Bhimrao Ambedkar
Submitted in partial fulfilment of the requirements of the degree of
Master of Arts
May 15,1915
Contents
Part I
Part II
Zemindary Settlement of Cornwallis
Village Land Revenue System
The Ryotwar System
The Salt Tax
Customs
The Stamp Duties
The Mint Revenue
Zemindary Settlement of Cornwallis
Village Land Revenue System
The Ryotwar System
The Salt Tax
Customs
The Stamp Duties
The Mint Revenue
Part III
The Land Tax
The Opium Revenue
The Salt Tax
The Customs Revenue
Miscellaneous Revenue
Public Works
The Pressure of the Revenue
The Opium Revenue
The Salt Tax
The Customs Revenue
Miscellaneous Revenue
Public Works
The Pressure of the Revenue
Part IV
Part V
Editorial Note in source publication
The copy of this dissertation
was secured from the Columbia University by Dr. Frank F.Conlon
of the Department of History, University of Washington, U.S.A. and was
presented to Mr. Vasant Moon of Dr. Ambedkar Research Institute, Nagpur,
in 1979.
The editors are grateful to the
University of Columbia, U.S.A. for their kind permission to publish this
unpublished dissertation which is in their ownership and possession. They also appreciate Dr. Conlon's
gesture of generosity and the assistance of Dr. Ambedkar Research Institute,
Nagpur, for making this paper available for printing to the Government of Maharashtra.
Without going into the
historical development of it, the administration of the East India Company may
be conveniently described as follows:
It was "
composed of the shareholders of the East India stock to a certain amount, who
elect from their own body by ballot a certain number of representatives
(twenty-four) to whom the proprietary confide the
planning and carrying into effect whatever measures may be deemed most
conducive to the interests of India and England, reserving to themselves a
surveillance and limited control over the proceedings of the delegated
authority."
The requirements of a seat and a
vote in this Court were as follows:
A proprietor of £ 500 stock was entitled to a seat in this
Court.
A proprietor of £ 1,000 stock was entitled to one vote.
A proprietor of £ 3,000 stock was entitled to two votes.
A proprietor of £ 6,000 stock was entitled to three votes.
A proprietor from £ 10,000 to £
1,00,000 and upward stock was entitled to four votes.
Besides this,
the stock must have been held for at least one year before voting. There was no
voting by proxy and minors were ruled as incapable of voting.
The voters counted Lords,
Commoners, women, clergy, and officers civil and military, both of the king and
the company.
The sessions of the Court were quarterly—March,
June, September, and December. Nine qualified proprietors were quite sufficient
to ask for a special session of the Court. The speaker was ex-officio the chairman who presided at the session,
brought forward all motions requiring the sanction of the Court, and laid
before the members the accounts of the Company's transactions.
The Court was authorised—
(1) To elect qualified persons
to constitute what is known as the Court of Directors.
(2) To declare the dividends on
the capital stock of the company within certain parliamentary restrictions.
(3) To frame, alter, or repeal such of the
by-laws as hinder the good government of the East India Company, provided they
do not conflict with the Acts of Parliament.
(4) To control in general any
increase in a salary or pension above £ 200 a year, or over any gratuity beyond
£600.
(5) To confer pecuniary reward
for good service.
II. The Court of Directors
It consisted of twenty-four
members. The Directors were elected by such of the Proprietors as were
qualified for a vote. The qualification of a candidate for the Court of
Directors were:
(1) He must be a natural or
naturalised subject of Great Britain.
(2) He must possess £2,000 stock
(no matter for what previous period).
(3) He must not
be a director of the Bank of England or the South Sea Company.
(4) He must be a resident of
England for two years after holding office in the Court.
(5) He must not have held any
maritime office in the Service of the Company for two years previous to his
proposed election.
(6) He must not have under any
plea or pretence whatsoever, endeavoured to obtain, directly or indirectly, a
vote for the election of himself or any other person to be a Director.
(7) He must take an oath
(b) not to have any dealing with
the company except as a private individual.
(c) not to hold any place or office of emolument under the Crown.
In order to fulfil the various
duties, the work was assigned to several Committees into which the Court was
sub-divided. They were:
1
|
Secret Committee
|
8
|
Buying Committee
|
2
|
Correspondence Committee
|
9
|
Warehouses Committee
|
3
|
Treasury Committee
|
10
|
India House Committee
|
4
|
Govt. Troops and Stores
Committee
|
11
|
Shipping Committee
|
5
|
Legal Proceedings Committee
|
12
|
Private Trade Committee
|
6
|
Military Proceedings Committee
|
13
|
Civil College
|
7
|
Accounts Committee
|
14
|
Military College
|
All appointments such as writers, cadets, and assistant surgeons etc.
were made by the Directors. The Civil and Military Services were recruited from
the graduates of the two colleges, which were merely a burden on the revenues
of the Company.
III. The Board of Commissioners for the Affairs of India (The Board of Control).
The powers of the Board are :
(1) "The superintendence
and control over all the British territorial possessions in the East Indies,
and over the affairs of the United Company of merchants trading thereto."
(2) "To superintend, direct
and control all acts, operations, and concerns, which in any wise relate to the
civil or military government or revenues of the British territorial possessions
in the East Indies, in the manner hereinafter directed."
" All the members of the said Board, at all convenient times, have access
to all palers and monuments of the said United Company, and are furnished with
such extracts, or copies thereof, as they require. The Court of Directors are
directed to deliver to the Board copies of all minutes, orders, resolutions,
and other proceedings of all General or Special Courts of Proprietors of the
Company, and of the Court of Directors, so far as relate to the civil or
military government or revenues of the British territorial possessions in the East
Indies, within eight days after the holding of such respective Courts; and also
copies of all dispatches which the Directors receive from any of their servants
in the East Indies, immediately after the arrival thereof; also copies of all
letters, orders and instructions whatsoever, relating to the civil and military
government or revenues of the British territorial possessions in the East
Indies, proposed to be sent or dispatched by the Court of Directors to any of
the servants of the Company in the East Indies; the Court of Directors are
required to pay due obedience to, and to be governed and bound by such orders
and directions as they shall, from time to time, receive from the Board,
touching the civil or military government and revenues of the British
territorial possessions in the East Indies." "Whenever the Court of
Directors neglect to transmit to the Board their intended dispatches on any
subject, within fourteen days after requisition is made, it is lawful for the
Board to prepare and send to the Directors (without waiting for the receipt of
the copies of dispatches intended to be sent by the said Court of Directors, as
aforesaid), any orders or instructions to any of
the governments or presidencies aforesaid, concerning the civil or military
government of the British territories and possessions in the East Indies : and the Directors are required to transmit
dispatches, in the usual form (pursuant to the tenor of the said orders and
instructions to be transmitted to them), to the respective governments and
presidencies in India, unless on any representation made by the Directors to
the Board, touching such orders or instructions, the Board shall direct any
alteration to be made in the same, which directions the Court of Directors are
bound to conform to."
The Board of Control was
sub-divided into six departments to answer its functions : (1) Accounts, (2) Revenue, (3) Judicial, (4)
Military, (5) Secret and Political, (6) Foreign and Public. The mode of local
administration in India was as follows :—
The country was divided into
three presidencies namely, Bengal, Madras and Bombay, the seat of government
being respectively at Fort William, Fort St. George, and Bombay itself.
In the beginning the Supreme
Local Administration of India was distributed among these three governments,
each one enjoying co-ordinate status. With a view to centralisation, the
Supreme Local Administration of India was vested in the Governor of Fort
William in Bengal, making the other two Governors subordinate to that of Bengal
who was made the Governor-General of India.
The appointment of the
Governor-General was made by the Court of Directors subject to the approval of
the Crown. The Governor-General was aided by a Council known as the Supreme
Council, originally composed of four members, three of whom necessarily had to
be the servants of the Company in India of at least ten years' standing. The
fourth one must not have belonged to the Company's Service. The Commander-in-Chief of forces in India was an ex-officio member of the Governor-General's office.
This Supreme Council of five members was expanded by adding to it in 1853, six
Legislative members who were authorised only to sit and vote on the framing of
Laws and Regulations. Four of these six Legislative members were required to be
the Civil Servants of the Company of ten years' standing in Bombay, Madras,
Bengal and the North-Western Provinces. The two remaining places were filled up
by the Chief Justice and one other Judge of the Supreme Court of Calcutta. The
Governor-General was authorised to add two more members to this Council of
eleven, under Section 22 of Statute 16 and 17 Victoria Chapter 95, but the
power was not exercised at best up to the time of the mutiny.
This Supreme Council of India,
therefore, was composed of six members including the Governor-General and the Commander-in-Chief for the purposes of Executive
Government and twelve members for the purposes of the Legislatures: seven members were deemed sufficient to form a
quorum.
The power of the
Governor-General was so great that he was nearly an autocrat. He could not only
veto all legislation in the Council but could initiate and carry out measures
independently of the Council. All " political " appointments including those of the Residents
to the native States and the Commissioners to the non-regulated provinces were
made by him. He could appoint the Lieutenant Governor of Bengal and of the
North-West Provinces and the judges of the lower courts and controlled military patronage in Bengal and the North-West provinces.
