumer is a sufferer in respect of the price and still more in respect of the quality of the article he consumes without any real advantage to the industry which is protected at his expense. I do not think you can have the case on behalf of free trade put more clearly or better than that. The House of Commons itself—at that time it was a Conservative House of Commons, being under the Government of Lord Beaconfield—passed on July 11th, 1877, the following Resolution without a division— That the duties now levied upon cotton manufactures imported into India, being protective in their nature and contrary to sound commercial policy, ought to be repealed without delay so soon as the financial condition of India will permit. In 1879 Lord Lytton was Viceroy of India, and I do not suppose that anybody can say that that distinguished man had any what are called "little-England" tendencies. He enjoyed to an extraordinary degree the personal confidence and shared the political opinions of Lord Beaconsfield. And what was the Indian policy of Lord Lytton at that time? On March 13th, 1879, Lord Lytton abolished the import duty on cotton goods except on the finest qualities and on April 4th, 1879, the House of Commons again dealt with the question and passed the following Resolution, also without a division— That the Indian import duty on cotton goods ought to be abolished as unjust to the Indian consumer, and we accept the recent reduction in the duties as a step towards their total abolition, to which Her Majesty's Government are pledged. A step further was taken in March, 1882, when, on the advice of Lord Cromer, my noble friend Lord Ripon's Government abolished all import duties except an import duty on salt and liquor, which they were obliged to retain because there existed on both those articles a heavy internal Excise duty. The present system of import duties was resorted to in 1894 only as a means to obtain revenue, and, as the easiest form of taxation, owing to financial embarrasments due to the serious fall in the gold value of the rupee.

I have referred to the history of the case in order to show that in the minds of great Indian statesmen of all Parties this import duty on cotton, which Mr. Brodrick held up as a precedent which we ought to follow, is one which has not been universally or generally acceptable, but has only been resorted to because of the necessity of raising revenue for India. I should like, in connection with this matter, to quote some very remarkable figures. The effect of the abolition of this duty upon merchandise—that is to say, the effect of the policy of my noble friend Lord Ripon—was this, that from 1878, when they first began to reduce the tax upon imports, to 1881 and 1882, when the duties were swept away, the value of the imports into India amounted to £47,000,000, whereas their value from 1881–82 to 1884–85, when the duties had been abolished, increased to £51,000,000.

I have endeavoured to show that the imposition of these duties was a matter of necessity and not of choice. But it should be borne in mind that the Secretary of State for India was speaking inaccurately when he stated that at the present moment there is a general duty of 5 per cent placed on all articles. That is not the case. There are the most striking exemptions, and it is just these exemptions that destroy the use of the Indian case as affecting the fiscal policy of this country. What are the things exempted at the present moment from any import duty in India? Why, grain, coal, railway material, and raw wool. That being so, it is really somewhat surprising that for what I can only suppose to be Party political purposes the Secretary of State for India should make use of the Indian case as one to influence and govern our fiscal policy in this country. In the cases to which I have referred, what passed through the mind of Lord Salisbury when he was Secretary of State for India, and no doubt in the same way through the mind of Lord Lytton and of my noble friend below me, the Marquess of Ripon, was that in all these matters you have to consider very seriously and gravely the interests of the consumer. The population in India, as we know, is poor as compared with the population of this country. The average income per head per year in India amounts to only £2, while it has been computed that in this country the average income amounts to between £30 and £40.

There is another consideration. The Secretary of State for India referred to the Indian precedent as one which enabled the Indian Government to retaliate against a foreign country. I have endeavoured to show, and I think I have succeeded in showing, that the history of this question as regards India is entirely different from what one would judge from the speech of the Secretary of State for India. The great statesmen who in the past have been connected with India have only reverted to these import duties as a means of revenue and not as a feature in general financial policy, and I think that the opinion of present-day statesmen responsible for India is equally at variance with the views of the Secretary of State for India. Your Lordships have no doubt read with great interest the Paper on preferential tariffs which represents the views of the Indian Government. In that Paper they deal very exhaustively and very carefully with the question of retaliation. In Paragraph 10 you will find this statement of policy— If Indian industries are in need of, or should now desire, a measure of protection, protective measures would necessarily seriously affect imports from the United Kingdom, and would only in a secondary degree affect those from foreign countries. We cannot imagine that the merchants of Lancashire or Dundee, to mention two interests alone, would be likely to acquiesce in such a course even though it were accompanied by still higher duties against the foreigner, or that it would be accepted by the Home Government. These words clearly show that, in regard to India, our hands and their hands are tied by general considerations. While Indian statesmen have always had before them the great problem of the poverty of the people and also the great interest of the consumer, they have always been conscious of the fact that our fiscal policy in regard to India cannot be governed entirely without consideration of the views at the time of the House of Commons; and, as I have mentioned. the House of Commons have repeatedly interfered in the matter and insisted that their point of view should be considered. The letter from the Government of India which I have quoted goes into the particular question that not only from a political, but from an economic, point of view, retaliation is in itself a very dangerous expedient. It says— We are fully alive to the value of the safeguard that we possess in the fact that so much of our exports consists of the materials used in foreign industries, and we believe that, in normal conditions, foreign nations will be deterred by the powerful motive of self-interest from striking at us lest in doing so they might injure themselves. But it would seem to us to be unwise to rely too much upon the hypothesis that India enjoys an effective monopoly in any large number of articles which are essential to the existence of foreign industries. Such a monopoly we at present hold with regard to jute— I am informed, however, that jute can now be grown with advantage in China— and perhaps the coarser classes of jute manufactures, as also in til seed, lac, teak wood, myrabolams, and mowra, while in some other articles we enjoy advantages of the nature of a modified monopoly owing to their limited production in but very few countries. With regard, however, to the greater portion of our exports, they compete successfully in foreign markets by reason of their cheapness rather than of their quality or kind. We cannot feel confident that the conditions and requirements of foreign industries have yet been ascertained with the precision and fulness necessary to make them a sufficiently broad and stable basis on which to rest a fiscal policy of very problematic value to India, whilst the consequences of failure might result in irreparable disaster. I do not, of course, attempt to say what was in the mind of the Secretary of State for India, but it has occurred to me that when he made the speech to which I have referred he may have had in his mind an Act passed in 1899 to amend the Indian Tariff Act. It is quite true that that Act did confer upon the Indian Government certain retaliatory powers, but, as I read the Act—and I should very much like to hear what the noble Marquess the Under-Secretary of State for India has to say in regard to the matter—it only applies to bounty-fed articles, and does not give the Indian Government a general power of retaliation absolutely new or novel in principle. It is only part and parcel of, and gives effect to, the policy of the Sugar Convention of the time, under which it will be remembered India obtained from the French Government the same treatment for its Indian products of coffee and sugar which the French Government gave to the same Brazilian products. But I should like in this connection to remind your Lordships that we on our part did not follow the principle of retaliation, but gave not only to France but to other foreign countries the same advantages which France enjoyed by means of that exchange.

