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 668 
 
THE 
 
 ECONOMIC EEVOLUTION OF INDIA 
 
 AND 
 
 THE PUBLIC WOKKS POLICY 
 
THE 
 
 ECONOMIC REVOLUTION OF INDIA 
 
 THE PUBLIC WOEKS POLICY 
 
 A. K. CONNELL, M.A. 
 
 AUTHOR OF "DISCONTENT AND DANGEK IN INDIA' 
 
 LONDON 
 
 KEGAN PAUL, TEENCH & CO., 1, PATERNOSTER SQUARE 
 
 1883 
 
H C 4 3 ^^ 
 
 "Oil, when degree is shaded. 
 Which is the ladder to all high designs. 
 Then enterprise is sick." 
 /'''^ / O ^ Oj A Shakespeare. 
 
 " I have known merchants with the sentiments and abilities of great statesmen ; 
 and I have seen persons in the rank of statesmen, with the conceptions and 
 characters of pedlars."— Burke's speech on Mr. Fox's East India Bill. 
 
 "It is not certain that the despotism of twenty millions is necessarily better 
 than that of a few, or of one." — J. S. Mill. 
 
 " The best state for human nature is that in which, while no one is poor, no one 
 desires to be richer, nor has any reason to fear being thrust back, by the efforts 
 of others to push themselves forward."^J. S. Mill. 
 
 "After clearly seeing that the structures and actions throughout a society are 
 determined by the properties of its units, and that (external disturbances apart) 
 the society cannot be substantially and permanently changed without its units 
 being substantially and permanently changed, it becomes easy to see that great 
 alterations cannot suddenly be made to any purpose." — Herbert Spencer. 
 
 (3"7i.e righU of translaUon and of reproduction are reserved.) 
 
PEEFACE, 
 
 In a small book called " Discontent and Danger in 
 India," published three years ago, after a year's 
 continuous investigation in India of the principles 
 of British administration, I attempted to give an 
 account of the -working of our land-revenue, legal, 
 and financial systems. I called attention to the 
 ceaseless activity which pervaded all the State 
 departments in their desire to convert the country 
 .to the English gospel of material progress. I now 
 see that this activity is, for the most part, the in- 
 evitable outcome of far-reaching economic changes, 
 and that these changes are themselves closely con- 
 nected with the Productive Public Works policy of 
 the Indian Government. 
 
 Since I wrote in 1880, our sources of information 
 
 a 3 
 
vi Preface. 
 
 on Indian affairs have been largely increased. The 
 Famine Commission has published its Blue-books, 
 and General Eichard and Sir John Strachey 
 have published their apologia pro vita sua in a 
 volume entitled the " Finances and Public Works 
 of India, 1869-1881." I have examined the com- 
 placent optimism of the latter work by the light of 
 the painful revelations of the former, and if I, an 
 insignificant outsider, have inveighed in somewhat 
 warm language against two distinguished Anglo- 
 Indian statesmen, my excuse must be found in the 
 fact that these two statesmen have so identified 
 themselves with the policy which I hold to be 
 radically vicious, that it is impossible to attack it 
 without attacking them. 
 
 The object of this present book is to show the 
 consequences of the Productive Pubhc Works policy, 
 not only for the finances of the Indian Government 
 ■ — an aspect of the question which the Stracheys 
 have chiefly considered in their book— but also for 
 the people of India as a whole. The flourishing 
 state of the Indian exchequer for the time being 
 does not necessarily imply the prosperity of the 
 
Preface. vii 
 
 people in the long run, because the Indian financial 
 system is bo differently conditioned to that of any 
 other Government, that it is impossible to argue 
 directly from the state of the public to that of the 
 private purse. 
 
 India is now, in consequence of the outlay on 
 Productive Public Works, subject to the play of 
 economic forces which, when once launched on any 
 land, are like the tides of the sea, remorseless and 
 irresistible in their strength. The dams and the 
 landmarks of the country are being gradually sub- 
 merged beneath the flood that is ever rolling in 
 from the West. England has in the past let loose 
 the same forces on Ireland, though in a somewhat 
 different way, and is slowly trying to stay their 
 fury now that they have proved dangerous to 
 herself. Are we willing to run the risk of having 
 another Ireland on our hands, an Ireland of two 
 hundred and fifty millions ? 
 
 Sir John Strachey will, no doubt, if he does me 
 the honour of reading this book, apply to me the 
 language which he has already used in reply to 
 those people who exhibit " the unfortunate English 
 
•viii Preface. 
 
 fashion of decrying the great achievements of their 
 countrymen." He will have " neither the time nor 
 the inclination to reply to statements of this sort," 
 hut he will be content to class me among " those 
 birds of evil presage which have at all times grated 
 our ears with their melancholy song, and by some 
 strange fatality or other have poured forth their 
 loudest and deepest lamentations at the periods of 
 our most abundant prosperity." This is, of course, 
 merely a rhetorical reply, and a rhetorical reply 
 of the most inconclusive nature. For who is the 
 Daniel called to judgment by Sir J. Strachey ? It 
 is Burke— Burke the upholder of justice to America, 
 the champion of Ireland against the commercial 
 selfishness of Bristol and Liverpool, the denouncer 
 of the rapacity of the East India Company's ser- 
 vants, the author of the famous dictum that " the 
 temper of the people amongst whom he presides 
 oiight to be the first study of a statesman," When 
 it is the policy of the Indian Government, not the 
 conduct of individual officials, that is to be de- 
 nounced, can it be supposed that Burke would not 
 have been found among the " birds of evil presage " ? 
 
Preface. ix 
 
 However, as to the truth of the vaticinations of 
 birds, the future alone can conclusively decide ; 
 \(>'r\ TiKoq opav. 
 
 In conclusion, I may say, that I do not much 
 believe in any financial reforms being advocated 
 either by the Indian Government or the India 
 Office. I agree with Mr. A. J. Wilson, to whose 
 writings I would here express my great indebted- 
 ness, in thinking that " nothing short of a 
 catastrophe will ever make that Government 
 seriously think of retrenchment. There are too 
 many traditions, too many departments, too much 
 self-seeking and jobbery, against any such idea." 
 The crash will come, as the Mutiny came, like a 
 bolt from a clear sky, and, unless the British nation 
 is warned in time, there will be a general wailing 
 and gnashing of teeth. 
 
 London, Jidj/, 1883. 
 
CONTENTS. 
 
 PART I. 
 
 PACE 
 
 The Material Development of India ... ... 1 
 
 PART II. 
 Railways ... ... ... ... ... ... 23 
 
 PART III. 
 Irrigation Works ... ... ... ... ... §3 
 
 PART IV. 
 An Alternative Policy ... ... ... ... 139 
 
 APPENDIX A. 
 Official Facts about the Condition of India ... 173 
 
 APPENDIX B. 
 
 Public Works and Private Enterprise ... ... 190 
 
 APPENDIX C. 
 
 The Village Systems of India ... ... ... 204 
 
PAET I. 
 
 THE MATERIAL DEVELOPMENT 
 OF INDIA. 
 
" It appears to me that the Productive Public Works expenditure 
 has for a long time been a very heavy charge upon the resources of 
 India."— /Speech hy tlie Marquis of Partington. 
 
THE 
 
 ECONOMIC EEVOLUTION OF INDIA 
 
 AND 
 
 THE PUBLIC WORKS POLICY. 
 
 The transference of the administration of our 
 Indian Empire from the hands of the East India 
 Company to those of the Crown bears a superficial 
 resemblance to the change which took place in the 
 Eoman Empire at the fall of the Eepubhc. In 
 both cases the era of conquest was followed by the 
 era of consolidation, in both cases commercial con- 
 siderations were avowedly subordinated to political, 
 in both cases the monopolization of power by an 
 oligarchy of families was abolished. But here the 
 resemblances cease, and the differences begin. The 
 imperial administration of the Eoman Empire led 
 to a longer tenure of office on the part of the 
 
4 TJie Economic Revolution of India 
 
 different proYincial administrators, to a larger 
 consideration of the interests of the conquered 
 races as compared with those of the conquering 
 country, to the freer development of provincial life, 
 and, finally, to the admission of provincial statesmen 
 to the council-chamber of one absolute monarch. 
 On the other hand, the imperial administration of 
 our Indian Empire has led to a shorter tenure of 
 povcer on the part of its Viceroys, Secretaries of 
 State, and their respective Councillors ; to the total 
 sacrifice of the interests of India to those of poHtical 
 parties ; to increased uniformity iu local administra- 
 tion ; and, finally, not to the admission of natives 
 to the supreme council of the nation, but to the 
 absolute domination of an aggressive and energetic 
 democracy of thirty-five millions over a population 
 of two hundred and fifty millions pre-eminent for 
 their passive and apathetic character. It was the 
 duty of J. S. Mill, whose experience of Indian 
 affairs, coupled with that of his father, extended 
 over well-nigh half a century, to draft the petition 
 presented to Parliament in 1858 by the Directors 
 of the East India Company. This petition was 
 pronounced by Earl Grey to be the ablest State 
 paper he had ever read. The leading ideas of 
 
and the Public Works Policy. 5 
 
 that paper were embodied by the writer in one of 
 the chapters of his " Eepresentative Government," 
 and form by far the most original and instructive 
 portion of that book. 
 
 " The government of a people by itself," he 
 writes, "has a meaning and a reality; but such 
 a thing as government of one people by another 
 does not and cannot exist. One people may keep 
 another for its own use, a place to make money in, 
 a human cattle-farm to be worked for the profit 
 of its own inhabitants : but, if the good of the 
 governed is the proper business of a government, 
 it is utterly impossible that a people should directly 
 attend to it." They are therefore obliged to give 
 some of their best men a commission to look after 
 it; but "they are every now and then interfering, 
 and almost always in the wrong place." This they 
 do in two ways ; either they force English ideas 
 down the throats of the natives, or else interfere on 
 behalf of the EngHsh settlers. " Now, if there is 
 ii fact," continues Mill, " to which all experience 
 testifies, it is that when a country holds another in 
 subjection, the mdividuals of the ruling people 
 who resort to the foreign country to make their 
 fortunes are of all others those who most need to 
 
6 The Economic Revolution of India 
 
 he held under powerful restraint. They are always 
 one of the chief difficulties of the government. 
 Armed with the prestige, and filled with the scorn- 
 ful overbearingness of the conquering nation, they 
 have the feelings inspired by absolute power with- 
 out its sense of responsibihty. Among a people 
 like that of India, the utmost efforts of the public 
 authorities are not enough for the effectual pro- 
 tection of the weak against the strong, and of all 
 the strong the European settlers are the strongest. 
 Wherever the demoralizing effect of the situation 
 is not in a most remarkable degree corrected by 
 the personal character of the individual, they think 
 the people of the country mere dirt under their 
 feet ; it seems to them monstrous that any rights 
 of the natives should stand in the way of their 
 simplest pretensions; the simplest act of pro- 
 tection to the inhabitants against any act of power 
 on their part which they may consider useful to 
 their commercial objects, they denounce and sin- 
 cerely regard as an injury. . . . The settlers, not 
 the natives, have the ear of the public at home ; it 
 is they whose representations are likely to pass for 
 truth, because they alone have both the means and 
 the motive to press them perseveringly upon the 
 
and the Public Works Policy. 7 
 
 inattentive and uninterested public mind." And 
 this power of the settlers, when backed up by their 
 supporters at home, is likely to be further in- 
 creased, if the control of Indian affairs should be 
 placed in the hands of an English Cabinet Minister 
 " who is thinking of English, not Indian, politics." 
 The dangers to the good government of India, 
 which MUl pointed out, have been greatly increased 
 since the idea of developing the resources of the 
 country by the construction of public works has 
 taken hold of the mmds of English statesmen. 
 The whole power of English capitalists and manu- 
 facturers has been brought to bear on the 
 authorities at the India Office, while English 
 settlers have never ceased to complain of each suc- 
 cessive Viceroy's slackness in encouraging private 
 enterprise by improved communications. During 
 the last fifteen years the various commercial 
 interests have found most willing instruments in 
 the persons of the two Stracheys, The latter are 
 not, of course, responsible for the initiation of the 
 Productive Public Works Policy; it commenced 
 with Lord Dalhousie, and has been carried on 
 by each successive Viceroy. But so far as that 
 policy has of late years been most strenuously 
 
8 Tlie Economic Revolution of India 
 
 pursued, there is no one, since Lord Dalhousie's 
 time, who has played such a distinguished part 
 in shaping it as General Eichard and Sir John 
 Strachey. In the hands of these two able men 
 the financial position of the Indian Government 
 has been changed. The key of Indian finance, 
 which used to be kept by the Land Eevenue Depart- 
 ment, is now to be found in the hands of the 
 PubHc Works Department, under whose guidance 
 the Indian Government has committed itseK to a 
 gigantic commercial speculation, of which the far- 
 reaching consequences, in the shape of "loss by 
 exchange" and the general strain on India's re- 
 sources, are only now beginning to be realized. 
 
 Silently, but surely, in pursuance of this policy, 
 an economic and social revolution has in the short 
 space of twenty years burst upon the most conser- 
 vative of countries. The status of centuries has 
 been transformed, not by the spontaneous enterprise 
 of the people, but by a tour de force on the part of 
 the Government. The means by which this revolu- 
 tion has been brought about have been lately, 
 described by its chief promoters, the Strachey 
 brothers, and, as might have been expected, on 
 reviewing their work they pronounce it "very 
 
and the Public Works Policy. 9 
 
 good." All estimates liave been verified, aU pro- 
 phecies have been fulfilled; public burdens have 
 been lowered, trade has expanded, and the land, 
 which for centuries has lain in darkness and 
 despondency, has at length been placed on the 
 royal road to progress and prosperity. Allusion is 
 indeed incidentally made to such minor matters as 
 the starvation of five millions of human beings, 
 and unknown millions of cattle, within the last 
 few years ; to the raising of the salt tax during the 
 last thirty years ; to the imposition within the last 
 fifteen years of local cesses * to the amount of 
 £2,300,000, and of nine different license and income 
 
 * Sir J. Strachey, in one or two places, speaks of the burden of 
 taxation as being lighter now than it was twenty-five years ago. 
 It is, no doubt, lighter for the rich, but it is heavier for the poor. 
 Besides the additional taxation mentioned above, it is notorious 
 that the last thirty years' settlement of the laud tax has, in various 
 parts of India, notably in Bombay and the North- West Provinces, 
 led to an increased demand. It may be less per head and even 
 per acre, but as a large part of the people on the laud are a mere 
 burden, and the poorer Muds of soil have been brought under 
 cultivation, the test of average incidence is worthless. The re- 
 mission of the income tax and the substitution of the license tax 
 has, as in the case of the abolition of the cotton duties, chiefly 
 benefited the richer natives and the Europeans. For further 
 illustration of this point, I must refer the reader to my brochure, 
 entitled "Discontent and Danger in India." (Messrs. Kegan 
 Paul & Co., 1880.) 
 
10 The Economic Revolution of India 
 
 taxes. But the repeal of the cotton and other duties, 
 about £1,200,000— which, by the way, fell chiefly 
 on the rich — and the inauguration of free trade, 
 put all these matters into the shade. Such " inci- 
 dents of the campaign" carried on by Western 
 civilization against Eastern barbarism are hardly 
 mentioned, except to point out the pleasing fact 
 that if the famines had not occurred, the public 
 treasury would have been overflowing. Similarlyj 
 India might say, there would have been less taxar 
 tion if Sir J. Strachey had never been there ; but 
 facts are facts, and hypotheses are not surpluses. 
 The question whether there is any relation between 
 the unprecedented sufferings of the late famine 
 years and the construction of public works, and 
 the collection of higher taxes to pay the interest 
 money on the Public Works loans, is utterly ignored 
 by General Eichard and Sir John Strachey, and 
 yet this is the question which outsiders cannot help 
 asking themselves. Lord Lytton — who, in home 
 affairs, was merely Sir John Strachey's grandilo- 
 quent spokesman— in a speech delivered in 1878, 
 justified the adopted principle of protecting the 
 country against famine by the example of Tm-got, 
 But Turgot's programme of " point de banqueroute, 
 
and the Public Works Policy. 11 
 
 point d'augmentation d'impots, pas d'emprunts," 
 is hardly to be compared to that of the Stracheys, 
 which entails a recurring insolvency, a debt of 
 many millions, and the increase of taxation. And 
 yet no one can doubt that in all they have done 
 they have entertained the most sincere conviction 
 that ultimately the greatest benefits will be con- 
 ferred on India, Indeed, they are such bigoted 
 believers in the all-saving power of free trade, 
 that they have advocated the introduction of its 
 necessary forerunner, the steam engine, without 
 waiting to count the cost to the country of this 
 expensive missionary. Utterly regardless of the 
 great gulf fixed between what the late W. Bagehot 
 caUed " a society of grown-up competitive com- 
 merce," such as that in England, and a society of 
 customary commerce such as that in India, they 
 have transferred " economical " theories to " un- 
 economical " societies, and, instead of establishing 
 free trade, they have built up the most oppressive 
 monopohes. 
 
 The development of the Public Works policy 
 offers a striking contrast to the settlement of 
 the land-tenure questions. In the one case, the 
 most contemptuous disregard has been shown to 
 
12 The Economic Revolution of India 
 
 the conditions and character of native life ; in the 
 other, the closest attention has been paid t,o native 
 customs and ideas. The aim of the settlement 
 officer, however thwarted by the inherent difficulties 
 of his task, has always been to assess the land tax 
 and secure the rights of the various classes in- 
 terested in the soil in the way which is best suited 
 to the varying conditions of each locahty. Grievous 
 mistakes have, no doubt, been made, and great 
 suffering has been inflicted, but the object has 
 always been to adjust as closely as possible British 
 principles of administration to native ways. But 
 the engineer has, as often as not, been given carta 
 blanche to construct any public works, which out of 
 his Western wisdom he may think desii-able, and 
 has been ordered to develop, i.e. Europeanize, the 
 country at all hazards. And the result of these two 
 methods of working is naturally very different. 
 While the land tax, under the principle of a thirty 
 years' settlement, has on the whole been fixed at a 
 moderate rate, local cesses and license, taxes have 
 had from time to time to be imposed, owing to the 
 reckless expenditure of the Public Works Depart- 
 ment. Indeed, it is very interesting to compare 
 the two types of mind which are fostered in Anglo- 
 
a7id the Public Works Policy. 13 
 
 Indian statesmen, according as they look at matters 
 from the Indian or EngUsh point of view. Lord 
 Lawrence, who had perhaps spent more time than 
 any other Anglo-Indian administrator in the con- 
 sideration of the Indian land-question and its 
 bearing on the welfare of the masses, and who 
 always gave the order to his settlement-officers to 
 " assess low," summed up his opinion in the follow- 
 ing emijhatic sentence : " Light taxation is, to 
 my mind, the panacea for foreign rule in India." 
 But with what does Su' J. Strachey conclude his 
 review of public works and finances ? Simply with 
 this : " Although new forms of taxation may be 
 difficult to devise, it would be a great error to 
 suppose that the limits of taxation have been nearly 
 reached." This sentence put into other words 
 means, " develop the country, though the people 
 die." The form of material prosperity, it is argued, 
 which England has developed, is the one thing 
 desirable. England has attained unto it by the 
 help of free trade and railways ; let India, there- 
 fore, also have free trade and railways. If India 
 cannot supply the capital necessary for their con- 
 struction, then England wiU be only too happy to 
 advance it. The money will be spent productively. 
 
14 Tlie Economic Revolution of India 
 
 and each country will gain by the outlay. If taxa- 
 tion has to be raised in India in order to further 
 this laudable object, yet what are a few millions 
 borrowed by the most benevolent of Governments, 
 and to be returned with interest later on, compared 
 with the vast sums squeezed out of the people by 
 extortionate native rulers, and spent on all sorts 
 of unremunerative extravagances? Of the three 
 factors which go to produce wealth, India has land 
 and labour, and England has capital. All that the 
 Indian Government has to do is to bring about a 
 happy union between the three, and the results 
 will surpass any which have yet been attained in 
 England. 
 
 This argument seems very conclusive. It is based 
 on all the accepted doctrines of the great English 
 economists, and no one but a fool can, it is sup- 
 posed, venture nowadays to dispute the universal 
 applicability of their teaching. But a closer ex- 
 amination of the theory involved will, I think, 
 show that there is a very grave fallacy underlying 
 the deductions which are drawn from it. It is 
 necessary, in the first place, to distinguish three 
 kinds of outlay: (1) That of indigenous capital 
 spent productively; (2) That of the same spent 
 
'f '^j^' 
 
 Miiii Wm-hs \olicy. 15 
 
 non-producti¥dy|^l^,3jjjgl|ii^^^|Wn capital spent 
 productively. l!fev|^i)^|^^^wffthat the first kind 
 of outlay is better for a country than the second ; 
 but it is not at all certain, to the same extent, that 
 the third is better than the second. For while 
 money spent under the second head, even if it be 
 raised by taxation, is ultimately returned to the 
 country whence it came, in the shape of wages, 
 etc., and the recipients of such wages may spend 
 it productively, money spent under the third head 
 necessarily leads to a heavy annual drain on the 
 resources of the country which borrows it. And if 
 the foreign capital is borrowed, not by individuals 
 who take the risk themselves, but by the Govern- 
 ment {e.g. Egypt), which is able, if it finds that its 
 expenditure is not really remunerative, to pledge 
 the whole credit of the nation, and to make up by 
 taxation the sums required for interest on capital, 
 then the consequences may be worse than those 
 caused by the non-productive waste of the Govern- 
 ment or individuals. And, lastly, if the Govern- 
 ment is a foreign Government, and it borrows of 
 capitalists of the same nationality as that of its 
 own officials, and if the money of the former tends 
 not only to increase the places of the latter, but 
 
16 The Economic Revolution of India 
 
 to lead to a great rush of settlers, then the jobbery, 
 waste, and oppression which will ensue will exceed 
 anything that is possible, even under the worst 
 Mnd of native Government. The whole character 
 of the foreign Government, which is ex hypothesi 
 superior to the native rule it has superseded, will 
 be transformed, an imperimn in imperio will be 
 established, and the whole power and prestige of 
 the governing body will be utiKzed, not for the 
 protection, but for the plunder of the governed. 
 And this, as we shall see later on, is what is. 
 actually happening in India. 
 
 In comparing the revenues of the Moghul * and 
 British Empire in India, Dr. Hunter writes : " Not 
 only is the taxatioji of British India much less than 
 that raised by the Moghul emperors, but it com- 
 pares favourably with the taxation of other Asiatic 
 countries in our own day." Assuming Dr. Hunter's 
 figures to be correct, it must be pointed out that 
 there is one most important difference between 
 
 * Dr. Hunter and others are always comparing British and 
 Moghul rule, but the latter was the rule of foreigners in race and 
 religion, though they were residents. But, as every one knows, the 
 Moghul rule was passing away when we first established ourselves- 
 in India, and we ought to compare our Government with the best 
 Hindu rule. 
 
and the Public Works Policy. 17 
 
 our rule and that of the Moghuls, and that is, ' 
 that the revenues they raised in India they spent 
 in India, whereas we send every year about 
 £20,000,000 out of the country for home remit- 
 tances, and by our construction of railways we have 
 destroyed the industries of a vast portion of the 
 population. " If their passion or their avarice," 
 said Burke, "drove the Tartar lords to acts of 
 rapacity or tyranny, there was time enough even 
 in the short life of man to bring round the ill 
 effects of the abuse of power on the power itself. 
 If hoards were made by violence, they were still 
 domestic hoards, and domestic profusion or the 
 rapine of a more powerful and prodigal hand 
 restored them to the people.* With many dis- 
 
 * £5 to £6 a year will keep a family in India. The Indian 
 Government has of late years been looking with a very covetous 
 eye on the rental of the Bengal zamindars, said to reach 
 £13,000,000, of which, if it were not for the Permanent Settlement, 
 the Government would claim six and a half millions instead of 
 three and a quarter. But if the Government got hold of this sum 
 and spent it on costly canals, it is very doubtful whether Bengal 
 would be benefited as it is at the present time, when a large part 
 of the rental is said to be spent unproductively by the zamindars. 
 Moreover, a large number of sub-holders have sprung up between 
 the zamindars and the ryots, and these absorb a share of the 
 rental. I am not arguing against the Bengal Bent Act, but only 
 against any further invasion of the Permanent Settlement by the 
 imposition of local cesses. 
 
 C 
 
18 The Economic Revolution of India 
 
 orders and few political cheeks on power, nature 
 had still fair play ; the sources of acquisition 
 were not dried up, and therefore the trade, the 
 manufactures, and the commerce of the country 
 flourished. . . . But under the English Govern- 
 ment all this order is reversed ... it is our pro- 
 tection that destroys India. It was their enmity, 
 but it is our friendship." The charge which Burke 
 brought against the East India Company in its 
 worst days is still more apphcable to the Govern- 
 ment of India under the Crown. Sir J. Strachey 
 points triumphantly to the fact of the productive 
 nature of a great part of India's debt ; but the 
 question is, To whom is it productive of wealth ? 
 is it to the English capitalist, or to the native 
 cultivator ? Loans raised for productive purposes 
 may only lead to loss of commercial profits, and 
 the taxation imposed to float these loans may be 
 merely another name for the' price paid in effecting 
 the conveyance of business from the hands of 
 natives to those of foreigners. 
 
 The poverty of India is now admitted by all 
 competent authorities, but the cause of that poverty 
 is still a disputed point. On this subject Sir Henry 
 Maine, in his recently published work, "Early 
 
and the Public Works Policy. 19 
 
 Law and Custom," writes as follows : — " The true 
 secret of the poverty- of India, from which she is 
 slowly recovering, I take to be the desolation caused 
 by the war and brigandage of about two thousand 
 several chiefs, while the Moghul dominion was dis- 
 solving. I think that India, during the reign of 
 Akbar and Jehangir, was probably as rich as the 
 Western world thought, but its carefully hoarded 
 capital was destroyed in the same way as the 
 accumulations of the Eoman Empire." But surely 
 it is too late in the day to throw the blame of 
 India's present poverty on the brigands that have 
 ceased to exist in Bengal for more than a century 
 and a quarter, in Madras and Bombay for more 
 than seventy years, and in the rest of India for at 
 least half a century. If any one is to be held respon- 
 sible for that poverty, it is the British Government ; 
 and if it has failed to diminish that poverty — still 
 more, if it has actually stimulated its growth — 
 it has done so under the influence of a false idea 
 as to what constitutes the basis of national wealth 
 and well-being. It has assumed that, in a country 
 of petite culture and home industries, a large 
 expenditure *of foreign capital is of more utility 
 than the petty outlays of native savings; that 
 
20 The Economic Revolution of India 
 
 collision between the interests of capital and labour 
 is preferable to their co-operation ; and that capital 
 ought to be the master of labour, and not its 
 servant; while it -has forgotten that it is the absence 
 of security on the part of millions of labourers to 
 reap all the fruits of their labours, not the absence 
 of vast accumulations of capital in the hands of a 
 few, that has been at the bottom of Asiatic indi- 
 gence. Speaking generally, there are two main 
 types of civilization known to history, the pro- 
 gressive and the stationary, the former being closely 
 connected with commerce, the latter with agri- 
 culture. In the course of centuries, England has 
 developed the former type, India the latter; but 
 we have , assumed that the latter can be trans- 
 formed into the former by the mere mechanical 
 means of money. We have, indeed, succeeded in 
 breaking up the ancient civilization of India, but we 
 are very far indeed from having imbued the people 
 with the spirit of our own. The two types are too 
 far apart for an ignorant peasantry, entirely 
 occupied in the struggle for existence, to readapt 
 themselves to the demands made upon them. The 
 consequence is obvious : through the breaches we 
 have made in the wall of firmly fixed custom, we 
 
and the Public Works Policy. 21 
 
 have let in the enterprising foreigner and the native 
 middleman of the trading centres, who bring with 
 them the spirit that is adequate to the changed 
 condition of society. Enforced progression has 
 been identified with spontaneous progress, and a 
 superficial movement with a radical transforma- 
 tion. " Improvement in the material condition of 
 the people of India," writes Sir J. Straehey, at the 
 conclusion of his book, " without which no other 
 forms of progress can be assured, is to be obtained 
 only through an accumulation of wealth accom- 
 panying a steady development of the foreign trade. 
 The means of accomplishing this are obvious and 
 quite within our reach ; if we fail to provide them, 
 we fail to fulfil a most imperative duty of the 
 governors to the governed. These means lie in an 
 intelligent extension of the great public works 
 which the country requires, whereby will be secured 
 its future well-being and the contiaued prosperity 
 of its finances." This is so clearly the voice of 
 economic fanaticism and self-approving congratu- 
 lation, that our scepticism is inevitably excited, 
 and we feel forced to examine the consequences of 
 theories which have been so inconsiderately trans- 
 ferred from their natural nidus in England to an 
 
2'2 Tlie Economic Revolution of India, etc. 
 
 alien habitat in India. Certainly, a priori con- 
 siderations lead us to doubt the conclusiveness of 
 the above argumentation ; but let us now proceed 
 to apply the a posteriori method of inquiry. 
 
PART II. 
 EAILWAYS. 
 
" There be but three Things which one Nation selleth to another 
 the Commodity as Nature yieldeth it ; the Manufacture ; and the 
 Vecture or Carriage. So that if these three wheels go, Wealth will 
 flow as in a Spring ,tide. And it cometh many times to pass 
 that the Work and Carriage is more worth than the Material, and 
 enricheth a State more." — Bacon. 
 
The policy of Extraordinary Public Works may be 
 said to have been set on foot in 1849-50, when 
 the first Guaranteed Indian Eailway Company was 
 formed. During the next thirty years the sum of 
 over £99,000,000 was raised in the English market 
 under the security of the Indian Government's 
 guarantee of five per cent. As up to the year 1877 
 the net earnings of these railways were not suffi- 
 cient to pay the guaranteed interest, the State 
 had to advance the sum required out of the 
 ordinary budget. These accumulated arrears of 
 interest amounted in 1881 to the enormous sum 
 of £28,425,119,* so that, if we add this sum to the 
 
 " See Indian Railway Eeport for 1881-82, par. 59. Sir J. 
 Strachey (" Indian Finances," p. 123) says : " It may easily be 
 calculated that the accumulated net charge due to the productive 
 public works, guaranteed railways, State railways, and irrigation 
 •works, from 1868-69 to the end of 1880-81, with compound 
 interest yearly at 4 per cent., would amount to rather more than 
 £22,000,000." But it is very misleading to choose 1868-69 as the 
 terminus a quo. Interest charges had to be paid for years before 
 that date. Sir J. Strachey may confine his review to 1869-1881, 
 
26 The Economic Revolution of India 
 
 capital mentioned above, we shall find that the 
 capital really expended is over ^127,000,000. The 
 heavy expenditure thus entailed on the State led to 
 a reconsideration of this railway policy, and it was 
 decided to have a State Public Works Department. 
 The new scheme of Extraordinary, or, as it is 
 now termed. Productive Pubhc Works, was first 
 proposed in 1864. It was pointed out that the 
 sums, about £500,000 yearly, available from the 
 surplus revenues for the purpose of extending 
 irrigation as a protection against famine were 
 absolutely insufficient, and it was desirable to 
 supplement them by borrowing during the next ten 
 years about thirty millions sterling. It was calcu- 
 lated that the earnings would gradually overtake 
 the expenses, and that before long the whole 
 interest on the borrowed capital would be covered, 
 the charge meanwhile being met from the general 
 revenues. The scheme, which was put into definite 
 form by Colonel E. Strachey, was sanctioned in 
 1868-69. " The expenditure during the first five 
 years averaged less than two millions yearly. In 
 
 but we must go further back than that to get at the real state of 
 the case. Sir J. Strachey reckons the net earnings of that date, 
 and yet leayee out of account the previous losses. 
 
and the Public Works Policy. 27 
 
 1870 it was decided that the further extension of 
 rail-ways should, as a rule, he undertaken directly 
 by the State, instead of, as heretofore, through the 
 agency of companies, and that the funds should be 
 supplied, as in the case of the larger irrigation, 
 works, by borrowing. After 1871 the expenditure 
 on railways considerably increased, and in 1873-74 
 and subsequent years the Public Works extra- 
 ordinary expenditure rose to three and a half 
 millions and upwards, the average for eight years, 
 including 1880-81, being a little more than four 
 millions yearly, and the total amount, which 
 appears as capital outlay from borrowed funds 
 during the fourteen years from 1867-68 to 1880-81, 
 being ^41,486,000." * It was calculated in 1873 
 
 * The above account is taken from the Famine Commission's 
 Eeport. This report, like many othera drawn up by Commissioners, 
 is obviously a medley of compromises. The members of the Com- 
 mission appointed in 1879 were— General Strachey (President) ; Mr. 
 Justice Cunningham ; Mr. J. Caird ; Mr. H. E. Sullivan, Madras 
 Civil Service; Mr. J. B. Peile, Bombay Civil Service; and Mr. 
 C. A. Elliott, Bengal Civil Service. Any one who reads through 
 the Blue-books will find that the conclusions arrived at are curiously 
 inconsistent with the premisses. The part referring to Productive 
 Public Works is evidently written by the President or Sir J. 
 Strachey, as whole paragraphs are word for word the same as 
 certain pages in Sir J. Straohey's book. The promoters of the 
 Public Works policy are thus allowed to sit in judgment on their 
 
28 The Economic Revolution of India 
 
 that the annual charge on the revenues resulting 
 from excess of interest over net revenue would in 
 1877-78 amount to £1,990,000, inclusive of the 
 charges involved for interest on the Guaranteed 
 Eailways capital. 
 