All districts not included
within the limits of any of the four Subordinate Governments
were under the direct jurisdiction of the Governor-General in Council who also
exercised such power over the native states as accrued to him through treaty
obligation. The official staff of the Governor-General was divided into four
departments, each one represented by a Secretary. These were :
(1) The Foreign Department
(foreign in relation to the native states).
(2) The Home Department,
handling the judicial and revenue correspondence.
(3) The Financial Department.
(4) The Military Department.
Besides these the Political and
Finance Secretaries had their respective Secret Departments which were
entrusted with secret dispatches.
The Subordinate Governments of Madras
and Bombay were administered thus: Each had its
respective Governors and Councils consisting of three members (including
the Commander-in Chief). Both the Governors and the Councillors were
appointed by the Court of directors. Bengal and the North-West
Provinces were each governed by the Lieutenant-Governors who were appointed by
the Governor-General. The Subordinate Governments were denied the power of
legislation or creating any new office, nor could they "
grant any salary, gratuity, or allowance without the previous sanction of the
Governor-General of India in Council." This extreme strictness though
required by law was not required by custom : in
order not to overburden the Governor-General, minor matters were executed by
the Governor who submitted a quarterly report of the same to the higher
authorities who reviewed it and as a matter of fact sanctioned it. The Bombay
and Madras Governments were privileged to hold direct correspondence with the
Court of Directors and did send the abstracts of their proceedings to the Court
and to the Government of India. The instruments of Indian Government were
furnished by what was and is known as the Civil (covenanted and uncovenanted),
the Military, the Naval and the Ecclesiastical Service. The collection of revenue
and administration of justice were relegated to the Civil Service.
For Civil and Military
recruitment, the East India Company had maintained two colleges in England (1)
the Haileburg College and (2) the Adiscombe Academy : Each
student cost the Company about £ 96 a year during his period of training.
All revenue was collected in the
name of the Supreme Government of India and was transferred to and controlled
by the Supreme Treasury. There was absolutely no local fiscal autonomy : the deficit in one province was made up by the
surplus in another and the entire India revenue was held responsible for the
debts borrowed for wars in one particular province :
in short, both Finance and Administration were absolutely centralised as in
France under the ancient regime.
So much for the pure system of
Administration. The criticism of it we will postpone till
we come to the next chapter.
The last chapter must have made
it clear how and why Western Europe was at a death grapple for the control of
India. We followed the armies of the different leaders of different nations—
fighting for a country the people of which had very little to choose in the
final destiny—the Cama, the Albuquerques, the Busseys, the
Lallys, the Clives, the
Malcolms, the lakes and the shores as though enacting the train of ghosts of Banquo's line all that terrified Shakespeare's Macbeth out of his senses.
II
In this chapter we have more
particularly to deal with the East India Company as a Political Sovereign and
the Finances without dilating upon its development from a Commercial Concern
into a Political Sovereign.
There is nothing strange in the
fact that the East India Company succeeded in establishing its suzerainty over
India as might have been seen from our past discussion. Having got a foothold
in the various provinces it extended its rule over the entire peninsula and
established by law what is known as the British Government in India : in other words, it established the State and carried
on the political and commercial
functions jointly. As a result of this combined activity the fiscal
administration of the Company in India was an entangled phenomenon. The
commercial and revenue returns were merged together
without any attempt at distinction. Any student of finance, therefore, has to
pass over the entire period ending in 1814 when by an
Act of Parliament the
Company was compelled to keep separate accounts of Finance and Commerce.
With this caution we will now
turn to the heads of Revenue.
(1) The Land Revenue
In spite of the early industrialisation
in parts of India, the country as a whole may be classed as an agricultural
country and land, today as in former times, furnished the state with a major
part of its revenue.
The British Government rightly
or wrongly established the principle of state landlordship
versus the principle of private property regulated
its land revenue system
in keeping with that policy.
There are different systems of
land revenue in India : It may be well to describe
them in the words of Parliamentary Blue-Books.
(1) The Zemindary
Settlement of Cornwallis
The most obvious feature of
advantage in this system is the facility of collection, as it is a much more
simple thing to obtain the revenue of a large
district from a certain moderate number of Zemindars or contributors, than it
is to perform the collection in details by the officers of the government
themselves, and another advantage undoubtedly is the greater degree of
certainty in the result of 1831 C. 3339.
This system of land tenure arose
thus : When the East India Company came into
possession of the revenues of the Dewanee of
Bengal, Bihar and Orissa, they found the land
revenue collected through the mediation of officers (subhedars)
under the Mohammedan government, who had charge of districts sometimes of more,
sometimes of less extent, with various titles, such as Zemindars and Talookdars, and who paid the revenue into the treasury
in one sum, for which they were found managing considerable districts whose
obligations consisted in paying a certain annual amount to the Government. Many
of them held their districts or estates under this condition hereditarily. [2. of. 1831
C. 3114, 3115, 3215.]
On the East India Company becoming possessed of the Bengal territory, great
abuses were found to prevail, and to be practised by the different sorts of
people employed in the collection of the revenue. The detail of the business
was so great, that it frightened Lord Cornwallis
and the Government of the day, and they conceived that no better method for the
protection of the Riots or small cultivators, could be invented, than to create
a species of landlords, from whom they expected much benefit to arise: the ground upon which they principally went was
this, what those Zemindars, having a permanent
interest in the land assigned to them, would have an interest in the prosperity
of the Ryots, in the same manner as a landlord in England feels an interest in
the prosperity of his tenants : This was expected to
produce two good effects, to create a landed aristocracy in the country, and
above all to afford protection to the Ryots or small cultivators, from the kind
of paternal feeling that was expected to pervade the Zemindars. [1. of. 1831 C. 3136.] With a view to the protection of the whole mass of
agricultural population and with the best motives, the Zemindars in 1793,whether cultivators or
officers in actual charge of districts, hereditary or by special appointment,
were created landholders of the country by which a property in the soil was
vested in them, in nearly as full a sense as it is to the holder of a
fee-simple in England. The sum which a zemindar had been in the habit of paying
was ascertained by the observation of a few prior years, the assessment or tax
was fixed forever, and an engagement
was made that this amount of land revenue should never be raised on him. Such
is the nature of the settlement known by the name of "
the Zemindary or Permanent Settlement ". [2. cf. 1831.0.3115,3116,3136,3215;
1832. R.C. p. 21.]
The institution of village
community was and is mainly to be found in northern India. The proprietary right of land is vested
in the entire community residing in the village. The administration of the
village is handed over to a headman elected by the villagers and is subject to
their removal. Under this system the lands are let out to men sometimes in the
same village, sometimes in the neighbouring village, while certain portions and
certain rights are possessed by the different craftsmen or artisans of the
village, such as the schoolmaster, the washerman, the barber, the carpenter,
the blacksmith, the watchman, the village accountant, etc. who have each a
right to a certain portion set aside for certain recognised expenses of the
village, and for defraying its hospitality towards strangers [1. of. 1830, L. 398, 399, 405,
406, 529.] These village communities are little
republics, having nearly everything that they want within themselves, and
almost independent of any foreign relations. dynasty after dynasty tumbles down : revolution succeeds
revolution. Hindu, Pathan, Mogul, Maratha, Sikh, English, are all masters in turn, but
the village communities remain the same. In times of trouble they arm and
fortify themselves; [2. cf. 1832 Commons' Rev. Committee, p. 29.] It is difficult to state the proportion of the
produce of the village paid to the Government: the authorities know little of
the precise property of any of the proprietors; it is not the interest or the
wish of the village that the Government should scrutinise and know their
possessions, therefore if any one of the brotherhood fails to pay his
proportion, that is a matter for the villagers at large to settle, and they
will often come forward to pay it for him, but these are all private
arrangements kept to themselves : and the Moceadim has no power from the Government to enforce
this assessment, what each man in the village has to pay is an internal
arrangement, which it is desirable for the Government not to interfere in, the
villagers settling among themselves what each has to pay, the total assessment
being calculated after enquiry into the state of prosperity in the village : what it has hitherto paid : what
it is capable of paying : the state of the village
lands, and what assessment they ought to bear with reference to the produce.
[3. cf. 1830 L. 401,402, 404, 528, 583, 584.]
