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essentially different from the currency of England: that rupees cannot be converted per saltum into pounds, by dividing by ten or by striking off the last figure: and that even if a conventional conversion is retained for purposes of loose comparison, it is with the actual values and not with the conventional figures that Indian financiers have to reckon, and by which they inust be judged. Third, that there is a very fundamental difference between Statements and Accounts: that an account is a record of the actual incomings and outgoings of money in the precise form in which those incomings and outgoings took place : that a statement is an exhibition of all the incomings and outgoings which can be properly assigned to a group of transactions, and respecting the accuracy of which exhibition, opinions will vary as the mind of man varies : that while the Indian accounts should thus form a complete record of all the incoming and outgoings of the individual years, Indian statements may be constructed to show for comparative purposes the actual financial results of a series of years; but that a conspicuous line should be drawn between Accounts and Statements in presenting the revenue and expenditure of India to Parliament.

I fear that I have too severely taxed the reader's patience by this lengthy exposition of our Indian accounts. But clear ideas on the character and defects of those accounts are the first essential steps to the understanding of Indian finance, and to grappling with the embarrassments which at present surround it. I shall now invite your attention to one of those embarrassments, in which the mercantile classes and the industrial cities of England have, at this moment, a very personal interest. I mean our Indian import duties. The history of these duties may be briefly stated as follows. Until India passed to the Crown in 1858, the Indian tariff was of the old-. fashioned, capricious sort. The downfall of the East India Company in that year left its revenues and expenditure in confusion, and the English Ministry resolved to send out the ablest financier whom they could find to set them in order. They selected the late Mr. James Wilson, well-known as Secretary to the Treasury, who had taken an important part in re-arranging the British tariff. Mr. Wilson was a skilful political economist, who came into prominence during the repeal of the Corn Laws, and who was identified, both by his principles and by life-long friendships, with the great Free Trade party in England. Mr. Wilson carried his Free Trade principles into his new duties as the first Finance Minister of India under the Crown. But he soon found that the nature of the Indian people was such, that direct taxation could not discharge in that country the preeminent function which it fills in English Finance. He did indeed lay on an income tax, but he distinctly stated that it was a temporary measure. Like all preceding and subsequent financiers in India, he had chiefly to rely on indirect taxation for maintaining an equilibrium between revenue and expenditure.

One important source of this indirect taxation was the Sea Customs. Mr. Wilson revised the Indian import tariff, and placed it on a sound basis. That basis had nothing to do with Protection, He re-organised the import tariff solely with a view to the fiscal necessities of India. It has been modified from time to time as regards its rates, but it remains to this day on its original basis as a fiscal tariff. For purely financial purposes, it was found necessary, up to 1875, to levy a general duty of 71 per cent. on merchandise imported into India. This rate was uniform, with a few exceptions, for all articles on which the Customs were levied. The history of the few exceptions is an instructive one. Pressure had soon been brought to bear upon the Indian Government to grant an exceptionally favourable rate to Manchester goods. By degrees, the Indian Government had to yield to that pressure, not in the interests of the Indian taxpayer, but under the louder and louder demands of a powerful party in England. While, as a matter of absolute fiscal necessity, it retained its tariff up to 1875 at not less than 71 per cent. on 78 out of the 84 classes of dutiable merchandise specified in its list, and for all other dutiable articles not specially mentioned, it had found itself compelled to let in Manchester goods, twist, and yarn at lower rates; some of them at less than one-half the normal tariff of 7. per cent. which the financial exigencies of the country required.

This was the state of the case up to 1875, when the depression of trade in England again led to the agitation of the question. Our Indian tariff, which had been organised by an English Free Trader, and organised by him for purely fiscal purposes, was accused of being a protective tariff as regards cotton goods. Now there are protective tariffs, and there are fiscal tariffs. A protective tariff is one designed primarily to give an advantage to the internal manufactures of a eountry by laying a heavy duty upon foreign goods. A fiscal tariff is one designed primarily to yield revenue. As a matter of fact, however, a protective tariff also acts as a fiscal one in supplying revenue, and a fiscal tariff also acts to some extent as a protective one in all countries which have competing manufactures of their own. Nevertheless, the distinction between a protective tariff and a fiscal tariff is a well-recognised one, and the Indian tariff had been framed by a Free Trade financier solely for fiscal purposes. An independent member stated in Parliament that no tariff in the whole world, not even the Chinese tariff, which we forced from that country by war, was so favourable to British manufactures as the Indian import duties.

