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THE NEW ERA OF INDIAN TRADE.

557

commercial importance of Cardiff or Greenock, and not one of them has a harbour which would admit at a low tide a ship drawing 20 feet.

The truth is, that it is far easier to pitch a camp and erect a palace, which, under the native dynasties, was synonymous with founding a capital, than it is to create a centre of trade. Emporia of commerce must grow of themselves, and cannot be called suddenly into existence by the fiat of the wisest autocrat. It is in this difficult enterprise, in which the Portuguese, the Dutch, the Danes, and the French had. successively failed, that the British in India have succeeded. We make our appearance in the long list of races who have The ruled that splendid empire, not as temple-builders like the English as cityHindus, nor as palace and tomb builders like the Musalmáns, builders. nor as fort-builders like the Maráthás, nor as church-builders like the Portuguese; but in the more commonplace capacity of town-builders, as a nation that had the talent for selecting sites on which great commercial cities would grow up, and who have in this way created a new industrial life for the Indian people.

Calcutta and Bombay, the two commercial capitals of India, are the slow products of British rule. Formerly, the industries of India were essentially domestic manufactures, each man working at his hereditary occupation, at his own loom or at his own forge. Under British rule, a new era of A new era of producproduction has arisen in India-an era of production on a tion, great scale, based upon the co-operation of capital and labour, in place of the small household manufactures of ancient times. based on To Englishmen, who have from our youth grown up in the Co-operamidst of a keen commercial civilisation, it is not easy to capital. realize the change thus implied.

tion and

cities.

The great industrial cities of British India are the type Growth of of this change. Under native rule, the country had industrial reached what political economists of Mill's school called 'the stationary stage' of civilisation. The husbandmen simply raised the food - grains necessary to feed them from one harvest to another. If the food crops failed in any district, the local population had no capital and no other crops wherewith to buy food from other districts; so, in the natural and inevitable course of things, they perished. Now, the peasants of India supplement their food-supply with more profitable crops than the mere foodstuffs on which they live. They also raise an annual surplus of grain for exportation, which is available for India's own wants in time of need. Accordingly,

Summary of Indian exports,

there is a much larger aggregate of capital in the country: that is to say, a much greater national reserve or staying power. The so-called 'stationary stage' in India has disappeared, and the Indian peasant is keenly alive to each new demand which the market of the world may make upon the industrial capabilities of his country; as the history of his trade in cotton, jute, wheat, and oil-seeds proves.

At the beginning of the last century, before the English became the ruling power in India, the country did not pro1700-1885. duce £1,000,000 a year of staples for exportation. During

India's

balance of trade.

What

she does with the balance.

the first three-quarters of a century of our rule, the exports slowly rose to about £10,000,000 in 1834. During the half century since that date, the old inland duties and other remaining restrictions on Indian trade have been abolished. Exports have multiplied by eight-fold. In 1880, India sold to foreign nations £66,000,000 worth, and in 1884-85, upwards of £80,000,000 worth of strictly Indian produce, which the Indian husbandman had raised, and for which he was paid. In 1880, the total foreign trade of India, including both exports and imports, exceeded £122,000,000. In 1884-85, the total foreign import and export trade of India, excluding treasure and Government stores, was over £136,000,000, or including treasure and Government stores, nearly £155,000,000.

India has more to sell to the world than she requires to buy from it. During the five years ending 1879, the staples which she exported exceeded by an annual average of over £24,000,000 the merchandise which she imported.1 During the next five years ending 31st March 1884, the gross surplus of exports of merchandise over imports rose to 30 millions sterling per annum.2

About one-third of this favourable balance of trade India receives in hard cash. During the five years ending 1879, she accumulated silver and gold, exclusive of re-exports, at the rate of £7,000,000 per annum, and during the next five years ending March 1884 at the rate of £11,000,000 per annum. With another third she pays interest at low rates for the capital with which she has constructed the material framework of her industrial life, her railways, irrigation works,

This calculation deals with the gross surplus of exports over imports, without going into the question of re-exports of foreign goods. The total 'merchandise' exported, during the five years ending 1879, averaged £63,000,000; the total 'merchandise' imported averaged £38,000,000. Vide post, Table at p. 562, entitled Foreign Trade of India.

This also is the gross surplus, with out deductions for re-exports.

SEA-BORNE TRADE OF INDIA.

559

cotton mills, coal mines, indigo factories, tea-gardens, docks, steam-navigation lines, and debt. For that capital she goes into the cheapest market in the world, London; and she remits the interest, not in cash, but in her own staples, which the borrowed capital has enabled her to bring cheaply to the seaboard. With the remaining third of her surplus exports, she pays the home charges of the Government to which she owes the peace and security that alone have rendered possible her industrial development.

The Home Charges include not only the salaries of the The supervising staff in England, and the pensions of the military Home Charges.' and civil services, who have given their life's work to India, but the munitions of war, a section of the army, including the cost of its recruitment and transport, stores for public works, and the materiel for constructing and working the railways. That materiel can be bought more cheaply in England than in India; and India's expenditure on good government is as essential an item for her industrial development, and repays her as high a profit, as the interest which she pays in England for the capital with which she has constructed her dockyards and railways. But after paying for all the Home Charges for the interest of capital raised in England for Indian railways, and other reproductive works, and for the materiel required for their construction and maintenance, India has still a surplus of £11,000,000 from her export trade India's for which she receives payment in silver and gold.

yearly savings.

trade.