 In 1876, owing to the great fall in the value 
 of silver, and the heavy losses entailed by famine, 
 '' it was resolved to restrict the outlay on Pro- 
 ductive Pubhc Works to the amount which it 
 was thought could be borrowed in India without 
 unduly pressing on the market, then estimated at 
 two or two and a half milUons per annum." 
 Stricter rules were also laid down for "limiting 
 the outlay of borrowed money to works which 
 could certainly be declared to be remunerative. 
 These orders have recently been reiterated with 
 increased emphasis, and the sum which, under the 
 latest instructions of the Secretary of State, may 
 be raised by loan for expenditure on public works 
 of all descriptions, excepting the East Indian 
 Eailway, is two and a half millions yearly." In 
 
 own -work. The verdict is obviously not that of impartial judges. 
 Mr. Caird's opinions, on the other hand, are those of an impar- 
 tial outsider reviewing the work of others; and his separate 
 memorandum, entitled " The Condition of India," deserves especial 
 notice. 
 
and the Public Works Policy. 29 
 
 pursuance of this policy a capital sum of thirty -four 
 millions, or of about thirty-two millions if we 
 exclude the frontier railways, paid for out of the 
 charge for the Afghan war, has been expended on 
 State railways. This capital has been raised 
 generally at four per cent., and, as the lines built 
 by the State only now earn two per cent., and as 
 the difference between this and the required interest 
 has only recently been covered (I assume for the 
 moment the correctness of official calculations) by 
 the surplus profits of the East Indian Eailway, 
 there has been in the past a yearly charge on the 
 revenues. Up to the years 1879-80 this amounted 
 to between two and three millions sterling. As in 
 the case of the Guaranteed Railways, this sum 
 ought to be added to the amount actually borrowed, 
 in order to give us the true cost of construction. 
 A perusal of official reports shows that these items 
 are not taken into consideration, the theory being 
 that when the railways earn surplus profits they 
 will pay back the arrears of interest. On the works 
 of irrigation, "for which capital and revenue 
 accounts are kept," there had been spent up to the 
 close of the year 1880 more than ^20,000,000. 
 We see, then, that the sum total spent by the State 
 
30 The Economic Revolution of India 
 
 and companies on Productive Public Works during 
 the last thirty years or so amounts to over 
 £180,000,000, a sum equal to nine years' land 
 revenue. During the same period there has been 
 a further outlay, provided chiefly by the revenues, 
 of somewhere between fifty and sixty millions on 
 ordinary,* i.e. non-productive, public works, such 
 as barracks, buildings of aU sorts, bridges, and 
 roads, the latter in many cases after heavy ex- 
 penditure being superseded by the railways. 
 
 It might naturally be supposed that if this vast 
 capital has been expended in India during the last 
 thirty years, the labouring classes must have 
 benefited by such an enormous addition to the 
 wage-fund of the country. This is what Sir J. 
 Strachey writes : " It is difficult to conceive con- 
 ditions under which the remittance of interest on 
 foreign capital judiciously applied could be onerous 
 to the country which pays it, for the investment 
 must necessarily have led to the outlay of a larger 
 
 * I am unable to go into this item of expenditure, but a 
 parliamentary inquiry -would certainly show that there has been 
 most frightful waste of money. The well-known case of the 
 Saugor barracks tumbling down might be easily paralleled. I 
 myself have been told of bridges — one in Hardui — never used by 
 the natives. 
 
and the Public Works Policy. 31 
 
 sum than the mterest sent away, and the balance 
 of what is thus produced remains in the country. 
 Thus in the case of the guaranteed railways, about 
 a hundred millions of capital have been raised and 
 spent in India, and, say, a£5,000,000 a year have to 
 be paid in England as interest on that capital, the 
 railways paying this £5,000,000 by earning a gross 
 income of £10,000,000, of which £5,000,000 is 
 spent in wages or other working expenses, and 
 affords increased profitable occupation to the people 
 of the country. The persons who voluntarily {sic) 
 pay the £10,000,000 for the use of the railways are 
 themselves largely benefited by them, and would 
 have to pay much more had they been obHged to 
 use rude means of conveyance." 
 
 This statement is brimful of fallacies, as a refer- 
 ence to the annual report on Indian railways easily 
 shows. The truth about the capital expenditure is 
 as follows. Of the Guaranteed Bailways capital of 
 £96,794,226, spent up to the end of 1880-81, 
 £46,918,177 were withdrawn in England and 
 £49,876,049 in India, while the charge for interest, 
 amounting, as shown above, to about £28,000,000, 
 was almost entirely remitted to England. Thus of 
 the sum total of capital req^uired for the construe- 
 
32 The Economic Revolution of India 
 
 tion of these railways only £21,000,000 were actually 
 spent in India, and as the sum remitted by the 
 railway companies themselves up to 1881 reached 
 the amount of over £29,000,000, there was no 
 balance at all remaiuing in the country. Indeed; 
 there was a deficit on the whole transaction of 
 £8,000,000. So far, then, from this investment of 
 foreign capital leadiug to "an outlay of a larger 
 sum than the interest sent away," it actually led to 
 the outlay of a smaller sum than would have been 
 spent in the country if no guaranteed railways had 
 ever been built.* 
 
 Of the £32,000,000 odd raised for State rail- 
 ways, twenty-four millions have been appropriated 
 in India, and seven and a half millions in Eng' 
 land,t while the charge for interest, between two and 
 three millions to be added to the capital account, 
 has also gone to England. Of the capital raised 
 for irrigation works, the largest proportion, if 
 not the whole, has been expended in India, there 
 
 * The total amount of guaranteed interest advanced up to 
 December, 1881, was £54,499,780, of which the Government 
 advanced £24,962,440, and ' the railways earned £29,537,340. 
 These sums are exclusive of the East Indian Railway. 
 
 t This part of outlay will probably be increased when the rail- 
 ways are " equipped." 
 
and the Public Works Policy. 33 
 
 being no large purchases in England of rolling 
 stock, iron for bridges, etc., as in the case of the 
 railways, but the interest is remitted to England. 
 
 In considering, therefore, the general effect of 
 productive public works, it is most important to 
 keep the following points well in mind : (1) That 
 about one-half of the capital sum spent in con- 
 nection with public works in India has been 
 spent, not in India, but in England ; (2) that 
 almost the whole interest, amounting to between 
 six and seven millions a year, is remitted to 
 England. Supposing that English railways had 
 been built out of French iron, etc., and the capital 
 had been raised in France, we should then be able 
 to understand what a fine instrument of plunder 
 may be found in a railway system established by 
 means of foreign capital and native taxation, and 
 actually built to a great extent out of foreign 
 materials. The fact is, that there is all the dif- 
 ference in the world between a country which has 
 itself volimtarUy furnished the capital and materials 
 for its railways and that which has not. In the 
 one case, the profits of the undertaking are dis- 
 tributed among indigenous capitalists, and work is 
 provided for home workmen; in the other, the 
 
34 The Economic Revolution of India 
 
 profits leave the country, the very possibility of 
 these profits is secured by taxation, and the only 
 work provided for the native labourer is that of 
 making the embankments, stations, etc.; and for 
 this, owing to the density of population, he receives 
 the minimum wage possible.* Nor is even the 
 whole of the money spent in maintaining and 
 working the lines distributed among the natives. 
 Coal to the amount of 175,951 tons, and k large 
 amount of new carriages, etc., come from England, 
 and of the total number of employes (169,577), 
 3763 are Europeans, earning the highest wages. 
 On the other hand, those who used to carry on the 
 transport trade, now superseded by the railways, 
 must have earned a good deal more than the 
 ^165,814 natives employed on the lines. They are 
 now thrown on the overburdened land. Finally, 
 Sir. J. Strachey calculates that India is benefited 
 by reason of its cheapened transport " thrice the 
 gross receipts (over £14,000,000), or £40,000,000 
 
 * While the capital outlay in India on railway construction 
 reached the annual sum of between three and four millions, 
 labourers had a large wage-fund to draw on ; but as the outlay is 
 necessarily contracted, the coolies are left with nothing but 
 enhanced prices. The Public Works policy of Paris has led to a 
 similar result. 
 
and the Public Worhs Policy. 35 
 
 yearly." I shall return to this point later on ; but 
 it may be here pointed out that, assuming that aU 
 the goods traffic is a natural and not a forced 
 trade, yet that traffic yields only £9,000,000 — the 
 rest is passenger traffic — and the profits must be 
 calculated on this sum only, and would therefore 
 be twenty-seven, not forty millions, an astonishing 
 blunder on the part of Sir J. Strachey, something 
 like that famous confusion of figures in the Afghan 
 war. But assuming that the gross receipts for 
 passengers are to be included, and that forty 
 millions are saved to the country, is it not obvious 
 that whereas now only £7,000,000 are spent in 
 the country on wages, £40,000,000 in wages and 
 profits would be distributed in the country if the 
 trade were still in the hands of native carriers ? 
 What, then, becomes of the people thrown out of 
 work ? The fact is, that Sir J. Strachey's calcu- 
 lation is a rather extravagant one. Without the 
 existence of the railways, the trade, as we shall 
 Bee later on, would be considerably lessened, and : 
 desirably so, except where it is reaUy developing the 
 resources of the country or carrying off surplus grain. 
 The one satisfactory, because popular, feature in 
 the railways is the passenger traffic. There were 
 
36 The Economic Bevolution of India 
 
 about fifty-two million passengers in 1881, of which 
 97*74 per cent, were of the lowest class (railway), 
 taking tickets to the amount of two and a half 
 minions sterling; butwe are perhaps encouraging, in 
 a not very paternal way, the childish native to waste 
 his money on unproductiye expenditure, instead of 
 improving the land. He thinks he may as well 
 pay for enjoying himself, as the benevolent Sarkar 
 wiU probably "loot " him in other ways, if he does 
 not voluntarily give something to the great God. 
 
 Having now stated correctly the real amount of 
 capital expenditure, and noticed a few preliminary 
 points, I will proceed to consider the question, Do> 
 the Productive Public Works pay their way, and 
 what general effect have they had on the country ? 
 Sir J. Strachey's verdict (in 1881) is as follows : — 
 " A retrospect of this chapter of our administration 
 shows that, notwithstanding many unforeseen 
 obstacles, the results obtained have greatly sur- 
 passed in their success the moderate anticipations 
 of those who initiated the policy of carrying out 
 works of permanent utility with borrowed money. 
 ... All that was first asked was, that this policy 
 should not lead to any increase of the public 
 burdens. It has already reduced these burdens by 
 
and the Public Works Policy. 37 
 
 a yearly amount of £3,000,000 sterling." It may 
 fee remarked incidentally that the public burdens 
 spoken of mean £1,800,000 of interest for Pubhc 
 Works loans, and £1,200,000 of interest on the 
 ordinary debt of India. The reduction of the first 
 burden means merely the reduction of one imposed 
 by the railways and irrigation works; while the 
 reduction of the second might have been more 
 easily effected without the railways. 
 
 The of&cial returns taken from the Blue Book on 
 Indian railways for 1881-82 are as foUows : — 
 
 Eailways. 
 
 Capital. 
 
 Gross receipts. 
 
 Working 
 expenses. 
 
 Set earnings. 
 
 (1) Guaranteed 
 
 (2) East Indian 
 
 (3) State lines, V 
 including lines 1 
 in Native I 
 States. Not 
 all finished ) 
 
 ■ £ 
 67,329,179 * 
 
 31,987,379 t 
 34,884,023 J 
 
 6,718,492 
 4,541,147 
 
 2,466,314 
 
 3,607,668 
 1,446,316 
 
 1,719,255 
 
 £ 
 3,110,824 
 
 3,094,831 
 747,059 
 
 
 134,200,581 
 
 13,725,953 
 
 6,773,239 
 
 6,952,714 
 
 * Capital raised at between Is. lOd. and 2s. the rupee. 
 
 t Lately purehased by State, which has to pay annuities, etc., 
 and to give share of profits to the working company. The capital 
 was raised at Is. lOd. the rupee, but the gross receipts aie reckoned 
 at 2s. the rupee. This is mere fancy reckoning. 
 
 X Capital raised partly in England and partly in India. The 
 receipts, etc., are reckoned at 2s. the rupee. 
 
38 Tlie Economic Betolution of India 
 
 Railways, 
 
 Interest. 
 
 Result to 
 State. 
 
 Loss by 
 exchange. 
 
 Accumulated 
 interest 
 cliarges. 
 
 Los.s by 
 exchange 
 up to 1881. 
 
 (1) Guaranteed 
 
 (2) East Indian 
 
 (3) State lines, 1 
 including lines 1 
 in Natire 
 States. Not 
 all iinished ) 
 
 £ 
 3,272,651 
 
 1,681,345 
 1,396,360 
 
 £ 
 -161,827 
 
 + 1,207,100* 
 -648,301 
 
 £ 
 
 about 
 620,000 
 
 381,553 
 
 about 
 100,000 
 
 £ 
 24,962,440 
 
 3,462,679 
 
 about 
 2,500,000 
 
 £ 
 
 about 
 1,000,000 
 
 about 
 600,000 
 
 about 
 160,000 
 
 
 6,349,366 
 
 396,972 
 
 1,001,653 
 
 30,925,119 
 
 1,750,000 
 
 According to these figures there is a clear surplus 
 of £396,972, after the payment of interest on the 
 total capital borrowed; hut a glance at the three 
 last columns proves that this surplus is purely 
 fictitious, as there is an annual " loss by exchange " 
 of about one million sterling, and four per cent, 
 interest at least ought to be charged on the thirty 
 millions sterling of accumulated interest charges. 
 In the Indian Budget the item of "loss by ex- 
 change—about ^£3,000,000 a year, caused by the 
 home remittances on Public Works debt. Adminis- 
 tration, and ordinary debt — is entered under a lump 
 
 * "Worting company's share of the profits, £206,386. 
 
EKEATUM.— Paqb 3S. 
 
 Later returns show that I have under-estimated the arrears of 
 interest for State Eailways. They amount to over £4,000,000. 
 Read, therefore, on pages 57, 58, 74, "£32,500,000" instead of 
 " £30,000,000." 
 
and the Public Woi^ks Policy. 39 
 
 sum, so that that part which is entailed hy the 
 Productive "Works loans does not appear under the 
 head of railway charges. But as it is at present 
 an essential condition of these charges, it ought to 
 be reckoned just as much as any other item, for it 
 obviously affects very closely the consideration of 
 the Public Works policy. Sir J. Strachey may set 
 it aside as an "unforeseen" item, but as he admits 
 that loss by exchange acts as a stimulus on Indian 
 trade to the extent of a two and a half per cent, 
 bounty, and as the railways get the benefit of such 
 stimulated trade, it is absurd to accredit the gains 
 and not the losses. Taking, then, into account 
 the loss by exchange, and interest on the past 
 interest charges, we see that there is a yearly 
 deficit of over two millions on the ivliole capital 
 outlay on Indian railways. To avoid further loss 
 by exchange the Indian Government now raises 
 its annual "Productive Public Works Loan" in the 
 Calcutta market, except so far as it employs com- 
 panies, but of course it does not get it on such 
 good terms as it would in the English market, and 
 it is not at all Hkely that the new lines built by the 
 State wUl earn the same profits as those which 
 form the main arteries for trade. So well aware 
 
40 The Economic Revolution of India 
 
 is the Indian Government of this aspect of the 
 question that it has lately heen trying to induce 
 "private enterprise" to construct the next rail- 
 ways; but it has not heen very successful. The 
 shares of the Bengal and North Western Company, 
 though hacked by the Eothschilds and Barings, 
 have not been taken up very readily, while ia the 
 case of the new Bengal Central and South Mahratta 
 Companies it has been found necessary to give 
 a guarantee for four, and three and a half per cent, 
 interest, while the railways are being constructed. 
 This distinct diffidence on the part of private 
 enterprise, in spite of the boasted success of the 
 existing lines, seems to show that the British 
 investor is not so easily persuaded of the increasing 
 prosperity of India. Major Baring may pipe, but 
 the investor will not dance, because he remembers 
 certain items lightly passed over by Sir J. Strachey, 
 and he fancies that the famine sufferings, which 
 are set aside as abnormal and unaccountable, may 
 result from a gradual exhaustion of the country's 
 agricultural resources; and new industries, such 
 as iron, copper, and gold mines, do not make great 
 progress. Unpleasant rumours have of late years 
 been floating about as regards the deterioration of 
 
and the Public Works Policy. 41 
 
 the soil in various parts of India, and the evidence * 
 of an optimistic Anglo-Indian like Sir Eichard 
 Temple, who has served in nearly every part of 
 India, as given before the Famine Commission, is 
 not at all reassuring. In answer to Mr. Caird's 
 «[uestions, he said : " I believe that in many parts 
 of India a gradual exhaustion of the soil is going 
 on. , . . The yield of the crops is popularly sup- 
 posed by the natives of the country in many parts 
 of India to be gradually decreasLng." *' Wheat- 
 land in the North-West Provinces," writes Dr. 
 Hunter, "which now gives only 8401bs. an acre, 
 yielded 11401bs. in the time of Akbar, and the 
 reason assigned for this falling off in the yield is 
 chiefly want of manure." In the same way Mr. 
 A. 0. Hume, the late secretary to the Agricultural 
 Department, writes : " That the gradual— and per- 
 haps, later, suddenly rapid — deterioration of the 
 major portion of our cultivated lands is, unless a 
 totally new system be inaugiurated, inevitably 
 impending, can be denied by no one conversant 
 with the subject." Speaking of Madras, Mr. 
 
 * See Appendix II. of Famine Beport, pp. 38, 39. Mr. Oaird 
 came to the conclusion that the land in many parts of India is 
 undergoing gradual exhaustion. 
 
42 Tlie Economic devolution of India 
 
 Eobertson, Head of the experimental farm in 
 Sydapett, says : " Experienced men positively 
 assert that the deterioration during the last thirty 
 years has been no less than thirty per cent." And 
 yet the Indian Government points with satisfaction 
 to the export trade in grain to the amount of 
 between thirty and forty million hundredweight^ 
 and on the strength of it calls to capitalists to 
 "come over and help them" to construct more 
 railways. Perhaps within the next half century 
 nothing wiU be seen in some parts of India but 
 an engine like the crow in the Qeorgics, 
 
 " Qua3 sola in siocS, secum spatiatur arenS.." 
 But, it wUl be replied, though the Indian rail- 
 ways do not as yet directly pay their interest on 
 the whole of the capital sum expended, yet the 
 benefits they confer on the country are so great 
 that not only is the policy of building the lines 
 already existing amply justified, but we ought to 
 add another ten thousand miles. What, then, are 
 these benefits ? First, they are said to have a 
 high strategical. value. Their use in this respect is 
 no doubt great, but it is probably much overrated. 
 Against external foes, as was shown in the case of 
 the Afghan war, so long as India remains quiet, they 
 
and the Public Works Policy. 43 
 
 would no doubt prove most useful ; but in cafe of a 
 general uprising on the part of the natives, it may 
 be doubted whether the difficulty of guarding them 
 might not prove too great, and our soldiers, now 
 unaccustomed to an animal transport service, might 
 be in a worse position than they were during the 
 Mutiny. But, granting that the railways are from 
 this point of view invaluable, they must so far only 
 be regarded as a necessary item in military ex- 
 penditure, as indeed is the case with the frontier 
 railways. Secondly, it is said that they advance 
 the commerce, civilization, and general prosperity 
 of the country. No one can deny that the trade of 
 India, as tested by the import and export statistics, 
 has increased very rapidly during the last thirty 
 years, but it is forgotten that it is not merely the 
 increase of exports and imports that ought to be 
 considered, but the whole external and internal trade 
 of the country. For instance, during the last ten 
 years, the value of cotton (manufactured) imports 
 has risen from fifteen to twenty-one millions ster- 
 ling, but it must not therefore be supposed that the 
 natives of India have suddenly grown rich enough 
 by that amount so as to be able to buy cotton 
 clothes. The profits of the cotton trade have 
 
44 The Economic Revolution of India 
 
 merely been transferred from the pockets of 
 Hindoos to those of Englishmen. Again, the value 
 of the export trade in grain has increased since 
 1872 from something less than £5,000,000 to over 
 £12,000,000, but does this arise from the great 
 surplus wealth which has been called into being by 
 the railways ? To some extent wheat-growing, 
 especially in the Punjab * — an, as yet, not over- 
 populated province — has been promoted by the 
 external trade ; but a large part of the export trade 
 in grain represents food diverted from the mouth 
 of the half-famished labourer. Dr. Hunter, in his 
 " England's Work in India," says, "Two-fifths of 
 the people of British India enjoy a prosperity Un- 
 known under native rule; other two-fifths earn a 
 fair but diminishing subsistence; but the remaining 
 
 * The Punjab Administration Eeport for 1881-82, states that 
 with the increase of the area under wheat there is a decrease of 
 that under barley and gram, the chief food of the poorer classes, as 
 far as the spring crops are coucerned. Indigo and cotton are also 
 superseding rice ; at the same time, a large number of weavers are 
 taking to the land. This economic change is chiefly due to the 
 two Punjab railways, which only now yield a net return of 
 £396,000, to cover interest charge of £810,000. Does the Province 
 really benefit by this quickened external trade ? lu the famine of 
 1877," though the spring crops were secured, prices rose to a great 
 height, and 340,000 persons of the poorer classes died. And this 
 is the most ilourishing province in India ! 
 
and the Public Works Policy. 45 
 
 fifth, or forty millions, go through life on in- 
 sufficient food:" and he admits that "if all the 
 poorer classes in India ate two full meals every day, 
 the surplus for export would be much less than at 
 present." The Famine Commissioners, writing in 
 1880, calculated the annual surplus at five million 
 tons of food, but Messrs. Caird and Sullivan say. 
 that "they are unable to place confidence in this 
 estimate. The average annual export of rice and 
 grain from all India is one million tons, which 
 would thus leave four million tons to be laid by — a 
 quantity sufficient to feed twenty-four millions of 
 people. As famine comes but once in twelve years, 
 there should in that period be an accumulation 
 sufficient to feed nearly three hundred millions ; 
 and yet when famine does come, and then affecting, 
 at its worst, not more than a tenth of that number, 
 it is only by immense pressure on other parts of 
 India, and at a quadrupled price, that the barest 
 sufficiency of supplies can be obtaiaed. This seems 
 clear proof that the alleged surplus must be greatly 
 over-estimated." The experience gained during the 
 famine seems, therefore, to support Mr. Hunter's 
 calculation about the insufficiency of the food 
 supply during years of plenty, and this statement, 
 
46 The Economic Bevolution of India 
 
 if correct, proves tliat the flourishing state of the 
 export trade in grain does not denote the prosperity, 
 but the poverty of the masses. Free trade for 
 England meant cheap food and higher wages ; for 
 India, what is called free trade means higher 
 prices, the destruction of native industries, and the 
 stagnation of wages. " The population," write the 
 above-mentioned Commissioners, " is increasing ; 
 the price of food is rising ; whilst, as the number of 
 the landless class, who depend on wages, is constantly 
 growing, the supply of labour, in the absence of 
 industries other than agriculture, must soon exceed 
 the demand. Already their wages bear a less pro- 
 portion to the price of food than in any country of 
 which we have Imowledge. The common price of 
 grain in the Southern States of America, on which 
 the free black labourer is fed, is the same as that 
 of the Indian labourer, viz. 501bs. to 601bs. per 
 rupee ; but his wages are eight times that of the 
 Indian, 2s. to 2s. M. against M. a day, whUst 
 the climate is much the same in its demands for 
 clothing and shelter. This is a fact of extreme 
 gravity, as illustrative of the poverty of the Indian 
 coolie or field labourer, not to be met by resting 
 satisfied that chronic famine is one of the diseases 
 
and the Public Works Policy, 47 
 
 of the infancy of nations ; for India, as a nation, 
 has long passed its infancy, and the task of the 
 British Government is, by fostering diversity of 
 occupation, to guard it against decHne." They go 
 on to say that, though there is a good surplus of 
 rice, there is only a small surplus of coarse grain — 
 the food of two-thirds of the people of India — to 
 meet a severe famine. I may further illustrate 
 the misleading nature of the inferences which may 
 be drawn from a flourishing foreign trade iu grain, 
 by poiuting out that in India all increase of taxation 
 tends to stimulate the export trade, and that in two 
 ways. The agriculturist is forced to grow more 
 paying crops, such as indigo, cotton, opium, and 
 the like, instead of grain crops; or, if he grows 
 grain crops, he grows the finer instead of the coarser, 
 and the market being glutted at the time when the 
 taxes are due, the price of wheat goes down, though 
 still too high for native consumption. Thus the 
 imposition, during the last ten years, of local cesses 
 to the amount of ^62,300,000, has no doubt added 
 to the volume of export trade, while the very fact 
 that the railways have brought the foreign market 
 to the door of the agriculturist, has been adduced as 
 a reason why the land-assessment should be raised. 
 
48 The Economic Revolution of India 
 
 In pursuance of this " merry-go-round " theory, it 
 is quite possible for the State first to stimulate 
 trade by taxation, then to carry off part of the 
 profits of this trade through the medium of the 
 railways, and then to raise the land tax on the plea 
 that the value * of land is much increased by im- 
 proved communications. Meanwhile, the lower 
 agricultural classes may be sinking deeper into 
 poverty. 
 
 It would take too long to go over all the items of 
 Indian trade, but it may be pointed out that a 
 great part of it is in the hands of the Indian 
 Government or English traders, who naturally 
 absorb the profits.f Thus tea, coffee, and indigo 
 
 » The rise in the value of land in India is continually put forward 
 as a proof of prosperity. But it does not necessarily arise from 
 increased out-t>im or profits, but from (1) pressure' of population, 
 (2) from the transferability and saleability of property in land 
 permitted by English laws. 
 
 t So far as tea and coffee plantations have opened up new 
 land, which would not otherwise have been brought under culti- 
 vation, the native labourers are benefited by the existence of a 
 new wage fund ; but so far as planters merely get hold of land 
 which would be otherwise cultivated by the natives themselves, 
 the only result is that the latter become wage-receivers instead of 
 independent cultivators. This is what an experienced Bengal 
 magistrate, Mr. C. J. O'Donnell, says of indigo-planting : " Indigo- 
 manufacture depends on indigo-planting, and indigo-planting covers 
 hundreds of thousands of acres with a crop that is ruin to the 
 
and the Public Works Policy. 49 
 
 plantations are chiefly worked by Englishmen, and 
 the native labourers merely receive a subsistence- 
 wage. The export of these items amounts to 
 £8,000,000 (1881). The opium trade, so far as 
 Bengal is concerned (about £6,500,000), is in the 
 hands of the Government, which retains two-thirds 
 of the price realized at the annual sale of opium 
 chests. So, again, if we examine the imports, we 
 shall find that sundry items, such as railway plant 
 and rolling stock (£1,117,765), are merely a neces- 
 sary part of railway and other English commercial 
 undertakings, and do not imply any greatly in- 
 creased demand for necessaries, still less for 
 luxuries, on the part of the natives themselves. 
 
 The above considerations ought to make us very 
 cautious in arguing from the trade statistics of 
 India, as though they told the same tale as those 
 
 farmer to cultivate — hundreds of thousands of acres which are held 
 under the worst form of the ruinous ticcadari leases. A large 
 indigo concern ordinarily keeps in cultivation two thousand to five 
 thousand acres, scattered over twenty to fifty villages. The land 
 is hardly ever held with any proprietory right, but is obtained on 
 short leases from the zemindars." The zemindars and planters are 
 leagued together to oppress the ryots. " There is hardly any rent 
 enhancement to which the ryots will not submit rather than have 
 their village made over in lease to an indigo-planter." If any one 
 wishes to know why the planters cry out against the Bengal Rent 
 Act and "Ilberts's Bill," let him read Mr. O'Donuell's pamphlet. 
 
50 The Economic Revolution of India 
 
 of England. The economic conditions of a country 
 whose population is chiefly engaged in agricul- 
 ture, whose exports exceed its imports hy about 
 iE20,000,000, are very different from those of one 
 whose population is largely engaged in industry, 
 and whose imports exceed its exports by over 
 ig 130, 000, 000. Sir J. Strachey quotes America 
 as showing a balance of trade similar to that of 
 India : but the former is a new country, with a 
 vast extent of virgin soil, and requires population 
 to open up its resources ; the latter is an old 
 country, with most of its best land densely 
 crowded. We must not, therefore, be content with 
 comparisons of Indian trade in 1850 and 1880, the 
 period during which the country has been opened 
 up by nine thousand miles of railway ; but we must 
 go behind the figures ; we must inquire into the 
 conditions of this trade, before we can be sure that 
 its prosperity implies the prosperity of the country 
 as a whole. Such an inquiry seems to show that a 
 great displacement of trade has taken place during 
 the last thirty years, but that this displacement 
 has in many respects thrown the profits of the 
 trade incto the hands of Englishmen instead of 
 natives. The latter may have gained somewhat, in 
 
and the Public Works Policy. 51 
 
 the case of cotton goods, by buying them in a 
 cheaper market, but so far as the importation of 
 foreign goods has displaced Indian labour, which 
 has been thrown back on the soil — this is especially 
 the case in the Bengal Presidency — and has in 
 time of scarcity to be supported by Government 
 out of taxation, there is a very serious set-off 
 against the gains of buying in a cheaper market. 
 If all the persons displaced by foreign competition 
 could find new industries ready to support them, 
 or would migrate to the hitherto uncultivated parts 
 of India, or emigrate to the colonies, then the 
 readjustments necessitated by railways and foreign 
 trade might be effected. But at present neither of 
 these conditions are realizable. The numbers em- 
 ployed, or likely to be employed, by manufactories, 
 mines, and on tea and coffee plantations are but a 
 small proportion of those thrown out of employ- 
 ment, while emigration beyond sea at the most 
 removes a few thousands. " From the testimony 
 received from every part of India," writes the 
 Famine Commission, " there is reason to fear that 
 so long as the tastes, habits, and temperament of 
 the Indian peasant remain unchanged, no material 
 improvement in his lot will be effected by emigra- 
 
52 The Economic Revolution of India 
 
 tion." Nor have attempts at colonizing waste parts 
 of India raet with any success. The truth seems 
 to be that native leaders are required in the 
 present as in the past, but they appear to have 
 lost their capacity for founding agricultural colonies. 
 The British Government has, by its supersession 
 of native administrators, paralyzed the power of 
 the upper classes to take the initiative ; while by 
 its destruction of the various home industries that 
 flourished through the length and breadth of the 
 land, it has killed the intelligence of the lower 
 classes. The result is obvious. The workmen, 
 thrown out of employment by foreign competition, 
 merely become a useless burden on the soil,* and 
 
 * It would be very interesting to know wliat amount of natives 
 in India receive wages from foreign capitalists engaged in business 
 not likely to be conducted by natives. The Famine Commission 
 Keport and Moral and Material Progress of India Blue Books give 
 some figures. Thus, we are told, there are fifty-eight cotton mills 
 in India, partly supported by foreign capital, employing 40,000 
 persons. There are also twenty-one jute mills in Calcutta, and 
 the number of employes for nineteen is stated to be 26,451. Three 
 coal mines in the Hazaribagh district employ 6210 persons, and 
 there are others elsewhere, but the number of employes is not given. 
 Then, the tea and coffee plantations employ a, large number of 
 coolies ; and there are some cloth mills. But, even if we take into 
 account the railway employifs, tliere can hardly be more than 
 700,000 persons employed directly by foreign capital. Against 
 this we have to set the millions of persons who have lost their old 
 
and the Public Works Policy. 
 
 a perpetually recurring tax on the community, 
 except so far as they are carried off by famine and 
 fever. 
 
