CHAPTER 3 THE SECOND PHASE OF THE PILLAGE

After 1812, economic exploitation of India entered into a new phase which remained in full bloom, until 1914. This phase was much more dangerous than the first one as it combined the looting of the first phase with the conversion of India to a purely agricultural country, from a great manufacturing-cum-agricultural country. 

Industrialization was going apace in England in the 19th century. Now England was in need of the markets where they could sell their finished products and from where they could buy raw materials. India was the deadly target. This could be possible only if India's manufactures were destoryed and she was converted into a purely agricultural country, producing such raw materials like cotton, jute, indigo, etc. which British factories needed. This was very evident in the proceedings of the parliamentary enquiry of 1813 preceding the renewal of the charter of the com- pany, and abolition of the monopoly of the company in the 

same year. 

The manufacturers of Britain dominated the British Parliament in 1813 they viewed India as a great market for finished and raw products. Before they could exploit India, the exclusive trade monopoly of the company had to be abolished. So the manufacturing and rival trade interests combined to make a concerted attack on the Com- pany giving rise to vast amounts of literature exposing the loot of India by the company. Consequently in 1813, the trade monopoly of the company was abolished, so that instead of just one, all could "bleed" India. 

It has been described before how England levied heavy duties on the import of Indian textiles. This duty was increased from time to time reaching 'enormously high" proportions. For example, in 1813 for every £100 of value, on white calicoes £85-2-1d. duty, and on nankeens and muslins £44-6-8d. was levied. Dyed goods were completely prohibited.' Compared to this, the import duties on Indian raw cotton in 1819 was only six shillings and three pence for 100 lbs. levied purely for revenue purposes. On the other hand, British products were exported to India on the payment of nominal duties, roughly such as would meet the charges of foreign trade administration. Indian manu- facturers were also not allowed to export to other foreign countries through the operation of the British Navigation Acts. Without these protective and prohibitive duties, rules, and state assistance, the British textile industry could not have developed in its early stages, even when it was run by steam, as compared to the Indian cottage industry -the prevalent mode of production throughout the world before the Industrial Revolution. A famous historian, H.N. Wilson, wrote "It was stated in evidence (1813) that the cotton and silk goods of India up to that period could be sold for a profit in the British market at a price from 50 to 60 per cent lower than those fabricated in England. It consequently became necessary to protect the latter by duties of 70 and 80 per cent on their value, or by positive prohibition. Had this not been the case, had not such prohibitory duties and decrees existed, the mills of Paisley and Manchester would have been stopped in their outset, and could scarcely have been again set in motion, even by the power of steam. They were created by the sacrifice of the Indian manufactures. Had India been independent, she would have retaliated, would have imposed prohibitive duties upon her own productive industry from annihilation. 

This act of self-defence was not permitted here, she was at the mercy of the stranger. British goods were forced upon her without paying any duty and the foreign manufacturer employed the arm of political injustice to keep down and ultimately strangle a competitor with whom he could not have contended on equal terms. 

These discriminating and prohibitive duties against the Indian products continued throughout the first half of the 19th century, even when Indian textile exports to Britain were sharply declining and British exports to India were sharply increasing as the following figures submitted to the Select Committee of the House of Commons in 1840 show .

In spite of this position, the evidence given to the Select Committee in 1840 indicated that the Indian cotton, silk, and woollen goods imported into Britain had to pay protective duties of 10, 20, 30 per cent respectively; whereas British cotton and silk exports to India paid duties of only 31%, and 2% on woollen goods, duties which were clearly for revenue purposes. This shows that even in 1840, when the Industrial Revolution was almost complete in England, the British government feared competition of Indian goods. If free competition would have been allowed even as late as 1840, when millions of industrial workers had left their age-long vocations, Indian textile products might have competed with British textile products. 

Although only the biggest industry-the textile indus- try of India has been discussed, the impact of the British rule was the same on the rest of India's industries. This leads to the conclusion that it was not the machine and steam which destroyed, at least in the beginning, the cottage based Indian textile and other industries; rather it was the British political power which was responsible for it. Obvi- ously, the destruction of Indian industries and trade, and severe misery and unemployment of millions would not have taken place if India was not governed by the foreign- ers. India possessed all the necessary factors-capital, labour, land, and entrepreneur-to change her methods of production from hand to machine in the normal evolution of its economy, as was done by many other countries of the world which did not crack and groan under the heavy bull- dozer of imperialism. 