Surveys of considerable expense
have been made by the Government : a minute account
taken of the state of the land in each village, the fields examined in the
presence of surveying officers with all the assistance they can procure, not
only from their own servants, but from the village communities, the people
themselves interested, and also the ryots and people of the neighbouring
villages who are invited to attend. The exact limits of the village are put
down, and even the details of land within the village, the productions, the
houses, fruit-bearing trees, and son on : the
assessment is grounded upon these particulars [1. cf. 1831
C. 3492.]
III. The Ryotwar System
The peculiar principle of the
third sort of assessment termed Ryotwar is to fix a maximum of assessment upon all the lands of the country
[2. cf. 1831 C. 45, 65.] The money rent of each
individual cultivator for the fields in his
occupation is defined with as much permanency as possible, the aggregate of
such rents making the total assessment, which varies each year with the
increase or decrease of cultivation. Another main principle of the Ryotwar system
is to protect the rights of all ryots or
cultivators, as they now exist in every village, from infringement : and to prevent all encroachment upon those rights [3
cf. 1831. C. 5156:] Thus, in the Ryotwar system,
the details of the interest of the respective Ryots are known completely, and
not at all in the Zemindary system; and the former effectually does what the latter proposes to do, but
never has done, and never can do, that is, fix an assessment upon all lands in
the country. Under the Ryotwar system, the assessment goes from land to the
aggregate: it respects property of every class, that
of the largest landholder, and that of the smallest :
it measures and assess every portion of an estate, and thus facilitates the
transfer of landed property, as the first question when taken into market
is—What is the amount of public demand upon
the land? [4 cf. 1831 C. 4565, 4567, 4568.] The
Ryotwar Settlement is applicable in every state of things: where there are proprietors it may be concluded with
farmers or cultivators : it may be equally made for
the largest or for the smallest quantity of land, for millions of acres or for
only a few. The owner of a single field may make his terms directly with the
Government, and turn to his cultivation, knowing that he cannot be called on to
pay more than a certain sum : for although the assessment under this system varies according
to the value of the land, difference of soil, population, situation, and other
localities : and although inferior land, paying a
lower assessment, becomes liable when sufficiently improved to pay the higher
assessment, there is nevertheless, a maximum for the best land beyond which all
produce is for the benefit of the landholder, and there are remissions in cases
of urgent distress. [1. of. 1832 C.R. P. No. 20.] Another advantage which the Ryotwar system possesses over the Zemindary is in the creation of a great body of independent proprietors, instead of a few
who are proprietors only in name : and there is an advantage for the great mass of the
people, but in the case of the Zemindary they
accumulate for the benefit of the few, while in the Ryotwar system there is
also tendency in a considerable degree to the accumulation of capital. [2. cf.
1831 C. 4577, 4578, 4579.]
Such was and is the system of
land revenue in India under the regime of the East India Company. A critical
estimation of the system we will reserve for the future.
The next important head of
revenue is the Opium revenue. The
opium revenue yielded next in amount to the land revenue and was levied in two different ways :
(2) "
By a high export duty levied in Bombay on opium grown in the native states of Malwa and shipped from Bombay."
By Regulation VI of 1799 section
3, poppy cultivation was prohibited in Bengal, and in the North-West Provinces
by Regulation XLI of 1803 Section 2.
"Annual engagements are
entered into by the Government with the Ryots in certain selected districts, to
sow a certain quantity of land with the white poppy, under a system of
pecuniary advances, the produce to be delivered in the form of opium to the
Government at a fixed rate........ The total net
receipts from the opium monopoly in Bengal amounted in 1856 to 2,767,136."
The revenue derived from transit
of opium has a pretty little history : prior to
1831 the British used to buy the opium from the native states (to keep a strict
monopoly of the article) through the Resident and hammer it out at Bombay or at
Calcutta. But to prevent the large smuggling into the Portuguese Settlements
the monopoly policy was given up in favour of the transit duties recovered by
way of " passes "
at a specified rate to cover the transportation cost to Bombay. The transit
duty was at first fixed at Rs. 175 per chest of 140
Ibs. each. This process showed a diminution in the
returns, consequently the rate was reduced to Rs. 125 per chest.
The conquest of Sindh closed the additional gate of smuggling the
opium into the Portuguese territories :
consequently it was hoped and rightly that a higher transit duty would give added
return as the change in the direction of the trade was impossible.' So in 1843 October, the rate was increased to Rs.
200 per chest, : in 1845 to Rs. 300 per chest and
in 1847 to Rs. 400 per chest,
IV. The Salt Tax
Salt is obtained in India in
different ways and is taxed in different ways in different parts of the
country.
It is obtained either by boiling
sea water as in Bengal, or by solar evaporation as in Bombay and Madras or from
natural resources such as the salt mines in Punjab and the salt lakes in Rajputana.
In Bengal the Company had a salt
monopoly. It was manufactured by the natives who contracted to deliver all
manufactured salt to the Government at a fixed low price. The Government then
sold this quantity of salt at six different agencies, Hidgelee,
Tumlook, Chittagong, Hiracan, Cuttack, Balasore
and Khoredah, at a price which was composed of the
actual cost plus the additional amount equivalent to the duty levied on
imported salt. As a result of this " the
average retail price to the consumer "
amounted to about a penny per pound.
The private manufacture of salt
was also allowed at Calcutta under a system of excise only equal in amount to
the import duty.
But on the recommendation of the
select committee of the House of Commons in 1836, there was introduced the
system of fixed prices, and open warehouses, at which the sales, instead of
being as before periodical "were constantly
going on."
In Madras, salt was manufactured
on behalf of the Government and was sold for internal consumption. The duty on
imported foreign salt was lowered from Rs. 3 per pound to equal the difference
between the cost price and the sale price of the article.
In Bombay the salt manufacture
was handed over to the individuals under the system of an excise duty
equivalent to the import duty on the article. The salt mines of Punjab were
worked by the Government and the salt was sold on the spot.
The North-West Provinces
depended upon the Lower Provinces of Bengal, the Sambhur
Salt lake in Rajputana and parts of western India
for their supply of salt. The duties were so arranged that the salt from all
parts when it reached the Northwest Provinces tended to be equal in price.
There were innumerable transit
or inland duties levied at every town and on every road in the shape of tolls.
But they were abolished in Bengal by Act 14 of 1836 :
in Bombay by Act 1 of 1838 : and in Madras by Act
6, of 1844 : and uniform system of customs was
established all through British India. The evil effects of these inland transit
duties will be discussed later on. There remained two sources of customs
revenue :
(1) The sea customs on exports
and imports, the former on salt and indigo.
(2) The land customs levied
mainly on articles crossing the frontier lines between the native and British
territories.
V. Besides the
salt and opium monopolies the East India Company had the tobacco monopolies as
another source of revenue.
VI. Abkarree or revenue obtained from the sale of monopolies to sell spirits and liquors. Licences were sold to the highest bidder who contracted to sell at his own price, the hours of business and the location of the shop being regulated by the Government.
VIII. The" Sayer duties " was a collective name for unclassified taxes. In different parts of the country it included different taxes. Once it included the irregular collections made by native revenue officers. In Madras it included the transit duties, in Bengal the pilgrim tax was included under this head. In the Deccan " this source of revenue " was " divided into two great heads the first denominated mohturfa, which embraces taxes on shops, trades, etc. : the other ballootah, which " comprehended " taxes upon the fees in kind received by the village artisans from the cultivators, and upon their enam (rent free) lands when they hold them. In one instance, the percentage upon bad coins was found to be included under the head Sayer."
IX. The Judicial Fees were realised in the form of stamps requisite in cases of different amounts in order to defray legal charges; the value of stamps varied with the amount of the suit.
Suits ranging up to Rs. 16
|
the stamps amounted to Re. 1.
|
From Rs. 16 to Rs. 32
|
Rs. 2
|
From Rs. 32 to Rs. 64
|
Rs. 4
|
From Rs. 64 to Rs. 150
|
Rs. 8
|
From Rs. 150 to Rs. 300
|
Rs. 16
|
From Rs. 300 to Rs. 800
|
Rs. 32
|
From Rs. 800 to Rs. 1,600
|
Rs. 50
|
From Rs. 1,600 to Rs.
3,000
|
Rs. 100
|
From Rs. 5,000 to Rs.
10,000
|
Rs. 250
|
From Rs. 10,000 to Rs.
25,000
|
Rs. 500
|
From Rs. 25,000 to Rs. 50,000
|
.Rs. 750
|
From Rs. 50,000 to Rs.
1,00,000
|
Rs. 1,000
|
Rs. 2,000
|
Besides this the exhibits filed,
summons, answers, replications, rejoinders, supplemental pleadings, the
authorisation to a lawyer to plead (sanad) are
required to be stamped, the stamp only varying according to the status of the
court.
X. The Stamp Duties first established in Bengal in 1797 were incumbent on all instruments such as contracts, deeds, conveyances, leases, powers of attorney, policies of insurance, promissory notes, receipts, bail bonds, and legal proceeding generally (bills of exchange under Rs. 25 and receipts under Rs. 50 were being exempted).
In Madras stamp paper was first
introduced in 1808,
chiefly on legal proceedings: and in 1816 the
duties were extended to bonds, deeds, leases, mortgages, bills of exchange and
receipts..
In Bombay the tax was first
introduced in 1815.
The English mode of distributing
stamps was adopted in India.
" The stamp vendors receive their supply from the collector : the vendors give security for the stamps, and
distribute them to the parties by whom they are required, receiving a
percentage on the sales ".
XI. The Mint Revenue was collected in the shape of a seignorage for coining of two percent on the produce, after allowing for the difference of standard and deducting the charges of refining when such were chargeable.
XII. The Marine Revenue was recovered by means of the port and anchorage dues, etc. in order to keep up the useful establishments at Calcutta, Madras and Bombay.
XIII. Subsidies from the native states payable under treaty obligations, amounting to about a half million pounds.
These were the thirteen sources
of revenue under the East India Company, many of which continue to be so even
today.
It will be also interesting to
note the entire revenue raised from the different sources and the percentage
ratio of each to the whole.
First the land tax : its yield and ratio to the entire revenue of British
India.