It was, therefore, with surprise that we in India heard our tariff accused of being a protective one. If Manchester said the friends of India in 1875, complains of our duties of 31 per cent. and 5 per cent. on her goods as being protective, then with much better reason may Birmingham, Staffordshire, and Sheffield complain of the 7) per cent. on their goods. For we have competing manufactures in India, although on a smaller scale, with each of the great industries of England. We had always thought that if our tariff was unduly

of protection to any class of goods, it was to Manchester goods that this preference and this protection had been shown; as we had let in the staples of Manchester at 31 and 5 per cent., instead of at the normal tariff of 75 per cent. Take the alphabetical list of our dutiable merchandise in the Indian tariff from the first article under A, apparel, to the last articles under U and W, umbrellas and woollen shawls, all of which up to 1875 paid 71 per cent., and you will find that there is a more or less brisk production of almost every one of them in India, and that the purely fiscal tariff acts pro tanto, and must act pro tanto, as a slightly protective one. For example, carriage-making is a great business in India, where the summer heat renders a conveyance as much a necessity of life as the winter renders a fire here. At one time, great numbers of carriages were imported into India from England. But the skilful Indian artisan learned by degrees to construct carriages as well as our English workmen do, and the import from England dwindled away. What would Manchester have thought if Long Acre had lifted up its voice against the Indian tariff, because it could not compete with the carriage factories in Calcutta ? Or if Norwich and Northampton had complained that they could not bring Indian hides to England, and make them into shoes or harness, and send them out again to India, as cheaply as the leather-castes work up the raw material at Cawnpur?

Or if our British oilmakers had bewailed their fate, because they could not bring home the Indian oil seeds, and extract their product, and reexport it to India, so as to compete with the oil-presses of Bengal ? Yet all these British manufactures paid the 7 per cent. tariff up to 1875, under a brisk competition with the Indian manufacturer.

But Lancashire, armed with the authority of the splendid services which she has rendered to England in the past, and strong with the strength of the great industrial interest which she worthily represents in the present, is always able to get her own way with a British Ministry. The position which she took up practically amounted to this. If any new industry arises in India, or if any old industry obtains such a development as to inconvenience the English producer, then that manufacture must straightway be removed from the Indian tariff. For example, beer is an article made on a large scale in India; and a friend tells me that the British brewers, encouraged by the success of Manchester, are already contemplating an agitation to get their commodity forced into India at reduced rates. Now in India the population has, in certain Provinces, outgrown the productive powers of the soil, and their sole chance of a livelihood depends upon the growth of their manufactures, and the opening up of new industrial outlets. But the position which Lancashire has assumed would render each new manufacture in India, and each extension of an old ope, a loss to the Indian revenues, by compelling its withdrawal from the Indian Customs tariff as soon as it became of sufficient importance to compete with the British manufacturer. Manchester has, therefore, forced the interests of English financiers in India into opposition to the industrial interests of the Indian people. For each new impulse to Indian manufactures implies, under the Manchester dogma, the loss of the article manufactured to the Indian Custom.

I think you will agree with me that this was a painful position for those who have the welfare of India at heart and who desire to see the finances of India in the interest of the Indian people. The Indian Government in August 1875 reduced its whole tariff to the very moderate rate of 5 per cent. Of the eighty odd classes of merchandise specified in the list, only two were let in at a lower rate, viz., iron at 1 per cent., and cotton twist or yarn at 3} per cent. You know the result. As trade became worse in England, Lancashire again agitated for a reduction of the duty on its goods. In 1878, the Indian Government again revised its tariff, removing many articles to the free list, and letting in the lower numbers of cotton twist free. But even this did not satisfy Manchester, and in March 1879, all grey cotton piece-goods, however designated, and not containing yarn higher than 30's, were exempted from the Indian import tariff. What can the unrepresented millions of India do against Manchester? It has been for them a losing battle from the commencement, and it will be a losing battle for them to the end.