Below are given a few extracts from the Select Com- mittee of the House of Commons in 1840 in which all the witnesses were Britons, "Have native manufactures been superseded by British?' a witness Melvill was asked. "Yes, in great measure, was his reply. 

"Since what period?' 

"I think principally since 1814.' 

"The export of raw produce from India was increased since she ceased largely to export manufactures' said Melvill. Another witness, Andrew Sym, said that "the people of India deprived of their occupations. by the displacement of Indian labour by the introduction of English manufac- tures-clothing, tools, implements, glass-ware and brass articles, turned to agriculture chiefly." 

Sir Charles Trevelyan said, "We have swept away their (Indians) manufactures, they have nothing to depend upon but the produce of their land" "The peculiar kind of silky cotton formerly grown in Bengal, from which the fine Dacca muslins used to be made, is hardly ever seen .Dacca which was the Manchester of India, has fallen off from a very flourishing town (from 150,000 to 30,000 or 40,000) to a very poor and small one; the distress there has been very great indeed.'

Mr. Larpent said, "We have destroyed the manufactures of India. He quoted the views of the Court of Directors, stated in Lord William Bentinck's minute of May 30, 1829: "The symapthy of the Court is deeply excited by the report of the Board of Trade, exhibiting the gloomy picture of the effects of a commercial revolution productive of so much suffering to numerous classes in India, and hardly to be paralleled in the history of commerce.

The representative of the British silk manufacturers and a member of the Committee considered 'more desirable perhaps that India should produce the raw material, and this country show its skill in perfecting that raw material?" To this Larpent replied, "The course of things in India is decidedly leading to that' 

Montgomery Martin, author of the first complete history of the British colonics in five large volumes, was another witness who said "I have been impressed with the conviction that India has suffered most unjustly in her trade, not merely with England but with all other countries, by reason of the outcry for free trade on the part of England without permitting to India a free trade herself.' And he added that, 'on all articles except those where we are supplanting the native manufacturers, and consequently impoverishing the country, there is a decreasing trade. We have during the period of a quarter of a century compelled the Indian territories to receive our manufactures; our woollens duty free, our cottons at 21 per cent, and other articles in proportion; while we have continued during that period to levy almost prohibitory duties, or duties varying from 10 to 20, 30, 50, 100, 500 and 1000 per cent upon articles, the produce from our territories . The decay and destruction of Surat, of Dacca, of Murshidabad and other. places where native manufactures have been carried on, is too painful a fact to dwell upon. I do not consider that it has been in the fair course of trade; I think it has been the power of the stronger exercised over the weaker. " 

For Martin, even describing the destruction of "the great polytechnical cities of India"" was "too painful" How painful this would have been to the people who experienced the destruction of their great cities and their means of liveli- hood, can only be imagined. 

Sir Henry Cotton, who himself for 35 years, and whose father, grand-father, and son were members of the most highly paid Indian Civil Service, wrote in 1890: "The Indian cities were populous and magnificent (before the British). . All the arts then flourished, and with them urban life. Now out of a population of three hundred millions, only 7 per cent live in towns of more than 10,000 inhabitants. In Ireland, that unfortunate annexe of the British dominions, the proportion is about 20, in Scotland it is 50, and in England and in Wales it is 67 per cent will cite as an example the city of Dacca . When it passed under British administration the population was estimated at two hundred thousand souls. In 1787 the exports of Dacca muslin to England amounted to £3,000,000; in 1817 they had ceased altogether. The arts of spinning and weaving, which for ages afforded employment to a numerous industrious population, have now become extinct. Families which were formerly in a state of affluence have been reduced to penury: the majority of the people have been driven to desert the town and betake themselves to the villages for a livelihood. . This decadence has occurred in all parts of India, and not a year passes in which the local officers do not bring to the notice of Government that the manufactur- ing classes are becoming impoverished. The most profi- table Indian industries have been destroyed and the most valuable Indian arts have greatly deteriorated. Dyeing, carpet-making, fine embroidery, jewellery, metal-work, the damascening of arms, carving, paper-making, even architec- ture and sculpture have decayed. .the loss of the subtle and refined oriental arts, the very secret of which has passed away. sacrifice of that constructive genious and mecha- nical ability which designed the canal system of Upper India and the Taj at Agra. " 