Periods
|
Land Tax Average Annual Revenue
|
|
1792-93 to 1796-97
|
4,068,000
|
50.33
|
1797-98 to 1801-02
|
4,126,000
|
42.02
|
1802-03 to 1806-07
|
4,582,000
|
31.99
|
1807-08 to 1811-12
|
5,078,000
|
31.68
|
1812-13 to1816-17
|
9,018,000
|
52.33
|
1817-18 to 1821-22
|
13,263,000
|
66.17
|
1822-23 to1826-27
|
13,567,000
|
61.83
|
1827-28 to 1831-32
|
13,112,000
|
60.90
|
1832-33 to 1836-37
|
11,942,000
|
57.00
|
1837-38 to 1841-42
|
12,380,000
|
59.05
|
1842-43 to 1846-47
|
13,432,000
|
55.85
|
1847-48 to 1851-52
|
14,947,000
|
56.06
|
1852-53 to 1855-56
|
16,183,000
|
55.40
|
1792-93 to 1855-56
|
10,349,000
|
54.07
|
Periods
|
Average Annual Revenue
|
|
1792-93 to 1796-97
|
264,000
|
3.27
|
1797-98 to 1881-82
|
312,000
|
3.18
|
1802-03 to 1806-07
|
579,000
|
4.04
|
1807-08 to 1811-12
|
767,000
|
4.79
|
1812-13 to 1816-17
|
958,000
|
5.56
|
1817-18 to 1821-22
|
1,090,000
|
5.44
|
1822-23 to 1826-27
|
1,641,000
|
7.47
|
1827-28 to 1831-32
|
1,747,000
|
8.12
|
1832-33 to 1836-37
|
1,677,000
|
8.00
|
1837-38 to 1841-42
|
1,547,000
|
7.38
|
1842-43 to 1846-47
|
2,965,000
|
12.33
|
1847-48 to 1851-52
|
3,840,000
|
14.50
|
1852-53 to 1855-56
|
4,943,000
|
16.91
|
1792-93 to 1855-56
|
1,667,000
|
8.71
|
Period
|
Average Annual Revenue
|
Ratio to The Total Revenue
Total Revenue ( per cent)
|
1792-93 to 1796-97
|
1,207,000
|
14.93
|
1797-98 to 1801-02
|
1,188,000
|
12.10
|
1802-03 to 1806-07
|
1,589,000
|
11.09
|
1807-08 to 1811-12
|
1,785,000
|
11.14
|
1812-13 to 1816-17
|
1,882,000
|
10 .92
|
1817-18 to 1821-22
|
2,256,000
|
11.25
|
1822-23 to 1826-27
|
2,603,000
|
11.87
|
1827-28 to 1831-32
|
2,590,000
|
12.03
|
1832-33 to 1836-37
|
2,036,000
|
9.72
|
1837-38 to 1841-42
|
2,593,000
|
12.37
|
1842-43 to 1846-47
|
2,798,000
|
11.65
|
1847-48 to 1851-52
|
2,438,000
|
9.14
|
1852-53 to 1855-56
|
2,677,000
|
9.17
|
1792-93 to 1855-56
|
2,118,000
|
11.07
|
Average Annual Revenue
|
Ratio to the Total Revenue (Percent)
|
|
1792-93 to 1796-97
|
192,000
|
2.38
|
1797-98 to 1881-82
|
304,000
|
3.10
|
1802-03 to 1806-07
|
596,000
|
4.16
|
1807-08 to 1811-12
|
807,000
|
5.04
|
1812-13to 1816-17
|
1,159,000
|
6.68
|
1817-18 to 1821-22
|
1,667,000
|
8.32
|
1822-23 to 1826-27
|
1,663,000
|
7.58
|
1827-28 to 1831-32
|
1,747,000
|
8.12
|
1832-33 to 1836-37
|
1,506,000
|
7.19
|
1837-38 to 1841-42
|
1,418,000
|
6.76
|
1842-43 to 1846-47
|
1,449,000
|
6.02
|
1847-48 to 1851-52
|
1,439,000
|
5.40
|
1852-53 to 1855-56
|
1,611,000
|
5.52
|
1792-93 to 1855-56
|
1,190,000
|
6.22
|
Periods
|
Average Annual Revenue
|
Ratio to the Total Revenue
(Per cent)
|
1792-93 to 1796-97
|
2,315,000
|
28.64
|
1797-98 to 1801-02
|
3,809,000
|
38.79
|
1802-03 to 1806-07
|
6,857,000
|
47.87
|
1807-08 to 1811-12
|
7,452,000
|
46.49
|
1812-13 to 1816-17
|
3,990,000
|
23.16
|
1817-18 to 1821-22
|
1,392,000
|
6.94
|
1822-23 to 1826-27
|
1,986,000
|
9.05
|
1827-28 to 1831-32
|
1,789,000
|
8.31
|
1832-33 to 1836-37
|
3,059,000
|
14.60
|
1837-38 to 1841-42
|
1,434,000
|
6.84
|
1842-43 to 1846-47
|
1,636,000
|
6.80
|
1847-48 to 1851-52
|
1,977,000
|
7.40
|
1852-53 to 1855-56
|
1,575,000
|
5.39
|
1792-93 to 1855-56
|
3,043,000
|
15.90
|
This much for the sources of
revenue and amounts raised from each one of them and their proportions to the
whole.
(1) Charges incident to the
collection of revenue.
(2) Military and naval charges.
(3) Civil, judicial and police.
(4) Public works.
(5) Interest on Bond Debt in
India.
(6) Allowances
and assignments to native princes under treaties and their engagements.
(7) Home charges, which included
:
(d) Charges of the East India House
and Board of Control.
A tabular arrangement of the
expenditure in chronological sequence may be of some value.
Selecting the period 1800 to
1857 we my take every tenth year as a representative year and mark the
percentage ratio of Charges to the Revenue of that particular year.
Net Revenue
|
Charges
|
Military Charges
|
Interest of Debt.
|
Civil & Political Charges
|
Judicial Charges
|
Provincial Police Charges
|
||
£
|
%
|
%
|
%
|
%
|
%
|
%
|
||
1809-10
|
11,238,000
|
11,076,000
|
58,877
|
18,010
|
7.221
|
7.525
|
1.991
|
1.639
|
1819-20
|
13,016,000
|
12,934,000
|
64,290
|
12.805
|
8.900
|
6.800
|
2.093
|
1.756
|
1820-30
|
14,200,000
|
13,107,000
|
53,754
|
12.124
|
9.575
|
7.107
|
1.535
|
2.810
|
1830-40
|
13,742,000
|
13,004,000
|
57,721
|
9.756
|
12.296
|
9.565
|
2.062
|
1.428
|
1840-50
|
19,510,000
|
16,404,000
|
51,662
|
10.512
|
8.902
|
7.100
|
2.062
|
1.661
|
1857
|
33,303,000
|
28,079,000
|
45,55
|
7.19
|
9.62
|
9.38
|
Public Works
According to Professor Adams the
finances of a country are to be judged from the viewpoint of developmental
expenditure : and among the developmental
expenditure of a country the Public Works take a prominent position.
Applying the same criterion we
are compelled to condemn the entire fiscal system
of the East India Company.
Before 1853 the administration
was engaged in war operations and not only did not project any new scheme of
public works, but it allowed the old ones to fall rapidly into decay.
Dr. Spray in his "Modern
India" (1837) says "It is in the territories of the independent
native chiefs and princes that great and useful works are found and maintained.
In our territories the canals, bridges and reservoirs, wells, groves, etc., the
works of our predecessors from revenues expressly appropriated for such
undertakings are going fast to decay."
Speaking of the Public Works in India, Mr.
John Bright said "With regard to
public works, if I were speaking for the natives of India, I would state this
fact, that in a single English country there are more roads—more travelable roads—than are to be found in the whole of India; and I would say also, that the single city
of Manchester, in the supply of its
inhabitants in the single article of water, has spent a larger sum of money
than the East India Company has spent in the fourteen years—from 1834 to 1848—
in public works of every kind throughout the whole of its dominions. I would
say that the real activity of the Indian Government has been an activity of
conquest and annexation."
Before the "Department of
Public Works" was made uniform for all the Presidencies of India the
important branch of administration was conducted in various ways.
In Bombay it was conducted by
the Military Board : Though subordinate, the
Superintendent of Roads and Tanks was outside the Military Board.
In Bengal the Military Board had
the entire control. In Madras the administration of this department was
threefold : There was—
(1)
The Public Works Department of the Board of Revenue.
(2) The Superintendent of Roads.
(3) The Military Board.
This variety in the system was
reduced to uniformity by Lord
Dulhousie who created a separate department of the
state for dealing with questions connected with Public Works.
We will review in brief the
Public Works that were executed under the regime of the East India Company.
(1) Canals Ganges Canal—449 1/2 miles.
Punjab Canals—425 miles of the Boree-Doab Canal in the Punjab were executed in May,
1856.
Madras Irrigation Works—Tanks,
reservoirs, and "annicuts" or dams,
across the beds of the Cauvery, Godavery, and Krishna Rivers.