 To sum up, the joint results of railways and free 
 trade may be briefly stated in this way. India 
 used to clothe itself, now England sends clothes, 
 and Indian weavers have lost an enormous source 
 of income, with the gain to the country of the 
 difference in price between EngHsh and Indian 
 goods. But to pay for these goods India has to 
 export vast quantities of food, and those who sell 
 this food make larger profits than before. There- 
 fore a certain portion of the community gain by 
 cheaper cotton goods and higher prices for grain. 
 But in order to attain this result they have had to 
 pay the sums before mentioned to buUd the rail- 
 ways. Besides that, they have to support in years 
 of scarcity a gigantic system of outdoor relief. Is 
 it not obvious that, taking the economic changes 
 as a whole, the country has lost an enormous 
 source of wealth ? If the import of cotton to India 
 
 industries under pressure of Western competition — aided, be it 
 always remembered, by railways built out of taxation — and have 
 been deprived of the profits of the carrying trade. The cultivators 
 employed by the cotton and indigo planters gain little benefit, 
 and ought not to be reckoned. 
 
54 Tlie Economic Revolution of India. 
 
 and the export of grain from India ceased to- 
 morrow, the Indian people would be the gainers, 
 though the Indian Government would be at its 
 wit's end. In fact, the interests of the two are not 
 identical. The Indian Government is now doing 
 its best to stimulate the export of wheat in order to 
 lessen its " loss by exchange " ; but this will only 
 result in higher food prices in India. We now see 
 the explanation of Mr. Hunter's assertion that 
 two-fifths of the people of British India enjoy a 
 prosperity unknown under native rule ; other two- 
 fifths earn a fair, but diminishing, subsistence ; 
 but the remaining fifth, or forty millions, go 
 through life on insufficient food. And in ten years, 
 according to Mr. Caird, there will be twenty 
 millions more people to feed. Can it, then, be 
 maintained that the material condition of India 
 has been improved by the enormous outlay on 
 railways ? 
 
 But you forget, replies the opponent of these 
 heretical views, that in time of famine the railway 
 brings food to starving districts. What would 
 have become of the people of Madras, Bombay,* 
 
 * The great famine in Southern India is spoken of by the 
 Commissioners as "the most grievous calamity of its kind ex- 
 
and the Public Works Policy. 65 
 
 and the North-West Provinces during the last 
 famine if it had not been for the railways ? My 
 reply is, What did become of them ? It is true, the 
 railways brought grain; yet they had previously 
 taken it away, and they brought it back at a 
 quadrupled price, and the Government had to 
 spend millions of pounds to enable the peasants 
 to buy it, and even then could not prevent fright- 
 ful moi-tality. What has been the native's custom 
 from time immemorial of providing against bad 
 years ? Why, the simple method of Joseph in 
 Egypt — that of storing grain. This is what the 
 official report * on the Mysore famine tells us : — 
 
 perienoed in British India since the beginning of the century." 
 The increased land-tax assessments in Bombay, the neglect of the 
 tanks in Madras, and the imposition of local cesses, coupled with 
 raising of the salt tax in both these provinces, no doubt largely 
 intensified the sufferings, due in the first instance to drought. AVe 
 hear a good deal of the rapid recovery of the agricultural popula- 
 tion after the famine. Of course, if a dense and over-taxed popu- 
 lation gets its numbers largely thinned by famine, the survivors 
 will be in a better state for the time being than they were before. 
 The real question is, does the action of the Government tend to 
 place the best classes of the country in a more comfortable con- 
 dition, or does it sacrifice the backbone of its peasantry to the 
 more worthless labourers ? 
 
 * I do not quote the above as proof that the railways depleted 
 Mysore — there were none there, and the depletion was due to the 
 revenue authorities rigorously collecting the land tax — ^but to 
 
56 The Economic Revolution of India 
 
 " The country had suffered in former years from 
 deficient rainfall, but actual famine had been 
 staved off by the consumption of the surplus ragi, 
 a coarse millet, stored in underground pits, from 
 which it is withdrawn in times of scarcity, as the 
 grain will keep sound and good for forty and fifty 
 years." Only two of the Famine Commissioners, 
 Messrs. Caird and SulHvan, seem to have recog- 
 nized the importance of this custom. In the 
 above-quoted very interesting appendix to the first 
 part of the Eeport, they write on the subject of 
 grain storage as follows : — " The food of the 
 people is of the simplest kind, grain, salt, and 
 a few condiments for a relish. The grain is easy 
 to handle, bears storage in pits for many years, 
 and the people themselves grind it as they require 
 it. The pits are made in the ground, in a manner 
 with which the natives are familiar, and cost 
 nothing beyond the encircling ring of baked clay 
 and labour in construction." It is this storage of 
 grain, the easiest kind of Famine Insurance Fund, 
 that the teachings of plain experience have forced 
 
 illustrate the native customs. The report I quote from is the 
 Blue Book on the Mysore famine, which goes fully into the causes 
 of that famine. In the Famine Commissions' Eeport, administrative 
 blunders are slurred over 
 
and the Public Works Policy. 57 
 
 the native to adopt throughout the length and 
 breadth of India, though the amount of stores varies 
 according to the necessities of each district. 
 
 Since the introduction of railways there is reason 
 to believe that the ryot, tempted by immediate 
 gain, or forced by taxation to sell his grain, is 
 beginning to store rupees instead of food ; but, as 
 he cannot eat his rupees or jewelry, and cannot 
 buy fuel so as to keep the manure for the land, 
 and has, according to the Famine Commissioners, 
 to give in famine times a quadrupled price for his 
 food, it is very doubtful whether he gains in the 
 long run. Anyhow, the landless labourer, who has 
 no produce to exchange for rupees, finds the 
 market price in time of scarcity utterly beyond his 
 means. Then the Government comes to the rescue 
 with relief works, the railways make roariag 
 profits — in fact, famine and war, both exhausting 
 for the country, are perfect godsends to the foreign 
 investor — and the Indian Government complacently 
 holds up its Public Works policy to an admiring 
 and interested English public. It wholly omits to 
 mention that in time past nearly £30,000,000 of 
 taxation have been squeezed out of the country to 
 pay interest charges, and that, if that sum had 
 
58 The Economic Reiiolution of India 
 
 been left in the agriculturist's pockets, lie might 
 himself have been better able to face bad times, 
 and have helped the labourer to do the same. But 
 Sir John Strachey utterly ignores this aspect of 
 the question ; he is quite content with pointing to 
 the relief works, and then insists on the necessity 
 of constructing more railways to ineet the next 
 famine cycle. One would suppose that railways 
 proceeded as a free gift out of the benevolent 
 bosoms of British capitalists, instead of being paid 
 for out of the hungry bellies of the Hindoo ryot. 
 The sum of £30,000,000 represents the amount 
 which India has had to pay out of taxation to get 
 its railways built, and then it has paid £15,000,000 
 (part of which went to the railway shareholders) to 
 keep the people alive, and after all has lost about 
 five millions of human beings. The 1877-78 
 famine of the North-West Provinces is a case in 
 point. The Famine Commissioners write as 
 follows : — " The calamitous season of 1877 was 
 accompanied by an extremely high range of prices 
 over all India, due partly to the deficient harvest, 
 and partly to the reduction of the food stock 
 through export from the Northern Provinces to the 
 South and to Europe." It is to be noted that 
 
and the Public Works Policy. 59 
 
 there are two railways running through these 
 provinces, but they did not prevent tlie people dying 
 to the number of 1,250,000, In the same way 
 during the Bengal famine of 1873-74 * " 222,576 
 tons of rice were exported from Calcutta alone, and 
 
 "■ Tho horrors of the Bengal famine of 1770 were greatly in- 
 tensified by the ever urgent demands of the East India Company 
 for more dividends ! Curiously enough, the French famine of the 
 same date was caused by the rapacity of the French Government, 
 and its waste in wars. So in native times wars made a year of 
 drought in India much more serious. As regards the famine of 1874, 
 Mr. 0. J. O'Donnell, in a letter addressed to the Marquis of 
 Hartington, entitled, " The Euin of an Indian Province " (Messrs. 
 Kegan Paul & Co., 1880), wrote as follows : — " Nothing seemed 
 to rae more certain, as the result of a careful study of the circum- 
 stances that gave rise to the disasters of 1874, than that drought 
 or failure of crops was not the cause of the so-called famine. A 
 thorough examination of rainfall tables established beyond doubt 
 the fact that the rains of 1873 were little short of a fair average, 
 and that the crops that form the ordinary food of the people yielded 
 fair average out-turns in that year. Especially was it evident that 
 rice, which alone failed, was not the food of the poor." Mr. 
 O'Donnell was sent to compile statistical accounts of the three 
 great Behar districts, and he gives the three following reasons for 
 the fact that one of the most fertile parts of India has become 
 notorious as the scene of frequent famines : — (1) The rack-renting 
 of the tenantry by the landlords, who farm out the rent collections 
 of their estates in parcels to speculating middlemen on short leases. 
 (2) The mismanagement by Government as Court of Wards of the 
 vast estates of the two greatest landlords of Behar. (3) The 
 eviction and oppression of the farmers by European adventurers, 
 for the purpose of indigo-planting, often with the support of officials 
 of the highest local position, 
 
60 The Econoviic Revolution of India 
 
 151,597 tons in twelve months, from October, 1873, 
 when widespread failure of the food supply was 
 certain, to October, 1874, when the distress was at 
 an end. As a fact the famine was only averted by 
 the interference of Government at an enormous 
 outlay (six and a half millions sterling) and the 
 importation of 516,000 tons of grain from without." 
 The Orissa famine of 1866 is generally adduced as a 
 proof of the necessity of better communications and 
 large irrigation works. But the Commission states 
 the reason of the great suffering to be that " the 
 food-stocks were low, both because the exports had 
 been unusually brisk of late, and because the people 
 had not been taught by precarious seasons to pro- 
 tect themselves by retaining sufficient stores at 
 home. ... It was suddenly discovered that the 
 province was bare of food." If railways were intro- 
 duced into Orissa, just as expensive canals have 
 already been introduced, and taxation were further 
 increased to pay interest charges, the ryot's habits 
 of thrift and foresight would be further broken 
 down. "The structure of Indian society," we are 
 told by the Commission, " is in some ways admir- 
 ably adapted for common effort against a common 
 misfortune. The ordinary form of life in the 
 
and the Public Works Policy. 61 
 
 Hindu family makes each individual a member of 
 a corporate body, in whose possessions, rights, and 
 duties, he participates, and to which he is legally 
 entitled to look for assistance in time of need. 
 Even where the legal right does not exist, the moral 
 obligation of mutual assistance is scarcely less 
 recognized. Apart from family ties there are other 
 relationships, such as those of landlord and tenant, 
 master and servant, employer of agricultural labour 
 and employed, alms-giver and alms-receiver, which 
 are of the utmost importance in binding the social 
 fabric together, and enabling it to resist any 
 ordinary strain. There are, too, salutary habits 
 of frugality and foresight, the precious result of 
 traditional experience, which have an all important 
 bearing upon the power of Indian society to pass 
 comparatively unscathed through periods of dearth. 
 Any form of relief calculated to bring these rights 
 into obscurity or destruction, or to break down 
 these habits, by showing them to be superfluous, 
 would be an incalculable misfortune." Is not this 
 the strongest condemnation of the three R's of the 
 Indian Government — Kailways, Eelief Works, and 
 Bates ? 
 
 But not only have railways helped to deplete 
 
62 The Economic Revolution of India 
 
 the people's stores, they have also helped to destroy* 
 the mainspring of their agricultural industry. " It 
 is not too much to say," writes Mr. A. 0. Hume, 
 " that one-half of the whole capitalized wealth of 
 ninety-nine hundredths of the whole population 
 of India is to be found in their cattle ; it is not too 
 much, I believe, to assume that the value of this 
 cattle, about a hundred millions, falls little if at all 
 short of seventy-five millions sterling." He calcu- 
 lates the average annual loss of cattle in India by 
 preventable disease of one form and another at full 
 ten million beasts. The largest proportion of this 
 loss is due to want of fodder, and want of salt,t and 
 
 * In the North- Western Provinces and Oudh, the railways and 
 taxation have together so stimulated the export trade, that bullocks, 
 which had better be employed in working on the land, are engaged 
 in feeding the railways. That this apparently flourishing state of 
 matters does not imply the prosperity of the peasantry may be seen 
 from the fact that the district officers in those provinces are con- 
 tinually calling attention to the increase of the money-lending 
 class, and of the indebtedness of the peasantry. In Oudh, where 
 very few of the ryots have oocupanoy rights, the talukdars ave able 
 to shift the burden of taxation on the backs of the cultivators, who 
 have to hurry off with their crops to the money-lender in order to 
 get rupees. In the Nortli-Western Provinces, where a large propor- 
 tion of the cultivators have occupancy rights, it is the landowners 
 — most of them small men, and members of village communities— 
 who are getting over head and ears into debt. 
 
 t In spite of the recent reduction of the salt tax to two rupees 
 
and the Public Worhs Policy. 63 
 
 the question arises, how far this want of sustenance 
 is due to a large portion of the profits of the carry- 
 ing trade being absorbed by the railways. What 
 amount of beasts have been displaced by the rail- 
 ways official statistics do not make it possible to 
 discover, but this is what the Famine Commis- 
 sioners write : " The ordinary carriage of the 
 country consists of carts drawn by bullocks, and 
 generally by two bullocks, and carrying seven or 
 eight hundredweight ; but where there is a con- 
 siderable traffic over a long stretch of first-class 
 roads, it is not uncommon to see two or even four 
 pair of bullocks yoked to carts capable of carrying 
 nearly a ton. In Madras and Mysore the carts are 
 of superior construction, with light, strong wheels 
 of an English pattern; in Upper India they are 
 more clumsy vehicles, with thick, heavy wheels, and 
 
 a maund (821bs.), it is still crushingly high, and in most parts of 
 India higher than it was thirty years ago. Salt was subjected by 
 the natives to potty duties, like other articles, but it was not made 
 a special source of large revenue. Dp to 1850, Madras and Bombay 
 paid three-quarters of a rupee per maund ; in 1843, the North- 
 Western Provinces paid two rupees per maund. The salt tax was 
 raised very considerably in the Punjab after annexation, and in 
 Sindh in 1878 ; it was almost nil before. Though railways have 
 cheapened the carriage of the best salt, yet many local supplies 
 have been suppressed by the Government, to protect its monopoly. 
 
64 The Economic Revolution of India , 
 
 often with wooden axles, strengthened with iron ; 
 in Central India it is still common to see little low 
 carts, with solid discs of wood tired with iron for the 
 wheels. The ordinary rate of freight by cart, when 
 the roads are good and traf&c abundant, is from 
 two to two and a half annas per ton per mile, and 
 it is sometimes as low as one and a half annas ; in 
 hilly and out-of-the-way tracts the rate often runs 
 up to four and five annas per ton. Some attempts 
 have been made to obtain statistics of the number 
 of carts, but they are very untrustworthy. Almost 
 every cultivator of any wealth keeps a cart in which 
 he yokes his plough bullocks, and brings home the 
 produce of his fields ; few villages of thirty or forty 
 houses but will contain ten or twelve carts. The 
 number ordinarily plying for hire is much smaller, 
 but whenever a demand arises an immense number 
 of these agricultural carts will turn out on the 
 road, especially in the season when field work is 
 scanty. As an instance of the extent of the supply 
 may be quoted the fact, that on a single road in 
 the Central Provinces, that from Nagpur to Bhan- 
 dara, 36,000 carts have paid toll in a single week. 
 In the less civilized and more remote parts of 
 the country pack-bullocks stUl ply for hire. They 
 
and the Public Works Policy. Cf) 
 
 are commonest in Central India, the Central 
 Provinces, the Hyderabad country, and the Western 
 Ghats of Bombay and Mysore; but their number 
 is small now compared to what it was when almost 
 the whole internal traffic of the country was carried 
 on in this way, and no army took the field without 
 a swarm of these ' Brinjara buUocks ' to carry its 
 commissariat." * 
 
 We may gather from the above quotation what 
 an enormous amount of bullock-power must have 
 been displaced by the railways. It is true that 
 railway carriage is three or four times as cheap 
 for long distp,nces as bullock carriage, but then the 
 whole profits of the latter were distributed among 
 the cultivators, while those of the former leave the 
 country. Further, the bullock transport enabled 
 the ryots to beep a larger number of cattle, for 
 either they employed their own animals partly for 
 carriage and partly for cultivation, or else they 
 paid others to keep transport cattle. Where the 
 railways have taken the place of this transport, 
 
 * Dr. Hunter, in a recent speech in the Viceroy's Legislative 
 Council, assigned as one of the causes of the wretched poverty of 
 the Ueocan ryot, the extinction by the railways of the great carrying 
 trade by pack-bullocks, partly from north to south, but chiefly dowu 
 the Gh§,ts to the coast. 
 
66 The Economic Revolution of India 
 
 it does not pay to keep cattle idle for part of the 
 year, or if they are kept they must be sadly under- 
 fed. Anyway, the land loses a large amount of 
 manure,* which is the one thing, according to 
 every authority, required for the country. But if 
 it cannot pay to keep so many well-fed cattle as 
 in old days, what is the native to do with the 
 money saved by a cheaper — hut only after he has 
 been taxed to establish a monopoly — method of 
 carriage ? The plain truth is that he can only 
 hoard it, unless the Government, by the imposition 
 of further taxation, is kind enough to relieve him 
 of his burden. Official reports are continually 
 pointing to the vast imports of treasure into India 
 as a proof of the prosperity of the country. But 
 they are, to a great extent, merely a proof of its 
 necessities, the result of economic changes. The 
 import of treasure is in part due (1) to the con- 
 
 * Mr. Hume says that " there is a vast consumption of manure 
 in brick-making, and here the D. P. W. are great sinners. The 
 increase of brick-making, and with it the consumption of dung as 
 fuel — it being in moat places cheaper than wood — has been enormous 
 of late yeais." The Government is now busy with schemes for 
 preserving forests, but it has, in the first place, allowed the rail- 
 ways to destroy them for sleepers, fuel, etc. The perhaps necessary 
 closing of the forests against the natives has recently led to loud 
 outcries in the native press. (See Appendix A.) 
 
and the Public Works Policy. G7 
 
 struction of railways, (2) to the gradual substitu- 
 tion of payments in money for payments in kind. 
 Year by year the village grain-heap, which used 
 to form the pivot of village life, has been super- 
 seded by the rupee-bag of the money-lender. 
 Landlords and labourers who used to receive 
 respectively their rents and wages in kind, are now 
 paid in silver. Not only does the Government's 
 demand for cash payments naturally cause this 
 change, but the increasing export of grain — the old 
 currency — has to be counterbalanced by the in- 
 creasing import of silver, the new currency. A 
 great part of the treasure which represents the 
 profits of the foreign trade goes into the pockets 
 of the native middleman, not into those of the 
 cultivator, and even when the cultivator does find 
 himself blessed with a small number of rupees, 
 after deducting his land-tax, his share of local 
 cesses and salt tax, what is he to do with them ? 
 It might be supposed that he would undertake 
 some agricultural improvements, for he is not so 
 ignorant or stupid as some people make out. This 
 is sometimes the case, but this excellent land of 
 investment is much discouraged by the fear that a 
 license-tax collector will notice such evident signs of 
 
68 The Economic Revolution of India 
 
 wealth, or that some local cess will be imposed, or 
 that at some future land-assessment he will haTC his 
 rent raised on his own improvements. " There 
 is strong proof," writes Mr. Caird, "that even a 
 thirty years' settlement is not reckoned by the cul- 
 tivator such a security as would lead him to spend 
 any capital he may save on permanent improve- 
 ments. A man having two holdings, of which one 
 is only a few acres of personal ' imam ' land upon 
 which a low quit-rent cannot be raised, will 
 spend all his savings upon it in making wells or 
 other permanent improvements, while he will not 
 lay out a penny in the holding which is liable to 
 future increase of assessment." So the simple- 
 minded peasant makes a pilgrimage by rail, or has 
 a grand wedding-feast, or hides his money in a 
 napkin, and brings it out in some year of scarcity 
 to pay for grain when it is quadrupled in price, 
 and so swell the profits of the railways. 
 
 The stereotyped answer to all the above con- 
 siderations is, that such suffering always accom- 
 panies any great changes by which a country 
 advances to a higher civilization ; that what is now 
 going on in India is just the same sort of thing 
 as went on in England at the beginning of this 
 
and the Public Works Policy. 69 
 
 century, when machinery took the place of manual 
 labour and steam superseded animal power. After 
 an inevitable period of misery, India, it is said, 
 will enter upon a great industrial career, and 
 she will thank English statesmanship for the open- 
 ing up of the country's resources. The analogy 
 is flattering to our national pride, but it is utterly 
 fallacious. The economic revolution which took 
 place in England was the result of indigenous 
 forces, and, as in the case of all external changes 
 which correspond to internal activities, after a 
 period of disturbance during which capital and 
 labour shifted to new spheres of action, a new 
 equilibrium was established. Capitalists who were 
 deprived of the old sorts of investments found new 
 ones offered to them, workmen who found old 
 industries failing, moved to a much larger world 
 of work. But in India the upper classes have lost 
 many of their old sources of income as adminis- 
 trators, soldiers, and public servants of various 
 sorts : while the ryot has no compensating source 
 of income in the new transport service, because 
 the capital is provided for him by a paternal 
 despotism or by foreign investors, and even if 
 small shares were offered him — and they must be 
 
70 Tlie Economic Revolution of India 
 
 very small — he would probably not invest in them ; 
 and the old industries, apart from agriculture, 
 which employed millions all over the country, are 
 being gradually destroyed by foreign competition, 
 which has been actually facilitated by taxes to the 
 amount of thirty millions sterling, squeezed out of 
 the ryot's own pocket to pay for improved com- 
 munications, euphemistically called opening up the 
 country to free trade. And it is this very impossi- 
 bility of any economic readjustment — except to 
 a very slight extent through the help of foreign 
 enterprise, which will again reap all the profits — 
 that is the r'eal reason why the construction of 
 railways and the establishment of the keen com- 
 mercial competition of the West lead to such 
 disastrous consequences. We have dealt with the 
 economic conditions of India as if we could isolate 
 them from its social conditions, we have treated 
 a passive people as though it possessed the most 
 active type of character, we have forced on it a 
 quick-working apparatus suited to a high-pressure 
 civilization, and have then expected that it will 
 work in the most beneficial way. We have treated 
 capital stored up in the shape of caste-bound skill 
 .and cattle, and distributed in infinitesimal proper- 
 
and the Public Works Policy. Yl 
 
 tions over a multitude of small husbandmen, as 
 though it were the large accumulations of enter- 
 prising capitalists who can shift their activity 
 according to the demands of the industrial market ; 
 and we have identified the non-migratory labourer 
 of India with his migratory counterpart in England. 
 Finally, we have treated a country liable to famine, 
 and to a great extent overcrowded with inhabitants, 
 as though it was teeming with surplus agricultural 
 wealth, or had a sparse population with unlimited 
 supplies of virgin soil ; and the result of such treats 
 ment is obvious — recurring famines and a flourish- 
 ing export trade in food, costly railways and relief 
 works, supported out of a rigorous revenue system 
 which rack-rents the ryots at the very moment 
 when their rents ought to be suspended. Lord 
 Derby is the only English statesman who ever 
 seems to have appreciated these facts. Speaking 
 in 1857, after his tour in India, he said : " It 
 seemed to be thought that because costly lines of 
 railway were suitable for this country, they were 
 equally suitable for India. He believed, and so 
 did more competent judges, that this was a 
 complete mistake. What was wanted in India was 
 not costly lines for rapid travelling, laid down in 
 
V2 Tlie Economic Revolution of India 
 
 a few parts, but a comparatively inexpensive, 
 though slow, means of communication extended 
 all over India." It is true that Lord Lawrence, 
 who necessarily knew India better than any pre- 
 ceding or succeeding Viceroy, sanctioned Colonel 
 E. Strachey's scheme, but in 1866 he wrote as 
 follows : — " What seems to me of more importance 
 than new lines of communication, is the question 
 of irrigation for many parts of India ; " and, " with 
 the lines under construction completed we should 
 do very well for a time ; " and it seems very doubt- 
 ful whether he would have sanctioned the reckless 
 railway mania of the present day. " Our main 
 object," he wrote again, " should be to complete 
 the railways in India. There are some lines still 
 to be commenced, but I doubt much whether they 
 will pay, and in our present financial difiiculties 
 I am for postponing them aU." But even if Lord 
 Lawrence's authority could be quoted for the con- 
 struction of all the present lines, and of another 
 ten thousand miles of railway, yet it must be 
 remembered that he was primarily an administrator, 
 and not an economist ; that he was too absorbed 
 in the solution of pressing problems to look far 
 ahead ; and that he naturally adopted, though with 
 
and the Public Works Policy. 73 
 
 considerable reservations, which were seen in his 
 opposition to the repeal of the cotton duties, the 
 generally accepted formula of the orthodox political 
 economy, which preaches the infinite efficacy of 
 foreign capital. Lord Derby, the only English 
 statesman of the highest calibre who has visited 
 India and examined its needs with unofficial eye, 
 saw clearly what the country required : " A com- 
 paratively inexpensive, though slow, means of com- 
 munication extended all over India." Good roads, 
 navigation where possible, and — ^where it was still 
 found that there was, taking good and bad years 
 together, real waste of produce, or an opening for 
 new industries not otherwise to be brought into 
 being — cheap railways would have provided all 
 that was necessary. As it is, we have first made, 
 in truly Eoman fashion, the most splendid and 
 costly roads, such as the great trunk road connect- 
 ing Calcutta with Allahabad and Delhi; then we 
 have constructed canals on which, though primarily 
 made for irrigation purposes, we have spent 
 thousands of pounds for navigation arrangements ; 
 and, finally, have superseded roads and rivers alike 
 by railways, which have managed to under-sell 
 the carriers on the former by the free gift of 
 
74 The Economic Revolution of India 
 
 £30,000,000 of taxes to get them constructed, and 
 an annual sum of about £1,000,000, reckoned as 
 loss by exchange, to enable them to pay their way ; 
 and distinguished Anglo-Indians, like Sir Eichard 
 Temple, regard this fact with the greatest satisfac- 
 tion. This is what he told the Famine Commis- 
 sion : " The old navigation of the Upper Ganges 
 has fallen off. . . . The navigation of the Indus 
 has greatly developed during recent years. It 
 remains to be seen whether it will be affected by 
 the railways ... On the western coast of India 
 the navigation by ocean-going country craft is 
 wonderfully great, and flourishes despite the exten- 
 sion of railways. At first it injuriously competed 
 with railways, but of late years the rail is beginning 
 to hold its own." 
 
 At present there is a great deal of traffic on the 
 Lower Ganges, Lower Brahmaputra, and the 
 Megna; but in Bengal, the Bengal Central Com- 
 pany, aided by a Government guarantee, i.e. taxation, 
 hopes soon to divert some of the boat traffic on the 
 Ganges, while a line is now being constructed by 
 the State to do the same kindly service for the 
 grain-carriers on the Gogra in Oudh, a densely 
 crowded and purely agricultural province. In the 
 
and the Public Works Policy. 75 
 
 same way the South Mahratta Line -will no doubt 
 be able, by help of its guarantee to be paid out of 
 taxation, to " divert still further the coast traffic," 
 and we shall then be told to congratulate the Indian 
 Government on its development of the resources 
 of the country, the fact being that the trade will be 
 unnaturally stimulated, and the profits taken out of 
 the pockets of native carriers and put into those of 
 English capitalists. When I was in India three years 
 ago, I remember an Oudh civilian translating to 
 me two lines of a popular song, the burden of which 
 was a plaintive wail over railways. Indeed, there is 
 every reason for believing that, if opportunity 
 offered, there would be a serious movement against 
 the railways on the part of the poorer agricultural 
 population. It sees fibre crops taking the place of 
 food crops ; it sees food carried off by the railways ; 
 it finds prices equalized indeed over a series of 
 years, but by a levelling-up process, and wages more 
 or less stationary; it sees native industries destroyed, 
 and manufactured goods taking their place; and, 
 finally, it has a fine feast once in ten years at relief 
 works, when it learns the difference between an 
 empty and comparatively full belly. And what of 
 the classes with interests in the soil ? Why, they 
 
76 The Economic Revolution of India 
 
 have the great pleasure of being taxed during years 
 of plenty to build the " productive " and "protec- 
 tive " railways, and then of being taxed during the 
 years of scarcity to support the relief works, and so 
 they are ground down between the upper and nether 
 mill- stones, and are gradually enslaved to the 
 money-lenders, who are merely the camp-followers 
 of that patent instrument of plunder and devasta- 
 tion, the Public Works Department, and faithfully 
 attend the march of the pioneer-corps as it opens 
 up the country to the mercies of the " Marwari," 
 and preaches the imperial policy of peace " through 
 blood and iron." When the next famine cycle 
 arrives, the expenditure of the Government on relief 
 works will reach an unprecedented sum. It must 
 justify the existence of the railways by saving, or at 
 least trying to save, every possible life, and whence 
 will come the food ? The growth of wheat crops, 
 partly in the place of other food crops, partly on 
 the newly cultivated lands of the Punjab, has been 
 largely encouraged by the demands of the European 
 market, but unless the Indian Government is itself 
 willing to feed the raasses by means of the most 
 costly food, the wheat supplies will not be available 
 for home consumption. It is true that Turgot 
 
and the Public Works Policy. ^7 
 
 grappled with the problem of French famines by- 
 fostering the export of corn in normal years, so as 
 to provide against seasons of scarcity; but the 
 peasantry of France, the wealthiest peasantry in 
 the world, with every inducement to save, are not 
 to be for a moment compared to the ryots, still less 
 to the landless labourers of India. 
 
 The forty millions who are now said to go through 
 life on insufficient food, will, during the years of 
 plenty, have their numbers still further increased. 
 The very hopelessness of their normal condition 
 makes then reckless about the future,* and the 
 substitution of relief works for industrial pursuits 
 is breaking down all their habits of thrift and self- 
 reliance. Eailways constructed, I repeat, by means 
 of taxation have destroyed the natural protections 
 provided for local industries by distance and diffi- 
 culty of transport, and have subverted by force, and 
 without any free assent or any corresponding pre- 
 
 * " The classes that suffer most are the weavers of coarse goods, 
 whose trade has almost gone from them, under the competition of 
 cheap power-loom fabrics, and who are very slow indeed to emigrate 
 or to abandon the handicraft of their forefathers. . . On occasions 
 we have spent public money in procuring the way for new industries, 
 but the effect of such undertaking is limited, and does not radiate 
 into the rural tracts.''—" Despatch of Government of India," July S, 
 1880, in reply to Mr. J. Oaird's Eeport. 
 