The last Question standing in my name on the Paper refers to the French market. In it I ask the noble Marquess whether India enjoys in the French market the full privilege of most-favoured-nation treatment which the United Kingdom enjoys, and if not, why not? I hope that I may have been wrongly informed in the matter, but the only information I can find dealing with this point, which is a very important one after the statement of the Secretary of State for India, is that contained in the Board of Trade Return of 1904. I find in that Return, on pages 319 and 320, that the products of the United Kingdom do enjoy the most-favoured-nation treatment in France; that France grants the minimum tariff to certain articles, the principal of which are coffee and tea, to British India, but does not grant to India a generally most-favoured-nation tariff upon all of them, and that, with the exceptions indicated, articles imported from British Colonies and India are subject to the French general tariff, which is, of course, very different from most-favoured-nation treatment. I hope the noble Marquess will be able to inform us that since that statement was published in the Board of Trade Return of 1904 we have been able to make arrangements with the French Government to obtain better treatment for Indian and Colonial products. I beg to put to the Government the Questions standing in my name.


My Lords, before the noble Marquess replies I have a Question to ask arising out of the statement made by the noble Earl. I understand that the Secretary of State for India rejoiced in the fact that India was placed in a position differing from this country in that she had within her grasp means whereby she could employ the weapon of retaliation against countries which did not fiscally commend themselves to the Government of India. In 1902, as the noble Marquess well knows, there was a Sugar Convention, and Russia declined to join that Convention. Russia protested that she did not place any bounties upon the exportation of her sugar, and considerable correspondence took place between the noble Marquess who leads this House and the Russian Government as to whether their statement was correct, and I think the noble Marquess proved to demonstration that the Russian Government did indirectly impose what, according to the Convention, would be deemed to be a bounty upon the exportation of their sugar. In the Commercial Treaty with Russia of 1859, which is still in existence, we have a most-favoured-nation clause, and the result is this, that while by the treaty products of the United Kingdom and the Possessions, namely, India, are entitled to the same treatment in Russia as the most favoured nation, on the other hand, we, Great Britain, contract that no higher duty should be levied on any article coming from Russia into the United Kingdom and Possessions than is payable on the importation from any other country. Russia has urged that it is a breach of the most-favoured-nation clause of their treaty to levy a countervailing duty upon Russian sugar. She has retaliated by placing a prohibitive duty upon the importation into Russia of Indian tea.

Tea is one of the staple industries of India, and on the borders of India the trade with a nation of some 140,000,000, all of them large tea drinkers, and a very large prospective market which was growing at the time and might have developed into very large proportions, has been closed to Indian tea. It was thought at one time that this was an insignificant market, but it has been shown that a great deal of Indian tea gets into Russia through the port of Hamburg, and therefore the Board of Trade Returns showing a very small amount of Indian tea going into Russia direct are misleading. India, we are told, has this wonderful weapon of retaliation in her hands. She has seen a large prospective market closed to her by Russia. Now, my Lords, if freedom to retaliate is enjoyed by India and if this is so admirable a weapon wherewith to reduce to terms a nation that has fiscal opposition to trade with the home country, I ask whether the Government proposes to put that weapon of retaliation into force. India has the revolver which the noble Marquess who leads this House desired. She has a country at which she desires to strike. It was threatened a short time ago that this country was going to use the revolver and retaliate by placing a practically prohibitive duty upon the importation into India of petroleum from Russia. If the noble Marquess and his Government have the courage of their convictions, if this is a weapon not merely to be brandished but to be used, I ask are they going to retaliate upon Russia? Are they, in answer to Russia's retaliation on India, going to prohibit the importation of petroleum into India? If not, my Lords, I do not think that the love they proclaim for the weapon of retaliation is borne out by their action. And if they are going to put a prohibitive duty on petroleum, I should like to ask the noble Marquess what he thinks will be the effect? Does he suppose for a moment that Russia, in answer to the explosion of that weapon, is going to alter her fiscal policy in regard to the importation into her country of Indian tea? If that is not to be the result, the net result of these two retaliatory measures will be that on the one hand Indian tea will be excluded from Russia, and, therefore, Indian tea growers will suffer, and, on the other hand, petroleum will be excluded from India, which will mean higher prices for what is a very necessary article to every poor inhabitant in India. I should like the noble Marquess to indicate to us whether he proposes to use this weapon which is now in his hand, and what he thinks will be the result.