(2) Truck Roads
miles
|
cost
|
|
From Calcutta to Peshawar
|
1,423
|
1,423,000
|
From Calcutta to Bombay
|
1,002
|
500,000
|
From Madras to Bangalore
|
200
|
37,121
|
From Bombay to Agra
|
734
|
243,676
|
From Rangoon to Prome
|
200
|
160,000
|
(3) Railways
From Calcutta to Burdwan
|
120
|
From Bombay to Wassind
|
50
|
From Bombay to Compooie
|
10
|
From Madras to Vellore
|
81
|
(4) Electric Telegraphs
From Calcutta to Peshawar }
From Agra to Bombay } in
all about 4000 miles
From Bombay to Madras }
Mr. Hendricks
says "Comparative to area and population, the extension of these works has
not been either so great or so continuous as might be desired. If we exclude
those undertakings that are of a purely military character, and review the
items which may be classed under Land and Water Channels of Communication and
Irrigation Works, or in other words, the Revenue— productive
public Works, in recent years of most activity, it appears that
an outlay of about one million and a half sterling has been the maximum for one
year. If we take the most immediately productive works, viz. : of Canalisation, Irrigation, it will be seen that
not more than 738,015 in the year 1853-54, and 543,333 in the year 1854-55, was
thus expended.
" The condition of the Revenue, as preventing a more rapid and extensive
outlay, has hitherto been an answer to those who might have been disposed to
urge that even these amounts are insignificant, when the British Indian
territory of 837,000 square miles, and its 132,000,000 of souls are considered.
This answer resolves itself purely into one of alleged difficulty. That this
difficulty is only apparent, and might be remedied, is evident, not only from
the practical testimony of the productive results of such expenditure in the
instances before adverted to, but also from the history and policy of the other
branches of the Colonial Empire of this country. And the history of the East
India Company, or of the trading companies of other countries, has shown no
exception to the general rule, that expenditure on carefully selected objects
of enterprise may often appear lavish and purposeless when it is but showing
the field whose harvest is the proof of the wise economy of that
expenditure."
The Pressure of the Revenue
This branch of our study is entirely
out of question : not that it is beyond our scope
but there are innumerable drawbacks in our way. First and foremost is, that we
have no absolutely correct statistics regarding population. Census was never
known at that period and any estimate of the population is at nest a guess too
broad and vague to be made the basis of any scientific conclusion.
Another serious handicap in the
way of such a study is the fact that every year the East India Company saw its
territory extended by several units of miles and one often wonders whether the
swell in the revenue is due to the high rate of taxation or the extension of
territory.
Thirdly,
the Revenue accounts of the East India Company are anything but perfect. As noticed before,
they were mixed with the commercial accounts till 1813 and when they were
separated by the Parliamentary mandate they were hardly made intelligible.
These serious handicaps
consequently compel us to leave aside this important phase of our study.
Certain detached statements if grouped together may convey to us some idea
regarding the pressure of the Revenue. Speaking about the Land Tax alone, Mr. R: C. Dutt, besides whom there is no better authority on the subject, says, " The Land Tax levied by the British Government
is not only excessive, but, what is worse, it is fluctuating and uncertain in
many provinces. In England, the Land Tax was between one shilling and four
shillings in the pound, i.e. between five and
twenty percent of the rental, during a hundred years before 1798, when it was
made perpetual and redeemable by William Pitt. In
Bengal the Land Tax was fixed at over ninety
percent of the rental, and in Northern India at over eighty percent of
the rental, between 1793 and 1822. It is true that the British Government only followed
the precedent of the previous Mohammedan rulers who also claimed an enormous
Land Tax. But the difference was this, that what the Mohammedan rulers claimed
they could never fully realise : what the British
rulers claimed they realised with rigor. The last Mohammedan ruler of Bengal,
in the last year of his administration (1764) realised a land revenue of
£817,553 : within thirty years the British rulers
realised a land revenue of £ 2,680,000 in the same Province. In 1802 the Nawab of Oudh ceded
Allahabad and some other rich districts in Northern India to the British
Government. The land revenue which was claimed by the British rulers within
three years of the cessation was £ 1,682,306. In Madras, the Land Tax first
imposed by the East India Company was one-half the gross produce of the land.
In Bombay, the land revenue of the territory conquered from the Marattas in 1817 was 800,000 in the year of the
conquest : it was raised to 1,500,000 within a few
days of the British rule : and it has been
continuously raised since. " No native prince
demands the rent which we do, "wrote Bishop Heber
in 1826, after travelling all through India, and visiting British and native
states. " A Land Tax which now exists in
India," wrote Colonel Briggs in 1830, " professing to absorb the whole of the
landlord's rent, was never known under any government in Europe or Asia."
"The people of Bengal and
of Northern India gradually obtained some relief from the heavy land assessment
of the early years of the British rule. In Bengal the assessment was made
permanent; and it has not been raised with the extension of cultivation, it now
bears (including Road and Public Works assessments, which have been since
imposed on the rental) a ratio of about 35 per cent on the rental. In Northern
India the' assessment was not made permanent, but
was reduced to slightly over 50 per cent including all assessments, in 1855.
But new assessments were added : calculations were
made not on the current, but on the prospective rental until the tax rose to close
upon 60 per cent on the rental."
In Bombay and Madras things
remained pretty much the same. In both these Presidencies the Ryotwar Settlement prevails. The working of this Ryotwar system
of land tenure during the regime of the East
India Company is best described by Mr. Fullerton (member
of the Madras Government)—" Imagine," he says, " the whole landed interest—that is, all the
landlords of Great Britain, and even the capital farmers, at once swept away
from off the face of the earth : imagine a rent fixed
on every field in the kingdom, seldom
under, generally above its means of payment :
imagine the land so rented, allotted out to the villagers according to the
number of their cattle and ploughs, to the extent of forty or fifty acres each.
Imagine the revenue rated as above, leviable through the agency of one hundred
thousand revenue officers, collected or remitted at their discretion, according
to their idea of the occupant's means of paying, whether from the produce of
his land or his separate property : and in order to
encourage every man to act as a spy on his neighbour, and report his means of
paying, that he may eventually save himself from extra demand; imagine all the
cultivators of a village liable at all times to a separate demand, in order to
make up for the failure of one or more individuals of the parish. Imagine
collectors to every country acting under the orders of a board, on the avowed
principle of destroying all temptation to labour, by a general equalisation of
assessment : seizing and sending back runaways to
each other: and lastly, imagine the collector, the
sole magistrates, or justice of the peace of the country, through the medium
and instrumentality of whom alone, any criminal complaint of personal grievance
suffered by the subject can reach the superior courts. Imagine, at the same
time, every subordinate officer, employed in the collection of the land revenue
to be a police officer, vested with the power to fine, confine, put in the
stocks, and flog any inhabitant within his range, on any charge, without
oath of the accuser, or sworn recorded evidence in the case."
To this Mr. Martin adds, " If anything could open the eyes of those who
uphold the Ryotwar System at Madras, these torture
revelations ought to do so. The late Mr. Sullivan , member of Council at
Madras, declared to the author, that when he saw the cartloads of
silver leaving his cutchery (treasury) for Madras,
and remembered the poverty of the people from whom it was collected, he
shuddered at the thought of their prospect during the ensuing year, as the
demands of the government were inexorable and a certain amount of money must be
forthcoming."
The Pressure of Inland Transit
duties will be considered later when we come to the economic condition of India
during the Company's rule.
As over against this pressure of
taxation we have very little information regarding the income of the people.
Nothing gives a better idea of
the pressure of the tax than its comparison with the income : but our knowledge of the income of the people is
very scanty. According to Munro the average wages
of an agricultural labourer was between 4s. and 6s. monthly and that the cost
of subsistence was between 18s. and 27s. a head per annum.
What was the pressure of the tax
we do not know. Circumstantial evidence goes to prove that it must have been
great.
IV
Mr. Martin sums up the entire
financial history most succinctly as follows:—
" The expectations raised by Clive of the
prosperity which would follow the territorial acquisitions of the Company, were
so far from being fulfilled, that it was found on this (when the Dewanee of Bengal and Bihar was granted to the
Company) and on subsequent occasions, that increase of revenue was almost
invariably attended with more than commensurate increase of expenditure : the cost of government by Europeans, the growth of a
standing army in each Presidency, and other sources of legitimate or
illegitimate expense, swallowing up all the anticipated surplus, and leaving
nothing for the development of the resources of the country or even the
maintenance of roads, canals, and other public works constructed by native
rulers."
Strange to say , the financial
affairs of the Company were woefully mismanaged. .A
writer of the time said, " We have an army
officered by British soldiers, manoeuvred according to European tactics. The
spirit and much of the letter of the English law pervades our jurisprudence :
our assessments for revenue are supposed to be based upon the doctrines laid
down by Adam Smith and his followers (?). Our finance alone is Indian. Our
military men study the strategy of Jomini: Blackstone and Bentham, Mills and
Ricardo are the text-books of our civilians, but the system of our financiers
is almost the same now as that of Abul Fazal, Akbar's minister some three
centuries ago."