78 The Economic Revolution of India 
 
 paration on tlie part of the population immediately 
 affected, the economic status of centuries. History 
 supplies us with no parallel instance of such a far- 
 reaching revolution imposed from without at the 
 point of the bayonet. We cannot, therefore, derive 
 any lessons from the past exactly appropriate to 
 the case before us, but it is impossible to suppose, 
 human nature being what it is, that such sudden 
 changes in the life of a very ancient civilization can 
 in the long run prove beneficial to its highest 
 interests. " If," writes Mr. Herbert Spencer, a 
 propos of the close connection of political insti- 
 tutions and social conditions, "greater modifica- 
 tions are by accident produced, the excess of change 
 is sure to be undone by some counter change." 
 This observation is particularly applicable to 
 economic changes in India. The sudden and 
 general introduction of railways and freetrade is 
 shattering India's social system, and with it all the 
 precious habits of prudence and the priceless feel- 
 ings of mutual dependence that have enabled its 
 children to weather the frightful storms which man 
 and nature have combined to launch on them. The 
 question which all who care for India's welfare 
 ought to ask themselves is, whether our boasted 
 
and the Public Works Policy. 79 
 
 gift of rapid communication, as the necessary con- 
 dition of freetrade, is not undoing all the good 
 which a strong and settled Government has heen 
 able in the past to confer on India. A nation does 
 not live by bread alone, but no higher life was ever 
 produced by the sheer pressure of hunger. What 
 is the use of all the boasted blessings of British rule, 
 security of person and property, a just administra- 
 tion, a higher system of education, and the latest 
 inventions of Western science, if the people who 
 only require a little coarse grain and salt, and a 
 few clothes of the roughest sort, are to live on the 
 verge of starvation ? 
 
 The standing argument against the East India 
 Company was, that it was too much permeated by 
 the commercial spirit, that it thought first of its 
 dividends, and secondly of the welfare of the ■■ 
 governed ; and it was supposed that if India became 
 a Crown dependency, ruled by statesmen directly 
 responsible to Parliament, the proper objects of 
 British administration would be attained. But ; 
 such sanguine hopes have not been at all fulfilled. J 
 The rods of the East India merchants have been 
 exchanged for the scorpions of Manchester and 
 Birmingham. The power supposed to be entrusted 
 
80 The Economic Revolution of India 
 
 to Parliament as a whole has really passed into 
 the hands of an energetic minority of manu- 
 facturers, merchants, capitalists, and planters, 
 interested in developing the resources of the 
 country, which means, to a great extent, appro- 
 priating the profits of the internal and external 
 trade. In India and England alike they urge the 
 Government to raise loans for the construction* of 
 railways, in order that, by the aid of taxation, they 
 may be able to reach the centres of trade up 
 country, and by their superior energy carry all 
 before them. By appeals to the benevolence of 
 the British public, which believes that the horrors 
 of famine will be wholly averted by the help of the 
 railways, they get to be regarded as angels of light, 
 and it is only now and then, when a Criminal 
 Procedure Bill, or an Income Tax, or a Eent Act is 
 proposed by the Indian Government, that their 
 real nature is revealed to the eyes of an astonished 
 nation. But these symptoms of an unregenerate 
 nature are soon forgotten, and the encouragement 
 
 * " Boads, bridges, and railways have been made at the cost of 
 public funds, for the service of tea, coal, and similar industries," 
 is the candid confession of the Indian Government (vide Despatch 
 of June 8, 1880), and yet the planters, etc., always cry out against 
 the imposition of an income tax on themselves. 
 
and the Public Works Policy. 81 
 
 of private enterprise is again preached as the 
 panacea for India's poverty ; and, in pursuance of 
 this idea, the Indian Government is gradually losing 
 its character of a paternal despotism, and is being 
 transformed into a despotism unparalleled for 
 rapacity in Indian history. What can be more 
 damning evidence than the growing indebtedness 
 of the peasantry, which has actually made it 
 necessary for the Government to pass an Act like 
 the Deccan Eyots and Jhansi Belief Bills, and to 
 think of itself starting agricultural banks all over 
 the country ? When this last measure is carried, 
 it will stand face to face with millions of plundered 
 peasants, and the latter will recognize at last the 
 true author of their miseries. When that hour 
 arrives, the sting of suffering might goad into 
 action the most fatalistic of races. " The matter 
 of sedition," wrote Lord Bacon, " is of two kinds, 
 much poverty and much discontentment. It is cer- 
 tain so many estates overthrown, so many votes for 
 troubles . . . And if this poverty and broken estate 
 be joined with a want and necessity in the mean 
 people, the danger is imminent and great. For 
 the rebellions of the belly are the worst." The 
 present condition of India could hai'dly be described 
 
82 The Economic Revolution of India, etc. 
 
 in terser terms. At the bottom of the scale are 
 forty millions * of landless people living on in- 
 sufficient food, and at the top are the old land' 
 owiiers, who are gradually getting into debt and 
 losing their land. The usurers, corn-dealers, and 
 middle-men generally are, no doubt, prosperous; 
 and there is a certain proportion of the peasantry, 
 with varying interests in the soil, who are fairly 
 comfortable, but with increasing numbers, and few 
 fresh openings for industry, and burdened with the 
 cost of keeping up the relief system, they too will 
 fall into the hands of the money-lenders. And the 
 Government, wishing to find some scapegoat for 
 the miseries of its rural population, turns on the 
 money-lenders, and, as in the Deccan and Jhansi, 
 devours them last of all after the manner of 
 Polyphemus.' 
 
 * See Appendix A. 
 
PAET III. 
 lEEIGATION WOEKS. 
 
" Neo tempore eodem 
 Tristibus aut extis fibrse apparere minaoes 
 Aut puteis manare oruor cessavit." 
 
 Virgil. 
 
" The special peculiarity of Indian agriculture," 
 ■write the Famine Commissioners, " is the in- 
 genious and assiduous manner in which water is 
 applied to increase the produce of the soil. Some 
 of the crops grown during the rainy season, and' 
 many of those grown in the winter and spring, 
 cannot be raised without artificial irrigation." 
 They then proceed to give a brief account " of the 
 principal methods adopted for utilizing (1) the rain 
 water ; (2) the water of rivers ; (3) the subterranean 
 springs and waters." 
 
 " The chief manner in which the surplus rain 
 water is made available for irrigation is by storing 
 it in tanks. It is in the south of India that these 
 tanks are most numerous, and are constructed on 
 the largest scale. In Madras and Mysore the 
 ingenuity of man has been employed for many 
 centuries in taking advantage of every locality in 
 which water can be caught and stored, and pre- 
 
86 The Economic Revolution of India 
 
 vented from running uselessly to the sea. Where 
 a depression exists, with two or three square miles 
 of catchment above it, an earthen embankment is 
 thrown across it ; some water is caught by this, to 
 be guided to the fields below, while the surplus 
 escapes, and flows past the flank of the embank- 
 ment. Half a mile lower down another embank- 
 ment is formed, and another beyond that, each 
 larger and stronger than the one above it, as the 
 drainage area of supply becomes larger. "When 
 the volume of water has become large, the embank- 
 ment is often faced with stone, masonry sluices 
 are formed in the embankment, communicating 
 with channels, which lead to the irrigated area 
 below ; the closing and opening of these sluices, so 
 as to distribute the water fairly and in order, 
 becomes the occupation of a hereditary servant of 
 the tank. The duty of repairing and turfing the 
 embankment, and keeping the stone revetment, 
 the sluices, and channel in order, attaches either to 
 the villagers who benefit by the tank, or to some 
 landowner (the heir, perhaps, of the original con- 
 structor), who is remunerated by the possession of 
 rights over part of the land irrigated, or to Govern- 
 ment in the case of the larger tanks. Some of these 
 
and the Public Works Policy. 87 
 
 maybe more properly called lakes. Thus the Sulikere 
 tank in Mysore (in the Chitaldrug district) and the 
 Cambam lake in Karnul, which are probably the 
 largest in India, are forty miles in circumference. 
 The smaller tanks are used only during the rains, 
 and chiefly for the rice-fields, which require a 
 constant and equable supply of water, without any 
 interval ; the larger contains a supply for the year, 
 and make possible the cultivation of the later rice — 
 which is sown in December or January, and ripens 
 in April or May — of sugar-cane, and garden crops. 
 
 " The same system of tank construction exists, 
 though not carried to such a pitch of excellence, in 
 the eastern part of the Hyderabad State and of the 
 Central Provinces. In Eajputama and Central 
 India tanks are not unfrequent, and some of them 
 are splendid works, made by throwing embank- 
 ments or masonry weirs across the valleys between 
 hills on either side." In the other parts of India 
 tanks and ponds are to be found, but not to such 
 an extent as in the above-mentioned provinces. 
 
 " Another common mode of obtaining the means 
 of irrigation is to dam up streams, and lead them 
 over the adjoining land by a side channel. This, in 
 the case of the smaller streams, is frequently done 
 
88 The Economic Revolution of India 
 
 with much efficiency without any intervention on 
 the part of the Government, except for the purpose 
 of deciding and recording the nature and priority 
 of the rights of those who use the water. The 
 larger rivers are, however, beyond the management 
 of individuals or village communities, and here the 
 State has been obliged to step in, and employ the 
 service of its most skilful engineers to control and 
 govern the stream. Something was done in this 
 direction by the native kings of the country before 
 the British rule. The most notable instances are 
 the channels taken off from the Caveri, in Madras, 
 and the canals from the Jumna, in Northern India, 
 and some of the inundation canals along the Indus. 
 But the chief irrigation canals of India have been 
 constructed under the British rule. These are of 
 two kinds — perennial and inundation canals. The 
 perennial canals, again, may be distinguished — first, 
 those which are drawn from rivers high up their 
 course, like those of Upper India ; secondly, those 
 formed in the deltas of the larger rivers, like those 
 of Madras and Orissa. 
 
 "The third and most important, because most 
 extensive, method of irrigation is by means of wells. 
 These are in almost all cases constructed by the 
 
and the Public WorJcs Policy. 89 
 
 agriculturists at their own cost : they can be made 
 in almost all localities. In the alluvial soil of 
 Upper India there is generally a water-bearing 
 stratum averaging from ten to forty feet below the 
 surface, through which the water percolates more 
 or less freely, sometimes bursting up in a copious 
 spring when it is tapped. The well-sinker has no 
 fear here of coming upon rock ; his only difficulty 
 lies in the sandy strata he may have to pierce 
 through. If the sand is very fine and contains 
 much water, it can only be pierced by putting down 
 a brick cylinder, which holds up the sand, and 
 sinks by its own weight till the spring is tapped. 
 Such a well will cost from a hundred rupees to five 
 or six hundred rupees, according to the depth to 
 which it is sunk and the diameter of the cylinder. 
 When the strata to be penetrated are fairly solid 
 and dry, the well will stand with httle or no artificial 
 protection, and can often be sunk without any brick 
 lining, and, where water is near the surface, at a 
 cost of two or three rupees. Where water is as 
 close as ten feet to the surface, or less, as it is in 
 the river basins and in many parts north of the 
 Ganges, the wells only last through one season, 
 and fall in in the rains." In the Central Provinces, 
 
90 The Economic Revolution of India 
 
 Berar, Bengal, Bombay Deccan, and Madras, the 
 use of wells for irrigation is much more restricted, 
 but still their number is by no means inconsiderable. 
 
 Taking British India, with its 197,000,000 acres 
 of ordinarily cultivated land, it would appear that 
 about 12,000,000 acres are protected by wells 
 (though on this point statistics are admittedly very 
 inaccurate), about 8,000,000 by canals, and about 
 9,000,000 by less reliable means of irrigation. Wells 
 and tanks may be said to have been constructed 
 almost entirely by native enterprise, and require no 
 skill which is not indigenous to the country. The 
 canals, on the other hand, have been to a great 
 extent* made by English engineers, and are super- 
 intended by a large staff of canal officers. 
 
 I shall now proceed to consider the financial and 
 economic results of the Public Works policy, carried 
 
 * Sir J. Strachey (p. 7 of " Finances of India ") accredits the 
 ■whole of the 8,000,000 acres irrigated by canals to the British rule. 
 This is obviously incorrect, as no allowance is made for native 
 works, such as the Indus inundation canals, and some of tho 
 Madras works. The Famine Commission gives the following 
 figures : — Ganges Canal irrigates 1,200,000 acres ; the Jumna 
 canals, 680,000 ; the Baree Doab, 250,000 ; the Agra Canal, 225,000 ; 
 Lower Ganges, 800,000 ; the Sone, 240,000 ; the Madras deltaic 
 canals, 1,683,000; the Punjab and Sindh Inundation Canals 
 respectively, 930,000 and 1,800,000. 
 
and the Public Works Policy. 91 
 
 out by the Indian Government, under the head of 
 Canal Irrigation. The Famine Commissioners write 
 as follows : — " On the works of irrigation for which 
 capital and revenue accounts are kept, there have 
 been spent, up to the close of the present year — ■ 
 
 "Outlay from borrowed funds ... ... ... £12,679,800 
 
 Surplus revenue ... ... ... ... 7,619,000 
 
 £20,298,800 " 
 
 In the Indian Eailways Eeport (1880-81), to which 
 is appended a statement on canals and irrigation, 
 the capital outlay is reckoned at £17,696,348, but 
 this lower estimate is probably due to the fact that 
 the amount of outlay on works only partially com- 
 pleted has not been taken into consideration. 
 Indeed, it is very doubtful whether, in the higher 
 estimate given by the Famine Commissioners, the 
 whole outlay has been calculated. It is admitted 
 that, in the case of the earher works, such as the 
 Baree Doab Canal,* which was commenced soon 
 after our annexation of the Punjab, the accounts 
 were very inaccurately kept, and the charges for 
 ordinary and extraordinary {i.e. productive) public 
 works were so inextricably jumbled together, that it 
 is quite impossible, at this distance of time, to get at 
 * Cf. Lord Lawrence's Life, vol. 1. p. 403. 
 
92 Tlie Economic Revolution of India 
 
 the real amount expended. In other oases, as, for 
 instance, in Madras, native rulers had already 
 employed labour before we toot the works in hand, 
 and this capital outlay is unaccounted for. Further, 
 as in the case of the railways, the sums paid out of 
 the Budget for interest charges * before the works 
 began to pay their way ought to be added to the 
 capital account. If these different items were 
 reckoned up, there is reason to think that the 
 capital expenditure would be shown to be consider- 
 ably larger than the highest estimate which official 
 returns have as yet made. For instance, the 
 Famine Commissioners, a jrropos of the Bengal 
 works, state that the capital spent on the canals in 
 Orissa up to 1st of April, 1878, was £1,750,000 ; 
 but the Irrigation Committee, appointed by the 
 Commission to go into the whole matter, calculatest 
 the capital outlay, including accumulated interest 
 charges, at £2,294,208. Again, in the official 
 statement appended to the railway report, t the 
 capital outlay on the Midnapore Canals, up to end 
 of 1880, is reckoned to be £749,047 ; according to 
 
 * Interest charges out of "revenue" for Ganges Canal alone 
 amount to £927,821. 
 t Appendix V. of Famine Commission, p. 124, par. 11. 
 t Page 57 of Railway Report, 1879-80. 
 
and the Public Worhs Policy. 93 
 
 the engineer's own statement,* the capital outlay, 
 up to April, 1878, was £918,951. It is therefore 
 impossible to accept with implicit belief even the 
 higher estimate of twenty millions odd as accurately 
 representing the total capital expenditure on irriga- 
 tion works. 
 
 The following returns are given for 1879-80 : — t 
 
 
 Capital outlay. 
 
 Gross receipts. 
 
 Working 
 expenses. 
 
 Rate per 
 cent. 
 
 
 i. 
 
 £ 
 
 S, 
 
 
 Bengal 
 
 4,979,900 
 
 110,378 
 
 92,176 
 
 •4 
 
 North-West 
 Provinces 
 
 5,345,919 
 
 405,468 
 
 136,251 
 
 5-03 
 
 Punjab ... 
 
 4,316,814 
 
 259,767 
 
 90,039 
 
 3-9 
 
 Madras 
 
 1,720,621 
 
 495,422 
 
 68,442 
 
 28-3 
 
 Bombay ... 
 
 1,333,694 
 
 39,011 
 
 28,984 
 
 -1-2 
 
 " It will be seen by this statement," writes Mr. 
 Juland Danvers, " that the aggregate amount of the 
 earnings from canals, after paying the working 
 
 * Appendix V. p. 130. 
 
 t In tbe Indian financial statement irrigation is entered under 
 two heads— (1) those works which pay well; (2) those which pay 
 badly. Thus, for the year 1881-82, we find under (1) receipts 
 from irrigation and navigation, £865,799; receipts from land revenue 
 due to irrigation, £491,220: expenditure £726,386. But under 
 (2) we find receipts, £131,239 ; expenditure, £789,933. It would be 
 desirable to know the nature of the latter kind. 
 
94 The Economic Revolution of India 
 
 expenses, was £882,414, being at the rate of £7'9 
 per cent, on the capital outlay of £17,696,348." 
 As the capital is said to have been raised at only 
 four and a half, there is, according to this account, 
 a clear gain to the Indian Exchequer. The Famine 
 Commissioners, it is true, reckon the capital outlay 
 at £20,000,000, but they, too, manage to get out a 
 clear balance sheet, by adding to the gross returns 
 under the head of increased land revenue due to 
 irrigation works. Thus they write : " The net 
 income of the whole of the works in operation was 
 in the year 1879-80, £1,165,800, which amounts 
 within a very small fraction to six per cent, on the 
 whole capital, including three and a quarter millions 
 on works not yet brought into operation. If (' if ' 
 is a conjunction of frequent appearance in Indian 
 accounts) this part of the outlay be excluded, the 
 income is found to be more than seven per cent, on 
 the capital actually utilized. The gross income 
 amounts to £1,687,800, of which £769,100 is 
 received directly in payment for the use of the 
 water, and £918,700 as additional land revenue 
 due to irrigation." Such is the magnificent result 
 arrived at by carefully cooking statistics, and 
 calmly ignoring some of the most important factors 
 
and the Public Works Policy. 95 
 
 in the problem. Griving up any attempt to get at 
 the real capital expenditure, I will now proceed to 
 examine (1) how the receipts are obtained ; (2) the 
 very serious deductions which ought to be made 
 from these receipts. 
 
 The most successful irrigation works in the 
 whole of India are the three deltaic systems in 
 Madras, the Godavery, the Kistna, and the Caveri, 
 which are said to yield direct returns of 8'7, 6*5 
 and 31.7 per cent, respectively on the capital spent 
 on them. The Caveri, which has formed the model 
 for the rest, is an old native work restored, and 
 though the Famine Commissioners assign the 
 above net returns, the Director-general of irriga- 
 tion * informed them that " calculations of interest 
 upon outlay would be only misleading in the case 
 of these works, of which the capital account in- 
 cludes no allowance for the labour expended in 
 some cases centuries ago on constructing the 
 various channels of distribution." It is certainly 
 a noteworthy fact that the irrigation work which 
 yields more revenue than that of any other in 
 India is the result of native enterprise, and " was 
 in full operation when Tanjore became a British 
 * Appendix V. p. 85. 
 
96 The Economic devolution of India 
 
 province." In 1836 Sir A. Cotton, taking a leaf 
 out of the book of native engineers, built the 
 Coleroon dam, whereby the irrigation system was 
 stiU further developed. Stimulated by the success of 
 the Coleroon ' anicut,' he then proceeded to bridle 
 the Godavery and Kistna in the same way. The 
 works on the former river were begun in 1845-46, 
 and those on the latter in 1850-51, and since they 
 have been in operation there can be no doubt that 
 they have conferred enormous benefits on the 
 country. The engineers have proceeded on prin- 
 ciples well tested by past experience, and have not 
 been prevented by any feeling of contempt for an 
 inferior race to learn a few lessons at the feet 
 of native teachers. As regards the indigenous 
 principle of irrigation, we learn the following most 
 instructive facts : — " The regulation of the dis- 
 tributary channels rests generally with the peasant 
 proprietors of the soil, locally termed the merassidars. 
 Some of these channels are as much as twenty 
 miles long, and irrigate a number of villages. In 
 such cases there is a weU-recognized custom, 
 defined generally in a written document, settling 
 the days and hours during which each village is to 
 take water, and similar rules lay down each man's 
 
and the Public Works Police/. 97 
 
 turn within the village. An establishment paid 
 and appointed by the merassidars, manages the 
 distribution of water to the fields. Complaints of 
 unfair appropriation of water rarely occur, and are 
 easily settled by the tahsildars." It will be in- 
 structive, later on, to contrast the indigenous with 
 the alien system, the system which rests on the 
 collective action of the village under a cheaply 
 paid headman, and that which rests on the in- 
 dividual pressure of a foreign and highly paid 
 engineer officer. 
 
 The absolute failure of the Madras Irrigation 
 Company Canal System forms a striking contrast 
 to the success of the above schemes. The company 
 was formed in 1858, and was authorized in 1860 
 to raise a capital of one million pounds sterling, 
 under a five per cent, guarantee. On the advice 
 of Sir A. Cotton, who after his success in the deltas 
 seems to have ever since been afflicted with water 
 on the brain, the company commenced operations 
 with the Tungabhadra project. The proposal was 
 to take from this river — (1) a large canal through 
 the Bellary district north of Mysore ; (2) a canal 
 from Kurnool on the Tungabhadra to Cuddapah 
 on the Pennair. " Judging from the success of 
 
 H 
 
98 The Economic Revolution of India 
 
 the works in the deltas, no one," writes the Madras 
 Irrigation Committee, "appears to have doubted 
 that this scheme would prove most successful. 
 The shareholders at home were assured that they 
 might confidently expect a return of thirty-one and 
 a half per cent, on their investments. It is melan- 
 choly to have to point out now how fallacious were 
 all these views, and how many considerations were 
 wholly lost sight of that ought to have received 
 the most careful and deliberate thought. The 
 estimates of the costs of constructing the canal 
 and of the revenue to be expected from it, were 
 based on the experience of the deltaic tracts. The 
 difficulty of passing through a rugged country, the 
 sparseness of population, the different character of 
 the soil, and other like considerations were over- 
 looked." The sum of one million was found in- 
 sufficient to complete even the canal from Kurnool 
 to Cuddapah, which was the first work taken in 
 hand, and the company was in 1866 authorized 
 to borrow the further sum of ^£600,000. And 
 what is the state of the company now ? For every 
 year up to 1876-77 the revenue has fallen short 
 of the working expenses, and advances (amounting 
 to £46,541) have been made by the Government 
 
and the Public Works Policy. 99 
 
 to the company. Besides this the Government has 
 to pay £50,000 per annum on the original capital, 
 and £372,000 out of the 600,000 is still owing to 
 the Secretary of State for unpaid debentures.* 
 And what is the cause of this disastrous drain on 
 the State ? The answer is hardly credible, but it 
 is given by the Madras Irrigation Committee. " It 
 is too evident," they write, "that water has been 
 brought to a people who do not want it, and will 
 only take it to a very limited extent." How is 
 this ? " Of the soil irrigable from the canal a large 
 proportion (probably fifty to sixty per cent.) is the 
 weU-known black cotton soil. It is highly fertile, 
 and with very slight ploughing produces in years 
 of ordinary rainfall fine crops of the large millet, 
 known throughout India as cholum, jonna, or jowar. 
 It is the staple food of the people, and the straw 
 is the best fodder for the fine cattle on which they 
 pride themselves. It is true that they consume 
 rice to a small extent, and have far to send for it. 
 If they understood how to grow it too, rice cultiva- 
 tion is the more profitable. But it requires a great 
 deal of manual labour, and is considered locally 
 
 * The company's undertaking has recently been purchased by 
 the Indian Government for £1,763,500. 
 
100 The Economic Revolution of India 
 
 to need a great deal of manure, which they cannot 
 always command. It is a new thing, and therefore 
 a distasteful thing, and its straw is an inferior 
 fodder. This is the main reason why the Kurnool 
 has been such a failure. Had its cost not exceeded 
 the original estimate (£415,250) even then it would 
 not have paid the guaranteed interest for many 
 years." And what does Sir A. Cotton, the pro- 
 jector of this scheme, say in his latest pamphlet,* 
 except that it is all due to bad management and 
 want of water, and that the difficulties will be got 
 over some day ? Till that very distant time arrives 
 it is as well to remember, in the face of Sir 
 A. Cotton's proposal to spend something like 
 £50,000,000 within the next twenty years, that at 
 present the area of wet cultivation watered by the 
 canal opened since 1871 reaches only 14,000 acres, 
 instead of between two and three hundred thousand 
 as estimated. The only bright feature in the 
 project is that in the famine of 1876-77 66,901 
 acres were watered; but it is very questionable 
 whether, even if in time of famine 200,000 acres 
 were irrigated, the drain of the ryot's grain, which 
 in the years of plenty has to help to pay for the 
 
 * " Public Works in Madras," by Sir A. Cotton, 1881. 
 
and the Public Works Policy. 101 
 
 works, does not take away more than the canal 
 gives in the years of scarcity. It must never be 
 forgotten that, as I have pointed out before, the 
 Indian cultivator has from time immemorial been 
 accustomed to store food against bad times, and 
 each additional item of taxation, such as the 
 raising of the salt in Madras from three-quarters 
 of a rupee in 1850 to two and a half rupees in 
 1880, and the local cess of 546,000 imposed on 
 Madras in 1871, makes it more difficult to practise 
 this thrifty habit. From the time the Madras 
 Irrigation Company was started, up to the year of 
 famine 1876-77, it cost the Indian Government 
 £800,000 in interest charges, £372,000 in de- 
 bentures, and £46,641 in working expenses ; alto- 
 gether £1,218,541. The question is, how much 
 had the ryots, who during famine paid from two 
 to six rupees an acre for their water, already paid 
 in the shape of exhausting taxation ? Truly, the 
 local cess of 1871 might be called a Famine 
 Insurance Fund in the sense that it insured its 
 horrors. We ought to congratulate the company 
 on the £24,819 which they squeezed from the ryot 
 during the famine, after having already got nearly 
 a million and a quarter from the general taxation 
 
]02 The Economic Revolution of India 
 
 of the province. What a debt of gratitude the 
 starving ryot owes to British benevolence, for having 
 been allowed to pay one million and a quarter 
 sterling to water 66,901 acres during five months ! 
 Why, the six engineers in charge draw ^6,108 per 
 annum, one-fourth of the whole sum earned during 
 the most — to the company — favourable year. And 
 this is what we call opening up the resources of a 
 country which is only waiting for the application 
 of Western science to be turned into a Garden of 
 Eden — or a Golgotha. 
 
 But it is not merely the utter fatuity of this 
 new-fangled scheme of Western engineering that 
 has to be pointed out. The neglect^ — consequent 
 on this outlay — of the ancient and weU-tried irriga- 
 tion works of the country is a still more disastrous 
 consequence of this waste of money. " Much of 
 the irrigation of the Madras Presidency," write the 
 Famine Commissioners, "is effected by means of 
 petty irrigation works, tanks and channels or 
 watercourses fed from tanks, and the account given 
 of the condition of these is by no means satis- 
 factory. In former days they were to a great 
 extent maintained by a system of contributed or 
 statutory labour, the Government being held liable 
 
and the Public Works Policy. 103 
 
 only for any considerable work of improvement or 
 restoration, and the ordinary petty yearly repairs 
 being done by the population interested in the 
 irrigation. In 1856-57 the duty of initiating tank 
 repairs was transferred from the revenue officials 
 to the reorganized Pubhc Works Department, with- 
 out, however, the power, which had been enjoyed 
 by the Collector, of enforcing statutory labour. 
 Since that time the ryots have taken less and less 
 part in the maintenance and repair of tanks and 
 channels. On the other hand, the Public Works 
 Department, though spending considerable sums 
 annually in the repair of particular works, have 
 not been able to carry out all the necessary 
 restorations; and there are many works which 
 have fallen out of order for want of proper super- 
 vision and timely repair." " In Madras," writes 
 Sir A. Cotton, "there are about forty thousand 
 tanks. They are a wonderful proof of the in- 
 telligence and enterprise of the natives in former 
 times. Some of them are known to have been 
 constructed about our era." And these are the 
 works, irrigating thousands and thousands of 
 acres, which have been allowed to a great extent 
 to go to ruin, while a million and a quarter sterling 
 
104 The Economic Revolution of India 
 
 has been spent on the irrigation of — on an average 
 ' — sixteen thousand acres. And what, apart from 
 want of funds, is the reason given for the destruc- 
 tion of these valuable tanks ? A very simple one : 
 the contemptuous indifference of engineers to such 
 petty works, and the non-enforcement of native 
 customs. "It is a singular feature," writes Mr. 
 Arundel, magistrate of Coimbatore, " of the centra- 
 lizing tendency of our bureaucratic rule, that the 
 village cpmmunities have lost much of the power 
 of self-rule and self-help they formerly possessed. 
 The native jury system, the punchayet, has been 
 rudely shaken. The decisions of such a body, if 
 ever it sits, no longer bears the old authority, and 
 for the upkeep of irrigation works the punchayet, 
 or native jury, cannot be relied on. . . . But the 
 communal labour, though it has languished almost 
 everywhere, and is in many places almost in a 
 state of suspended animation, has never com- 
 pletely died out, and exists in various forms and 
 various degrees in different parts of the Madras 
 Presidency. ... It flourishes with the greatest 
 activity upon works such as temporary drains in 
 river-beds and river-fed irrigation channels, where 
 the expenditure of time, money, and labour ,is 
 
and the Public Works Policy. 105 
 
 greatest, and where the neglect of common duties 
 is immediately followed by common loss or common 
 ruin. It has become most lethargic as regards 
 rain-fed reservoirs, where only a trifling expenditure 
 of labour is regularly needed, and where the results 
 of neglect are not immediately felt." Mr. Arundel 
 proposes that the communal labour should be re- 
 established under the supervision of the district 
 boards, established a few years since by the Local 
 Fund Act. Certainly it is this method, coupled 
 with some reduction of the land tax to encourage 
 tanks, not some local cess to be placed in the 
 hands of the PubHc Works Department with all its 
 expensive machinery, that offers the best hope in 
 the future for restoring the old irrigation works 
 which have helped to stave off drought in the past. 
 The heavy losses entailed on the cultivators and 
 the Government by the omission to repair the 
 tanks may be judged of by the following instances, 
 taken from the memorandum of the magistrate of 
 Coimbatore : — " The irrigated lands left uncultivated 
 during 1875-76, owing to causes beyond the farmer's 
 control, amounted to 240,000 acres, and the assess- 
 ment thereon (£105,000) was remitted by the 
 Government. In addition to this, a sum of 
 
106 The Economic Revolution of India 
 
 £119,000 was remitted on account of causes arising 
 entirely from deficiency of water. Of this amount 
 (£224,200) a large sum, difficult to estimate, but 
 certainly reaching to some tens of thousands of 
 pounds, would undoubtedly have been saved to the 
 public revenues, and a sum more than twice as 
 great to the wealth of the country under an 
 efficient and economical distribution of water from 
 all the State irrigation works throughout the 
 country." Further, the area left imcultivated, 
 owing to causes within the farmer's control (or 
 rather causes within his control if there were 
 enforced statutory labour), was 136,000 acres. 
 