My Lords, it is not generally supposed to be a very congenial task to be called upon to explain the speech of another individual, to define his opinions, to interpret his motives, or to guarantee the accuracy of what he said; but I have no hesitation on this occasion in saying that the Secretary of State for India has no reason at all to doubt the general accuracy of the report of his speech to which the noble Earl has called attention. As your Lordships will readily recognise, it is clearly a very compressed report, a condensed description by the reporter who furnished it to The Times, of what my right hon. friend said; but I am perfectly ready to admit in essentials it is an accurate representation of speech. The noble Earl quoted at the commencement of his speech the sentence preceding the words he has put down on the Paper. In his notice the noble Earl calls attention to the statement of the Secretary of State for India that— They got infinitely more consideration from foreign countries for Indian products than we did for British products. The reason for that was that our hands were tied here, and that they were untied in India. It is right, however, that the whole context should be placed before your Lordships in considering this matter, and accordingly I will read the passages which led up to the extract quoted. My right hon. friend said— For his own part he wanted the largest amount of free trade which could be got. When he said that he was told that he was a platitudinarian. He sat down with great satisfaction under that designation, because he thought the time had come for us to look back fifty years and see whether any one of the conceptions which were formed by those who then advocated the measures by which free trade was secured had been realised. He was an adherent of Mr. Balfour in this matter, and those of that way of thinking had endeavoured to see whether they could not bring down these tariffs which were placing 60 per cent., in some instances, on the products of this country when sent abroad. What was asked was that the country should be allowed to arm itself and untie its hands. He represented India, which was a free-trade country. They had got a revenue tax on all imports in India; they had got the power in India to put on any tax they pleased on any imports. What was the result? Then follows the sentence which appears in the notice placed on your Lordships' Paper by the noble Earl. Before I deal with the Questions put to me, I think it necessary that I should draw your Lordships' attention to the fact that in the second Question the noble Earl has interpolated a very important word which does not exist in the report of my right hon. friend's speech. He asks whether, as a matter of fact, there is any country that admits any Indian products on a lower tariff than the "corresponding" British products, and if so, what country and what products. The Secretary of State never used the word "corresponding."


I did not say he did. I have asked for specific Answers to these Questions.


The inference any one would draw is that the noble Earl framed his Questions on the speech of my right hon. friend.




I regret that I should have misunderstood the noble Earl's Questions, but whether or not the Questions are framed on my right hon. friend's speech I repeat that the word "corresponding" cannot be inferred from anything the Secretary of State said. The noble Earl has traversed a good deal of ground. He has dealt with subjects more or less remotely connected with the Questions on the Paper, but very slightly relevant to the speech of the Secretary of State. In the first instance, the noble Earl asks in what sense the hands of the British Government are less tied in India than at home. My answer to that is that the Government in India have greater freedom in the matter of tariff than is permitted to the Executive Government at home in three important particulars. The first is the statute law, the second is the character of Indian import tariffs, and the third is the nature of the import and export trade of India. With regard to the statute law, Section 23 of the Indian Sea Customs Act lays down that the Governor-General in Council can, without resort to the Legislature, exempt, by notification in the Gazette, goods imported to or exported from India from the whole or part of the Customs duties. This power has been exercised in two notable instances, the first of which the noble Earl has already alluded to. In 1878–1879 Lord Lytton, who was then Governor-General, repealed the duties on cotton manufactured goods and on a large number of other articles; and, more recently still. Lord Curzon has reduced from 5 per cent. to 2½ per cent. the duty on vinegar and copperas in order to give effect to the convention which was recently concluded with France by which India acquired the benefit of the French minimum tariff on colonial produce. By the Indian Tariff Act the Governor-General in Council, by notification in the Gazette, is empowered to place countervailing duties on bounty-fed articles the produce of any country, dependency, or colony on import into India. Neither the power to abolish or reduce existing duties, nor the power to impose countervailing duties, belongs to the Executive Government at home without reference to Parliament.

I should, I think, acknowledge quite frankly that the Indian Government, notwithstanding the statutory powers which it possesses, is under the control of the Secretary of State, who is himself responsible to Parliament for what he sanctions and what he does. I would further observe that the practice has generally been—and where it has been thought advisable—for the Government of India to ascertain the views of the Secretary of State in any contemplated exercise of its powers. But Parliament in its wisdom has always recognised that India should have a wide and generous exemption from interference in the management of its own taxation in its own interests. Further, Parliament, with great discretion, has refrained from interference with the imposition of taxation by the Indian Government, an interference which it very wisely and properly exercises with regard to the imposition of taxation by the Government at home.

Turning to the character of India's import tariff, I would observe that a revenue duty on a large number of imported articles is a weapon ready to the hand of the Indian Government that does not exist in the case of the Home Government, which confines its duties to a very few specified articles. The import tariff in India affects a large number of small articles, not, it is true, bringing in a large amount, and I submit that it would be possible without inconvenience to the finances of India to make concessions in regard to a large number of these articles in any question of negotiations with foreign Powers.

India also obtains to a certain extent greater freedom than this country from the nature of her import and export trade. The exports of India, as compared with her imports, for the five years ended 1903, stand in the relation of three to two, whereas the exports of the United Kingdom, as compared with our imports, bear the relation of three to five. It must be borne in mind, in discussing this question, that while Indian exports are composed to the extent of very nearly one-half of raw material, and, if you add food stuffs, to the extent of quite three-fourths, the exports from the United Kingdom consist to the extent of four-fifths of manufactured goods. I venture to submit that there is not much that is "corresponding" in these figures.

It should also be remembered that the protective tariffs of foreign countries affect India, engaged as she is in the production of raw material, far less than they do those countries which are engaged in the export of manufactured goods. Moreover, India does enjoy a modified monopoly in regard to certain articles which she produces; and I submit that this affords her a weapon ready to hand as a means of retaliation, if she is attacked, by raising the prices of these exports which are themselves of supreme or vital necessity to the countries which import them. The noble and learned Lord who spoke just before me, asked a Question with regard to retaliatory tariffs. He instanced the case of the Russian surtax on tea, and I understood him to ask why the Indian Government had not put their powers into force in dealing with this increase of duty. It is perfectly true that the Russian Government have raised to a very large extent their duties on Indian and Ceylon tea imported into Russia; but it was found on examining the case that while these duties were operative on tea entering Russia by Odessa, that was not the case with regard to tea entering Russia by Dalny and by Vladivostock. While the Indian Government would have been perfectly prepared, as the noble and learned Lord suggested, to take the case of petroleum in hand——


I did not suggest it.