But the people of India, although their poor, semi-articulate complainings have no chance as against the clear, persistent voice of Manchester, deeply feel the wrong, and bitterly resent it. Since 1869 I have attentively studied the native Press, and my cheeks have sometimes flushed with shame at the justice of its complaints. When England wished to give an unusually splendid entertainment to a European prince, say the native journalists, it did so out of the Indian revenues. When England wished to make war in Abyssinia, it took the Indian troops and charged their pay to the Indian Exchequer; and so on through a list of accusations, which are repeated in every newspaper, both native and European, throughout all India. You do not realise in this country bow the honour of England suffers from these accusations. The action of Manchester regarding the cotton duties has given fresh bitterness to such complaints. In order to let in Manchester goods free, or at low rates, Indian financiers have to keep up the old bad system of taxing Indian exports. They have to levy a cruel duty on Indian rice, with rates on Indian oils, seeds, indigo, lac, hides ; in respect of all which commodities the Indian producer bears a keen competition with other countries in the markets of the world. To avoid anything like a protective import duty, as against the Lancashire millowner, you force Indian financiers to keep up export duties, which form a protective tariff in favour of competing countries at the expense of the poor Indian peasant. How can you venture to give a Free Press to India, or any most meagre form of representation to India, so long as you maintain such a system of finance ? No doubt, the removal of the import duties would reduce the cost of certain classes of cloth and other British especially of indirect taxation, would reduce the cost of living. The English financiers whom England has sent to India have not yet been able to find a substitute for indirect taxation in that country; and before they take off the import duties on the plea of Protection, they should take off the export duties on the same ground. It falls to me, as a corresponding member of the National Indian Association, to receive a number of the Indian youths who come to complete their studies in this country. These young men have been trained in our own State schools, but they assure me that a bitter conviction is spreading throughout the thinking classes of their countrymen, that the Indian finances are being dealt with in the interests not of India, but of England.

This conviction is happily not altogether well founded. For our Indian tariff, although designed for fiscal purposes, must unavoidably act to a small extent as a protective tariff. Now, I hold that England has so deep a stake in the Indian finances, both from her vast loans to India and from her general responsibility for the welfare of India, that she has a right to lay down the great principles to be followed in Indian finance. England is entitled to say, “We have now made up our mind that our Indian financiers shall Jevy no import duty which has in the very least degree, or even accidentally, a protective result.' If England is prepared to take up this position, Indian financiers can only reply that the whole Indian tariff must be given up. But England has no right, while sanctioning the Indian tariff as a whole, to forcibly withdraw from that tariff the very articles which make the tariff a profitable one to India. At present England leaves India to keep up all the Indian custom-houses, coastguards, and preventive establishments; while, under pressure from Manchester, England deprives the Indian tariff of the very articles which made its custom-houses pay.

I believe that there is a solution for this difficulty. Looking to the recent history of our Indian tariff, and remembering the might of Manchester and the powerlessness of the Indian people, it would almost be better for Indian financiers to offer to give up their import duties altogether. They should say to England, We have an import tariff, levied chiefly from British goods, which yields us in round figures one and a-half millions per annum. You English financiers levy from our Indian staples, tea and coffee, about a million per

Well, we are willing to give up altogether our Indian customs tariff of one and a-half millions per annum, and let in all merchandise free, if you will give up the million which you levy from our tea and coffee, and let in our Indian products free.'

In short, I think that England and India would find it to their mutual advantage to enter into a treaty of commerce. object to the word treaty, then call it a convention, to be settled, not between a Secretary of State in London and a Viceroy in Calcutta, both of whom are controlled by the political party for the time being in office, but by commissioners appointed to arbitrate impar

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