Year
|
Gross Revenue
|
Gross Expenditure
|
1792-93
|
5,512,761
|
3,873,859
|
1793-94
|
8,276,770
|
6,593,129
|
1794-95
|
8,026,193
|
6,567,808
|
1795-96
|
7,866,094
|
6,888,997
|
1796-97
|
8,018,171
|
7,508,038
|
1797-98
|
8,059,880
|
8,015,327
|
1798-99
|
8,652,033
|
9,139,363
|
1799-1800
|
9,736,672
|
9,955,390
|
1800-01
|
10,485,059
|
11,468,185
|
1801-02
|
12,163,589
|
12,410,045
|
1802-03
|
13,464,537
|
12,326,880
|
1803-04
|
13,271,385
|
14,395,405
|
1804-05
|
14,949,395
|
16,115,183
|
1805-06
|
15,403,409
|
17,421,418
|
1806-07
|
14,535,739
|
17,508,864
|
1807-08
|
15,669,905
|
15,850,290
|
1808-09
|
15,525,055
|
15,392,889
|
1809-10
|
15,655,985
|
15,534,711
|
1810-11
|
16,679,197
|
13,909,981
|
1811-12
|
16,605,615
|
13,220,966
|
1812-13
|
16,336,290
|
13,515,828
|
1813-14
|
17,228,711
|
13,617,725
|
1814-15
|
17,297,280
|
15,955,006
|
1815-16
|
17,237,819
|
17,059,968
|
1816- 17
|
18,077,578
|
17,304,162
|
1817-18
|
18,375,820
|
18,046,194
|
1818-19
|
19,459,017
|
20,396,587
|
1819-20
|
19,230,462
|
19,689,107
|
1820-21
|
21,352,241
|
20,057,252
|
1821-22
|
21,803,108
|
19,856,489
|
1822-23
|
21,171,701
|
20,083,741
|
1823-24
|
21,280,384
|
20,853,997
|
1824-25
|
20,750,183
|
22,504,156
|
1825-26
|
21,128,388
|
24,168,013
|
1826-27
|
22,383,497
|
23,312,295
|
1827-28
|
22,863,263
|
24,053,837
|
1828-29
|
22,740,691
|
21,718,560
|
1829-30
|
21,695,208
|
20,568,358
|
1830-31
|
22,019,310
|
20,233,890
|
1831-32
|
18,317,237
|
17,048,173
|
1832-33
|
18,477,924
|
17,514,720
|
1833-34
|
18,267,368
|
16,924,332
|
1834-35
|
28,856,647
|
16,684,496
|
1835-36
|
20,148,125
|
15,994,804
|
1836-37
|
20,999,130
|
17,363,368
|
1837-38
|
20,858,820
|
17,553,525
|
1838-39
|
21,158,099
|
21,306,232
|
1839-40
|
20,124,038
|
22,228,011
|
1840-41
|
20,851,073
|
22,546,430
|
1841-42
|
21,837,823
|
23,534,446
|
1842-43
|
22,616,487
|
23,888,526
|
1843-44
|
23,586,573
|
24,925,371
|
1844-45
|
23,666,246
|
24,293,647
|
1845-46
|
24,270,608
|
25,662,738
|
1846-47
|
26,084,681
|
26,916,188
|
1847-48
|
24,908,302
|
26,747,474
|
1848-49
|
25,396,386
|
26,766,848
|
1849-50
|
27,522,344
|
26,960,988
|
1850-51
|
27,625,360
|
27,000,624
|
1851-52
|
27,832,237
|
27,098,462
|
1852-53
|
28,609,109
|
27,976,735
|
1853-54
|
28,277,530
|
30,240,435
|
1854-55
|
29,133,050
|
30,753,456
|
1855-56
|
30,817,528
|
31,637,530
|
1856-57
|
31,691,015
|
31,608,875
|
1857-58
|
31,706,776
|
41,240,571
|
Taking into account the period
between 1792 to 1857 Mr. Ramesh Chandra Dutt says, " It will be seen that if there were fourteen
years of deficit, there were thirty-two years of surplus; and if the deficit
amounted altogether to nearly seventeen millions the surplus amounted to nearly
forty-nine millions. The net I financial results of Indian administration was
therefore a surplus of thirty-two millions during forty-six years. But this
money was not saved in India, nor devoted to irrigation or other works of improvement It went as a continuous tribute to England
to pay dividends to the Company's shareholders; and as the flow of the money
from India was not sufficient to pay the dividends, there "was an increasing debt called the Public Debt
of India." [1.R.C. Dutt. " India under Early
British Rule." p. 408.J—
There were two distinct ways in
which loans were raised in England and in India.
In India when the government was
in need of money it advertised that the Treasury was open to receive money upon
loan at certain rates specified in the advertisement and upon the conditions
there contained. So long as the loans remained open, parties were admitted to
make what payments they pleased, and to receive what are called loan notes in
acknowledgement, and these to any amount. The money raised on loan was all
raised in India.
In England a different mode
operated. The only mode, it was so stipulated by the Parliament, by which the
East India Company was able to raise loan there was analogous to that of other
corporations viz. on bonds, and all the Home debt was raised on bonds.
The Public Debt of India, at least under the
Company's rule was I entirely the creation of war. We will follow the progress
of these two debts separately.
In 1792 the Indian Debt was a
little over £7,000,000: within seven years it had
risen to £10,000,000. In 1800 it was £ 14,625,384 carrying a total interest of
£ 1,342,854. Now came the wars of Wellesely with
the Marathas and in one sweep he raised the Indian
Debt to the amount of £ 30,098,857 in 1807-08 bearing a total annual interest
of £ 2,339,087. After the conclusion of peace, attempts were made to lower the
debts by redemptions : as a consequence of this
policy the Indian Debt was brought down in 1810-11 to £22,545,843 and the
interest to £ 1,503,434. But wars were the rule and peace the exception :and in 1819-20 by the
Nepal War and the First Maratha War the Indian Debt
was raised to £
31,338,855. By 1823-24, as a result of the intervening peace, the debt was
reduced but the next year the First Burmese War of 1824-25 raised it to £
38,316,486. In 1835-36 the debt was reduced to £31,821,1 18: but a train of
military operations were awaiting India. The Afghan
War , the Sindh War, the two Sikh Wars, the Second Burmese War
increased the debt which in 1852-53 amounted to £52,313,094 and the interest to
£2,479,133. In 1853-54, however, the Indian Debt was reduced to £49,762,876. In
1853-54 the Public Works policy was inaugurated and as a consequence of it the
Indian Debt increased to £ 55,546,650 in 1855-56.The year 1857-58 witnessed what is known as the
Indian Mutiny or the War of Independence, raising the Indian Debt to £
60,704,084.
The Home Bond Debt (in England) In 1800, the Home Bond Debt amounted to £ 1,487,112 at 5 %
interest. But the wars of Wellesly also told upon
the Home Debt and increased to £4,205,275 in 1807-08 :
in 1811-12 the Home Bond Debt reached its maximum limit of £ 6,565,900 at 5 %. In 1816-17 the rate of interest was reduced to 4 %
and it never rose above it. In 1814-15 the Home Bond Debt was reduced to
£4,376,976. By occasional reductions it lowered to £ 1,734,300 in 1840-41. As a
result of the Afghan War and the Mutiny the Home Bond Debt rose to £ 3,894,400,
besides £ 40,000,000 as the cost of the Mutiny.
It is likely to be a matter of
surprise when one sees the smallness of the Indian Home Bond Debt as compared
with the Indian Debt. But the surprise will no longer exist when we know that
the capacity of the East India Company to borrow in England was strictly
limited by Parliamentary Regulations. The Parliament was ever eager to obtain
the advantages of the rule of the Company without its disadvantages. It was
eager to obtain command of the Indian Empire, but till the end was achieved
always looked upon it as problematical and did not want to jeopardise the
interests of the country in a project which in spite of its apparent success
looked anything but certain of beneficial results. Hence, the Parliament put a
strict embargo on the Company's raising the loans beyond a certain limit lest
the Company lose its hold upon India and bring ruin on England by jeopardising English capital.
V
The East India Company in spite
of the fact that she was a source of great prosperity to England suffered great
humiliation at the hands of the British Parliament and people.
The East India Company was
jealous of her monopoly of the Indian trade and the British were determined to
derive as large a gain as possible for allowing her that privilege. Every
weakness in the administration was made an excuse for extortion and
interference : and renewal of charter was often an
occasion to disgorge her of her wealth accumulated by the monopoly of Indian trade.
Very early in the history of the
Company a controversy as to this monopoly of trade had arisen and pros and cons
were acrimoniously discussed. Up to 1833 the Company, by means fair or foul,
managed to win over the English statesmen to continue her monopoly. But in that
year the cry against her monopoly had grown so loud that both the Company and
the Ministers had to give in and the East India trade was thrown open to all
the English public.
By the Act of 1834 the Company ceased to be
a commercial corporation. How the obligations of the Company were met may be
seen from the following :
"The tangible commercial
property sold under the Act of 1834, realised £15,223,480 which was thus
disposed of: £8,191,366 towards discharges of India Debt: £2,218,831 was
applied in payment of territorial charges in England: £
1,788,525 was applied in liquidation of part of the Home Bond Debt: £ 2,000,000 was paid into the Bank of England, for
investment in the funds, to provide a "
Security fund " at compound interest, for the
ultimate redemption of the capital stock of the Company (6,000,000) in 1874: £561,600 was applied in compensations to ship-owners
and other persons : and the remainder of £ 463,135
was retained in England, as an available cash balance for the purposes of government
in India. The unavailable assets claimed as commercial by the Company—viz. the
India House in Leaden Hall Street, one ware-house retained for a military store
department, and house property in India, the whole valued at £ 635,445—remains
in the hands of the Company but applicable to the uses of the Indian
Government."