They recognised that the import of tea into Russia was, as a matter of fact, not affected; and I believe I am right in stating that the Returns for the last nine months show an actual increase of the tea trade in that direction. With regard to the second Question which the noble Earl asked, I have ventured to submit to the House that the use of the word "corresponding" is misleading. The contention of my right hon. friend, which, I submit, is borne out by the facts I have ventured to state to your Lordships, was that India does obtain for her staple products of raw material greater consideration from European countries than the United Kingdom obtains for its staple products of manufactured goods. The staple products are not identical and cannot be corresponding. The fact remains, however, that Indian exports are more lightly taxed than the exports of the United Kingdom. I will read to your Lordships two brief extracts from the despatch of the Government of India to which the noble Earl has already alluded. They state, after going through the facts, that— The net result is that Indian exports, to a value exceeding £38,000,000 sterling and approximating to one-half of the entire volume of our export trade, are admitted free of duty into the consuming markets, while of the remainder a considerable proportion is either subject to relatively moderate duties, or, as in the United Kingdom, to duties imposed for purely revenue purposes and with no attempt to differentiate against us. And at the end of their Report they say— All that we seek is that we shall not be pledged in advance to accord equal treatment to the imports of all countries alike, irrespective of whether they penalise our exports or not. And we are hopeful that the mere announcement that our hands are free will of itself suffice to maintain us in the enjoyment of that considerable measure of free exchange which we already possess, and from time to time even to extend it. Now, my Lords, I come to the third Question put by the noble Earl, and it is one which requires a slight explanation. I have to inform the noble Earl that France does not extend to the colonial dominions of those countries which enjoy the full privileges of the most-favoured-nation treatment the same privileges that she extends to them, and the reason why she does not give the most-favoured-nation treatment to all goods of Indian origin is that she declines to extend to countries in the East, where labour is cheaper, those advantages. But I submit that, as a matter of fact, India occupies a far more favourable position with France in regard to her products than the United Kingdom. The French Government, in framing a minimum tariff applicable to European States, have framed it with a consideration of the conditions which regulate production in Western countries. Their rates represent what they believe to be the adequate protection of French industry against competition in Western countries, and consequently, as a matter of traditional policy, the French Government declines to extend to the colonial dominions of the countries with which she trades the most-favoured-nation treatment which she gives to the mother country. That is the established policy of France, but it has been very considerably modified by India in the case of the convention to which allusion has already been made this evening.

Although it is not a matter that arises on the question, I wish to make it plain that I have not ventured, in what I have said, to suggest any desire on the part of India to engage in a war of duties. What I do contend is that, while the nature of India's trade, and the character of her tariff, make her less vulnerable than the United Kingdom, she owes a large portion of her immunity from impediments to trade to the fact that she is free, if she wishes it, to retaliate. I have to thank your Lordships for the patient indulgence with which you have listened to me on a subject of which, while I know it excites great interest, the details cannot be said to be interesting. I will not venture to hazard any statement as to whether the Answers I have given may or may not be satisfactory to the noble Earl. but I trust, at all events, that I have made it clear to the House that the Secretary of State for India was both accurate in what he said and justified in the conclusions he drew.


My Lords, I do not agree with the noble Marquess the Under-Secretary of State for India that the subject to which my noble friend behind me has called attention is one the details of which are not interesting.


I should have said the figures.


Nothing seems to me to be of more vital interest to the prosperity of India than the question of the use which is made of those powers which the noble Marquess has accurately stated the Executive Government of India possess, and which the Government at home have not. The fact that the Executive in India have the power of exempting articles from duty, of reducing the duty, and of imposing countervailing duties, makes it doubly necessary for us to keep a watchful eye on the proceedings of that Government, and also fully justifies my noble friend in calling attention to words which reveal something of what in literary circles is called the mental attitude towards these problems of my right hon. friend the Secretary of State for India. The noble Marquess alluded to the Act XIV. of 1899, which gives the Governor-General of India in Council the right to impose a countervailing duty to the extent to which a bounty in a foreign country favours exportation therefrom. The Act was applied to sugar and the result shows clearly the danger and the risk of entering on a countervailing policy. In 1902 the Financial Member of the Government of India came down to the Indian Legislative Council and had to admit that the policy of the countervailing duty introduced by the Act of 1899, as regards sugar, had completely failed, and he was obliged to propose an additional duty in order to meet the bounties which resulted from the cartels or trusts organised by the sugar growers and manufacturers of Germany and Austria. No doubt a measure of that kind was more easy to pass through the legislature of India than it would have been if it had been proposed in Parliament here, and, as is usually the case with measures submitted to the Indian Legislature, those additional countervailing duties were adopted without great difficulty. This seems to me to be an object-lesson in the policy of countervailing duties—you know where you begin, but you cannot foresee where you are to stop.

What I think we have a right to asks whether, in view of the encomium passed by the Secretary of State for India on the policy represented by the Act of 1899, he is of opinion that it would be desirable to pass a similar Act here giving the Home Government the same power, the same rights, the same weapon which the Government of India has at its disposal under that Act of 1899. I think it is quite fair to draw that conclusion from the language quoted by my noble friend. Allusion has been made to the convention of February, 1902, with France, and in the despatch of the Government of India, to which reference has been made, they seem to consider that a great advantage was obtained in that convention by the very small concession of 2½ per cent. on vinegar and copperas which became applicable to all countries. As explained by the noble Marquess, the reason that that concession was so easily obtained was that France was then engaged in a tariff war with Brazil, and in order to justify the preference given to certain Indian exports it was important to obtain a small concession from India. The noble Marquess seemed to indicate that the policy of negotiation with foreign Powers could be carried out on a large scale by means of the Indian tariff, and that it gives opportunities for such a policy which our tariff does not give. But at the same time the noble Marquess stated that the Secretary of State for India had declared that India was a free-trade country, and that the tariff was only one for revenue. I wish to call his attention to the fact that you cannot use a tariff for revenue for purposes of negotiation, except to any limited degree; if you were to do it on a large scale, then obviously you would interfere with the finances of India to an extent which would be unwarrantable. If you are bent on carrying out that policy of negotiation, then you must introduce in India, as is the case in other countries which have a protectionist fiscal policy, a maximum tariff. The margin between the maximum and the minimum tariff would give you the power of negotiating which a revenue tariff does not give. Therefore, my contention is that the instance given of these negotiations with France is not one which can be quoted as a precedent for similar negotiations with other Powers, and that the statement of my right hon. friend the Secretary of State for India that his hands were untied is not accurate because they are tied by the necessities of Indian finance.