Even the British Governor-General of India in 1834 had to admit "The misery hardly finds a parallel in the history of commerce. The bones of the cotton-weavers are bleaching the plains of India' while their blood was enrich- ing the plains of Britain. Tens of millions of people became unemployed and died. 

By 1850, instead of exporting various types of textiles-- cotton cloth, muslins, silks, woollens, etc. to the whole world, India was importing one-fourth of all British cotton exports. The textiles of India wrapped the mummies of Egypt, beauti- fied the ladies of Rome, created political and economic stir in Europe, put large sums of money in the pockets of the Europeans, induced the Africans to sell their brothers to the white man as slaves, met a fairly large proportion of the world's demand up to the early 19th century, and employed tens of millions of people-all those textiles and people were knowingly" destroyed by 1850 by the magnificent exploi- ters. 

The same melancholy story applies to the other indust- ries of India. Take for example, the shipping industry. From the very dawn of India's history about 5,000 years ago India's shipping industry was also well developed, along with other industries, which continued to be so till about the middle of 19th centuary. 

In 1814, the British Parliament passed an Act that no ship, even though British owned, could enter London if British mariners did not make up at least three-fourths of its crew. 

As in the case of textile and other industries, the British government also imposed discriminatory rates of import duties against non-British Indian ships between 1811 and 1818, which were, in the words of an eminent Indian economist, 'most harmful to the Indian mercantile marine, 145 

The ancient industry of Indian shipbuilding, 'was finally abolished in April, 1863, shortly after the assumption of the Government of India by the crown' England. "Scarcely anything has struck me more forcibly,' says Digby, 'than the manner in which the Mistress of The Seas in the Western world has stricken to death the Mistress of the seas in the East. 

The same miserable condition was experienced by iron smelters, steel makers, paper manufacturers, sugar manufac- turers, shoe-makers, metal workers, potters and hosts of other industries. Further details regarding other industries need not be given, as this brief sketch of British policy is sufficient to indicate their deliberate "bleeding" of India. 

About the middle of the 19th century in England the Industrial Revolution was complete; the people were migrat- ing from the villages to the cities in large numbers. Displaced from agriculture, they were being employed by the manufac- turing industries. The country had become the 'workshop" of the world, the richest nation on earth, and had scaled up the ladder of civilization. On the other hand in India, the industrial ruination was almost complete. People were mig- rating in large numbers from the cities to the villages as the land could not possibly be taken away by the British. Displaced from manufacturing industries and trade, they were absorbed by agriculture. The country had become the poor- est nation on earth, and was thrust down the ladder of civilization. 

When the misery of the people became unbearable, they revolted against the British in 1857. The revolt was termed 'mutiny' by the British and a 'War of Independence' by the Indians. As a result of this Great Revolt, the British govern- ment directly, as opposed to indirect rule through the Com- pany, took over the administration of India in 1858. How- ever, this did not mean at all that the exploitation of India was in any way discontinued; rather, 'exploitation was dress- ed now in all the forms of law-i.e. the rules laid down by the victors for the vanquished. Hypocrisy was added to brutality, while the robbery went on." 

To pacify the people Queen Victoria issued a Proclama- tion in 1858 expressing the earnest desire to stimulate the peaceful industry of India' That means the British could no longer follow their policy of forbidding outright the importation of machinery into India by the Indians. Instead now, the British followed various indirect means to discourage modern industry in India. As an example, let us consider the nascent modern textile industry of India. 