Though as a trading body the
Company disappeared, she continued her existence as a political sovereign of
her territories in India. Unfortunately for the Company her days were fast
being numbered.
It is an error to suppose that
the East India Company was abolished because of her inefficiency as manifested
in the Mutiny of 1857. On the contrary, before the mutiny had actually taken
place, the discussion about the direct assumption of the Government of
India by the Crown was set afloat, which is indicative of the fact that mutiny
or no mutiny, the British statesmen were impatient to have direct control over
the " leaves and
the fishes " that came but indirectly from
their rule in India by a process of disgorging a corporation which directly fed
them on beef fat.
This round about process was
tiresome and mentally exhausting for impatient minds. Lord Palmerston having been
returned by a strong majority in 18 57 as a result of his success in the
Crimean War immediately notified the Directors of the Company to their great
surprise that he proposed to introduce a Bill for the abolition of the Company
and the resumption of the direct Government of India by the Crown.
Unfortunately, the mutiny did occur in 1857 and gave a strong
impetus to the abolition movement already in full swing.
On the 31st day of December,
1857, the Chairman and the Deputy Chairman of the Company replied to the
notification of Palmerston urging that "an
intermediate, non-political, and perfectly independent body " similar to the Company was a necessity for the
administration of India.
Besides this the Company sent a
formal petition to both Houses of Parliament. John Stuart Mill who drafted the
petition showed the fallacy in the arguments of the mover of the Bill for the
abolition of the Company. From the very beginning the Crown had exorcised its
control over the Indian Government through its Minister presiding over the
Board of Control. Between the Government in India and the Crown Minister there
was the Court of Directors which the new Bill wanted to do away with. Mill
argued that this Court of Directors (the organ of the East India Company), the
embodiment of experience was a good guide for the Crown Minister who really
controlled the entire administration of India, and said that if evils have
really arisen from the mode of administration the remedy that was sought viz.
of doing away with the Court of Directors and thus making the Crown Minister an
autocrat was worse than the disease. " To
believe that the administration of India would have been more from error had it
been conducted by a Minister of the Crown without the aid of the Court of
Directors, would be to believe that the Minister, with full powers to govern
India as he pleased, has governed ill, because he had the assistance of
experienced and responsible advisers."
A diversity of opinion prevailed
as to the future connection of India with England.
The Stanley Review, an important
newspaper in England argued that the East India Company be maintained to keep
India away from English politics. It made quite a point of the fact that
Englishmen who went over to India became autocrats and that in it there was a
danger to democracy. It boldly proclaimed that "India,
like a colossal torpedo, will paralyse the beneficent activities
and benumb the free moral life of England "...
and if...... "
brought full in sight of England, will serve her as a great school, in which
she may learn the principles of the King of Naples
and the practices of Mrs. Stowe's Legree."
Others, notably a certain
Richard Congreve, a disciple of Conte pleaded that India should be left to work out
her own destiny. He maintained that the rule of one people by another is
demoralising and not wise for the better development of humanity. In
order to prevent any other nation from stepping into India after the English
had left he proposed that an international board be appointed to regulate the
administration which was ultimately to devolve upon the Indians when they became
capable of self-government.
None of these views, however,
fall in with those of the British Parliamentarians who decided differently.
They were determined to abolish the East India Company and take the government
of India immediately-under the Crown : they desired
to substitute direct government for the double government. As a result of this neither the petition nor the
independent public opinion proved of any effect and Palmerston
introduced his Bill for the Abolition of the Company and the future government
of India. Before the Bill was passed, the Conspiracy Bill threw out the
government of Palmerston which was succeeded by a conservative one under the
leadership of Lord Derby. After Lord Palmerston's
Bill had gone out by his overthrow, Benjamin Disraeli,
the Chancellor under Lord Derby introduced his India Bill. John Stuart Mill's comparison of the
merits of the two bills is very instructing and later events have borne out his
contentions. He says :—
"The means which the Bills
provide for overcoming these difficulties (of the government of one nation by
another) consist of the unchecked power of a minister. There is no difference
of moment in this respect between the two Bills. The minister, it is true, is
to have a Council. But the most despotic rulers have Councils. The difference
between the Council of a despot, and a Council which prevents the ruler from
being a despot is, that the one is dependent on him, the other independent;
that the one has some power of its own, the other has not. By the first Bill
(Lord Palmerston's Bill) the whole Council is nominated by the minister; by the
second (Disraeli's Bill) one half of it is
nominated by him. The functions to be entrusted to it are left, in both, with
some slight exceptions, to the minister's own discretion."
Disraeli's Bill suffered worse fate than the one of Lord Palmerston.
It simply fell. A new bill was therefore introduced in August, 1858, and passed
designated as an "Act for the better government of India."
The Provision of this Act (of
Section 75) which still largely regulate the administration of India may be
divided into classes according to their nature :
(1) Those dealing with the past
affairs.
(2) Those dealing with the
future affairs.
We will first consider those
that deal with the past affairs— mainly the settlement of the fiscal and
commercial obligations of the Company. Section 42 of this Act " provided that the dividend on the capital stock
of the East India Company, should be charged and chargeable upon the revenues
of India alone."
Amidst all the questions between
India and England that had to be settled with equity none was more prominent
than the question of the Indian debt. Who should bear the burden of the Indian
debt was the burning question of the time. The crux of the question was who was
responsible for it and what was its purpose ?
The most enlightening commentary
on the problem is that of Major Wingate who immediately after the mutiny argued :
" Have the people of India had a voice in the management of their affairs,
or have the taxation and expenditure of the Indian Government been regulated
with a view to the welfare of India alone, without intervention or interference
on the part of the government of this country ? By
no means, the Government of India, whether viewed with reference to its forms
or powers, has been, from the first hour of its existence up to the present
time, the creation of the British Parliament. The power vested in the
Government of India to contract debt, was a delegation of authority from the
British Parliament, which, up to this hour, as in the case of the last
debenture loan, exerts a right of interference over its exercise...... The East India Company have been declared by
Parliament to have been simply trustees for the British nation, which,
in accordance with this view, altered the conditions of their trust from time
to time, and finally relieved the trustees of its exercise altogether. When the
subject is carefully examined, it will be found that the Government of India,
so far from being the Government of a distinct state, has been, from the first,
simply a department of the British
Government. The British ministry, acting through the President of the Board
of Control, formed the real motive power which decided the policy of successive
Indian administrations, and the East India Company was simply a convenient
screen...... If the facts be so, then, and they
cannot be gainsaid, we seem to be shut up to the conclusion that the acts of
the Government of India, from first to last, have been the acts of the British
nation. India has never had even the shadow of a constitution, or of a national
government, but has been ruled as a conquered country, according to the views
of successive British Parliaments and the British administrations. The Indian
debt has really been incurred by the Government of this country : and how, then, can we possibly shake ourselves free
of Indian liabilities ?"
Mr. Wingate
also appealed to the humane part of the British public by dwelling upon the advantages to England and the injuries
to India:
" In proceeding to consider these advantages, there is one most important
fact, which should ever be present to the mind of the reader, and that is, that
those advantages, be they great or small, have cost the nation nothing to
acquire. This may sound as a startling assertion in the ears of Englishmen of
this generation, who have not yet forgotten the heavy bills which they have had
to pay for Canada rebellions
Caffre wars, Ceylon insurrections, and many manumissions
of West Indian. Slaves; and who are annually
reminded of the cost of governing, or protecting our colonies and dependencies,
by the financial estimates submitted to Parliament; but the assertion,
nevertheless, is strictly and liberally correct. "
Strange," may we wonderingly exclaim, " that we, who have spent so much on our colonial
possessions, and have waged so many costly wars for thankless foreigners,
should have laid out no money in the acquisition or improvement of our great
Indian Empire. The thing cannot be : it is too astounding
for belief." Astounding indeed it is: but
there is something still more astonishing behind; for not only is it a fact
that India has been acquired without the expenditure of a single shilling on
the part of this country, but it is equally a fact that, so far from involving
outlay, India has regularly paid to Great Britain a heavy tribute, which there
is reason for thinking has not fallen far short of the almost incredible sum of
a hundred millions sterling in the course of the present century."...... " The
Indian tribute, whether weighed in the scales of justice, or viewed in the
light of our own true interest, will be found to be at variance with humanity,
with common sense, and with the received maxims of economical science."
" Has our policy in India been determined out of pure, unselfish, and
benevolent regard for the welfare of the people of that country, and without
the smallest regard for the manner in which it may affect our own away ? Was this the principle which guided us in imposing
prohibitive duties upon Indian manufactures imported into this country, and
merely nominal duties upon British manufactures imported into India ? Was it out of pure regard for India that cotton exported to Great Britain from
India, is exempt from duty, while it is
taxed on exportation to all parts of the world
besides ? Was it Indian interest which dictated the
fixing of import duties upon goods brought to India in
British ships, at one-half of the amount levied upon similar goods brought in
ships to any other country? Were native interests solely concerned in the
exemption of Europeans in India from the jurisdiction of the ordinary courts of criminal justice, by which
native redress for British wrong-doing, has been made a practical impossibility
in ninety-nine cases out of a hundred ? Was it out
of consideration for the tax paying Hindu and Mohammedan,
that the official European in India was provided with a costly ecclesiastical
establishment before anything else was done for their education or
enlightenment ?