Allusion has been made, and I need not further dwell on it, to the question of the increased duty on tea imposed by Russia. The noble Marquess was quite accurate when he stated that the object of the Russian duty was to divert the tea trade to Dalny and to the Siberian Railway. The Government of India were prepared to retaliate by imposing a differential duty on Russian petroleum. This duty would have inflicted on the millions who light their huts with oil, a burden which their very limited purchasing power would have made a serious hardship. Fortunately the duty was not imposed. The noble Marquess alluded to another alternative—namely, retaliation by export duties. I cannot conceive a more unfortunate policy than a policy which would enhance the cost of Indian exports, and I should wish to receive some assurance that there is no intention on the part of the Secretary of State to enter upon such a policy. The Government of India state in the despatch which has been several times quoted this evening that "in no circumstances whatever would they allow a policy of retaliation to develop into one of aggression." They "recognise that it would be a calamity should they become involved in such struggles with the important purchasers of their exported produce." Now, I should like to ask this question. Where do you draw the line between a policy of retaliation and a policy of tariff wars? If you start on a policy of retaliation you will almost inevitably be drawn into a policy of tariff wars.

We cannot forget that the foreign trade of India is the great security for the redemption of the debt of India to this country. The balance of trade with the United Kingdom is adverse to India, but the balance of trade between India and foreign countries is largely in favour of India. Less than 30 per cent, of her exports come to the United Kingdom, and, as the noble Marquess has admitted, a large portion of the exports of India are admitted free of duty because they are composed mainly of raw materials and food-stuffs. The Government of India point out that— If by a change of fiscal policy the balance of trade in favour of India should dwindle or disappear, the whole work of ten years will be sacrificed; and the set-back to our trade, our revenue, and our credit would immensely outweigh any benefits that we might reasonably expect from the most unconditional surrender of our opponents in the war of tariffs. I ask whether the Secretary of State endorses this opinion of the Government of India, and whether, if India is to be represented at the conference in 1906—and I suppose India will be represented at that conference—her representative will be allowed to make a statement such as that made by the Government of India in their despatch. The representative of India will at that conference represent 300,000.000 of His Majesty's subjects, as against 50,000,000 of Britons throughout the Empire. I wish to be assured that no measures will be taken, no use will be made of the liberty to which the Secretary of State has alluded, to impose artificial restrictions of any kind on the trade of India, and to destroy the freedom of trade which she has enjoyed in recent years.

India's manufactures, industries, and mineral resources certainly require development, but no protection is needed for the purpose, because there is a redundant population, and, therefore, cheap labour available to any extent. What you want is capital and skill. A recent important document published by the Government of India—I refer to the review of Mr. T. H. Holland, Director of the Geological Survey of India—shows what her mineral resources are. What can be done by the enterprise of individuals has been shown by one of the leading representatives of the Parsee community of Bombay, the late Mr. Tata, who at his own expense brought American mining experts to the Central Provinces, with the result that in the district of Raipur immense quantities of extremely rich iron ore have now been discovered. What I look forward to is not the imposition of duties on Indian exports, not the removal of Customs duties in order to please foreign countries; but the removal of such duties as those on cotton goods, which will allow the Indian purchaser of those goods to purchase them at a lower rate than at present. Our first consideration with regard to the Indian tariff is how it effects the welfare of our Indian fellow-subjects. I think the Secretary of State for India will admit that if his hands are untied in some respects as regards legislation, they are certainly not untied as regards the economic condition of India; and I trust that he will not use the liberty which he possesses by altering the policy to which I think the prosperous condition of Indian finances is largely due.


My Lords, I venture to offer a few remarks to your Lordships on this subject, because I wish to carry the argument a step further and lay before the House a consideration which it seems to me is worthy of its attention. The noble Marquess who replied on behalf of the Government has shown that the statements of the Secretary of State for India in the speech which has been quoted were accurate in fact and substance, and that there are on record certain instances in which the Government of India have been enabled to put into practice the principles embodied in the remarks of the Secretary of State. The noble Lord who has just sat down took exception to one instance, that of the countervailing duties upon sugar imposed by the Government of India, and he deprecated such legislation because of the fear he entertained as to where such steps might eventually land the nation which took them. But, my Lords, I find in the Blue-book from which he and other speakers have quoted these words— It is possible, also, that the course taken by India in 1899, in imposing countervailing duties on bounty-fed sugar, may have had some share in inducing the bounty-giving countries of Europe to participate in the Brussels Conference, whose object was the abolition of bounties on sugar, thus securing a freer exchange of this commodity. Those of your Lordships who believe that that Convention has done a great deal towards securing free exchange of sugar, will highly commend the step taken by the Government of India which led to that beneficent result. I find, further, that, however untied the hands of the Secretary of State for India may be at this moment, the Council . of India ask in this Blue-book for further freedom. They say, on page 10— Even where no actively hostile action has supervened, and nothing further than friendly negotiations are in progress, it seems probable that greater freedom of policy on our part would be attended with beneficial results. It seems to me, therefore, that the words of the Secretary of State are more than justified.

India is in a peculiar position. In the words of Sir Edward Law, the Financial Adviser to the Council, India pursues a fiscal system which is neither free trade, fair trade, nor protection. If I were to venture to characterise that system, I would call it "tied" trade. India is largely a tied house to England. We interfere in her system to a large extent, and her Government is not entirely independent of ours. The point to which I would ask your attention is this, that had a system of entire liberty of action subsisted between this country and the Empire of India, certain fiscal events in the history of this country and India might have had very different results. The hands of the Secretary of State as regards Indian matters are untied as against foreign nations, but they are tied as against this country. Had there been entire liberty of negotiation on the part of India, can it be supposed that the tea duty, which we have increased in England from 4d. to 6d. and from 6d. to 8d., would have been so often raised without active opposition on the part of the Indian Government? And does not the history of the Indian cotton duties show that Lancashire at any rate has something to be thankful for in the fiscal relations existing between this country and India?