 The Government in this case did not lose any- 
 thing, for it collected the wet assessment (£57,800) 
 as usual, but the ryots were entirely out of pocket 
 to that amount, though it is difficult to see with 
 what justice the village headmen are held re- 
 sponsible for enforcing customary labour and pro- 
 tecting water channels when the Government has 
 itself allowed the former to lapse, and injury to the 
 channels can only be prevented by an injunction 
 or civil suit, and is not punishable under the 
 penal code. The truth is, that ever since these 
 works were handed over, in 1856-67, to the ex- 
 
and the Public Works Policy. 107 
 
 pensive machinery of the Public Works Department, 
 the excellent and economical old village customs, 
 up to that time maintained by the influence of the 
 English magistrate or native tahsildar, have fallen 
 into desuetude. "Why should the ryot stop holes 
 or cut down prickly pears," asks the above-men- 
 tioned officer, "when Government was going to do 
 all that for them ? " On the other hand, the D. P. W. 
 establishment works with the greatest irregularity ; 
 " the Government allotment for repairing a 
 channel, removing sand, silt, weeds, etc., is not 
 a fixed annual amount, but is liable to vary with 
 the demands for repairs elsewhere, and with the 
 condition of the Imperial exchequer " {i.e. guaran- 
 teed interest for railways and Madras Irrigation 
 Company must be regularly paid up), "which 
 ruthlessly cuts down .the allotment for a whole 
 district or Presidency when the financial equilibrium 
 of the Empire is uncertain." The allotments are 
 often made at intervals of years, whereas a small 
 sum annually expended is all that is required. 
 The revenue authorities and the engineers spend 
 their time in quarrelling with each other as to 
 whose duty it is to conduct the repairs, and nothing 
 is done. The Madras famine throws a lurid light 
 
108 The Economic Revolution of India 
 
 on these matters. It is the history of dual control 
 all the world over. 
 
 There is no better instance than Mysore of the 
 fate which befalls a country when it has once got 
 into the hands of the Public Works Department 
 and general red-tapism. During the last eighty 
 years Mysore has experienced three kiads of 
 government : (1) native rule, 1799-1811, under the 
 famous Brahmin Pirnia, assisted by three EngHsh 
 officials; (2) European supervision, 1832-1857, 
 under the able hand of Sir Mark Cubbon, assisted 
 by four Europeans ; (3) bureaucratic routine, 1857- 
 1880. I shall compare briefly these three periods. 
 Pirnia, at the time of his dismissal by the young 
 rajah, left a surplus of two crores of rupees in the 
 treasury, which was squandered by the profligate 
 young rajah. Sir Mark Cubbon, though reducing 
 taxation to the extent of eleven lakhs a year, 
 increased the revenue from forty-four to eighty-two 
 lakhs (£820,000), and left a surplus of a hundred 
 and two lakhs of rupees. Small works of irigation, 
 suited to the wants of the people, were alone en- 
 couraged, and were carried out by the natives 
 themselves. Though the province suffered from 
 time to time, owing to the want of rain, yet it 
 
and the Public Works Policy. 109 
 
 always managed to tide over bad harvests without 
 any disaster. With the departure of Sir Mark 
 Cubbon all was changed. Under the Dalhousian 
 zeal for progress, the European agency was 
 gradually increased, entailing an expenditure of 
 £90,000 instead of iG13,000 ; a public works 
 department was established; the opinions of the 
 civilian staff, the requirements of the country, and 
 the needs of the people were ruthlessly set aside, 
 and the surplus disappeared. In 1863 the Bombay 
 settlement officer appeared on the scene, with all his 
 rigorous and vigorous assessment ideas. He soon 
 frightened away the village headman, " who " (I 
 quote from the report of the Mysore famine, 
 pages 8-10) " used to be the father of his village ; 
 the connecting link to prevent the disintegration of 
 the ryotwari system and the dispersion of the 
 ryots ; the man to whom the ryot looks for a loan 
 if he is unable to pay his revenue, and the labourer 
 for an advance of food if employment is slack and 
 his stock has run out." The old amildars, or 
 native of&cials, well known to the people, and 
 knowing them well, were superseded by Madras 
 B.A.'s. Such was the state of Mysore when the 
 terrible famine of 1876-78 began to afflict the 
 
110 The Economic Revolution of India 
 
 country. What happened we may learn from the 
 Famine Eeport. It is a hideous story. Before 
 the famine actually set in in all its horrors, the 
 land tax (the surplus in the treasury heing ex- 
 hausted) was rigidly exacted, so that the stores of 
 grain and bullion were exhausted ; and when, at its 
 height, the Government was actually spending 
 thousands of pounds, the ryot was being sold up 
 and coming on the relief works — ^relief works for 
 which the Indian Government is always taking 
 credit. The famine cost the State 110 lakhs of 
 rupees, i.e. more than a year's revenue ; the people 
 lost nine million and three-quarters sterling in pro- 
 duce, a quarter of a million in cattle (the Forest and 
 Eevenue Department refused at first, though peti- 
 tioned by at least one district officer, to open the 
 fodder preserves), and more than one million lives, 
 i.e. a fifth of the whole population. And what was 
 the Public "Works Department doing all this time ? 
 The Famine Commissioners shall tell us: — "The 
 upland plateau of Mysore, from its nature, contains 
 no very extended drainage basin, nor great plains, 
 such as are met with in other parts of India. Its 
 surface is a succession of hill and valley, and the 
 ingenious method in which each valley was made 
 
and the Public Works Policy. Ill 
 
 to contain a chain of irrigation tanks, and each 
 river to feed a series of irrigation channels, left the 
 British officers, who administered the province, 
 little to do but to put the old works in thorough 
 repair. The long economical rule of Sir Mark 
 Cuhbon left {i.e. in 1857) an overflowing treasury, 
 and, after much discussion (this seems to have 
 lasted about thirteen years !), in 1873 the accumu- 
 lated funds were ordered to be applied to the 
 systematic restoration of the irrigation works. 
 (The question is, When did they get out of order ?) 
 Unfortunately, too much was attempted. (N.B. — 
 This is very characteristic of the D. P. W.) On the 
 Mysore registers there are nearly 40,000 tanks, 
 of which 28,000 yield a net revenue of less than 
 fifty rupees apiece. It was proposed to restore 
 all, even the smallest (here is a grand scheme !), 
 but experience has proved such a restoration to 
 be quite impracticable. Up to 1878 only some 
 of the tanks in two of the eight districts had 
 been restored . . . and in Kolar, the district in 
 which most had been done, it was estimated that 
 to complete the whole district would cost £700,000," 
 (that is to say, if the expensive 
 D. P. W. were to be employed),y!^9^cupy tlu:^ 
 
112 The Economic Revolution of India 
 
 years. Mysore has now exhausted its resources in 
 its struggles with the late famiae " (or rather with 
 the Bombay settlement officer), " and the expendi- 
 ture for the future must be controlled most care- 
 fully. It would be unwise policy, however, to 
 neglect works on which the very life of the province 
 depends." 
 
 Let us thank heaven that, in spite of Lord 
 Lawrence's weighty authority, it was decided by 
 the Secretary of State for India to allow Mysore to 
 revert to native rule, and so get out of the clutches 
 of the Bombay settlement officer and the Public 
 Works agency. As in the case of Madras, the 
 native custom of statutory labour has fallen into 
 disuse, but " the sooner," write the Famine Com- 
 missioners, " it is revived, the better." And so, after 
 all the terrible, and to a great extent avoidable, 
 suffering inflicted by experiments of every sort on 
 this country, which twenty years ago was in the 
 most flourishing condition, the utmost that the 
 Famine Commission can suggest is, that we had 
 better revive native customs. Truly a lesson of deep 
 significance to a Government which justifies its 
 existence on its superior enlightenment ! It is 
 certainly curious to find the Commission advising 
 
and the Public Works Policy. 113 
 
 (in 1880) the Indian Government, before handing 
 the province over to the native rulers, to draw up a 
 project specifying what tanks are to be restored at 
 the expense of the State, -with an estimate of the 
 cost in the order in which they are to be taken up." 
 I do not know whether Lord Eipon's Pubhc Works 
 secretary has been kind enough to make any 
 suggestions on this head. It is to be hoped that he 
 has not done so. All I notice is that there has 
 lately been nearly one quarter of a million sterling 
 spent on thirty-five miles of railway running up to 
 Bangalore, to be continued eventually to Mysore, 
 and then on through the northern districts to 
 Dharwar. If the Bombay settlement system is 
 allowed to gradually throw all the ryots into the 
 hands of the moneylenders, a process going on very 
 rapidly in 1879, according to Mysore Famine 
 Keport (pages 8-12), the railway ought to pay most 
 splendidly, as the export trade wiU be largely 
 stimulated in normal years by a highly assessed 
 land tax, and in times of scarcity the Mysore 
 Government will be forced by the Imperial Govern- 
 ment to raise a loan to feed its starving ryots. It 
 is to be hoped that the shares of this railway are 
 held by the Mysore Government or natives of 
 
114 The Economic Revolution of India 
 
 Mysore, so that at least the profits may be kept in 
 the country, otherwise it will be drained of its 
 bullion and grain stores. Perhaps twenty years 
 hence it will be discovered that railways in Mysore 
 and Madras are too exhausting, and that we had 
 better " revive native customs," in this case those 
 of storing ragi in pits against bad seasons. So 
 impressed were two of the Famine Commissioners, 
 Messrs. Caird and Sullivan, by the reasonableness 
 of this custom that they actually suggested that the 
 State should store grain in inaccessible parts of 
 India. But the easiest way of doing this is not to 
 deplete the cultivators' own stores, even in accessible 
 places, still less to diminish the out-turn of the 
 land by neglecting to keep in repair irrigation 
 works, which have been proved to be the best 
 adapted to the country. 
 
 The above account of the Madras irrigation works 
 will, I think, have clearly shown that they have 
 been successful only where they have been conducted 
 on native principles ; that the most Western science 
 can do is to suggest slight improvements in the 
 construction of dams and sluices; that if a large 
 increase of land revenue is due to some few big 
 irrigation works, a very large decrease is due to the 
 
and the Public Works Policy. 115 
 
 neglect of an enormous number of petty works ; and 
 that, finally, the only kind of work absolutely 
 origmated by British engineering science has proved 
 a most disastrous failure. 
 
 When we pass on to Bengal, we find the history 
 of the Madras Canal repeated : " The canals of 
 Orissa and Midnapur were begun in November, 
 1863, by the East India Irrigation and Canal Com- 
 pany, and were ta,ken over by the Government on 
 the 1st of January, 1869, on payment to the com- 
 pany of £1,040,050. This was a very liberal 
 payment. The company's £20 shares were not 
 then worth more than £16 in the market, Govern- 
 ment bought them for £21. A compensation bonus 
 of £50,000 was paid to the company's officers, 
 besides £57,000 on account of home charges for 
 direction. The works were not intrinsically worth 
 more than £700,000. ... If it were possible 
 (which at present it is not) to obtain one rupee of 
 net revenue for every acre watered, it would be 
 necessary to irrigate 175,000 acres simply to pay 
 the interest of the money paid to the company over 
 and above the value of the property bought." Since 
 taking over the works, the Government has spent 
 over two millions sterling on the two canals. The 
 
116 The Economic Revolution of India 
 
 accounts for all the Bengal canals were, in 1879-80, 
 as follows : — 
 
 
 Capital out- 
 lay. 
 
 Interest at 
 a per cent. 
 
 Working 
 expenses. 
 
 Gross 
 receipts. 
 
 Result. 
 
 
 BupeeB. 
 
 Rupees. 
 
 Rupees. 
 
 Rupees. 
 
 Rupees. 
 
 Orissa... 
 
 2,29,91,691* 
 
 9,3i,626 
 
 2,08,694 
 
 2,65,000 
 
 - 9,78,320 
 
 Midnapur 
 
 91,89,516* 
 
 4,13,528 
 
 2,03,797 
 
 1,70,093 
 
 - 4,47,232 
 
 Sone pro- 
 ject ... 
 
 2,45,33,9851 
 
 11,04,029 
 
 3,57,310 
 
 5,31,590 
 
 - 9,29,749 
 
 
 -23,55,301 
 
 The failure of the Orissa works is ascribed by the 
 Famine Commission to bad management and in- 
 sufficient expenditure, and they suggest that if the 
 capital outlay be increased to £3,110,000, so as tO' 
 irrigate 800,000 acres (they now water 183,000), 
 the cost per acre would be diminished by a third. 
 This may be true, meantime the country is to be 
 further taxed by imposition of " an owner's rate," 
 and such taxation, together with the Bengal cess, 
 will have, for many years to come, to pay interest 
 
 * The aoeumxilated interest charges up to April, 1878 (52,10,789 
 -(- 21,37,743 rupees), are included, but not the capital outlay, if 
 any, since that date. 
 
 t The accumulated interest charges up to April, 1877 (27,74,095) 
 rupees) are included. 
 
and the Public Works Policy. 117 
 
 charges. Of the Midnapur canal, now completed, 
 the Irrigation Committee write as follows : — " Were 
 it a question of introducing irrigation for the first 
 time into Midnapur, Government would probably 
 have no difficulty in deciding against it. . . . The 
 question arises, whether it is worth while to continue 
 its maintenance, and whether it would not be better 
 to dismiss the irrigation establishment altogether, 
 and use the canal exclusively for navigation, the 
 returns for which were in 1878, 1,06,917 rupees, as 
 compared with 53,483 rupees for water rent. So 
 much for the outlay of 91,89,516 rupees ! 
 
 As the Sone canal system is not yet completed, it 
 is too early to state whether it is successful or not, 
 but the methods taken to make it pay are very 
 instructive. It is calculated that it will water 
 eventually 1,100,000 acres, but it is candidly re- 
 marked by Colonel Haig, the chief engineer, that 
 " the area under the Sone canals includes at least 
 500,000 out of the 600,000 acres watered by wells, 
 as the ryots " (the italics are mine, as I shall refer to 
 this point later on) " universally abandon the wells for 
 the cheaper canal icater, when they can get it." It is 
 further remarked by another engineer, that rice 
 irrigation was practised in Behar before the con- 
 
118 The. Economic Revolution of India 
 
 §truction of the canals, by holding up the water in 
 hollows by long low embankments locally termed 
 ahdras. They exist all along the drainage depres- 
 sions, but are falling into disrepair as irrigation 
 extends. Still, the cultivators try occasionally to 
 fill the pools behind the ahdras by canal water; 
 and to irrigate it at their pleasure, evading canal 
 rates by saying that it is rain water. At first sight, 
 it would appear a good plan to accept these aa 
 affording ready made facilities for irrigation which 
 the people are accustomed to. But everywhere in 
 North India it has been found that irrigation must 
 sooner or later be accompanied by di-ainage " (this 
 entails further outlay), " or the land becomes water- 
 logged : while these embankments last, thorough 
 drainage is impossible. So the canal officers are 
 doing wisely in setting their faces against the use 
 of ahdras." Is it possible to conceive a more con- 
 clusive instance of impertinent and unnecessary 
 interference with native ways, and aU to make a 
 canal pay which was obviously not wanted at all, 
 as there were natural tanks and wells. And then, 
 when the canal is ready, we are told that there will 
 be further expenditure on getting rid of the water 
 which has swamped the land ! With regard to the 
 
and the Public Works Policy. 119 
 
 charge for interest, together with the loss on 
 the working of these three canal systems, Colonel 
 Haig is equally frank. He says it is provided for 
 by the Bengal Public Works Cess, and therefore " it 
 is not necessary to take into account, in calculating 
 the cost of irrigation in the future, the accumulated 
 interest and working expenses of past years." That 
 is to say, if the canals do not pay, and the natives 
 do not want them, yet the Bengal Cess, i.e. taxation, 
 will make them a success, and force the ryot to take 
 the nmc " cheaper water." The engineers will get 
 the credit for saving the country from famine, on the 
 strength of which it is proposed to make another 
 canal in North Behar, although it is confessed that 
 "there are really no reliable statistics whatever of 
 the areas in Bengal protected by wells and tanks." 
 But, so far as anything is known of North Behar, it 
 is stated that in Sarun, Chimparun, and Tirhoot 
 "the spring level is much nearer the surface than 
 in South Behar, being from ten to fifteen feet only 
 below ground," and this is the district in which a 
 canal is to be made, to irrigate 1,100,000 acres. 
 When the ryot has paid the local cess, and canal 
 water is offered at one and two rupees an acre, no 
 doubt it is cheaper to use canal, and not well water ; 
 
120 Tlie Economic Revolution of India 
 
 but this only means that the ryot's wells are under- 
 sold by the Government water-works, which have 
 been paid for out of his own purse. He becomes the 
 victim of a monopoly. If the Bengal ryot had pro- 
 tection for his agricultural improvements, would he 
 not be able to make his own irrigation works? 
 As it is, the great mass are at the mercy of the 
 zamindars and the Government. 
 
 The returns for the irrigation works of the North- 
 West Province are much more favourable than for 
 those of Bengal. 
 
 The figures are as follows : — 
 
 
 Capital. 
 
 Eevenne. 
 
 Working 
 expenees. 
 
 Interest. 
 
 
 £ 
 
 £ 
 
 £ 
 
 £ 
 
 Oangea Canal ... 
 
 3,024,541 
 
 357,457 
 
 107,496 
 
 136,103 
 
 Agra Canal 
 
 777,155 
 
 42,151 
 
 21,684 
 
 34,971 
 
 Lower Ganges] 
 Canal, only juet} 
 finished ...J 
 
 1,543,219 
 
 5,860 
 
 7,071 
 
 69,444 
 
 These figures appear to demonstrate the signal 
 success of the North-West Provinces canals. But 
 there are some very serious deductions to be made. 
 The past interest charges for the Ganges Canal 
 alone amount to £927,821, and to this we have to 
 
and the Public Works Policy. 121 
 
 add. the still accumulating charges for the other 
 two. Secondly — and this is a stiU more serious 
 set-off, affecting alike the North-West Provinces and 
 the Punjab — there has been a great loss of land 
 revenue owing to increased exudation of reh or 
 saline efflorescence, in many of the canal-irrigated 
 districts. This is what Mr. A. 0. Hume writes : 
 "In Oudh, the Punjab, and the North-West 
 Provinces the soils contain an appreciable ad- 
 mixture of saline particles. With the construction 
 of high-level canals the subsoil water-level is raised, 
 the surface flooded, the earth yields up its soluble 
 salts to the water, which again restores them (but 
 on the surface) as it passes in vapour. At first 
 the result may be good, and marvellous are the 
 crops that have been raised in the Doab on the 
 first introduction of canal-irrigation, owing to the 
 first slender doses of potash and chloride of sodium. 
 But nature works on blindly and unceasingly. The 
 water below searches out one by one each soluble 
 particle in excess of the particular soil's capacity 
 of retention, and, as it slowly creeps up by capillary 
 attraction, leaves these ever behind it on the 
 surface. Time passes on ; some crops begin to be 
 unprofitable. In the hottest time of year a glimmer 
 
122 The Economic Revolution of India 
 
 as though of hoar frost overspreads the land. . . . 
 Along the little old Western Jumna Canal thousands 
 of fields are to be seen thus sterilized. Along the 
 course of the mighty Ganges Canal,* a work as it 
 were but of yesterday, the dreary, wintry-looking 
 rime is already in many places creeping over the 
 soil. . . . The time must come when some of the 
 richest arable tracts in Northern India will have 
 become howling saline deserts." And this terrible 
 fact is admitted by the engineers themselves. Thus 
 Sir Andrew Clarke, late Public Works Minister in 
 India, writes of the " vast oosiir plains, within easy 
 reach of the canal, lying waste and barren," and 
 the white patches called " rc7i." " They represent 
 a serious loss of revenue to Government, the reh 
 especially so, for it is found to spread in a most 
 alarming way with the extension of irrigation." 
 
 * In a despatch of the Marquis of Hartington's, dated January, 
 1881, 1 find the following significant paragraph : — 
 
 " Among the additions to the original project found necessary 
 here, as the papers provided show, extensive works for the drainage 
 of tracts through which the (Ganges) canal and its branches run. 
 I especially desire that the periodical reports of the Irrigation 
 Department should show, in a condensed statement, what results 
 have been attained by these drainage works in the reduction of 
 water-level in saturated soil, in the diminution of that saline 
 efflorescence which has been attributed to the action of the canal 
 water in low land, and in the improvement of local health. 
 
and the Public Works Policy. 12 
 
 Q 
 
 If, then, the canals have helped to cause this 
 serious loss of revenue, why does not the loss of 
 land revenue, as well as the gain of land revenue, 
 appear in the canal accounts? Within the last 
 few years a sum of £500,000 has been added, under 
 the head of enhanced land revenue, due to irriga- 
 tion works, but there is no set-off reckoned at aU. 
 Further, it is asserted, on the authority of Sir 
 George Couper,* late Lieutenant-Governor of the 
 North-West Provinces, that " there are some canals 
 that ought never to have been constructed, to 
 defray the cost of which the agricultural wealth of 
 the country has been drained" (the Local Cess 
 Act of 1869 imposed £391,000 on the North-West 
 Provinces). The fact is, as a perusal of the Blue 
 Books clearly shows, that over a great part of the 
 Noi-th-West Provinces and Oudh, the water is not 
 very far below the surface, and if canals are 
 carried through these districts, there is always 
 great danger that the water will be drained away 
 from the shallower wells. As an instance of the 
 harm which may be done, we are told that " the 
 construction of the Lower Ganges Canal, for a 
 length of seventy-six miles through a country 
 * Appendix V. p. 95. 
 
124 The Economic Revolution of India 
 
 already most lavishly supplied with means of 
 irrigation, was only prevented by the care and 
 foresight of Colonel Brownlow." He was then — 
 fortunately for that district — chief engineer of the 
 North-West Provinces, and is an officer well known 
 for his abhorrence of speculative schemes of irriga- 
 tion. si sic omnes ! The question is, how many 
 wells have in dry seasons been drained, and — for 
 this is another charge against the canals — how 
 many acres have in wet seasons been water-logged 
 by the canals running across the lines of drainage ? 
 If these three items — ^loss by reh, loss by well- 
 drainage, and loss by water-logging of land — be 
 deducted from the revenue of the canals, their net 
 earnings would sink to a very small sum. But, reply 
 the engineers, "the canals perform yeoman service 
 in the years of drought. During the years 1877-78, 
 the irrigated area was 1,461,000 acres, and crops 
 to the value of £3,000,000 were raised, which would 
 otherwise have been lost." But as canals have 
 made it necessary to impose a local cess, have 
 spread reh, and injured wells, the gain to the 
 peasantry during one year of drought is largely 
 counterbalanced by their loss during the nine years 
 of normal rainfall. " In ordinary years," writes 
 
and the Public Works Policy. 125 
 
 Mr. C. A. Elliott, the secretary of the Famine 
 Commission, "the normal rainfall in the North- 
 West Provinces is sufficient, unassisted, to produce 
 grass and fodder, and to bring the kharif {i.e. 
 autumn) crops to maturity. Only in years when 
 there is a failure of rain — say, once in ten years, 
 at the outside — would canal water be of great use 
 to the kharif food and fodder crops ; in the other 
 nine years, it would generally do harm rather than 
 good, if admitted into the fields." Why, then, 
 should the peasantry be forced by taxation to 
 provide canals ? The serious drawbacks to canal- 
 irrigation are so well known to district officers in 
 the North- West Provinces and Oudh, that during 
 the last few years attention has been chiefly paid 
 to the best means of increasing the area of well- 
 irrigation, and canal schemes are in bad odour. 
 Nearly six million acres in the North-West Pro- 
 vinces and Oudh are already irrigated by wells, and 
 it is found that where water has to be got by lift 
 and not by flow, the cultivator is careful not to use 
 more than is absolutely necessary. 
 
 The cultivated soil of the Punjab and Sindh 
 is •par excellence the gift of the rivers and canals. 
 In the southern parts of the former province, the 
 
126 The Economic Revolution of India 
 
 water is too deep below the surface to be raised 
 by a well, and the rainfall is so scanty, even in 
 the best of years, that it cannot be relied on for 
 irrigation purposes. Native rulers were well aware 
 of the necessity of utilizing the rivers. The canals 
 taken from the Jumna, and the inundation canals 
 along the Indus — the latter watering 1,800,000 
 acres, and cleared by a system of contributory 
 labour — are evidence of native enterprise. The 
 two great works of English engineers are the new 
 Baree Doab Canal, designed by the present Lord 
 Napier, and the Sirhind Canal, fed respectively by 
 the Eavee and Sutlej ■ 
 
 The following returns are given for the year 
 1879-80 :— 
 
 
 Capital. 
 
 Revenue. 
 
 Working 
 expenses. 
 
 Interest 
 
 at H 
 per cent. 
 
 Net 
 Profits. 
 
 Western Jumnal 
 Canal i...J 
 
 Baree Doab ... 
 
 691,940 
 1,494,937 
 
 140,638 
 119,129 
 
 £ 
 43,624 
 
 46,415 
 
 £ 
 31,137 
 
 67,272 
 
 £ 
 85,877 
 
 5,442 
 
 During the famine year of 1877-78 the Baree 
 Doab and West Jumna canals are calculated to 
 have saved crops to the amount of i£l, 438,000, an 
 
and the Public Works Policy. 127 
 
 amount equal to about two-thirds of the cost of 
 the works. The Sirhind Canal, which runs partly 
 through native and partly through British terri- 
 tory, has only been recently completed. With its 
 total length of 502 mUes, and its 2,500 mUes of 
 channel, it is intended to irrigate S22,000 acres 
 in British and 261,000 acres in native states. 
 The total cost is estimated at over £4,000,000, 
 about two-thirds being defrayed by the British 
 Government, and one-third by the Native States of 
 Paliala, Jhind, Nabha, Maler Kotla, and Malagarh. 
 The management of the internal distribution of the 
 water is to be left to the village communities. 
 Government interfering only to advise or prevent 
 wilful waste. It is to be hoped that the canal wiU 
 prove a real blessing to the Punjab ; but the note 
 of warning, struck by Lord Eipon in declaring it 
 open, points to serious dangers ahead. "I am," 
 he said, " a warm friend of irrigation, but I must 
 express my belief that it is possible to have too 
 much of a good thing. ... It is found that, 
 although for a few years after the opening of a 
 new canal the increase of fertility of the irrigated 
 soil is great and striking, a time comes when the 
 crops begin to fall off, and the land commences to 
 
128 The Economic Revolution of India 
 
 show signs of decline. Why is this ? Because an 
 excessive use has been made of the water, and 
 too exclusive a reliance placed upon it. Water 
 is not a substitute for manure as a restorer 
 of the powers of the soil." The truth of these 
 remarks has been exemplified along the course of 
 the Western Jumna Canal. This canal was in 
 part built in native times, but is said to have been 
 disused on account of reh appearing on the lands 
 irrigated by it. English engineers have not only 
 reopened the old channels, but they have also built 
 new ones, and the reh is spreading along both. 
 The attempt is now being made, by an expenditure 
 of three-fourths of a million on drainage works, to 
 remedy this state of matters ; but at present there 
 is a serious loss of revenue, which ought to be 
 deduced from the net earnings, now reckoned at 
 fourteen per cent, on the capital outlay. Anyhow, 
 till the reh difficulty is satisfactorily solved, it 
 seems absurd for the Famine Commission to pro- 
 pose a further extension of the Western Jumna 
 Canal through the districts north-west of Delhi. 
 
 The account given of the Ajmere irrigation 
 works, wells, and tanks is most instructive, as 
 contrasting the native and D. P. W. methods of 
 
and the Public Worhs Policy. 129 
 
 procedure. "Irrigation," writes an experienced 
 officer, " in most parts of the district would, how- 
 ever, appear to have been developed to the utmost 
 extent desirable. It is, indeed, a question for 
 consideration whether there is not already tbo 
 much irrigation in some places. The irrigated 
 land is in excess of the manured, and the result 
 is a deterioration of the soil where the water is at 
 all brackish." The tanks, some of which were 
 made some thirty years ago by the energy of 
 Colonel Dixon, do not directly pay, on account 
 of the excessive cost of maintenance by the PvMic 
 Works Department. " It is," writes the above- 
 mentioned officer, " aS' though the roads and build- 
 ings branch of the D. P. W. were employed to a 
 large extent in repairing village huts. Most of the 
 tanks (the small ones) can as easily be repaired by 
 the villagers as their wells; these tanks were 
 mostly made by them. The larger tanks only 
 require professional supervision. All the revenue 
 is swallowed up in maintenance under the present 
 system. In Colonel Dixon's time" {i.e. before the 
 regular D. P. W. appeared on the scene) "the za- 
 mindars assisted in the construction of tanks, and 
 in many instances wholly constructed their tanks. 
 
130 The Economic Revolution of India 
 
 Of late years it has been held to be the duty of 
 Government to do the repairs, and the liability 
 of the villagers is gradually being forgotten. . . . 
 Formerly the villagers were encouraged to help 
 themselves, now they look to Government to do 
 everything for them. The system is gradually 
 tending to drive all energy and enterprise out of 
 the people, and to make them perfectly helpless in 
 time of difficulty." The objection to a tank system 
 being further extended is that when water is 
 obtained by flow, instead of by lift, as in the case 
 of wells, the peasantry become less industrious. 
 The villagers need to be encouraged to help them- 
 selves, and the performance of certain duties in- 
 sisted upon. " Well-irrigation should be stimulated 
 by offering every inducement for its extension. 
 Greater facility in obtaining suspensions of the 
 Government demands in bad seasons, or for other 
 sufficient and special causes, would be considered 
 a great boon, and tend more and more to relieve 
 the cultivators from debt." 
 
 Much the same language is used by the district 
 officers of the Central Proviuces, where bureaucratic 
 interference has not yet had time to destroy native 
 enterprise. "For my own part," writes Mr. G. J. 
 
and the Public Works Policy. 131 
 
 NichoUs, the Commissioner of Excise, " I think that 
 the people, if taccavi (i.e. loans) could be obtained 
 more easily, and were to be collected rather less 
 stringently, would do all that is requisite for them- 
 selves. ... I am inclined to think that the first 
 effect of the introduction of any Government irri- 
 gation system would be to concentrate the popula- 
 tion on the parts affected, and for a considerable 
 time to throw back the spread of cultivation, to 
 check the formation of habits of enterprise and 
 frugality, and to lower even further the standard 
 of industry and independence of living." The truth 
 is that the country suffers more from excess of rain 
 than drought, and the black soil is very retentive 
 of moisture. The natives are well aware of these 
 facts, and seem to have provided, or to be willing 
 to provide, all the irrigation works requisite. But, 
 in spite of this, the Central Government engineers 
 have been continually urging the necessity of canal- 
 irrigation, and have with difficulty been prevented 
 from having their way. 
 
 In Bombay the Government Irrigation Works 
 have been an utter failure, and that part of the 
 local cess of 1871 (£217,000), which has gone to 
 pay their interest charges, might have been left to 
 
132 The Economic Revolution of India 
 
 fructify in the pockets of thfe ryots, or satisfy local 
 wants. " Up to the close of 1877-78," write the 
 Famine Commissioners, "the outlay on these 
 schemes had heen £1,280,000. ... It is calculated, 
 putting aside two incomplete schemes, the canals 
 during 1877-78 earned the net sum of £5,380, or 
 0'45 per cent, on the capital outlay, an insignificant 
 contribution towards the yearly accruing interest 
 debt of £47,000. In the famine years of 1876-77 
 and 1877-78, 17,000 and 24,500 acres were irri- 
 gated ; but in 1878-79 the area fell to 15,400 acres. 
 At present they must be regarded as a small and 
 moderately hopeful experiment " (this is certainly a 
 very curious conclusion) ; " but at present they are 
 on the debtor's side of the accounts. They have a 
 capital debt of over one million, an accumulated 
 interest charge of £249,000, a deficit on working 
 expenses since the outset of £26,900, the total 
 deficit being over a quarter of a million ; and they 
 are not likely, as matters now stand, to overtake 
 these sums for many years to come." And what 
 are the reasons assigned for this failure ? " Poverty 
 and debt, concurrently with many other causes, of 
 which the principal are dislike of novelty, the 
 trouble and expense of levelling their fields, the 
 
and the Public Works Policy. 133 
 
 belief (admitted by the Famine Commissioners to 
 be justifiable) that the crops sown on black soil 
 will not be benefited by irrigation, the sparseness 
 of population, the defective supply of water on 
 many works in the hot season, and the fear that 
 irrigated land will be assessed at higher rates at 
 the net revision of the land-revenue." Truly, a 
 most damning catalogue of causes, but damning, 
 not to the experienced native agriculturist, but to 
 the crass stupidity of the Bombay Government in 
 allowing the D. P. W. engineers ever to construct 
 the canals, instead of itself considering whether a 
 remission of taxation would not help the ryot out 
 of his difficulties. 
 