In the 1860's some Indian and some British entrepre- neurs started spinning and weaving mills in India. In 1872, there were only 18 mills in Bombay Presidency and 2 in Calcutta. The import duty levied by the government of India was 31% on cotton twist and yarn and 5% on cotton goods. This duty was levied purely for revenue pur- poses to meet the deficit in the budget. But the textile manufacturers of England could not bear this small duty. The President of the Manchester Chamber of Commerce insisted that the Government of India should identify themselves with the cause of 'civilization, justice and Christianity" by adopting complete free trade. The British textile manufacturers opposed these duties as they feared the growth of textile mills in Indian markets would reduce their fat profits. Consequently, they put heavy pres- sure on the home authorities to get these duties repealed. India's remote dictator-the Secretary of State-expressed his desire to repeal the duties to the Viceroy of India, Lord Northbrooke. Northbrooke and his Council in 1876 view- ed this question from the point-of-view of budget-balancing and they, therefore, refused to remove the duty which 'can- not practically operate as a protection to native manufac- ture. 

The dictator could not tolerate his orders being flouted and his country's interests ignored. Consequently, North- brooke was forced to resign in 1876, succeeded by Lord Lytton, who was prepared to do the bidding of the Secretary of State. But as he faced severe financial difficulties caused by the terrible Madras famine of 1877, he delayed the mea- sure of abolishing the duties with the consent of the Secre- tary of State. At this, the British House of Commons, com- pletely ignoring the terrible famine caused by their govern- ment's ruinous economic policies, passed a resolution in 1877 -the very year of famine-calling upon the government of India to repeal without delay 'the duties now levied upon cotton manufactures imported into India. Consequently in the following year, the government of India exempted from duty certain kinds of imported goods with which Indian goods were supposed to compete. 

But even this did not satisfy the British textile interest and they continued their pressure on the government of India through their home government for the total abolition of import duties. Therefore in 1879, Lytton removed the import duty on all imported cotton goods containing no yarn finer than 30s-the coarser cotton goods, which formed the main product of Indian mills. This step was taken when in the words of an Indian economist, "Southern India had not yet recovered from the Madras famine of 1877; when Northern India was still suffering from the famine of 1878; when new cesses on land had recently been added to the Land Revenue; when the Famine Insurance Fund created by special taxes had disappeared; when the estimated budget showed a deficit; and when troubles and a vast expenditure in Afghanistan, brought about in quest of a scientific frontier, were impending.' 

Another devastating blow to the Indian industry was given in 1882 when all remaining import duties, excepting those on salt, and liquors, were also abolished. 

Until 1894 the situation regarding import duties remain- ed practically the same. Due to heavy expenditure on the imperialistic Burma war and other military preparations in the north-west, the government of India faced a deficit of more than two million pounds sterling in the budget of 1894. The problem was how to raise the money and also how to keep the competitive power of the giant British textile indus- try with the dwarf Indian textile industry. The device adopted in 1894, perhaps not adopted so far by any other country, was to levy an import duty of 5% on British cotton goods and yarn; and to levy the countervailing excise duty of an equivalent amount on the Indian mills. This amount was reduced to 31% in 1896 and yarn was altogether exemp ted from duty, again at the behest of British industry. Excise duty at equivalent rate was also imposed on all cotton goods. Needless to say, the ultimate sufferers were the Indian nascent textile industry and the people of India, who now had to pay more, both for British and Indian goods. 

This excise duty of 31% remained in full force until 1925 when due to trade depression and nationalist pressure, it was suspended and finally abolished in 1926. 

Not only the people of India, but even some of the members of the Viceroy's Council and officials of the government of India, in addition to European Indian non- officials, who had their own interests in the textile mills of India, vehemently protested over it; but of no avail. 

Dundee (Scotland) manufacturers of jute products campaigned against Indian jute manufacturing in the last quarter of the 19th century. But since Dundee manufac- turers were not as strong as the cotton manufacturers of Lancashire and Manchester, and since Indian jute industry was completely owned by Britons, unlike the partly Indian and partly British owned textile industry, the jute industry was not taxed. 

The British apologists argue that since Britain believed in free trade and laissez faire, they could not give protection to the textile industry. But the British did give protection, money, land grants and other encouragements to the indust- ries which were controlled by Britons for their interest like tea, indigo and railways. Railways in India were a perfect example of deviation from the principles of laissez faire. 