The fact is that the relations between this country and India more nearly approximate to the ideal of free trade than those of almost any other two countries. It is not a perfect and ideal free trade, but, as approximating to the ideal, it is the nearest we can arrive at, and in considering a system of retaliation for this country, similar to the system which His Majesty's Government can use in India, I submit that it is of the highest importance that the hands of the mother country and the Colonies should be tied as against each other, and that there should be satisfactory relations subsisting between them similar to those between us and India. In other words, if we are going to deal with foreign countries in a spirit of retaliation, it is necessary that we should be at least secure of our own Colonies. I have said that the system subsisting between this country and India is a satisfactory one, inasmuch as it closely approximates to the free-trade ideal, but I do not imagine that we need be perfectly satisfied with the system as it exists. I am convinced that there is no Member of this House who would not say that no system of Imperial preference, no system for a British Zollverein, would be perfect in which India did not play a prominent part, and at the forthcoming Colonial Conference India should be well represented.

I venture to think that there are a considerable number of points well worthy of the attention of such a Conference from the point of view of India. After all, India exports a great quantity of raw material which is necessary for the countries of the world. India exported to this country 20,000,000 cwts. of wheat the year before last, and last year over 20,000,000 cwts. India exports a great quantity of jute, oils, seeds, and so forth. It is surely well worth the consideration of such a Conference whether a preference on wheat and so forth would not greatly assist India, and whether a system of export duties in India similar to the duty existing on rice might not do a great deal of good towards diverting much of that trade to this country which now goes to Continental countries. The mother country has a right, considering the part she has played in the development of India, to ask for consideration in this and other kindred questions. India is in a higher state of development than any other tropical country, and the demand for tropical goods is constantly increasing. Therefore we hold in our hands a considerable weapon. I have ventured to trouble your Lordships with these few remarks because it seems to me that India is peculiarly a case wherein our relations have been satisfactory, and it is of the greatest importance that His Majesty's Government, if they are going to embark upon a policy of retaliation against other countries, should also establish satisfactory relations with our Colonies, remembering that had those satisfactory relations between ourselves and India not subsisted it might have been impossible for any British Chancellor of the Exchequer to have obtained the necessary revenue from increased duties on tea, and Lancashire might have suffered very much from the increased duties India might have imposed upon cotton.


My Lords, however much we may differ with regard to the important subject discussed this evening, we shall, I think, be unanimous in welcoming the appearance of the noble Lord who has just addressed the House, who has shown in his speech that he can contribute to our debates with ability and advantage. The noble Lord who raised this question did so apparently with the object of showing to your Lordships that the Secretary of State for India, in a speech lately delivered by him, was inaccurate with regard to certain statements of fact. The noble Marquess who represents the India Office must, I think, have convinced the House that as far as the accuracy of that speech is concerned it is not open to criticism. The noble Lord, however, drew from that speech a number of inferences, many of them, it seemed to me, far-fetched and of an exaggerated character, and I must protest, in the name of my right hon. colleague, against the kind of construction which the noble Lord placed on his remarks. Another noble Lord detected in the speech of my right hon. friend what he called an encomium framed with the idea of suggesting that the tariff legislation of this country might be assimilated to the tariff legislation of India. I do not find any trace of such a suggestion in my right hon. friend's speech. The noble Lord also dwelt on the limitations to which the use of a moderate revenue tariff must necessarily be liable. That is a self-evident proposition which we can scarcely dispute. He even commented on the terrible iniquity of a duty on petroleum, which I understand has never been imposed. I shall not follow the two noble Lords into these regions. The few words which I propose to address to your Lordships shall be limited to the questions before the House. I do not think there can be any doubt, as stated by the Secretary for India, that the Government of India does enjoy a real, although possibly a small, advantage under the present system of its tariff arrangements. There can be no question that India has an amount of freedom in these matters which is denied to the mother country. I am not going to dispute that that freedom must be exercised subject to the general supervision and control of Parliament. That, of course, goes without saying, but making every allowance for that, India does, in fact, enjoy a liberty which we do not possess. What your Lordships may not remember is that this liberty is one which this country at one time did enjoy and which was taken away from it. In 1845, a Customs Duties Act was passed under which it was enacted— That it shall be lawful for Her Majesty, by and with the advice of her Privy Council, by her Order in Council, from time to time to order and direct that there shall be levied and collected any additional duty, not exceeding one-fifth of the amount of any existing duty, upon all or any goods, wares, for merchandise, the growth, produce, or manufacture of any country which shall levy higher or other duties upon any article the growth, produce, or manufacture of any of Her Majesty's dominions than upon the like article, the growth, produce, or manufacture of any other foreign country. That was a power which this country actually enjoyed between the years 1845 and 1853. In the latter years by a Customs Consolidation Act, that statute was repealed and the power was taken away. It is also the case, as the noble Marquess was able to show the House, that the power thus conferred on the Indian Government has not remained in abeyance, but has been actually exercised with very useful results. There was the case of the alteration of the tariff by Lord Lytton in 1878–9; but there was to my mind a much more remarkable case in the convention with France in 1903, when India was able, by reducing her import duties from 5 per cent, to 2½ per cent, on certain articles in which French trade was interested, to obtain the admission of certain other products in which India was largely interested under the minimum as distinguished from the maximum French tariff. That was a clear case of a transaction highly beneficial to India, and which India would not have been able to accomplish had she not been in a position to offer something in exchange for what she required from a foreign country.

It seems to me to be self-evident that the enjoyment of this statutory power, coupled with the existence of a moderate all-round tariff and with the power of modifying and varying that tariff from, time to time, does place in the hands of the Indian Government an extremely useful weapon for the purpose of any negotiations with other Powers into which from time to time it may be necessary for her to enter. It is clear also that the Government of India attaches very great value and importance to the retention of that power. As to the treatment of Indian products in foreign countries, it may be said that, as a general average, Indian products are subject to duties ranging between 1 and 11 per cent., while British products are subject to duties averaging between 13 and 35 per cent., a very considerable advantage accruing to Indian products as distinguished from the products of this country. When we come to the case of France, that advantage is retained. In France Indian products are subject to duties averaging 5 per cent, as against an average of 34 per cent, paid by British products. That is a much more substantial benefit than anything that India could derive under the most-favoured-nation treatment. However desirable the most-favoured-nation treatment may be in theory, it has not always in practice produced the results which you might hope to derive from it. In these days of highly-specified tariffs and very minute classification it is always quite easy for the ingenious people who contrive tariffs to befriend the country they wish to befriend and to damage the country they wish to damage without denying or depriving of most-favoured-nation treatment those who are entitled to it.