 Sir Eichard Temple has been posing recently as 
 the advocate of Lord Eipon's local government 
 schemes, but when he was Governor of Bombay he 
 did his utmost, in spite of the protests of district 
 officers, to imperialize the local cess funds of the 
 Bombay talukas, expressly levied in 1869 for local 
 purposes, such as village roads, tree-planting, rest- 
 houses, wells, and the like. He cancelled aU the 
 local orders requiring local funds to be spent in 
 the districts ; he sanctioned expenditure on imperial 
 roads, and the like ; and, by a system of a five years' 
 
134 The Economic Revolution of India 
 
 budget, gave over the funds to tlie tender mercies of 
 the D. P. W. engineers. The old local works 
 required no professional or engineering skill ; they 
 interested the people, who willingly gave their 
 money for them, and they formed a desirable outlet 
 for local activity. Instead of the local budget being 
 carefully drawn up so as to make revenue and ex- 
 penditure balance,* large loans were raised for 
 various works, and Sir Eiehard Temple gained the 
 warm approval of Lord Lytton's Government during 
 the famine year for his economical administration. 
 The fact is that he looted the district municipal 
 committees of their monies. And what was the 
 consequence ? The committees, finding that they 
 had no funds to carry out necessary local improve- 
 ments, such as wells and tanks, had to levy another 
 cess on themselves, and it was this very recourse to 
 a public subscriptions system t that the local cess 
 
 * See " Memo on Local Government in Bombay," by Javerilal 
 TJmiashankar Ydjnik, Bombay. 
 
 t I notice, in the last issue of the " Moral and Material Progress 
 of India " (p. 55), that during the year 1879-80, when the local 
 governments vpere squeezed by Lord Lytton's Government of 
 £670,000, partly to pay for the repeal of the cotton duties, " in 
 many instances the money allotted out of the road cess by the 
 committees for village works (in Bengal) was supplemented by 
 funds raised among the villagers." That is to say, the State 
 
and the Public Works Policy. 135 
 
 of 1869 professed to abolish. It is in this insidious 
 way that local taxation has been increased in 
 different parts of India. Local funds, on the plea 
 of giving legislative sanction, have been made first 
 provincial; then, as in Lord Lytton's time, under 
 pressure of war, famine, or loss by exchange, they are 
 made by financial readjustments imperial, or, if they 
 are still called provincial, they are handed over to 
 the D. P. W., and are squandered on imperial works. 
 And what does the Bombay Government now 
 propose to do ? It wishes to spend, during the next 
 five years, four erores of rupees (£4,000,000) in the 
 construction of more canal works, and to impose a 
 light cess (cesses are always light to the mind of 
 some officials) to pay for the interest charges and 
 working expenses. And further taxation is pro- 
 posed, irrespective of the fact that the Deccan ryot 
 is notoriously suffering ' from a heavily assessed 
 land tax and an enhanced salt tax. Surely this is 
 the most rampant kind of red-tapism, and it is no 
 wonder that Lord Eipon's scheme for self-govern- 
 ment has met with little favour at Bombay. 
 
 having imposed a road cess, aud having appropriated some of its 
 proceeds to meet deficit caused by repeal of cotton duties, the 
 villagers had again to contribute towards repairing the roads .' 
 
136 Tlie Economic Revolution of India 
 
 An imjjartial examination of the financial results 
 of the irrigation works undertaken by the Indian 
 Government will, I think, lead to the following 
 conclusions. The perennial canals drawn from 
 rivers high up their sources have, with the excep- 
 tion of the Baree Doab, West Jumna, and Ganges 
 canals, proved a costly failure; of these three 
 fairly successful canals the two last-named are 
 somewhat doubtful blessings, and the only as yet 
 absolutely successful venture is the Baree Doab 
 canal. On the other hand, the deltaic works which 
 have been constructed on native lines have con- 
 ferred undoubted benefits on large districts, and 
 wherever the native tank and embankment system 
 has been maintained or extended by the energy of 
 individual officers, the best results have ensued. 
 Lastly, it cannot be too strongly asserted that the- 
 institution of a Pubhc Works Department, with its 
 enormous staff and costly machinery, has been a 
 most fatal mistake. The old system, under which 
 a certain number of engineers were attached to 
 each province only as necessity required, was 
 infinitely preferable to the present system, by 
 which each district has a regular staff of Public 
 Works, as well as of district officers. The conse- 
 
and the Public Works Policy. 137 
 
 quences of the change may be seen in the lavish 
 outlay on unnecessary and useless State canals 
 throughout the length and breadth of India, and 
 the omission to spend petty sums on necessary 
 and useful village works. The Public Works 
 Department has had to justify its existence by 
 designing schemes utterly unsuited to the country, 
 while by its absorption of local funds it has dis- 
 tinctly prevented the maintenance and extension of 
 irrigation works which have been proved to be 
 beneficial. Engineers have gone about the different 
 provinces, not studying the nature of the soil, the 
 climatic conditions, and the character and means of 
 the cultivators, but with their heads brimful of 
 scientific theories, and their hearts burning with 
 zeal to supply water at any cost. Professional 
 ambition and philanthropic ardour have spurred 
 them on, but the drag-chain of common sense 
 has been conspicuously absent. Hence a double 
 pressure has been put upon the Government of 
 India. The enthusiasm of its own ofiicers has been 
 backed up by the self-interest of Lancashire manu- 
 facturers. The former have had visions of canal- 
 watered crops' flooding every market, while the 
 latter have dreamed dreams of ryots rolling in 
 
138 Hie Economic Revolution of India, etc. 
 
 riches and consuming cargoes of cotton. And finally, 
 the British nation has been taught by Sir John 
 Straehey and Mr. Hunter to thank heaven that it 
 has not behaved to India like native rulers, extor- 
 tionate, unjust, extravagant spendthrifts that they 
 were, nor even like that " publican," the East 
 India Company, but has, like a true friend, always 
 spent the country's revenues with entire regard to 
 its best interests. 
 
PAET IV. 
 AN ALTEKNATIVE POLICY. 
 
" Above all things good policy is to be used tbat the treasury 
 and monies in a State be not gathered into few hands ; for other- 
 wise a State may have a great stock and yet stMve. And money 
 is like Muck, not good except it be spread." — Bacon. 
 
In the face of the facts which have been adduced in 
 the foregoing pages, it is difficult to understand 
 how the Famine Commissioners are able to justify 
 their recommendation to the Indian Government to 
 continue its Public Works policy. A capital sum 
 of £180,000,000 has been spent during the last 
 thirty years on railways and canals, and the 
 interestcharges, however concealed, still constitute 
 a heavy burden on the revenues of the State. If 
 the country were showing undeniable signs of 
 assured prosperity, if the public revenues were 
 steadily increasing, apart from taxation, and if the 
 Public Works were paying their way, then it might 
 be fairly argued that the material development of 
 the country would be further forwarded by the ex- 
 penditure of many more millions sterling on rail- 
 ways and canals. But if the indebtedness of the 
 agricultural classes is on the increase, if the public 
 revenues are collapsing from loss by exchange and 
 
142 The Economic Revolution of India 
 
 a diminishing opium trade, if public works entail 
 local cesses and famine insurance funds to pay 
 their incidental charges, it would certainly appear 
 to be the height of folly to go on adding to the 
 public debt. In 1879, a Committee of the House of 
 Commons recommended that the Indian Govern- 
 ment should not borrow more than £2,500,000 in 
 any one year for outlay on railways and irrigation. 
 This recommendation was adopted by the Secretary 
 of State for India, and the restriction was for a 
 short time maintained ; but lately, under different 
 pleas, the above sum has been largely exceeded. 
 Thus for the year 1882-83 a sum of £1,763,500 
 appears, under the head of Productive Public Works, 
 on account of the purchase of the Madras Irrigation 
 Company's undertaking ; and £713,200 on account 
 of capital expenditure on the East Indian Eailway, 
 in addition to the ordinary loan of £2,500,000 for 
 Productive Public Works. At the same time, the 
 old guarantee system of building railways is being 
 revived, and the Indian Government has to pay the 
 required interest charges out of its ordinaryrevenues. 
 Thus there seems every reason to suppose that 
 there will be an increasing annual outlay. Indeed, 
 the very necessities of the Indian Government force 
 
and the Public Works Policy. 143 
 
 it to have recourse to the help of English capitalists. 
 It is itself now obliged to raise its loans in the 
 Calcutta market, and has, therefore, no sums at its 
 disposal in London to pay off its home debts, and 
 so diminish the drain of loss by exchange. Whereas, 
 if guaranteed companies are formed in England, 
 their capital can be placed at the disposal of the 
 India office, and so lessen the Secretary of State's 
 Bills. The Indian Government is therefore strongly 
 tempted to meet its financial difficulties by a 
 system of indirect borrowing in the London market, 
 and to overlook the question whether India can 
 bear the ever-increasing burden of debt. But this 
 method of warding off the evil day cannot be 
 pursued for ever, and war or famine, or a falling off 
 in the opium receipts may before long make it 
 absolutely necessary to reduce expenditure. 
 
 But, even as matters now stand, no further ex- 
 penditure should be made on public works, except 
 from surplus revenue, and the Public Works Depart- 
 ment ought to be thoroughly overhauled.* There 
 can be little doubt that the establishment might be 
 largely cut down. Lord Lytton did good work in 
 this direction, but the axe has yet to be laid at the 
 * See Appendix B. 
 
144 The Economic Revolution of India 
 
 root of the tree, Cooper's Hill College, which has 
 been well stated by a distinguished Anglo-Indian 
 engineer, to be a " disgraceful imposition on India." 
 The district engineer staff is still unnecessarily 
 numerous, and is therefore always on the look-out 
 for big jobs. Local committees, under the super- 
 vision of district of&cers, could undertake a large 
 proportion of the work now performed by highly- 
 paid engineers ; they ought of course to have a 
 share of the Public Works cesses placed at their 
 disposal. One engineer, if he had merely to under- 
 take the higher kind of superintendence, would be 
 sufficient for three or four " districts," and he ought, 
 for all ordinary public works, to be strictly controlled 
 by the district magistrates. By this means all 
 extravagant outlay wotild be cheeked. Having 
 reduced the present expensive Public Works estab- 
 lishment, the next question is to encourage in 
 every possible way the self-reliance and enterprise 
 of all the agricultural classes. Hitherto the whole 
 tendency of our policy has been to do everything 
 for the people, and nothing through the people; to 
 impose local cesses, and then spend them with little 
 regard to the wishes or wants of the people them- 
 selves, and much regard to the wishes and wants of 
 
and the Public Works Policy. 145 
 
 the engineers. The result is, that the security 
 which we have professed to give with the one hand 
 by our thirty-year settlements, we have taken away 
 with the other by a variety of exactions. At the 
 present moment the Government, as we have seen, 
 holds the people in the hollow of its hand ; but if it 
 does not wish to find itself more and more assuming 
 the position of a taskmaster, with a gigantic popu- 
 lation of slaves living on a mere subsistence-wage, 
 it must cultivate the growth of an independent and 
 enterprising spirit in its peasantry. Agricultural 
 improvements in the shape of wells — which can be 
 made in almost all localities, and which are prefer ■" 
 able as a source of water-supply to canals — or 
 works for reclaiming and draining lands, ought to 
 be encouraged by the land-settlement rules. Th6 
 Famine Commission calls attention to the alleged 
 disinclination of landowners to spend money, 
 whether their own or borrowed, on the improvement 
 of the land, because they doubt whether "at the 
 expiration of a term of settlement they will be 
 allowed to enjoy the whole of such an improvement, 
 or -whether it wUl form the occasion for the en- 
 hancement of their assessment. In the Punjab, it 
 is a rule of the revenue system that constructors of 
 
 L 
 
146 The Economic Revolution of India 
 
 new wells should be protected for twenty years from 
 enhancement, on account of the irrigation thus 
 provided ; and that repairers of old weUs and diggers 
 of watercourses should be similarly protected for 
 ten years. In the North- West Provinces and Oudh 
 and the Central Provinces, no definite rule appears 
 to have been laid down. In Behar and Madras 
 rules' have been issued but have not the force of 
 law ; in Bombay alone has an Act been passed." 
 Lastly, in Bengal, though the landlord is secm-ed 
 by the Permanent Settlement, the cultivator, who 
 might, if protected, undertake improvements, is more 
 or less at the mercy of the zamindar, land-jobber, 
 and indigo-planter. Indeed, where the zamindari 
 system prevails, the tenant, except in the North- 
 West Provinces, has no right, if ejected for non- 
 payment of rent, to any compensation for unex- 
 hausted improvements. The Famine Commission 
 proposes a rule should be laid down that the assess- 
 ment of land irrigated front a permanent well 
 should not be liable to enhancement on account of 
 the well at any revision of the settlement, provided 
 the well is kept in efficient repair. There is reason 
 to believe that such, a rule, if adhered to, would do 
 more to protect India against drought than all the 
 
and the Public Works Policy. 14T 
 
 mostly canals that have been built in the last twenty 
 years. But it must be adhered to, and not practi- 
 cally stultified by the imposition of new rates on 
 Jand, or continual changes in license taxes. The 
 uncertainty which has resulted from the financial 
 vagaries of the last fifteen years is utterly destruc- 
 tive of any spirit of confidence which would lead to 
 the outlay of capital on agricultural improvements. 
 If the Indian Government cannot inspire the sense 
 of security under the present system of thirty-year 
 settlements, it had better give a Permanent Settle- 
 ment to the whole of India, and give it not, as in 
 Bengal, to the landlords only, hut to the cultivators 
 as icell. Anglo-Indians often speak of India's 
 peasant proprietors, but they are a mere fiction of 
 their imaginations. In no part of India have the 
 actual cultivators that security which is implied in 
 the idea of peasant proprietorship, though in some 
 parts they may have something approaching to it. 
 Mr. George's scheme for the nationalization of the 
 land is there to a great extent realized, but as the 
 Government is not itself national, and spends a 
 large portion of its revenues outside the country, 
 and must pay its English debts with unvarying 
 punctuality, the interests of the Indian rent-payers 
 
148 The Economic Revolution of India 
 
 are often sacrificed to those of the English rent* 
 receivers. 
 
 The Indian Government, in the face of the 
 financial uncertainties caused by loss by exchange, 
 naturally wishes to retain the power of applying 
 the thumb-screw. But surely a more statesman- 
 like method of action would be to cut down the 
 system of borrowing for public works, and con- 
 sider the best means of encouraging native enter- 
 prise. It is this kind of private enterprise, and 
 not that of English capitalists, except in non- 
 agricultural districts, on which rest the real hopes 
 of India's progress and prosperity. It is very 
 difficult for any bureaucracy, and especially one 
 conducted by British energy, to practise the lesson 
 of self-abnegation and humility, especially when its 
 presence in India seems to force it to play the part 
 of an omniscient and ubiquitous Providence. But 
 it is the very benevolence of its governmental 
 method that will compel it to interfere less than 
 it has hitherto done. It has, to a large extent,, 
 removed the old physical checks on population — 
 with the exception of famine, which it aims at 
 averting — and it is essential to the expensive prin- 
 ciples of Western administration that prudential 
 
and the Public Works Policy. 149 
 
 checks should take the place of physical ones, or, 
 at least, that all unproductive outlay, such as that 
 on weddings, should be discouraged. In, freely 
 developed countries, the very struggle with physical 
 checks produces habits of thrift and prudence. 
 But in India it is a foreign government that has 
 abolished the physical checks, and the people have 
 not thereby gained any higher qualities which may 
 fit them for the new state of things. We stand, 
 therefore, face to face with the Malthusian problem 
 in its most exaggerated form. The natural increase 
 of Indian population is reckoned as somewhat in 
 excess of one per cent, per annum, or of two 
 millions a year, while the area under cultivated 
 crops is already equal to one acre per head of 
 the population, and, as we have seen, the pressure 
 of commercial competition tends to force an ever- 
 increasing number on the land. Any action on 
 the part of the Indian Government which merely 
 aims at providing an increased means of subsist- 
 ence, and does not call into existence any self- 
 acting checks on population, can only end in 
 increasing the difficulties of the situation. The 
 more dependent and spiritless the Indian peasantry 
 become, the more rapidly and recklessly will they 
 
150 Tlie Economic Revolviion of India 
 
 increase up to the margin of subsistence, and where 
 famine now slays its thousands, it will in the future 
 slay its tens of thousands. The classes which are 
 now well-to-do will get gradually more and more 
 impoverished under the pressure of taxation, im- 
 posed in the vain hope of keeping alite the starving 
 mass of agricultural labourers, till at last India 
 wiU sink into the condition of a gigantic pauper- 
 warren. If this dismal consummation of all our 
 benevolent activity is to be avoided, the Indian 
 Government must reverse its present principles of 
 action. It must cease to regard its own energy as 
 a stibstitute for the energy of the people. It must 
 direct all its efforts towards encouraging the 
 self-help and self-restraint of the better class of 
 peasantry, by making the most potent and palpable 
 appeals to the most ordinary principles of self- 
 interest. 
 
 It is generally asserted that, unless the natives 
 of India change their marriage customs, nothing 
 can be directly done by the Government to 
 eiicourage prudence. But it is forgotten that 
 these marriage customs, though sanctioned by 
 religion, have taken their rise in social reasons, 
 and if the latter conditions are changed, the re- 
 
and the Public Worhs Policy. Ibl 
 
 ligious sanction may also be modified.* In his very 
 interesting volume of essays, entitled, "Asiatic 
 Studies," Sir Alfred Lyall, the present Lieutenant- 
 Governor of the North-West Provinces, has pointed 
 out the very elastic nature of primitive religion. 
 Under the Hindu system, novel social practices 
 are continually being introduced, on the plea that 
 " it is the god's good pleasure to ordain and 
 sanction these practices ; but it will almost always 
 be found that they are really founded upon some 
 selfish material interests, and are not, as they are 
 usually supposed to be, merely whimsical super- 
 stitions as to what will please the gods, or as to 
 what is right and proper. Perhaps the best 
 example of a selfish device, obtaining vogue under 
 the cloak of a necessary rite, is afforded by the 
 famous practice of a widow becoming sati, or 
 burning herself alive with her dead husband, which 
 is undoubtedly, as Sir Henry Maine has pointed 
 
 * Although the proportion of married to unmarried persons is 
 much higher in India than in England, yet English marriages aro 
 far more prolific than Indian. Thus, according to the last census 
 retm-ns of the North-Western Provinces and Oudh, the average 
 number of children for every 100 -wives between 20 and 40 is 30.22, 
 and between 15 and 55, 20-11 ; while in England it is 35-87 and 
 22-35 respectively. 
 
152 The Economic Revolution of India 
 
 out, connected with the desire of the husband's 
 family to get rid of her right, if she is childless, to 
 a tenancy for life upon her husband's land." 
 
 Many other instances, especially those of medical 
 treatment, are mentioned as receiving a theological 
 interpretation, although they are based on the 
 simplest physical processes. In the same way, 
 " many other practices, ascertained empirically to be 
 fit and expedient, have become in course of time so 
 overgrown and concealed by the religious observance 
 in which they were originally wrapped up, that it 
 is now very difficult to extract the origiaal kernel 
 of utility, and one only hits upon it by accident, 
 when, in trying to abolish what looks like a 
 ridiculous and useless superstition, the real object 
 and reason are disinterred, and sometimes prove 
 worth knowing. Thus the rule of burying Hindus, 
 who die by small-pox or cholera, is ordinarily 
 expounded by priests to be imperative, because the 
 outward signs and symptoms of those diseases 
 mark the actual presence of divinity; the small- 
 pox is not the god's handiwork, but the god itself 
 manifest. But there is also some ground for con- 
 cluding that the process of burying has been found 
 more wholesome against contagion than that of the 
 
and the Public Works Policy. 153 
 
 hurried and ill-managed cremation wliich prevails 
 during a fatal epidemic." Similarly, Sir Henry 
 Maine has recently pointed out that the religious 
 necessity, under the Hindu system, of having a son 
 to perform the funeral rites, is intimately connected 
 •with the old social necessity of keeping up the 
 village community. When each village, with the 
 portion of land which it had conc[uered or cleared 
 for itself,, formed a little state, and the waste of 
 human life by war, famine, and disease was very 
 great, the instinct of self-preservation brought all 
 the pressure of social customs and religious sanc- 
 tions to bear on the duty of keeping up the popula- 
 tion. The sentiment of the Jewish Psalmist is 
 especially appropriate to the state of war: "Lo, 
 children and the fruit of the womb are an heritage 
 and gift that cometh of the Lord. Like as the 
 arrows in the hand of the giant, even so are the 
 young children. Happy is the man that hath his 
 quiver full of them : they shall not be ashamed when 
 they speak with their enemies in the gate." But 
 now that the state of peace has in India succeeded 
 to the state of war, and the density, not the paucity, 
 of the population constitutes the true difficulty, it 
 is the duty of the Government to encourage a point 
 
154: The Economic Revolution of India 
 
 of view more suited to the present condition of 
 things. This can only be done by securing to the 
 agricultural classes the fruits of their labour and 
 abstinence. The construction of wells and tankSj^ 
 and the planting of trees, has been from time 
 immemorial regarded as a public benefaction, but 
 the Indian Government directly discourages this 
 excellent practice, by applying local funds to the 
 construction of railways and canals which in many 
 cases are of very doubtful utility. It thereby not 
 only takes away any motive for individual energy 
 or charity, but it destroys that one form of collec- 
 tive activity which is indigenous to India, namely* 
 that of protecting the soil against the common 
 enemy, drought* Wlierever one goes throughout 
 the whole length and breadth of India, whether to 
 Eajputana, with its semi-tribal, semi-feudal organi-' 
 zation ; or to the Punjab, with its joint village com- 
 munities ; or to Madras and Bombay, with their 
 looser' village organization ; or to the almost bar-^ 
 barous tribes of the Central Provinces ; — the same 
 system is to be found working, where it has not 
 been thrown out of order by the interference of the 
 Public Works Department, namely, the annual 
 enrolment of the community for the repair of the 
 
and the Public Works Policy. 155 
 
 old irrigation works, and, if necessary, for the con- 
 struction of new ones. In some parts there is a 
 religious ceremony called the "wedding of the 
 tanks," and large sums of money are spent in 
 feeding and feeing the Brahmins, and though 
 there may he a good deal of money expended un- 
 productively on this religious jollification, yet it is 
 hetter laid out, in the long run, on the fruitful 
 marriage of a tank than on the barren follies of a 
 canal. To enlist the religious sentiments of the 
 people on the side of social utilities ought to be 
 the great aim of the British regime, for the collec- 
 tive superstitions of the masses are likely to prove 
 of more efficacy than the coercive philanthrophy of 
 the Public Works Department. Mr. Caird was 
 evidently much impressed by the absurdity of 
 instituting an expensive * engineering establish- 
 
 * I will take one instance, given ia the] Jndj'are Gazetteer. In 
 Mysore, during the period 1831-56, before the institution of the 
 Public Works Department, the expenditure was as follows : — 
 £325,000 on irrigation works, £287,500 on roads, and £60,000 on 
 public buildings. Since its institution during 1856-76, £528,017, 
 £967,491, and £291,995 were spent on these works respectively ; 
 and the tank system got out of repair ! And now railways are to 
 supersede some of the roads. Mr. E. Elliot, the well-known Mysore 
 planter, in a book .published some time ago, distinctly prophesied 
 a famine, if the resources of the country were drained for ex- 
 
15^ The Economic Revolution of India 
 
 ment to do for the natives what they could easily 
 do for themselves. " The whole of the arable land 
 of Egypt," he writes, " is dependent on the waters 
 of the Nile for moisture, as there is no rain. The 
 work of keeping the irrigation canals and their 
 hanks in repair far exceeds in proportion anything 
 that is done in India by the Public Works Depart- 
 ment ; but it is done by the people themselves, on 
 a system not unlike ours in the fens and flat dis- 
 tricts, ratione tenurce. Each year a calculation is 
 made of the labour required, and a fourth or a 
 third, as may be necessary, is levied from the 
 labour power of each village. The individuals 
 change from time to time with one another, but 
 one-fourth at least of the adult male population is 
 thus taken for the public works for six months of 
 the year on an average, who receive no wages, and 
 find their own food. This is a tax on the land 
 equal to one-eighth of its agricultural labour, which 
 valued in money would be equivalent to one-fifth of 
 the Government land revenues, and is regarded as 
 an insurance premium for the indispensable protec- 
 tion thus afforded to the agricultural land of the 
 
 travagant public works. We have seen above how the famine was 
 caused. See Appendix B. 
 
and the Public Works Policy. 157 
 
 country. And I think it is very probable that in 
 earlier times in India the old irrigation was main- 
 tained by the people themselves on a somewhat 
 similar system, which might, with great public 
 advantage and economy, be to a large extent reverted 
 to." In our short-sighted benevolence, we abolished 
 in most parts the corvee, on the ground that forced 
 labour was not to be countenanced by a nation 
 which had spent millions in putting down the slave 
 trade, and boasted itself to be the apostle of freedom 
 all over the world. Moreover, the very word corvee. 
 suggested that decayed remnant of feudalism which 
 helped to bring about the French Eevolution, 
 instead of a national army system such as might 
 be seen in Prussia. 
 
 What the Government has now to do is to retrace 
 its steps, to breathe fresh life into the old village 
 system by giving over to local bodies the control of 
 local affairs. By this means the co-operating aid 
 of the people will be enlisted on the side of the 
 Government, and the fatal tendency of the peasantry 
 to rely on the efforts of others rather than their 
 own will be materially checked. To prevent op- 
 pression, and to apply the suitable stimulus, the 
 supervision of the district officer will no doubt in 
 
158 The Economic Revolution of India 
 
 most cases be found necessary, but, except in cases 
 where the requisite engineering knowledge and skill 
 are not forthcoming, the English public works 
 officer ought to be conspicuously absent. 
 
 Having done its best in years of plenty to ac- 
 custom the peasantry to collective action and 
 individual enterprise, the Indian Government ought, 
 in seasons of famine, to aim at encouraging a 
 village relief system by which aimless wandering 
 might be prevented, and overcrowded Government 
 relief works might be discontinued. The Famine 
 Commissioners write: "Native society is justly 
 famous for its charity. It is owing to the profound 
 sense which is felt by all classes of the religious 
 duty of succouring, according to their means, the 
 indigent and helpless who have claims on them 
 as members of the family, the caste, or the town 
 and village, that in ordinary times no State 
 measures of relief are needed." But in time of 
 famine such charity cannot be practised, if the 
 Government, by the rigorous exaction of the land 
 tax, not only deprives the wealthier classes of their 
 power to help the poorer, but actually cripples them 
 for the future by forcing them to borrow of the 
 money-lenders. The Famine Commissioners dis- 
 
and the Public Works Policy. 159 
 
 tinctly advise the Government " to relax the 
 demand for land revenue at a time of widespread 
 loss of harvest, suspending it freely in proportion 
 to the degree of that loss, on condition that a pro- 
 portionate relief is given to tenants and others who 
 have subordinate rights in the land." This pro- 
 posal has been urged for some time past by more 
 than one district officer,* and the Indian Govern- 
 ment professes to have always acted on this prin- 
 ciple, but any one who reads the official reports of 
 the last famine is well aware that very great suffer- 
 ing was inflicted by the non-observance of this 
 principle. In fact, one of the most notable features 
 of the revenue system, as now administered, con- 
 sists in its ever-increasing strictness. I will take, 
 as an illustration, the famines of 1837-38 and 
 1877-78, both of which affected the North-West 
 Provinces. In the first case, we are told " remis- 
 sions and suspensions of revenue were freely 
 
 * If any one wishes for full information on the working of the 
 land revenue system, he cannot do better than read " Our Land 
 Eevenue Policy in Northern India," by C. J. Oonnell, Bengal Civil 
 Service, 1876: Thaoker, Spink & Co. This book was written at 
 the time of the last thirty years' settlement, the writer being 
 himself engaged in the settlement work. Some relief has recently 
 been given to the heavily taxed landowners of the North- Western. 
 Provinces by the remission of the Patwari cess, £316,000. 
 
160 The Economic Revolution of India 
 
 granted, the remissions amounting to nearly half 
 the land revenue demand in the affected tract ; " 
 but in the second, though a quarter of the land 
 revenue was suspended at the end of 1877, arrears 
 were collected so rapidly in the spring of 1878, that 
 the landowning classes were forced to sell and mort- 
 gage their property.* The famine was not really 
 
 * For further facta on this point I must refer to " Discontent and 
 Danger in India," pp. 34-36 and 134-138. The Indian Govern^ 
 ment has lately issued a number of resolutions to the revenue 
 authorities of Northern and Central India, giving thom greater 
 discretion. It is to be hoped that financial necessities will not 
 stultify these measures. Loss by exchange is reckoned at £3,115,600 
 for the year 1882-83, and at £3,548,000 for the year 1883-84. 
 About one-third of this is due to productive public works re- 
 mittances, and the rest to remittances for the ordinary public debt 
 and administration. It is generally admitted that each addition 
 to the capital borrowed in England tends, in the long run, to 
 increase the loss by exchange, though momentary relief may be 
 obtained. Thus the large loans raised for railways have 
 materially aifected the whole of the home remittances, so that 
 without them the loss by exchange would be lessened by a much 
 larger sum than that which is directly due to these loans. " The 
 direct cause of this loss was shown by Mr. Goschen's Silver Com- 
 mittee of 1876, to be due to the gradual increase in the home 
 charges, but more to the absence of a set-off to the Secretary 
 of State's drafts on India, which set-off had, up to about 1872, been 
 supplied during a series of years by capital of the Guaranteed 
 Eailway Companies paid into the India Office Treasury. The 
 influence of Council Bills, in keeping down the market price of 
 silver, is far more weighty and persistent than is the effect of the 
 recently increased production of silver." Mr. Martin Wood, from 
 
and the Public Worhs Policy. 161 
 
 over till after the autumn harvest of 1878, so that 
 the indulgence shown by the Government was very 
 small indeed. As we have seen, 1,250,000 died during 
 the famine ; and next year another 1,000,000 died of 
 fever, the fatal nature of which was largely due to 
 insufficient food. Nothing is known with exactness 
 as to the mortality of the year 1837, but it was 
 calculated by Colonel Baird Smith, long after, at 
 about 800,000. Other instances might be adduced to 
 show that the Indian Government does not act up to 
 its professions on this point. The fact is, that the 
 home remittances which must be punctually paid 
 have reached such a heavy sum, especially since 
 they have led to the item of " loss by exchange," 
 that the Government is compelled to play the part 
 of a remorseless Shylock, and exact its fuU pound 
 of flesh, even though it drains the very life-blood of 
 India's social system. 
 
 It is a notorious fact, that in the famine of 
 1877-78 the Lieutenant-Governor of the North- 
 
 whose pamplilet, "Indian Public Works Finance," the above 
 extracts are made, advocates a return to raising loans in England 
 for productive public works, but the whole of his argument is based 
 on the assumption that the works already made are remunerative. 
 In the Financial Statement of March, 1881, Major Baring said, 
 " We can never feel any certainty of the sum to which the item 
 ' Loss by exchange' may not amount." 
 