Even the economists of the classical school of Britain, like Mill, Pigou and Marshall, who were otherwise staunch believers in free trade and laissez faire, considered protection as a permissible exception to the free trade position in the case of infant industries. Pigou, for example, admits that the case for protection is "particularly strong as regards an agri- cultural country wishful to develop manufactures' "' 

Besides, no country in the world, including Britain, had ever developed its industries without protection of the home market from foreign competition, either by prohibiting outright the entry of foreign goods or by imposing heavy protective duties. In the case of Britain, we have already seen the workings of this policy against Indian goods. As a matter of fact, Britain adopted free trade only when she became the leading industrial power in the world. When Britain was struggling to become an industrial country, she adopted the policy of protection. When she completely industrialized herself and became the leading industrial power 

42 British The Magnificent Exploiters of India in the world, her self-interest demanded that the policy of protection be abandoned in favour of free trade. No other free country in Europe and elsewhere followed Britain's freely given advice in this matter. If India had been a free country, she would have done the same as was done by Japan in Asia. 

Such were the policies of the British government before the First World War, meant clearly to destroy existing tradi- tional industries and discourage modern industries in order to make India a source for raw materials and a market for British manufactures. The figures of employment in Indian modern industries tell their own story. According to the official Report, the number of workers in shops employing 20 or more coming under the Factories Act was only 951,000 out of a total working population of nearly 150,000,000 in 1914.

About of them were employed in the cotton mill industry, which received a great fillip by the Swadeshi (literally means country made) Movement of 1905. This movement was launched in 1905 to boycott British goods and patronize India made goods, particularly cloth. The Swadeshi Movement remained an important feature of the Freedom Movement of the 20th century. Two other large organized industries by 1914 were jute and coal-all three were consumer industries. The only basic industry essential for industrial development was the Tata iron and steel factory which started production in 1912 in spite of the fact that the British, "placed every barrier known to imperialism in Mr. Tata's path.' It was chiefly with American expert help that steel industry owned by an Indian was started. The First World War came to its help as it created huge demands for steel and later the national move- ment saved it from destruction. The government of India, in spite of the needs of the First World War, did not allow Tata to manufacture locomotives as it might have hindered the progress of the British locomotive industry.' 

A few thousand persons were employed in modern industry. But at the same time many more thousands were being made unemployed according to the systematic and planned policy of the so-called 'most benevolent" govern- ment. For example, the census report of 1911 tells us that textile workers decreased by 6% in the preceding ten years, the decrease which was attributed to the almost complete extinction of cotton spinning by hand.' In the hide, skin, and metal trades also, the Census of 1911 recorded a 6% decrease in the employment of workers, in spite of the fact that at the same time the number of metal dealers increased six times. The reason was "largely to the substitution of indigenous brass and copper utensils by enamelled ware and aluminium articles imported from Europe. 

The same picture was revealed by the iron and steel industry. The government's 'Imperial Gazetteer of India' of 1907 stated: "the native iron-smelting industry has been practically stamped out by cheap imported iron and steel within range of the railways, but it still persists in the more remote parts of the peninsula. 

Even the government annual report for 1921 mildly states that 'some time prior to the war, certain attempts to encourage Indian industries by means of pioneer factories and Government subsidies were effectively discouraged from Whitehall.'

The remote dictator of India, the Secretary of State, J. Chamberlain, in 1917 said that "India will not remain and ought not to remain content to be a hewer of wood and a drawer of water for the rest of the British Empire', which indirectly admits India to be so, at least before 1917. The Government of Madras was foolish enough to set up a 'Department of Industries' for research in 1906, which the British Government had to suppress. What could be a more reliable epitaph of the British imperialism in India, which deliberately deprived about one-fifth of the human race ir an age of mechanical production from taking any recognis- able part in the manufacture by machinery that could com- pete in any way with British industry? 

The old co-ordination of India's industry and agricul- ture was replaced by the co-ordination of Indian agriculture and British industries. As a result, the population depen- dent on agriculture went on swelling like a cancer through- out the British rule. To push India further into a producer of raw materials and food, and a sure market for manufac- tured products, the British brought back an infinitesimal portion of the great loot for investment, mainly in the rail- ways and plantation (tea, coffee and rubber) industries, This loot was now called 'British capital'.