The noble Lord who opened the debate had another object in view which I for one can appreciate—I mean the desire to obtain from His Majesty's Government some kind of assurance that they did not harbour any designs which could deprive India of the advantage she now enjoys or jeopardise her commercial prosperity. I cannot help thinking that it was almost superfluous to suggest that His Majesty's Government could be so extremely unwise as to meditate the imposition upon the Indian Empire of any tariff system unsuited to its requirements. I am tempted to remind your Lordships of a debate which took place in this House two years ago upon a kindred question, when four ex-Viceroys of India got up in their places and were unanimous in declaring that we could be no parties to any change in the tariff arrangements of India which might have a prejudicial effect on the prosperity of that great Empire. We all of us admitted that the position of India differed very greatly from that of the self-governing Colonies, and that the Indian question must be considered with reference to Indian interests. That has been, so far as I am aware, the attitude which the Government has always assumed when discussing this subject, and it is also the attitude which has been assumed by the Government of India in the despatch which has been quoted to-night.

With reference to the points raised by Lord Reay, if I were inclined to fence with the noble Lord I should reply that it is a little premature to ask the Government to announce the particular treatment which they intend to prescribe for India, should they ever be called in and asked to prescribe. We have stated very distinctly that, so far as this Government are concerned, we have no intention to propose new measures of this description. But I do not want to put off my noble friend with a dilatory answer; and I say unhesitatingly that nothing is further from our thoughts, or from the intentions we have repeatedly and publicly proclaimed, than an attack upon free trade whether in India or elsewhere. I hear an incredulous murmur from the front bench opposite, and I think that murmur is probably due to the fact that noble Lords opposite are aware that our interpretation of the words "free trade" and "protection" does not always absolutely agree with theirs. But noble Lords opposite are evidently not quite clear in their minds on this point. If I wished to prove that I should refer to the speech of Lord Reay, who constantly spoke of India as a free-trade country, in spite of the fact that India has a general tariff, upon imports and has the power of varying that tariff from time to time in order to obtain valuable consideration from some other Power. I always understood that that was the unholy thing we were warned against, and I am glad to find the minds of noble Lords so far open that they see that a country may remain free trade although it has a tariff which it is allowed, with the least possible difficulty and inconvenience, to modify from time to time when it desires to do so.

With regard to the question whether India is to be represented at the Conference in 1906, there again I speak with bated breath, because I feel that we are scarcely in a position to take upon ourselves to say what conditions shall be imposed upon that Conference, or what procedure shall be followed when it assembles; but so far as we have any voice or part in the matter, we say that in our contemplation no such Conference could usefully be assembled unless India was given the fullest and amplest opportunity of making her wishes known and felt before any final decision was come to. In the Prime Minister's memorable speech in Edinburgh your Lordships will find that stated in the most categorical manner. I am very glad, if it will give noble Lords any satisfaction, to reaffirm that statement to-night; and to say that, in my opinion, and, I believe, in that of my colleagues, there is no idea whatever of imposing upon a reluctant India any system unsuited to her requirements or which in the judgment of those best competent to express her opinions would be detrimental to her interests.


My Lords, the noble Marquess who has just sat down seemed very pleased because my noble friend behind me spoke of India as a free-trade country. India, no doubt, has now certain duties levied for purposes of revenue, but she gave a most distinct proof of a free-trade policy by placing an Excise to balance the duties which she found it necessary to place upon the imports of cotton. I think a country that has done that is entitled still to call her self a free-trade country.

Before I proceed to deal with what seems to me to be the most vital question we are concerned with to-night, I should like to say a few words with respect to the convention with France. There is a little obscurity about that matter. The convention has never, I believe, been laid before Parliament. It is discussed to-night by Ministers; doubtless they will lay it before Parliament to-morrow; but I hear rumours—I do not know whether they are true or not—that that convention, made in 1903, has never to this day been ratified, but is, nevertheless, actually in force. Now that, surely, is a curious state of things. I should never dream of pitting my judgment upon a question of diplomatic practice against that of my noble friend opposite, who is so great a master of diplomatic science; but I should have thought that to carry an unratified treaty into actual operation was a proceeding of a very curious kind. It certainly is a proceeding which must give very little satisfaction to India, because if the treaty has not been ratified it has no legal effect at all. When the treaty is laid on the Table there will probably be found an Article in it providing that it cannot be brought to a conclusion without due notice, but so long as it is not ratified it can be put an end to at any moment. Therefore I feel some difficulty in comprehending the exact position in which we stand in regard to that question, and I should be glad if some member of His Majesty's Government would tell us whether or not the treaty has been ratified. Am I not right in saying that this country has given to all countries the advantages which she gave to France under that convention? If so, we have done a very right thing, and it is a proof that there is still some lingering attachment to free-trade principles among noble Lords opposite.

I am not about to enter into any argument with the noble Marquess the Undersecretary with respect to Mr. Brodrick's speech, nor am I going to make any special attack on that speech as a speech. I confess I was a little surprised to hear from the noble Marquess that he admitted, in a general way, the accuracy of the report of that speech. I certainly expected that he would have said that the report was not accurate. He did say it was condensed, and the majority of us know, to our regret, that condensed reports do not always give an accurate idea of what is said. The report in question represents Mr. Brodrick to have made a variety of assertions which are incorrect. The report makes him say that they had got the power in India of putting on any tax they pleased on any imports. "They" means the Government of India. When my noble friend apposite spoke he alluded to the powers which India enjoyed. He meant the powers which the Executive Government of India enjoyed. India would enjoy these powers just as much if the Executive Government had to get their new duties confirmed by the Legislative Council, It is not India that enjoys these powers, it is the Executive Government that enjoys them.