 M 
 
162 The Economic Revolution of India 
 
 West Proyinces, in spite of all protests, received 
 peremptory orders from Simla to collect the land 
 revenue. The financial exigencies of the moment 
 were declared to be paramount, and the Viceroy 
 of the time being — as is always likely to be the ease 
 with such ephemeral personages — had to act with 
 an eye to immediate necessities. But, as the 
 Famine Commissioners clearly see, the only hope-i 
 ful method of solving the famine problem is through 
 the village organization. Charitable landowners, 
 if leniently dealt with by the revenue officials, will 
 no doubt be able to give a large amount of help, 
 but their efforts may require supplementing by the 
 iState. " In most parts of India," we are told, 
 " some village organization exists, which offers a 
 ready and natural, though still imperfect, machinery 
 for coping with famine, and it is of special im^ 
 portance that whatever is possible should be 
 done towards improving and strengthening this 
 machinery where it is present, so that it may 
 become more thoroughly efficient for the purposes 
 of village relief. For the future progress of the 
 country, the encouragement of the principle of local 
 self-government, by which business of all kinds 
 should be more and more left to local direction, is 
 
and the Public Works Policy. 163 
 
 of much moment, and nowhere more so than in 
 deahng with the relief of local distress ; and how- 
 ever great be the difficulties in the way of its early- 
 practical realization, it will be well never to lose 
 the opportunity of taking any steps that may lead 
 towards it." Mr. Caird considered the decadence 
 of the village system to be at the root of many of 
 the evils from which India is suffering : — " By our 
 centralizing system we have drifted away from the 
 patriarchal method of rule common in the East, 
 where the populations are agricultural and dense, 
 under which the management of the people is left 
 to their natural leaders, the headmen of the 
 villages, hereditary or elected by the people, who 
 are recognized by the community, and who ad- 
 minister justice and preserve order, and are re- 
 sponsible for the public revenue. We have 
 superseded this by discrediting the headmen, and, 
 in Madras and Bombay, by an attempt to bring 
 millions of small holders into direct contact with 
 the Government through native officials of a low 
 type (for the higher officers, so few in number, 
 rarely have time to see them), and with a theory 
 that our European officers, so few in number, will 
 be able personally to supervise the arrangement. 
 
164 Tlie Economic Revolution of India 
 
 ■whicli is physically impossible. The headmen, no 
 longer recognized or treated as leaders, and seldom 
 communicated with, except through the lower 
 class of native officials (who are said to he apt 
 to take advantage of their position to extort bribes), 
 become distrustful of us, and are distrusted by us. 
 I rarely met a civilian in India who did not speak 
 of the headmen with distrust. The British mer- 
 chants who carry on their great business in India 
 make no similar complaints of the native mer- 
 chants, whom they find honest and upright.* Our 
 
 * This is frankly admitted by British officers who have lived in 
 sympathetic contact with the people. Thus Mr. W. C. Benett, 
 now Head of the Agricultural Department of the North-Western 
 Provinces and Oudh, writes, in his introduction to the Gazetteer 
 of Oudh, a typical Hindoo province : " Trade transactions involving 
 enormous sums are carried through with a want of precaution 
 which we should consider idiotic, but which is justiiied by the 
 rarity of breaches of faith. In a country where writing is an art 
 as common as it is with us, large debts are contracted every day on 
 nothing but the verbal security of the borrowers, and if there may 
 be occasional repudiation in our courts, the fact that that security is 
 still considered sufBcient is ample proof that the debts are honour- 
 ably acknowledged among the parties themselves. In such cases 
 limitation is never thought of, and families who have emerged from 
 poverty will discharge debts contracted by their ancestors a century 
 back, of which no other record exists but an entry in the money- 
 lender's private ledger. Their whole social system postulates an 
 exceptional integrity, and would collapse at once if any suspicion 
 of dishonesty attached itself to the decisions of the caste 
 'panoliayats. This point is worth insisting on, as on it depends the 
 
and the Public Works Policy. 165 
 
 officers do not know the natives as they used to 
 do when our Government was less centraUzed, and 
 they are every year becoming more strange to the 
 people by the increase of modern judicial duties, 
 and the frequent changes from locality to locality." 
 To this charge the Indian Government replies, " It 
 is hardly correct to say that the British Govern- 
 ment has effaced the village or communal system. 
 That system had disappeared from Bengal, if it 
 ever existed there, long before the British conquest. 
 It flourishes still in Northern India, and some of 
 its more important characteristics are still in full 
 vigour among the peasant proprietors (ryots) of 
 Western and Southern India. But, after all, the 
 village is a primitive social organism," and, as is 
 frankly confessed in this despatch, the reign of 
 peace and law, and the commercial development 
 of the country tend to break it up. Anyhow, 
 whether the blame lies with the violence of the 
 Mussulman tax-gatherer and the Mahratta horse- 
 man, or with the benevolence of the British ad- 
 ministrator and progressist, it is admitted that over 
 
 whole of their fortune as a Belf-governlng nation, and though much 
 has. occurred to impair their character in this respect, it would be 
 unsafe to deny them, at any rate, the capacity for the first of 
 political yirtues." 
 
166 The Economic Revolution of India 
 
 a great part of India the one naturally evolved 
 form of organization has been gradually losing its 
 vitality. What has taken its place ? The symbol 
 of Western civilization, the home of commercial 
 activity, the battle-field of capital and labour — the 
 municipality. "Before our own eyes," writes Mr. 
 Hunter, in his enthusiastic eulogy on the in- 
 dustrial era, " we see the self-government, which 
 the primitive village communities had ceased to 
 give, developing into a higher form of self-govern- 
 ment under municipal institutions. At this moment 
 there are nearly one thousand municipalities in 
 India, with a municipal population exceeding four- 
 teen millions, and raising among themselves for 
 local purposes a revenue close on two millions 
 sterling. There are also in some of the provinces 
 district boards and rural unions, which do for 
 the country what the municipalities do for the 
 towns. The Indian races are visibly passing from 
 the village into the municipal stage of social 
 organization ; and the first lessons in local govern- 
 ment are being learned by fourteen millions of 
 native citizens." All this must sound very fine 
 in the ears of Manchester and Birmingham, with 
 their bran-new municipal government; but is not 
 
and the Public Works Policy. 167 
 
 Mr. Hunter somewhat presuming on the ignorance 
 of the British public ? It may be true that we 
 have called into life a thousand municipalities as 
 commercial centres ; but on how many of the nearly 
 half-million village communities, the agricultural 
 centres scattered all over India, have we passed a 
 sentence of death ? The native population is 
 becoming more and more engaged in agriculture ; 
 is it losing the capacity for joint action? Is it 
 invisibly passing into a stage below that of the 
 village, that of competitive animalism ? Calcutta, 
 Bombay, Cawnpore, and Kurrachee may fill an 
 Englishman's heart with pride ; but are the toiling 
 millions up country the better, physically and 
 morally, for the existence of great trading marts ? 
 " After a minute comparison," writes Mr. Hunter, 
 " of rural India at present with the facts disclosed 
 in the manuscript records, I am compelled to the 
 conclusion that throughout large tracts the struggle 
 for life is harder than it was when the country 
 passed into our hands." And as a result of this 
 intensified struggle for existence, the old morale of 
 the villagers is sadly deteriorating. The pressure 
 of population on the soil necessarily decreases the 
 surplus left over for rent and revenue purposes, and 
 
168 The Economic Revolution of India 
 
 the necessity for protecting the tenant against the 
 rack-rents of the landlord, and the landlord against 
 the defalcations of the tenant, and both against the 
 rapacity of the usurer, entails continually fresh 
 legislation, with its inevitable attendants of liti- 
 gation and lying. British Courts and Codes, with 
 all their costly apparatus, which can alone keep the 
 peace between the now bitterly contending parties, 
 have gradually superseded the cheap justice of the 
 old arbitration courts of the village commune.* 
 
 The combined action of all these powerful 
 forces cannot but disintegrate the village organism 
 into a mere concourse of social atoms. This new 
 change is euphemistically called the development of 
 
 * " In India,'' writes Sir J. Caird, in a letter to the Times, Not. 
 27, 1872, " much of the business of the local courts is to aid in 
 collecting the debts of the money-lenders. The cost of this is 
 repaid by fees exacted by the State, amounting to about twenty 
 per cent, of the value in dispute paid by the losing party, who is, 
 as a rule, the impoverished cultivator. These fees, bringing in a 
 public revenue of £2,000,000, add ten per cent, to the burden of the 
 land revenue; and if we assume that as much as one-fourth in 
 number of the landowners, and those the poorest, are always before 
 the courts, the fees operate as an addition of forty per cent, to the 
 land revenue, paid by those unfortunate litigants, as they fall 
 chiefly on them. This is a blot which should as early as possible 
 be met by a large reduction in the scale of fees." For further 
 evidence on this head, I must refer to " Discontent and Danger in 
 India," pages 53-63 and 127-128 
 
and the Public Works Policy. 169 
 
 the sense of individual rights, and is regarded as 
 an advance in civilization, and will, we are assured, 
 lead to the supersession of the old village system by 
 local and district boards, and municipalities of the 
 Western type. No doubt such organizations, if they 
 do not lead to increased taxation, may help to 
 revive local life in agricultural districts ; but, after 
 all, for the toiling masses the village must remain 
 the only possible centre of co-operative life. In 
 Western countries, after many centuries of change, 
 the village has been superseded by wider societies 
 as the inspirers of public spirit, and the growth of 
 individualism has been balanced by the sense of 
 duty to the community ; but in India the village 
 still includes all that we mean by the terms church, 
 community, and country. In its life the higher 
 phases of Hindoo existence have been developed ; 
 beside its watering-places and beneath the shade 
 of its trees, the prophets and poets, the artists and 
 architects, the weavers and the workmen of all 
 kinds, have expressed in their words and work the 
 joys and sorrows, the hopes and fears, of their 
 souls. If the life of the village* is destroyed, 
 
 * For description of Indian village system, as given by Mr. 
 B. H, Baden-Powell, Bengal Civil Service, see Appendix 0. 
 
170 Tlie Economic Revolution of India, etc. 
 
 Indian society is in a state of spiritual dissolution, 
 and is only held together by the external force of 
 an omnipotent Government, which protects the 
 individual rights it has itself bestowed, but paralyzed 
 the sense of social obligations which have been 
 handed down from the past, and crushes the 
 creative powers of the present. Surely the plains 
 tive appeals of invisible spirits must ring sometimes 
 in the ears of the Indian Government and of the 
 English Parliament, that, like Faust in his passion 
 of speculative radicalism, have cursed the practical 
 conservatism of immemorial custom : — 
 
 « Weh 1 weh ! 
 Du hast sie zorstortj 
 Die Bchone Welt, 
 Mit machtiger Faust ; 
 Sie sturzt, sie zerfallt ! 
 Ein Halb-gott hat sie zerschlagen ! 
 "VVir tragen 
 
 Die Triimineni ins Niohts hiniiber 
 TJnd Klageu 
 
 Ueber die Verlorne Sohone. 
 Maeh tiger 
 Der Erden-sohne, 
 Prachtiger 
 Baue sie wieder 
 In deinem Busea baiie sie auf I " 
 
APPENDICES. 
 
APPENDIX A. 
 
 The following extracts are taken from official and semi- 
 official publications. T. C. = Famine Commission's 
 various Blue-books ; C. D. = a memorandum by Mr. 
 Caird, called " Condition of India ; " and R. C. D. = 
 the reply of the Indian Government to tbe same. 
 
 " The available good land in India is nearly all 
 occupied. There are extensive areas of good waste 
 land covered with jungle in various parts of the 
 country, which might be reclaimed and rendered suit- 
 able for cultivation ; but for that object capital must be 
 employed, and the people have little to spare. The 
 produce of the country, on an average of years, is barely 
 sufficient to maintain the present population and make 
 a saving for occasional famine. . . . Scarcity deepening 
 into famine is thus becoming of more frequent occur- 
 rence. . . . There are more people every year to feed 
 from land which, in many parts of India, is undergoing 
 gradual deterioration." — C. D. 
 
 Indebtedness of the Landed Classes. 
 " No subject has been more strongly and frequently 
 pressed on our attention than the evil results which 
 
174 Appendix. 
 
 spring from tlie degree to which the landowners are 
 sunk in debt, the asserted rapid increase of their in- 
 debtedness, and the difficulty they find in extricating 
 themselves from such burdens. In some parts of India, 
 notably in the four districts of the Bombay Deccan and 
 in the Jhansi district^ their indebtedness has become so 
 grievous, that the Government has recently been led to 
 take special steps for their rescue, and in other parts 
 it has at different times intervened to protect special 
 classes whose ruin, otherwise unavoidable, it was thought 
 necessary, on political grounds, to ward off. 
 
 # # # * * ^ 
 
 " We have found no reason to believe that the agri- 
 cultural population of India has, at any known period 
 of their history, been generally free from debt, although 
 individuals or classes may have fallen into deeper em- 
 barrassments under the British rule than was common 
 under the native dynasties which preceded it. 
 
 ****** 
 " We learn, from evidence collected from all parts 
 of India, that about one-third of the landholding class 
 are deeply and inextricably in debt, and that at least 
 an equal proportion are in debt, though not beyond the 
 power of recovering themselves." 
 
 "The origin of debt among the landed classes is 
 traceable to various causes, among which the most 
 prominent are the failure of crops from drought,* 
 
 * That is to say, if the land tax is rigoroiisly collected, as, for 
 instance, in Jhansi, in the famine of 1868, and in the Xorth-U'estem 
 
Appendix. VI b 
 
 expenditure on marriage or other ceremonies, general 
 thriftlessness, an improvident use of sudden inflations 
 of credit, the exactions of an oppressive body of middle- 
 men, and administrative errors such as unsuitable 
 revenue settlements ; and debt once incurred very 
 rapidly grows with exorbitant rates of interest." — F. C. 
 
 Ageictjltuee. 
 
 " With regard to the ordinary food staples of the 
 country, the cereals, pulses, and millets, it cannot be 
 said that any improvement has been effected within the 
 last twenty or thirty years in the method of their culti- 
 vation or in their outturn of produce. On the contrary, 
 as time has gone on, as the pressure of population on 
 the soil has increased, as peace has enabled more labour 
 to be devoted to agriculture, and as canals have in parts 
 provided a more liberal and constant supply of water, 
 it can hardly be doubted that the temptation has been 
 felt to raise more crops off the soil, and to extend 
 cultivation to poorer soils which formerly were un- 
 
 Provinoe in the famine of 1877-78. The statements of the regis- 
 tration officers showed that some thirty thousand registered sales, 
 of the value of thirty-seven lakhs, were the direct result of the 
 failure of the crop in the North-Western Province for the latter 
 year. Of the effects of this famine Mr. (now Sir) Auckland Colvin, 
 late collector of Bijnour, wj'ote, that " money had to be borrowed on 
 a large scale at a high rate of interest, and much jewellery was 
 sold or pawned. A calamity such as that of 1877-78, partial 
 though it is, guts a district ; embarrassments have been renewed or 
 created which will never be cleared off." — See "Discontent and 
 Panger in India," pp. 32-36, and 131-137. 
 
176 Appendix. 
 
 remunerative, and that thus to some extent the earlier 
 cultivated and better soils have been exhausted, and 
 the addition of the poorer ones has lowered the general 
 average of production. It is easier to point out these 
 faults than to devise the remedy. The main defects of 
 the Indian system of agriculture consist in ploughing 
 too superficially, in not giving enough manure, and in 
 the reckless use of water when the cultivator can get 
 it with little labour. Of these faults he is generally 
 conscious, but they are largely due to his poverty, and 
 it is of no avail to ask him to correct them, as long as 
 he is unable to buy and to feed more and stronger 
 bullocks, to save his manure, and to resist the tempta- 
 tion of getting as much as possible out of the land 
 to-day without regard for the morrow." — F. C. 
 
 Classes that suffer in Famine. 
 
 " A main cause of the disastrous consequences of 
 Indian famines, and one of the greatest difficulties in 
 the way of providing relief in an effectual shape, is to 
 be found in the fact that the great mass of the popula- 
 tion directly depends on agriculture, and that there is 
 no other industry from which any considerable part of 
 the community derives its support. The failure of the 
 usual rain thus deprives the labouring class, as a whole, 
 not only of the ordinary supplies of food obtainable at 
 prices within their reach, but also of the sole employ- 
 ment by which they can earn the means of procuring 
 it. The complete remedy for this condition of things 
 will be found only in the development of industries 
 
Appendix. 177 
 
 other tlian agriculture " (why have we ruthlessly de- 
 stroyed those which existed ?) " and independent of the 
 fluctuations of the seasons. With a population so dense 
 as that of India, these considerations are of the greatest 
 weight, and they are rendered stiU more serious by the 
 fact that the numbers who have no other employment 
 than agriculture, are in large parts of the country 
 greatly in excess of what is really required for the 
 thorough cultivation of the land. So far as this is the 
 case, the result must be that the part of the population 
 which is in excess of the requirements of agriculture 
 eats up the profits that would otherwise spring from 
 the industry of the community. It is not surprising 
 that in a country thus situated material progress is 
 Blow."— F. C. 
 
 Food. 
 " The food of the people is essentially vegetable, and 
 consists for the most part, as might be expected, of the 
 food crops ordinarily raised in the country they in- 
 habit, the coarser grains being consumed by the 
 poorer classes of popalation, and the finer and dearer 
 kinds by the richer classes. In the Punjab, the North- 
 Western Provinces, and Oudh, in Behar and the 
 northern part of the Central Provinces, and in Gruzerat, 
 the poor classes live on the millets grown in the rains, 
 and on. barley and gram; the richer classes eat prin- 
 cipally wheat and rice. In Bengal proper and Orissa, 
 and the eastern portion of Central India, rice is the 
 principal food — the coarse, early rice being mainly 
 taken by the poor ; the finer, late rice by the rich. 
 
178 Appendix. 
 
 In the south or Mahratta speaking part of the 
 Central Provinces, in Berar, in the Bombay Deccan, 
 and the northern part of Madras, the two large 
 millets, jowar and bajra, form the principal food of the 
 poor, the rich generally living on imported rice and 
 wheat. In Mysore the ordinary food is the small 
 millet, ragi. In the southern part of Madras and the 
 western districts of Bombay rice is chiefly consumed, 
 though there is also a good deal of millet grown and 
 eaten. All classes miz pulses with their food, the 
 nitrogenous matter which is foand in the pulses supply- 
 ing an ingredient of which little exists in the cereal 
 grains, and which is necessary for the nutrition of 
 persons who rarely eat meat. 
 
 "Meat is comparatively little eaten by any classes in 
 India. Mabomedans, indeed, for the most part, make 
 it a regular article of their diet, but in small quantities, 
 to supplement ths main vegetable elements of their food. 
 The meat they eat is generally that of sheep and goats, 
 less often beef or fowl. The lower classes of Hindus 
 have no scruples in eating meat other than the flesh of 
 horned cattle, and their abstinence is largely due to 
 their inability to buy so expensive a luxury." — F. C. 
 
 " About 80 per cent, of the natives are permitted by 
 their caste rules to eat this kind of food (fish), practically 
 the only animal food available to the Indian husband- 
 man. The price of flsh has doubled, and for a time the 
 fishing castes prospered greatly. In time, however, the 
 enormously increased consumption began to tell. . . ■ 
 In 1871, returns collected from all India disclosed an 
 
Appendix. 179 
 
 alarming decrease in this important source of food. 
 Almost everywhere the yield has ceased to be equal to 
 the demand. In some parts, the fishing castes had so 
 exhausted the waters that many of them, had to give up 
 their hereditary trade and become tillers of the soil. In 
 others, the people were eating frogs instead of fish, cook- 
 ing them in the sam.e way, and distinguishing between 
 the comparative delicacy of the 'solitary,' 'green,' and 
 spangled species." — •" England's Work in India," by W. 
 W. Hunter, pp. 63, 64. 
 
 Cattle, 
 
 " The Indian climates, varying as these do, appear to 
 be specially favourable to cattle. Every one who has 
 kept cattle here knows that, if moderately fed and given 
 plenty of work, and kept away from contagion, they 
 never seem to be sick or sorry, but work on hardy and 
 healthy from youth to extreme old age. They are very 
 prolific, too. If our poor beasts only had reasonably fair 
 play, the whole empire would swarm with cattle, and 
 cattle able to work the heaviest ploughs, and, in soils 
 and situations where this was necessary or desirable, to 
 plough as deep as you like. 
 
 " But what can be expected under existing condi- 
 tions ? Annually a rigid Lent, too often merging into 
 actual starvation, followed by a sadden gorging with 
 unwholesome food. The people are keenly alive to the 
 dangers of such alterations, and labour hard to prevent 
 the latter, or they would not keep a single head alive ; 
 but, despite all their care, their losses are enormous. 
 
180 Appendix. 
 
 la bad years whole provinces are devastated. But a few 
 years ago more than half the cattle in Oudh were lost 
 during two successive bad seasons." — A. O. Hume. 
 
 " The pasture grounds of the villages have to a large 
 extent been brought under the plough, and the cattle 
 in many districts have degenerated from insufficient 
 food. The same number of oxen can no longer put the 
 same amount of work into the soil. . . . While, there- 
 fore, the husbandman has now to wring a subsistence 
 out of inferior lands which he would not have touched 
 a hundred years ago, the good lands have deteriorated 
 for want of manure and fi-om want of rest, and the 
 cattle have degenerated from lack of pasture. This sad 
 description does not apply to all India, but it represents 
 the state of things in large and increasing areas where 
 the population has outgrown the food-producing powers 
 of the land."— W. W. Hunter. 
 
 " The working cattle are almost entirely stall-fed, the 
 stalks of the rain crops and the straw of the spring 
 crops being entirely utilized for this purpose. The 
 stalk of the jowar, bajra, maize, and other great millets 
 furnish an immense weight of fodder to the acre. These 
 crops are sometimes grown for fodder only, and are cut 
 before the seed ripens. Green fodder crops are un- 
 common, and if they are not more generally sown, it is 
 probable that they are not as paying as the crops now 
 raised at the same time. It is undeniable that in the 
 dry parts of India cattle, if not driven away to distant 
 highland pastures, suffer much during the three hot 
 months of summer before new forage springs up on the 
 first fall of rain. Our Agricultural Department in the 
 
Appendix. 181 
 
 North- Western Provinces has for some time past given 
 attention to this subject, and has succeeded in greatly 
 extending the growth of lucerne grass, and other foreign 
 fodder plants. We will shortly consider whether the 
 further extension of green fodder on canal-irrigated land 
 might not be promoted by reducing the water-rent on 
 fields put" down with green food fodder crops." — 
 R. 0. D. 
 
 Fuel ksd Manueb. 
 
 The cattle dung is almost universally collected and 
 dried for use as fuel. Even if the ashes are thrown 
 upon the land, the straw part, so useful for retaining 
 moisture, is lost. The gradual reclamation of jungle, 
 owing to the pressure of population on the land, is 
 abolishing the old fuel. " Many careful observers 
 believe," writes Dr. Hunter, " that the clearance and cul- 
 tivation of the jungles have been carried to such an excess 
 in some parts of India as to seriously alter the climate. 
 For forests, and the undergrowth which they foster, not 
 only husband the rainfall, but they appear to attract it. 
 A hill covered with forest is a reservoir of moisture ; the 
 same hill, stripped of its woods, becomes hard, arid 
 ground, down whose bare surface the tropical rains rush 
 off in destructive torrents, instead of sinking into the 
 subsoil, or being stored up in the vegetation." In the 
 Oazetteer of India, under the heading of Coorg, it is 
 noticed that the coffee-planters have in that part been 
 guilty of ruthless destruction of the forests. The rail- 
 ways have also helped — they consumed 154,318 tons of 
 wood for fuel in 1881-82 — and now a costly Forest 
 Department is required. 
 
182 
 
 Appendix. 
 
 Coal. 
 
 As far as I can discover, coal is only used for the rail- 
 ways and factories ; it is too expensive for tlie peasantry. 
 As a rule, coal-beds are only found in certain parts south 
 of the Ganges and north of the Godaveri. Iron manu- 
 factures have hitherto failed, owing to the large per- 
 centage of ash in the coal. Native iron industries 
 are said to be languishing under English competition, 
 though it is admitted that the native method of smelting 
 iron is better than that tried by BngHsh companies. 
 See Gazetteer of India, passim. 
 
 Population, etc. 
 
 " In the country immediately under British rule there 
 are, on the average, 211 persons to the square mile ; if 
 the feudatory states be included, the average is 165 to 
 the square mile. In order of density the provinces 
 stand thus : 
 
 Oudh 
 
 468 
 
 Bengal 
 
 397 
 
 North-Western Provinces 
 
 378 
 
 Madras 
 
 226 
 
 Mysore 
 
 187 
 
 Punjab 
 
 173 
 
 Bombay 
 
 131 
 
 Berar 
 
 129 
 
 Ajmir 
 
 119 
 
 Assam 
 
 99 
 
 Central Provinces 
 
 91 
 
 Coorg 
 
 84 
 
 British Burma 
 
 31 
 
Appendix. 
 
 183 
 
 " The average, in the case of Bengal and the North- 
 Western Provinces, is brought down by the large area 
 of mountainous and thinly peopled hill-country. In 
 the Punjab, the large desert tracts produce a like result. 
 
 " In Bengal there are seventeen districts in which the 
 population is over five hundred to the sqaare mile, 
 thirteeen in the North Western Provinces, seven in 
 Oudh, three in the Punjab, one in Madras, and one in 
 Bombay. 
 
 " The great preponderance of this population is rural ; 
 in Bengal, North- Western Provinces, and Oudh, ninety- 
 three per cent, of the inhabitants live in villages, and 
 only seven per cent, in towns containing over five 
 thousand people. 
 
 " The thirty-seven millions of houses occupied by the 
 people of British India are grouped into 493,444 town- 
 ships or villages, giving an average of 5'14 people to 
 a house, 75 houses, and 386 persons to a village. 
 
 " The following table is an estimate of the propor- 
 tions into which the adult male population is divided 
 as regards employment : — 
 
 
 
 Estimated 
 
 
 Per cent. 
 
 number of 
 adult males. 
 
 Professional, including Government service . . . 
 
 3-6 
 
 2,232,000 
 
 Domestic 
 
 6-2 
 
 3,844,000 
 
 Agricultural 
 
 5&-1 
 
 34,844,000 
 
 Commercial 
 
 5-2 
 
 3,224,000 
 
 Industrial 
 
 131 
 
 8,122,000 
 
 Labourers 
 
 12-3 
 
 7,626,000 
 
 Independent and non-productive 
 
 3-4 
 
 2,108,000 
 
 
 100- 
 
 62,000,000 
 
184 Appendix. 
 
 " Of the 2,232,000 classed as professional, about one 
 million are employed under public authority, and include 
 223,000 police and village watchmen, and 571,000 
 municipal, local, and village officials. About another 
 million are employed in private professions : 629,000 are 
 recorded as being engaged in religious or charitable 
 duties ; 139,000 in literature, science, and education ; 
 218,000 in the fine arts. 
 
 " Thirty-four and three quarters millions, or 56'2 per 
 cent., are returned as agricultural. As to this, it must 
 be remembered that — 
 
 " (1) The agricultural population is not restricted to 
 adult males, large numbers of women and children being 
 engaged in agriculture. 
 
 " (2) Many artisans and professionals, besides their 
 trade, own and cultivate land, and must be added to 
 the population that lives on the soil, as must also the 
 greater part of the labouring population. 
 
 "It is probable that ninety per cent, of the rural 
 population, or rather more than eighty per cent, of 
 the total population, is closely connected with the 
 land. 
 
 " The commercial class is returned as numbering 
 nearly three and a quarter millions of adult males. Of 
 these nearly two and a half millions are engaged in 
 trade, mainly as general merchants and shopkeepers, 
 and a quarter of a million are bankers and money- 
 lenders. The rest, in number about one million, are 
 carriers, such as boatmen, cartmen, bearers of palanquins, 
 or porters ; and 896,000 are connected with navigation, 
 
Appendix. 1^5 
 
 their numbers being largely recruited from tlie boatmen 
 who ply on the rivers of Bengal. 
 
 " The industrial and artisan class numbers eight 
 millions. Its most important divisions are the class 
 engaged in making fabrics and articles of dress, number- 
 ing three and a quarter millions ; and the workers 
 in metals, minerals, etc., including potters, number 
 1,373,000. These two classes, weavers and potters, are 
 conspicuous among the classes upon whom famine 
 presses most heavily. 
 
 " Most important of all, however, for the purposes of 
 famine relief administration, is the class of labourers, 
 numbering over seven and a half millions, the great 
 majority of whom are agricultural labourers ; of these 
 two and a half are in Bengal, two millions in Madras, 
 one and a half millions in the North- Western Provinces. 
 The list is concluded with a class of " non-productive " 
 persons, amongst whom a million " beggars and paupers " 
 may be taken as representing the number of persons 
 dependent in ordinary times on the charity of the public. 
 Thus the classes most liable to suffer from famine, the 
 labourers, beggars, weavers, and potters, amount in 
 number to about thirteen millions of adult males, or a 
 population of nearly forty millions, including women 
 and children, or twenty per cent, of the total population 
 of British India."— F. 0. 
 
 Waste Lands. 
 " On the whole, then, it may be said that there are 
 considerable parts of India, such as the Bardwan and 
 
186 Appendix. 
 
 Patna divisions of Bengal, the Benares division, and 
 the lower and middle Doab in the North-Western 
 Provinces, with parts of Rohilkhand and Ondh, and two 
 or three of the most populous districts in the Punjab, 
 in which the population is so dense that it presses closely 
 on the means of subsistence ; and here, unless the exist- 
 ing system of agriculture is improved as to yield a 
 larger produce per acre, there is no room for an increase 
 of the population. Excluding these tracts, there is in 
 most villages scope for a slow and gradual extension of 
 cultivation by the breaking up of uncultivated land, 
 and for the more careful cultivation of what is now 
 under tillage, and outside the village areas there is an 
 immense extent of land which is more or less fit for 
 cultivation. But much of it is poor land, and where 
 it is not poor, either the climate is feverish or else the 
 conditions are so different from those that prevail in 
 the densely populated places from which emigration 
 might be desired or expected to conae, that settlers 
 would be alarmed or discouraged. Probably the only 
 tracts to which these objections do not apply are the 
 desert waste places between the Punjab rivers and along 
 the Indus, in whichj if irrigation is ever introduced, 
 cultivation can be carried on under much the same con- 
 ditions as those which prevail in the greater part of 
 Upper India. 
 
 " la connection with this subject may be noticed the 
 extent and locality of unoccupied land available for 
 European settlers. It is admitted, as the fruit of 
 general experience, that Europeans cannot actively carry 
 
Appendix. 187 
 
 on agricultural operations, or bring up families, in the 
 plains of India. Suitable sites for such settlers can only 
 be found in elevated hill tracts, where the climate is 
 cold enough for European constitutions. Even there, 
 in the hot season of the year, field labqur could hardly 
 be undertaken by Englishmen, and such labour is always 
 performed by natives of India at the settlements that 
 have been formed by Europeans. With few exceptions, 
 these settlements are to be found only on the Himalayan 
 ranges to the north of the Punjab, the North-Western 
 Provinces, and Eastern Bengal, on the mountains border- 
 ing the Assam Valley and Cachar, and on the southern 
 portion of the Western Ghats, from the Mysore territory 
 to Travancore. In the two first-named tracts are situated 
 the greater part of the tea-gardens of India, and some 
 cinchona plantations, and the teas of Kangra, the Dehra 
 Dun, Kumaon, Darjeeling, Assam, and Cachar are 
 already widely known. In the last, the best-known 
 parts of which are Coorg, Wynad,, Ootacamund, and the 
 Pulney Hills, coffee is largely produced, with some tea 
 and cinchona, and the same region is now becoming 
 more widely known on account of the discovery of 
 gold within it..* Much of the land, however, that is 
 suitable for cultivation in such localities is either subject 
 to private rights, or else has been reserved by Govern- 
 ment for purposes of forest conservation, and it would 
 be a mistake to suppose that there is any large area 
 open to European settlers in which no rights exist, and 
 which Government is able to dispose of without inter- 
 
 * N.B. — These mines have recently ceased working. 
 
188 Appendix. 
 
 ference ■witL. the existing local population, or without 
 injury to other interests which it may be important to 
 respect." *— F. C. 
 
 Native States. 
 