Was it unselfish regard for the
natives that dictated the policy of obtaining, upholding and extending British
dominion in the East, by means of taxes raised in India, in
opposition to the rule obtaining in all other British dependencies, of
providing for the costs of their military defence from the British Exchequer ? And lastly, were the
arrangements for defraying what is styled "
the home charges," out of the Indian revenues, under which nearly one
hundred millions sterling of taxes collected in India, have been transferred to
Great Britain in the course of the present century, devised for the purpose of
benefiting the people of India alone ? Let the
candid reader thoughtfully and conscientiously answer these questions for
himself, and then say whether British interest as well as Indian interests have
not had a share in determining the course of our Indian policy." All the
arguments legal and humanitarian failed to win the day. The English Parliament
flatly refused to share in the Indian Debt which created the acquisition of the
Empire. The entire heavy load of the debt of the East India Company amounting
to £ 69,473,484—mostly unproductive—was placed on the shoulders of the
poverty-stricken natives who had no voice in the doings of the Company. This was not all : the unfortunate mutiny had cost £ 40,000,000, and as a legitimate
expenditure for the acquisition of an empire, England in justice ought to have
paid the cost of the mutiny. John Bright who often exposed the cause of the
Indian tax-payers appealed to the Parliament saying
" that the forty millions which the revolt
will cost is a grievous burden to place upon the .people
of India. It has come from the mismanagement of the Parliament and the people
of England. If every man had what was just, no doubt that forty millions would have to be paid out of the taxes levied
upon the people of this country (England)."
The practical outcome of these
unjust arrangements was that the people of India purchased the empire at many
millions for the debt was only a part of the
cost, and made an offering of it to the British_Crown : in other words, the Empire was either a gift
or a trust.
The arrangements regarding the
stock of the East India Company are in the same iniquitous strain. The stock of
the Company was redeemed by a loan which was also added to the already enormous
debt consolidated into what is known as the India Government Debt.
What the Act really did was to
annihilate the Board of Control : the Company
though legally extinct continues to live for all practical purposes and enjoys her dividends
even to this day in the shape of interest paid out of Indian revenues. The
astounding result of this policy was gains to England and costs to India. When every effort at giving justice to
India failed in the British Parliament, Lord Derby moved that this enormous
debt of India be guaranteed by the Parliament so that on the security of it the
interest rate be lowered and the Indian tax-payer be relieved. He said:
" I am aware that the uniform policy of the Parliament and the Government
of this country has been to decline all responsibility in regard to the debt of
India, which has been held to be a charge only on the Indian Exchequer. Dealing
with the present state of affairs I may say at once that I am not going to
recommend any change in that policy. I know well the alarm which any such
proposition would create and I know the refusal which it would inevitably
receive. But this is a question which will recur again and again, and which
will have to be considered in the future as well as in the present.
I would likewise ask the House
to bear in mind that if ever the time should come when the established policy
in this respect should undergo a change, and when a national guarantee should
be given for those liabilities, that guarantee would operate to reduce the
interest paid upon the Indian Debt by no less than £ 750,000 or even £
1,000,000 which, formed into a sinking fund, would go far to pay off the whole."
John Bright who through sheer short-sightedness opposed said:
" I object to an Imperial guarantee on this ground—if we left the services
of India, after exhausting the resources of India, to put their hands into the
pockets of the English people, the people of England having no control over
Indian expenditure, it is impossible to say to what lengths of unimagined
extravagance they would not go : and in
endeavouring to save India, may we not go far towards ruining England ?"
Not only was there no warrant
for Mr. Bright to magnify this danger so much, but he failed "to see that
the people of England would have very soon ceased to neglect the affairs of
India, and would have obtained a real control over Indian expenditure, if some
share of the liability of the Indian Debt had been thrown on them."
The discussions were all
abortive and did not even recompense the breath that was wasted and in no sense
did the natives get any relief from "the direful spring of woes
unnumbered."
Let us now see what the Act willed
for the future. Section 55 said, " excepting
for preventing or repelling actual invasion of her Majesty's Indian
possessions, or under other sudden and urgent necessity, the revenues of India
shall not, without the consent of both Houses of Parliament, be applicable to
defray the expenses of any military operation carried on beyond the external
frontiers of such possessions by her Majesty's forces charged upon such
revenues."
With profound respect for the
intellect of Mr. R. C. Dutt, one, however, cannot understand on what ground
does he characterise this section as " one
salutary financial provision ". That it was an
improvement over the financial administration of the East India Company no one
can doubt. But it is by no means salutary in that the revenues of India have
been spent outside India for non-Indian purposes, even after the Act. The fatal
error lay in this,—the excepting clause in the above section which sanctions
the expenditure of Indian revenue outside of India omits the vital word previous. The clause in order to be
salutary in effect ought to run—" the revenues
of India shall not, without the previous consent of both Houses of
Parliament, be applicable etc......." and not
in the way it does. An unknown writer says, "
in all probability that essential proviso was
comprised in the original draft, but afterwards eliminated by the same
mischievous hand which contrived in Sections 26, 27,28 to secure the entire
immunity, irresponsibility, and personal autocracy of the secretary of
state."
After showing that Lord Stanley
and the Earl of Derby who had so much to do with the framing of the statute
were united in including the neglected proviso the writer quotes the opinion of
Mr. Gladstone regarding Section 55 as follows :—
In my view it was the purpose of
this clause to require the Preliminary consent of parliament to the issue of
Indian money for the purpose of operations carried on by the forces charged
upon India beyond the Indian frontier, except in certain special cases, which
were very carefully defined. It was, in fact, to prevent the use of Indian
money for military operations. I remember this; for I myself was the author of
the clause, and the present Lord Derby, who was Secretary of State for India at
the time, concurred with me as to its objects."
The same writer goes on to say :
"There are few, if any
causes, that have brought more disaster and financial damage to " India of the Queen "than has the utter
disregard of the safeguards ostensibly ordained under these despised and
neglected provisions of the Act. We are well aware that, even had the saving
word " previous "
been included in the Section, the clamour on behalf of pseudoimperial interests, or the exigencies of party
schemes, might have sufficed to override the claims and rights of the Indian
people. But that word would, at least, have secured an Invaluable respite, during which the voice
of reason might have been heard."
The non-fiscal sections of this
Act were :—
(1 )
The territories of the East India Company were vested in her Majesty, the
Queen, and the powers exercised by the East India Company and the Board of
Control were vested in the Secretary of State for India. He was to have a
Council of fifteen members who would hold office
during good behaviour, and each member was to have a salary of £ 1200 a year
out of the revenues of India. The pay of the Secretary of State and all his
establishment would similarly be charged to India.
(2) The Secretary of State was empowered to
act against the majority of the Council except in certain specified matters.
And on questions of peace and war (which had hitherto been dealt with by the
Board of Control through the Secret Committee of the Court of Directors), the
Secretary of State was empowered to send orders to India without consulting his
council, or communicating them to the members.
(3) The Governor-General of
India and the Governors of Madras and Bombay would henceforth be appointed by
Her Majesty the Queen; and the appointments of Lieutenant-Governors would be
made by the Governor-General subject to the approbation of Her Majesty. Rules
should be framed by the Secretary of State for admission into the Civil Service
of India by competition.
The evil tendencies of the
administrative section above referred to have been attested to be (1)
autocracy, (2) secrecy, and (3) irresponsibility, ail of which are inimical to
the good administration of the country. It is lamentable
that the Act made no provision for enlisting the voice of the natives in the
administration of their own country. In this vital respect, can any one say
that the administration of the Company differed very much from the
administration of the Crown ?
In order to give publicity to
the provisions of this Act, Queen Victoria asked Lord Derby (apparently not
being satisfied with the first draft of it) to issue a Proclamation which, as
she said, " should breathe feelings of
generosity, benevolence, and religious toleration, and point out the privileges
which the Indians will receive in being placed on an equality with the subjects
of the British Crown, and the prosperity following in the train of
civilisation. "
This Proclamation was read out
in India and has been regarded as the Magna Chart
of India not that the Magna Chart contained the
rights of people but that it was a Great Document. It remains, however, to
estimate the contribution of England to India. Apparently the immenseness of
India's contribution to England is as much astounding as the nothingness of England's contribution to India. Both are, however true statements if
looked at from economic points of view. But from another point of view, if
India's tribute cannot be weighed in the scales of justice and humanity then
England's contribution cannot be weighed in the scale of gold and silver. The
last statement is both literally as well as figuratively true. England has
added nothing to the stock of gold and silver in India :
on the contrary, she has depleted India— "
the sink of the world."—
Her
contribution lies in an uneconomic realm: but just
the same, it is too great to be measured in terms of coin.
" Englishmen can look back on their work in India, if not with unalloyed
satisfaction, at least with some legitimate pride. They have conferred on the
people of India what is the greatest human blessing—Peace. They have introduced
Western education, bringing an ancient civilised nation in touch with
modern institutions and life. They have built up an administration which, though it requires reform with the
progress of the times, is yet, strong and efficacious. They have framed wise
laws, and have established Courts of Justice, the purity of which is as
absolute as in any country on the face of the earth. These are results which no
honest critic of British work in India regards without high admiration."
But whether mere animal peace is
to be preferred to economic destitution, let every one decide for himself.