The trade of India may be considered under four heads- Divisions (1) sea-borne trade with foreign countries; (2) coasting trade; of Indian (3) frontier trade, chiefly across the northern mountains; (4) internal traffic within the limits of the Empire.

The sea-borne trade most powerfully attracts the imagina- Sea-borne tion, and we have the most trustworthy statistics regarding it. trade. With an extensive seaboard, India has comparatively few ports. Calcutta monopolizes the commerce, not only of Lower Bengal, but of the entire river-systems of the Ganges and the Brahmaputra. Bombay is the sole outlet for the products of Western India, Gujarát (Guzerát), the Deccan, and the Central Provinces; Karáchi (Kurrachee) performs a similar office for the valley of the Indus; and Rangoon for that of the Irawadi. These four ports have been chosen as the termini where the The four main lines of railway debouch on the sea. In the south of great India alone is the sea-borne trade distributed along the coast.

ports.

Minor ports.

The two

centres.

Early Portuguese trade,

The south-western side has a line of fair-weather ports, from Goa to Cochin. On the south-east there is not a safe harbour, nor a navigable river-mouth; although ships anchor off the shore at Madras, and in several other roadsteads, generally near the mouths of the rivers. A Madras harbour has, however, been under construction during several years; and, in spite of destructive cyclones and storm-waves, the work is now well advanced. Since these sheets went to press, a project has been put forward for constructing docks at Madras, to cover 25 acres, protected by groins thrown out at right angles from the beach, and by a breakwater (1885).

Of the total foreign trade of India, Calcutta and Bombay til recently controlled about 40 per cent. each. Madras had 6 per cent., Rangoon 4 per cent., and Karachi 2 per cent, leaving a balance of only 8 per cent. for all the remaining ports of the country. In 1884-85, Bombay had 43°51 per cent. of the foreign trade; Calcutta, 36'97 per cent.; Madras, 5'43 per cent.; Rangoon, 4'67 per cent.; and Karáchi, 3'79 per cent., leaving only 5 per cent. for the minor ports, of which the principal are-Chittagong, Maulmain, Akyab, Tuticorin, and Coconada. Calcutta and Bombay form the two central depôts for collection and distribution, to a degree without a parallel in other countries. The growth of their prosperity is an index of the development of Indian commerce.

When the Portuguese, the pioneers of Eastern adventure, discovered the over-sea route to India, they were attracted to the Malabar coast, where they found wealthy cities already 1500-1600. engaged in active commerce with Persia, Arabia, and the opposite shore of Africa. From Malabar they brought back pepper and other spices, and the cotton calicoes which took their name from Calicut. Fixing their head-quarters at Goa, they advanced northwards to Surat, the ancient port not only for Gujarát but for all Western Upper India. But with the Portuguese, the trading instinct was subordinate to the spirit of proselytism and to the ambition of territorial aggrandizement.

Dutch

1630.

The Dutch superseded them as traders, and organized monopoly, a colonial system upon the basis of monopoly and forced labour, which survives in Java to this day. Last of all came the English, planting factories at various points along the Indian coast-line, and content to live under the shadow

English

factories, 1625.

of the native powers. Wars with the Portuguese, with the Dutch, and with the French, first taught the English their own strength; and as the Mughal Empire fell to pieces,

EARLY ANGLO-INDIAN TRADE.

561

they were compelled to become rulers in order to protect their commercial settlements. Our Indian Empire has grown out of trade; but, meanwhile, our Indian trade has grown even faster than our empire.1

1600-1700

'The Governor and Company of Merchants of London English trading to the East Indies' was incorporated by Royal trade, Charter on 31st December 1600, having been directly called into existence by the grievance of monopoly prices imposed upon pepper by the Dutch. Its first voyage was undertaken

in 1601 by five ships, whose cargoes consisted of £28,742 in bullion and £6860 in goods; the latter being chiefly cloth, lead, tin, cutlery, glass, quicksilver, and Muscovy hides. Their destination was 'Atcheen in the Far East' (Sumatra). The first English factory was established at Bantam in Java, in 1603. The return cargoes, partly captured from the Portuguese, comprised raw silk, fine calicoes, indigo, cloves, and mace. The earliest English factories on the mainland of India were founded at Masulipatam in 1610, and Surat in 1612-15. In 1619, ten ships were despatched to the East by the Company, with £62,490 in precious metals and £28,508 in goods; the proceeds, brought back in a single ship, were sold for £108,887. The English made no great advance in trade during the 17th century. By the massacre of Amboyna (1623) the Dutch drove the English Company out of the Spice Islands, and the period of its great establishments (aurangs) for weaving had not yet commenced in India.

1700-64.

Early in the 18th century, our affairs improved. During the Our trade twenty years ending 1728, the average annual exports from advances, England of the East India Company were £442,350 of bullion and £92,288 of goods. The average imports were valued at £758,042, chiefly consisting of calicoes and other woven goods, raw silk, diamonds, tea, porcelain, pepper, drugs, and saltpetre. In 1772, the sales at the India House reached the total value of 3 millions sterling; the shipping owned by the Company was 61,860 tons. From 1760 onwards, the Custom House returns of trade with the East Indies are given in Macpherson's History of Commerce. But they are deceptive for comparative purposes, as they include the trade with China as well as with India.

In 1834, when the Company's monopoly of trade with China Statistics as well as with India ceased, the exports from India were valued for 1834.

at £9,674,000, and the imports at £2,576,000. Shortly after

1 The history of the early European settlements in India has been already dealt with in chapter xiv. pp. 356-377.

VOL. VI.

2 N

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