 " Nothing struck me more than the greater liveUness 
 and spirit and general evidence of active industry in 
 the capitals of native states compared with towns of 
 equal populations under our rule. The native gentle- 
 men are more independent, the upper class in the 
 British States having become to some extent gradually 
 levelled down and absorbed in the general community. 
 The people in the cities are undoubtedly more prosperous 
 and happy than ours. Each is a centre, where the 
 ablest and wealthiest congregate ; in which the revenue 
 of the State and the great landowners is received ; and 
 where all classes of artificers, shopkeepers, artisans, and 
 
 * I may here point out that European tea-planters have in a 
 great many cases received their lands on long leases or on fee- 
 simple, while no natives, except in Bengal, have been so favoured. 
 " Land in Assam, for instance, is granted for tea-planting on easier 
 terms than for rice cultivation " (e.f. Despatch of Indian Govern- 
 ment, June 8, ISiiO). And though the planters get roads, bridges, 
 and railways made out of public funds, they are always attacking 
 the Government for non-encouragement. What they really want 
 is to have the natives at their mercy, to have no labour-transport 
 laws nor rent acts, but to have — as they had for six months in 1860, 
 at the time of the Bengal indigo riots — ^the power of enforcing 
 contracts by a criminal suit with the penalty of imprisonment. 
 Though tea-plantations are entirely worked by European capital, 
 coffee plantations are worked partly by natives and partly by 
 Europeans. In fact, coffee was long ago cultivated by the natives. 
 
Appendix. 189 
 
 labourers find regular employment, and native art and- 
 skill are developed and rewarded. The example we 
 have afforded of impartial justice, and tlie equality of 
 all men before the law, is taking root in the native 
 states where our influence extends, and this is combined 
 with the presence of governments whicb. determine and 
 carry into execution each for itself, as it can afford, the 
 public works deemed best for general convenience. It 
 is this self-containedness and self-dependence that is 
 wanting in our provinces." — C. D. 
 
APPENDIX B. 
 
 Depaetmbnt of Public Woeks. 
 
 " The very costlj Department of Public Works, as a 
 general office connected with the Viceregal Government, 
 should he closed, each province should carry on its 
 ■works as it found most desirable and as its finances 
 admitted. Native engineering talent should be culti- 
 vated, and full scope given to it. Of the large body of 
 officers employed in the Public Works Department in 
 India, nearly four-fifths are English, and the native 
 employes are generally kept in the most subordinate 
 positions. Native engineering talent has thus not 
 only received little encouragement, but has been kept 
 down by the present system. The existence of it is 
 undoubted, but the men who would have been found to 
 direct, in former times, are gradually disappearing. 
 They were the hereditary leading masons who still in 
 native states keep their pre-eminence. Their merit and 
 artistic taste have been always f ally appreciated by the 
 English engineers and contractors, and their special 
 skill in irrigation works in a country the chief art of 
 which for ages has been the economical use of water, is 
 fully recognized. This class of men, working in con- 
 
Appendix. 191 
 
 junctioa with the native banker, who manages the 
 accounts, might become native contractors, either of 
 whole or sections of works, and take the place of the 
 more costly European. The elaborate amount of English 
 book-keeping and correspondence required by the Public 
 "Works Department, for which they were not fit, has 
 excluded their practical and useful assistance from 
 being taken full advantage of, and has necessitated the 
 introduction of an entirely new class of overseer in the 
 native of Bengal. If, instead of a Central Department 
 attempting to deal with all India, each province was 
 left to its own guidance and responsibility, local wants 
 would be listened to, local interests and sympathy would 
 be aroused, public works would not be prematurely 
 urged, and those most urgently needed would be first 
 attended to. The local gentry and heads of villages 
 would be called on to take a share in local administra- 
 tion, and native engineers and contractors would be 
 consulted and employed. This would raise their position 
 and admit the development of the talent kept dormant 
 under our present arrangements. Not only would the 
 State be served by a much less costly instrumentality, 
 but there would be gained also that continuity of design 
 which is so liable to be broken by the change of European 
 engineers, obliged by the climate to seek health at home. 
 The costliness of the present system prevents many 
 useful wants from being undertaken ; the money goes so 
 short a way. A change of this kind would tend to great 
 economy, and would bring out as coadjutors with us in 
 the administration of India the most ingenious class of 
 
192 Appendix. 
 
 nati"7;e talent, better capable of aiding in the deyelop- 
 ment of the country than even that large body of native 
 officials now found so indispensable in the Judicial and 
 Revenue Departments." — C. D. 
 
 WeliiS. 
 
 " It was pointed out by Sir Arthur Wellesley, in 1805, 
 and continues still to be the fact, that much the largest 
 proportion of people in India are fed on grain other 
 than rice — somewhat less than a third on rice. The 
 grain is chiefly sown on the higher and dry soils which 
 depend on the monsoon rains, and which cannot be 
 conveniently reached by river-channel irrigation. Hence 
 the great advantge of giving to such lands, wherever 
 practicable, the benefit of wells. If each cultivator had 
 the power of applying water to one-third of his culti- 
 vated land, the country would be secure against drought 
 and famine. And, though water is not found in all 
 parts within such a depth as would admit of its profit- 
 able use, there are districts in most part of India where 
 wells might be made with perfect success, and without 
 that risk of sickness which so frequently accompanies 
 canal irrigation in other localities than deltas. The 
 collector of Cuddapah, in Madras (Mr. T. D. Gribble), 
 thus describes the value of wells in time of famine : 
 ' The month was February, 1877, when the famine was 
 at its worst. There was not a drop of water in any 
 tank or channel, and the whole country was burnt up 
 waste. Suddenly I came across a broad valley through 
 which the high-road ran, which was, comparatively 
 
Appendix. 
 
 speaking, a perfect garden of millet and raggi crops. 
 The millet was the height of a man, with heavy cobs 
 just ready for reaping. These crops were entirely 
 raised under wells, and extended for more than five 
 miles. When I passed out of this belt to a part of the 
 country where there were no wells, the land was a dry, 
 arid waste. Similar cultivation was to be seen wherever 
 there was a well. During the season of 1876-77, there 
 was scarcely an acre of productive cultivation (except 
 under a few of the largest river- channels) which was 
 not dependent upon a well. Had it not been for the 
 comparatively few wells that we have, the famine would 
 have been far moro intense than it was.' Erom what 
 I saw there, and in other parts of India, I am able most 
 strongly to confirm the recommendation of the Com- 
 mittee of the House of Commons on Indian Public 
 Works, in favour of advances being offered to the culti- 
 vators for the extension of wells and river-fed or deep 
 tanks. But the mode of administering such advances 
 ought to be greatly simplified." — C. D. 
 
 In spite of the rule laid down in Madras, that no 
 additional assessment is charged in respect of wells 
 constructed by a cultivator, the collector of Cuddapah 
 draws attention to the fact that this rule does not apply 
 to wells which "from their locality are supposed to 
 derive their supplies from Govemruent tanks and 
 channels." Such wells are chargeable with a higher 
 assessment, " even though there is no water in the- 
 tank. . . . Sometimes, again, a well is dug in land 
 commanded by a Grovernment irrigation work, and the 
 
 
 
194 Appendix. 
 
 water taken to land which the Government work does 
 not command, and the land thus irrigated is charged 
 with the irrigation assessment. This again operates as 
 a discouragement to well-construction " (extract from 
 " Note on Wells in Cuddapah," by Mr. H. S. Cunning- 
 ham, Appendix V). — F. C. 
 
 Canals. 
 As an instance of what the ryots wUl do in canal 
 irrigation, under the guidance of an influential district 
 officer, I will quote the following article, which appeared 
 in the Pioneer of January 2, 1883 : — 
 
 "DisTEiCT "Works. 
 
 " Saturday, the 2nd of December, was a day memor- 
 able in the annals of the Jut of Ferozepore. It then 
 dawned upon his unsophisticated mind that it is really 
 possible for rates of taxation to permanently decrease, 
 and that even a district officer has bowels and will not 
 enhance an assessment unnecessarily. It appears that 
 on that day the Deputy Commissioner of Ferozepore 
 convened the abnoshes (lit. water-drinkers), being the 
 recipients of irrigation from the canals of the district, 
 for the annual meeting held to audit the accounts of 
 those canals for 1882. On this occasion it was settled 
 that the hachh or rate to meet the expenses of the 
 coming year should be reduced from three annas to 
 two and a half annas per acre. This is the third year 
 of such annual audit meetings, and the second in which 
 such reduction of assessment has been afiforded — the 
 
Appendix. 195 
 
 rate for 1881 having been fixed at tlie first of these 
 meetings, tentatively at four annas per acre. The first 
 reduction had not, however, heen fully and thoroughly 
 Relieved in by the people. It would not last, they 
 thought, now that a new district officer was at the 
 helm. So we are told that ' the abnoshes were agree- 
 ably surprised, as there was a rumour afloat among 
 them that the hacKIi would be enhanced this year — so 
 everybody was delighted with the result, and there was 
 general rejoicing over it.' 
 
 " Clearly there is something novel about all this, 
 which requires explanation for most of our readers. 
 Every one knows that there is a great canal in the 
 Perozepore district, and the ceremonies at Rupar are 
 still fresh in our memory. But evidently the Sirhind 
 ■Canal is not worked for two and a half annas per acre 
 irrigated, nor is it likely that the owners of the land 
 irrigated will be asked to audit the yearly account of 
 that "work. The Perozepore canals, of which the audit 
 meeting vsras held at Zira, on the 2nd of December, with 
 such eclat (for we learn that they ' had illuminations 
 and fireworks and races, and the haclih mela was a 
 grand success), has evidently no connection with the 
 orthodox irrigation department. There are certainly, 
 as many people are aware, systems of irrigation in the 
 Punjab which have not been constructed by the Canal 
 Department, though now under its management ; which, 
 indeed, have, in the thirty years that we have held the 
 province, hardly been added to, though certainly the 
 canals themselves have been improved. Such are the 
 
196 Appendix. 
 
 canals from the Indus, ChenaTa, and Sutlej, constructed 
 by tte native rulers of Mooltan and Dera Ghazi Khan. 
 The Ferozepore canals are, however, we are told, not ten 
 years old, so they cannot come into this category. 
 These canals have, it seems, heen constructed by com- 
 bination of the people of Perozepore and the civil 
 officers of that district ; the former giving the labour, 
 and the latter the direction and impulsion. To most 
 civil officers it may appear strange that this sort of 
 thing should be possible without an Act, but in fact not 
 only was legislative sanction not required, but no money 
 was asked for. The people of Ferozepore appear to be 
 a simple sturdy race, with the instinct of reliance on 
 and obedience to a Hakim. If the Hakims had con- 
 fidence in themselves and hustled these good people into 
 exertion for the purpose of bettering themselves, the 
 people were willing to trust themselves to the Hakims 
 and to do as these directed. So when it occarred to 
 the civil officers that the Sutlej was flowing uselessly 
 past Terozepore and that its waters might as well be 
 brought to the parched fields, the people turned out 
 obediently to execute the works marked out and allotted 
 to them. The Sutlej never had been led out of it& 
 banks certainly, and they had always heard that some 
 saint had said this never should be done ; but if the 
 English Hakims knew better, then well and good. 
 
 " And so in three or four years the existing system of 
 canals was executed by the labour of the people. And 
 they are cleared and maintained to this hour by the 
 labour of the people. Every year the cubic contents of 
 
Appendix. 197 
 
 ■clearance in each, canal are calculated, as is easy to do, 
 ' benchmarks being fixed in their bottoms to show the 
 designed bed, and the total is divided by the irrigated 
 .area in acres of each canal, thus giving a rate of clear- 
 ance in cubic feet per acre. This rate multiplied by 
 the irrigated acreage of each village gives the quota of 
 that village, to which a length of canal containing that 
 -quota of clearance is accordingly assigned. A date is 
 fixed by which clearance is to be completed, and the 
 villages are then left to execute their tasks at their con- 
 venience. They do it generally with a rush. On some 
 ■convenient day after the autumn harvest the whole 
 population of the village proceeds to the spot, and, with 
 drums beating, the work of a month is cleared ofE in 
 three days. Or, if the spot is inconveniently distant, 
 they give the job on contract to some other village more 
 favourable situated. The most onerous part of the 
 maintenance of irrigation canals is thus disposed of ; 
 but of course there are other raatters which have to \)e 
 paid for in cash. A competent manager is required ; 
 .a surveyor's services are in constant requisition ; super- 
 visors are necessary on three hundred miles of canals. 
 Moreover, inundation canals frequently require renewal 
 ■of heads. A change in the course of the river leaves 
 the head, or cuts it away, or a sandbank masks it. A 
 new head has to be made, sometimes three or four miles 
 long, and the canal has to be perhaps regraded through- 
 out. A competent officer is reqnired to decide on this 
 line ; the surveyor has to level it ; the officer has then 
 to design the work, and the surveyor to lay it out. 
 
198 Appendix. 
 
 Then the computatijii^BMUtaie made; a rateable distri- 
 bution of tlip^»»^,s3^lcKRjfci^iUages concerned, 
 contracts gu^n out, designs fnrimheMk The works and 
 yearly cleafance jW'Ig t^'We sMervisedB moreoyer, there 
 are constarkly d^nbutaries^TOired mj the zemindars 
 which have'^^^ifejlj^^M-g^^^^^^ppigned, and their 
 execution hj^i^^^^^^^^e^ after. Thus an 
 establishnient has to be maintained for the canals, and 
 the funds have to be provided by the beneficiaries ; for 
 of course Government, having no connection with 
 such canals, nor deriving any profit from them, will not 
 assist them. 
 
 " This, then, is the explanation of the ceremony lately 
 held at Zira, in Ferozepore. The abnoshes or bene- 
 ficiaries of the canals met to audit the accounts of the 
 pay of their employes and other expenses incurred upon 
 necessary works not conveniently to be executed by 
 their own labour, for the year 1882 ; also to provide 
 the funds for similar expenditure in the ensuing year^ 
 These arrangements are made in the presence and with 
 the approval of the Deputy Commissioner; but the 
 management of the irrigation is in the hands of a 
 special Extra-Assistant Commissioner, lent by Govern- 
 ment to the Ferozepore abnoshes for this purpose, and 
 paid by them out of the above funds, as are the other 
 employes, This system was introduced only in the end 
 of 1880, the canals having up to that time been managed 
 by the civil officers of the district. So long as those were 
 the qfficers who originally took up the scheme this was 
 all very well, and it saved expense to the zemindars. 
 
Appendix. 199 
 
 But in other hands such a system became unsatisfactory 
 and burdensome, and the present one was accordingly 
 substituted for it. It works satisfactorily, and there 
 can be no doubt that, in this m.ethod of constructing 
 and managing inundation canals, an important question 
 has been solved, and that the measure may be developed 
 throughout the riverain districts of the province with 
 much advantage. This is the view taken by Sir Charles 
 Aitchison in a circular directed to the Deputy Commis- 
 sioners of all such districts, which will, we trust, ere 
 long produce good results. The example of Ferozepore 
 has clearly shown what can be done by officers familiar 
 with the theory and practice of canal construction and 
 management, supported by a manly and willing people. 
 To officers not possessing the necessary engineering 
 knowledge scientific guidance can be afforded. That 
 part presents no difficulty. What remains is to combine 
 energy and influence on the part of the district officer 
 with energy and confidence on the side of the people. 
 Where these factors both exist, the result will be 
 assured." 
 
200 
 
 Appendix. 
 
 TABLE I, 
 
 Eetubn'of the Total Net Expekditdeb tjpok all Sokts op 
 
 
 Protective 
 Public 
 WorliS. 
 
 Other 
 Public 
 Works 
 (ordinary) 
 of all 
 kinds.* 
 
 Productive Publio Works (other 
 
 than capital outlay) exclusive 
 
 of Guaranteed Companies. 
 
 Total 
 net 
 charge 
 upon 
 revenue 
 of the 
 year.* 
 
 
 Years. 
 
 Irrigation 
 and navi- 
 gation .f 
 
 state 
 raU- 
 ways. 
 
 East Indian 
 Railway, 
 from let 
 January, 
 
 1880 (after 
 its pur- 
 chase by 
 
 the State). 
 
 
 1873-74 
 
 1874-75 
 
 1875-76 
 
 1876-77 
 
 1877-78 
 
 1878-79 
 
 1679-80 
 
 1880-81 
 
 + 1881-82 
 
 lfl82-83 
 
 (Revised Estimate). 
 
 1883-84 
 
 (Budget Estimate). 
 
 £ 
 
 
 
 790,000 
 
 144,200$ 
 1,355,800$ 
 
 £ 
 4,603,300 
 
 5,066,826 
 5,125,187 
 4,394,435 
 4,090,395 
 
 4,426,980 
 4,336,593* 
 
 4,353,882* 
 5,441,050* 
 
 6,260,300* 
 6,123,900* 
 
 £ 
 349,776 
 
 372,121 
 325,372 
 390,766 
 113.683 
 
 136,658+ 
 
 -m,usf 
 
 -157,0mf 
 
 -8i,^00f 
 - C3,00f 
 
 £ 
 183,638 
 
 239,547 
 312,089 
 440,141 
 537,988 
 
 681,883 
 715,203 
 
 643,283 
 290,295 
 
 176,236 
 150,324 
 
 £ 
 
 - m,757 
 -1,K7,167 
 
 -1,S89JSS? 
 
 - S9i,m 
 -i,m,7Bi 
 
 £ 
 5,136,714 
 
 6,678,494 
 5,762,M8 
 5,225,342 
 4,742,060 
 
 5,244,621' 
 3,774,615 
 
 3,408,849 
 4,934,440 
 
 5,605,100 
 6,615,000 
 
 
 * Exclusive of the amount charged in the accounts and estimates for expenditure on 
 frontier railways, viz. :— 
 
 In 1879-80 ... ... ... £1,334,350 
 
 In 1880-81 ... ... ... ... ... 2,293,616 ' 
 
 In 1881-82 ... ... ... ... ... 224,682 
 
 Bevised estimate, 1882-83 ... ... ... 281,500 
 
 Budget estimate, 1883-84 ... ... ,., '" ... 67,600 
 
 £4,201,64? 
 
 + Including interest on the portion of capital outlay on Madras Harbour Works 
 charged to the Productive Public Works account. 
 
 J The figures given above for the year 1881-82 will not be found to agree with those 
 given on page 37, as the former are made up for the financial and the latter for the calendar 
 year. The item of loss by exchange is not reckoned, and the charge for guaranteed roll- 
 
Appendix. 
 
 201 
 
 Public Works in India, from 1873-74 to 1883-84. 
 
 Productive 
 Public 
 Worlcs, 
 capital ex- 
 penditure 
 (including 
 from 1st 
 January, 
 1880, East 
 Indian Kail- 
 way). 
 
 Eemarks. 
 
 3,553,307 
 
 4,219,571 
 4,270,629 
 3,809,284 
 4,J91,052 
 
 4,381,898 
 13,095,19211 
 
 9,29r,2331[ 
 
 Interest on capital outlay on Productive Public Works was charged at 4 per 
 cent, from 1873-74 to 1877-78 ; at 4^ per cent, from 1878-79 to 1880-81 
 and at 4 per cent. 1881-82, 1882-83, and 1883-84. 
 
 Portion of Land Revenue due to irrigation in Northern India and Bombay 
 first credited to Productive Public Works in 1877-78 ; and in Madras in 
 1879-80. 
 
 II Includes £9,676,614 debt incurred for the purchase of the East Indian 
 
 Eailway. 
 ^ Includes £5,640,728 for outlay incurred in previous years from ordinary 
 funds on Productive Public Works, now transferred, viz. : — 
 
 On irrigation works ... ... ... ... £4,792,017 
 
 On State railways ... ... ... ... 848,711 
 
 4,844,400tt 
 
 3,820,100tt 
 
 £5,640,728 
 ** Includes £586,300 debt incurred for discharge of portion of the East Indian 
 Railway Annuity, and £640,608 for outlay incurred in previous years from 
 ordinary funds on Productive Public Works, now transferred, viz, : — 
 On irrigation works ... ... ... ... ^619,084 
 
 On State railways ... ... ... ... 21,524 
 
 £640,608 
 ■H" Includes £450,000 debt incurred for discharge of portion of the East Indian 
 
 Railway Annuity, and also £1,763,500 debt incurred for the purchase of the 
 
 Madras Irrigation and Canal Company's Works. 
 JJ Includes £880,100 savings from previous allotments for State railways, 
 
 £16,000 for part purchase of Madras Irrigation Canal, and £424,000 for 
 
 East Indian Eailway. 
 
 ways is purposely omitted. It will also be noticed that in the case of the East Indian 
 Eailway, there is an annual debt incurred for discharge of annuities. I do not know whether 
 any of the interest on this debt is reckoned with that on the ordinary debt of India, (see 
 Table II., note J). Besides the capital expenditure on Productive Public Works from loans, 
 the India Government spends each year half the Famine Insurance Fund, or £750,000 on 
 " protective " works. In the House of Commons debate of May 8tb, Lord George Hamilton 
 remarked of these works that " he had looked upon them with great difBdence," their title 
 meant that " they were non-productive, and that they bad been pressed upon the Govern- 
 ment by an engineer because the localities did not need them." — A. K. C. 
 
 { The short outlay in 1882-83 was owing to the transfer of the Southern Mahralta 
 Railway to a private company. It was proposed to spend £369,800 on this line during 
 the year, instead of which the company has to refund to the Government about £270,000 
 for past outlay on the railway. The amount thus set free has been re-allotted for outlay 
 during 1883-34, in addition to the fixed allotment of £750,000. 
 
202 
 
 Appmdix. 
 
 TABLE II. 
 
 BuDSET Accounts op Pbodtictive Public "Works foe Year 
 1881-82* 
 
 Eeceipts. £ 
 
 State railways ... 2,556,542 
 
 Guaranteed and sub- 
 sidized railways ... 3,615,479t 
 
 East India Railway.. 3,261,857t 
 
 Irrigation and navi- 
 gation 865,799 
 
 Madras Irrigation 
 Company 8,834 
 
 Land reyenue due to 
 irrigation 491,220 
 
 10,799,731 
 
 Other irrigation 
 works ... 131,239 
 
 Expenditure. £ 
 
 Working and main- 
 tenance of State 
 
 . railways 1,686,392 
 
 Interest and share of 
 profits for guaran- 
 teed and subsi- 
 dized railways ... 3,678,754 
 
 Ditto for East India 
 
 _ Railway l,43S,703t 
 
 Working and main- 
 tenance 455,635 
 
 Interest, etc 
 
 Interest on debt for 
 
 productive public 
 
 works : — 
 
 (1) Railways ... 
 
 (2) Irrigation... 
 Miscellaneous 
 
 50,496 
 
 l,594,687t 
 726,386 
 17,952 
 
 9i649,005 
 789,933 
 
 * These accounts are made up for the financial, not the calendar 
 year. The rupee is reckoned throughout at 2s. 
 
 t Net traffic receipts. The companies pay for the working" 
 expenses, etc. 
 
 X See Table I., note {. This sum does not represent the 
 whole charge on the Indian Government for the East India Rail- 
 way. In the railway report the yearly charge on the railway is 
 said to be £1,631,500 + interest at 4 J per cent, on capital advanced 
 by the State since the purchase, viz. £1,107,683. Mr. Julaud 
 Danvers informs me that of the interest on debt for State railways 
 £434,242 is for the Bast Indian line: If so, th'ere remains an interest 
 charge of £1,160,445 (net charge £290,295) for the State lines 
 proper. This is considerably less than the sum £1,395,360 given 
 on page 38, and is not explained by the difference between the 
 financial and calendar year. I imagine that in the annual report 
 interest is charged on the capital (nearly £4,000,000) expended on 
 
Appendix. 
 
 203 
 
 TABLE III. 
 According to the latest returns, the Indian railways, 
 taken altogether, are said to yield 5i per cent, on the 
 capital expended. An analysis of financial results of 
 the different railways up to 1881 shows that there are 
 only two lines which are beginning to pay their interest 
 charges on the whole capital expended : — 
 
 
 Net interest 
 
 charges 
 
 advanced by 
 
 State. 
 
 Total surplus 
 
 profits. Halt 
 
 share to 
 
 State. 
 
 Net earn- 
 ings in 
 1881 on 
 
 borrowed 
 capital. 
 
 Year of 
 
 com- 
 pletion. 
 
 East India Kailway 
 
 Eastern Bengal 
 
 Great Indian Peninsula... 
 Bombay, Baroda, and Cen- 
 tral India '. ... 
 
 Sind, Punjab, and Delhi .. 
 Oudh and Eohilkund ... 
 
 Madras 
 
 South Indian ... 
 
 £ 
 
 3,462,679 
 
 330,381 
 
 6,611,090 
 
 3,165,352 
 6,064,598 
 1,663,204 
 5,643,207 
 1,484,602 
 
 £ 
 
 5,855,427t 
 
 582,317 
 
 1,694,441 
 
 195,379 
 
 3,872 
 none 
 none 
 none 
 
 8-85 
 9-46 
 6-28 
 
 6'55 
 2-55 
 3-12 
 1-81 
 2-72 
 
 1871 
 1871 
 1871 
 
 1877 
 1870 
 1874 
 1873 
 1868 
 
 
 28,425,119* 
 
 8,331,436 
 
 
 
 frontier railways (see note * Table I.), but this ia not reckoned in 
 the above statement. By this means the State is accredited with 
 all the gains of these railways and none of the losses ; the most 
 Costly railways are made out to be the cheapest, the fact being tliat 
 they are constructed out of taxation, imposed under the head of 
 war charges, famine insurance funds, and other high sounding 
 titles. It thus becomes impossible, without minute investigation, 
 to say whether any given line pays its way. It is the same with 
 irrigation works. 
 
 * The State's share of profits is, I believe, deducted before 
 these figures are made-up. 
 
 t The East India Railway profits since purchase are not included 
 (see Table I.). The State railways have no surplus profits. It 
 must also be pointed out that the receipts due to war and famine 
 have considerably increased the profits of the railways, but the 
 State had to pay heavily for both; The Afghan war gave the Sind, 
 Punjab, and Delhi railway company a i^resent of £1900. 
 
APPENDIX C. 
 
 " Indian villages may he grouped into two broad 
 classes, ■which, before I describe their differences, I may 
 at once characterize for convenience of reference as the 
 joint, or united, and the non-united village. 
 
 " The essential feature of the joint village is that all 
 the land inside its limits, whether waste or cultivated, 
 belongs (either as the result of its natural constitution 
 or of our revenue system) to the entire body of village 
 " proprietors." The management of affairs is by a 
 panchayat or committee, representing the heads or 
 elders of each section ; if there happen to be no 
 sections, the pancJi may be a single individual. The 
 village also is assessed by Government in one lump 
 sum, for which the whole body is joiutly responsible. 
 
 " In the non-united village, on the other hand, no 
 one has any claim to anything but his own holding: 
 the village, of course, makes use of the waste for 
 grazing or wood-cutting, but the State can grant it 
 away to any one it pleases. The village, again, is 
 managed by a single headman (called patel in Central 
 India, imandal in Bengal, muqaddam, in Northern India, 
 and by various names according to varieties of dialects 
 
Appendix. 205 
 
 in the Soiitli). This headman is partly, at any rate, 
 appointed by the State, though the office, like every- 
 thing Hindu, becomes hereditary by ctistom. The 
 headman realized the Government revenue from each 
 holding, and this was done by dividing the grain 
 produce before it left the threshing-floor. In later 
 times, when the governing power demanded a lamp 
 sum as revenue from the village, the headman appor- 
 tioned the burden among the landholders. Bach had 
 then to pay the allotted share, whether light or heavy ; 
 but there was no joint responsibility of the village as a 
 body. If one man failed or absconded, the others had 
 nothing to do with it ; the headman arranged for the 
 cultivation of the vacant holding. There was no objec- 
 tion to outsiders coming in on the same terms as the 
 rest, and there was no pre-emption right." 
 
 The joint vUlage, according to Mr. Baden-Powell, is to 
 be found chiefly in the Punjab and North- West Provinces, 
 also in parts of Oudh, Central Provinces, and Northei-n 
 Bombay. The non-united village is to be found chiefly 
 in Central and Southern India, in parts of Bengal 
 (though in the latter province it has fallen into decay) , 
 and in Oudh. With the exception of the land-holding 
 classes, the features of the two types of villages are 
 much the same. There are the village accountant and 
 the watchman ; the artisans, such as the carpenter, the 
 potter, the leather- worker, and blacksmith ; the washer- 
 man ; the water-carrier ; the barber ; the astrologer ; the 
 minstrel ; the priest ; the dancing-girls ; and the money- 
 lender. "All have their recognized position in the 
 
206 Appendix. 
 
 village, and their perquisites and remuneration in grain 
 or otherwise." Then there will be a few tradesmen 
 who sell foreign .goods, and, last of all, the menials and 
 labourers of all sorts.* 
 
 One of the most disastrous results of the gradual 
 dissolution of the village system, especially in the most 
 Anglicized districts, is the supersession of the old^ 
 resident money-lender, very often the village head- 
 man, or one of the leading land-owners, by the foreign 
 usurer, called the sowcar. In order to secure to the 
 ryot easier terms than those afforded him by the 
 sowcar. Sir William Wedderburn has recently proposed 
 that land-banks should be established in the Deccan, 
 the capital to be furnished partly by native and partly 
 by English capitalists. The success of land-banks in 
 other countries is quoted as justifying the sanguine 
 hopes entertained as regards this new Indian experi- 
 ment, and if the native money-lenders can be induced 
 to embark their capital in the banks and give the 
 benefit of their local experience, the banks may prove 
 beneficial to the ryot. But there are certain con- 
 siderations of an important nature which appear to 
 have been ignored by the different advocates of these 
 land-banks. If the banks, which it is proposed to 
 gradually establish throughout India, are to be in part 
 supported by English capital, and the Indian Govern- 
 ment is to use its land-revenue machinery for the 
 
 * See "A Manual of the Land Eevenuo System and Land Tenure 
 of British India." By B.'H. Baden-Powell. Government Printing 
 Office, Calcutta, 1882. 
 
Appendix. 207 
 
 collection of interest, a twofold result will ensue. First, 
 another great trade will, by tlie help of the power and 
 prestige of the Indian Government, be gradually appro- 
 priated by English capitalists, and another cause of 
 depletion, in the shape of home remittances for interest, 
 will be added to those already existing. Secondly — ^and 
 this is a point which wholly differentiates the proposed 
 Indian land-banks from those of self-governed countries 
 — the last buffer between a foreign government and its 
 poverty-stricken peasantry, suffering from a much more 
 exhausting drain than the demands of the usurer, will 
 be removed. All the bitter feeling which has hitherto 
 been directed against the native money-lender, as in 
 the Deccan and among the Sonthals, will be turned 
 against the Indian Government, which, in addition to 
 the collection of its own land-revenue, will be forced by 
 absent and necessarily ignorant capitalists to collect the 
 instalments of interest due to the land-banka. The 
 strict exaction of the land tax in years of scarcity, 
 which has, notoriously in the Deccan, Jhansi, and the 
 North-West Provinces, increased the indebtedness of 
 the peasantry, will lead to still more disastrous results, 
 if the Government is to give a guarantee to the English 
 money-lender. 
 
 I believe myself, and my belief is based on the 
 opinions of many experienced district officers, that 
 more real help is to be given to the Indian ryots by a 
 return to a more elastic system of collecting the land- 
 revenue, such as is the practice in Native States, and 
 was the practice formerly in British Provinces, than in 
 
208 Appendix, 
 
 any direct interference wifcli the native money-lender^ 
 except so far as to secure by provisions, similar to those 
 of the Deccan Ryot Relief Act,* a simpler and cheaper 
 system of procedure, and fairer dealing between both 
 parties concerned. 
 
 * For provisiona of this Act, etc., see " Discontent and Danger in 
 India," pp. 52-67 and 127-131. 
 
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Kegan Paul, Trench & Co.^s Publications. 37 
 
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