Then we are told by the noble Marquess he Under-Secretary that Mr. Brodrick's statement was correct on three grounds. one of those grounds being the difference between the products of India and of this country. That is a natural advantage, and it cannot possibly have been meant by Mr. Brodrick when he made his speech. That is an advantage which India possesses because she happens to have some products which other people want; but t is not a special, or a legislative, or a political advantage. Then we come to the Act, to which the noble Marquess alluded, by which the Governor-General in Council is empowered to reduce or remit duties. The Governor-General in council has no power under that Act—indeed, the noble Marquess did not say he had—of putting on duties. He can only take them off or lower them, and there remains nothing except the Act which was passed in 1899 with reference to the Sugar Convention. That Act is very strictly limited. It gives a power, no doubt, to the Executive Government in India which I should not like to see the Executive Government in this country possess, because I do not think that at the present moment we should be particularly inclined to render the enactment of a new Sugar Convention easy. It has not been so eminently successful as to make that desirable.

But the real question, or what seems to me to be the most important question tonight, is this—Are we to take the speech of Mr. Brodrick, of a Cabinet Minister, as representing the policy and the wishes of His Majesty's Government? We all know that Cabinet discipline is not very strictly enforced by the present Prime Minister, but I am old enough to believe that Lord Melbourne was right when on one occasion when Prime Minister he put his back to the door of the Cabinet room just as the members were leaving, and said— Gentlemen, it does not signify a hang what we say, but we must all say the same thing. That is not the invariable practice of the present Government, and we have long been puzzled to know what is this famous retaliatory policy of which so much is heard and so little is known. Has it been explained by Mr. Brodrick or not?. Do His Majesty's Government desire to have that to which Mr. Brodrick points—namely, a large power conferred upon the Government of the country to impose or alter Customs duties without the special consent of Parliament in each case? That, my Lords, is a very simple question. It can be answered at once. If the Prime Minister was in your Lordships' House and I was asking him the question, I should not expect an answer, "Yes" or "No." But possibly noble Lords on the front bench opposite are not quite so clever as Mr. Balfour, and I hope, therefore, there will be some answer given to this important question.

Are we to understand from this speech, which has been, as I understand it. approved by His Majesty's Government, that the policy of the Prime Minister—the policy of which we hear in general terms so much, and the details of which are so carefully concealed from us—is to confer upon the Executive Government of this country a right to impose' alter, or remit duties without the special consent of Parliament in each case? That, my Lords, appears to me to be the most vital point in this discussion. It is very natural that matters relating to India should have occupied the greater portion of your Lordships' time to-night, and I should be the last person to grudge any discussion upon those matters. But my noble friend opposite is under a complete delusion if he thinks that we were desirous of attributing to His Majesty's Government any intention of doing injury to India with regard to fiscal matters. What I fear is that they will take this Indian example, which in itself is small, but which is easily capable of expansion, for the purpose of what they call untying their hands in this country. Now, to untie the hands of the Executive Government is to tie the hands of Parliament. It is touching very closely some of the most fundamental rights which have been obtained for us by our forefathers, and it is a policy to which I and those with whom I am accustomed to act on these benches will give most determined and uncompromising opposition.


My Lords, the noble Marquess opposite has put a definite Question to His Majesty's Government, which deserves and ought to receive a reply. I think it was clear from the speeches of the noble Marquess the Under-Secretary and of my noble friend beside me that the speech of the Secretary of State for India was a statement of fact which was true in all particulars. Why more than that should be read into those observations passes my comprehension. The noble Marquess opposite laughs. He seems to think that a speech is to be examined, not in respect of what it contains, but what it possibly might indicate. Let me apply that line of argument to the noble Marquess's speech. He has told us a story about Lord Melbourne on a certain occasion putting his back against the door of the Cabinet room just as the members were leaving, and saying— Gentleman, it does not signify a hang what we say, but we must all say the same thing. We now know what will be the principle which will guide the policy of the Government of which the noble Marquess will, no doubt, be a member in the next Parliament. It is, that it does not matter at all what Ministers say so long as they all say the same thing. If the electors of this country have it in their will, as they undoubtedly have it in their power, to change the present Government for another, we shall watch with great interest how the noble Marquess and his colleagues live up to this doctrine. We shall notice that they always say the same thing——


I hope they will.


They may say the same thing, but from my experience of noble Lords opposite and right hon. and hon. Gentlemen of their Party, I shall be very surprised if they think the same thing; and I am a little surprised at the candour of the noble Marquess in telling us beforehand how much confidence we are to place in the statements of himself and his colleagues when they constitute the Government. The speech of my noble friend the Secretary of State for India is to be examined in the light of precisely what it contains without any speculation as to what my right hon. friend was supposed to have had at the back of his mind. All that we have to say in answer to the Questions put to us is that the speech is true in substance and in fact, and upon that we rest our case. The Question with regard to the French treaty is one which I must leave to my noble friend the Secretary of State for Foreign Affairs to answer.


The noble Marquess has not answered the Question which has been put to him very pointedly by the noble Marquess opposite. I have asked that Question myself several times, and have not got an Answer.


Will you repeat the Question?


The Question is this, Whether His Majesty's Government seek for executive powers, which, in some respects, are exercised by the Indian Government, of changing materially the taxation of the country without reference to Parliament?


My noble friend knows as well as I do that it is absolutely impossible to withdraw matters from the cognisance of Parliament. The specific Answer to the specific Question of the noble Marquess is that His Majesty's Government have always declined to give any communication of what policy they may or may not submit to a future Parliament. I am very glad to repeat that Answer, and I hope it will be distinctly understood.


My Lords, if I am not out of order, I will answer the specific Question put to me by the noble Marquess opposite. The noble Marquess asked whether the French Convention was put into operation before it had been ratified. The facts are these. The convention was signed by the French Ambassador and myself in February, 1903. So far as His Majesty's Government were concerned, that was enough for us. But according to French law, in a case of that kind an exchange of ratifications is necessary. The convention was not adopted by the French Senate until December 17th, 1904; and it was not until January of this year that we received from the French Government an intimation that they were ready for the necessary exchange of ratifications. But in the meantime, by an informal arrangement, it was determined that the convention should come into operation, and it has, in fact, been in operation since the time it was signed.

The subject then dropped.