JANUARY 1919] THE IDEA OF A WORLD-STATE. city-states in the ancient world made nationstates in the modern; and the further stage of this development may possibly be an international organisation. The trend of history points to some such evolution. The XIX century, according to Hobson, has made three contributions to the possibility of an international state: first the settlement of political government upon a basis of nationality which is an essential step to internationalism; secondly, the series of inchoate and fragmentary but genuine attempts of the great powers in the various congresses to work together upon critical occasions in the interests of justice and order and to embody in acts or conventions some policy which is the result of their deliberations; thirdly, the progress of Federation which furnishes a hopeful mode of reconciling the demands for local autonomy, with effective central sovereignty. "The network of national, financial and intellectual communications connecting all parts of the developed world and establishing quick, constant, cheap and reliable modes of transport for men, goods, money and information form the actual basis of what may not improperly be called an economic world-state." . The present war itself, paradoxical as it might seem, is contributing to the possibility of realising the idea of a world-state. It has convinced the whole world how fatal is the result of "the clash of competing ambitions," and how intensely denationalising a process warfare is. If individual suffering improves people, national suffering also must. To some thinkers, on the contrary, the present war appears to put off, if it does not render futile, the possibility of organising an international polity. To them Viscount Bryce has some weighty answers to make. It was civil war that in the past has cemented national unity; the great Civil War and the French Revolution finally unified England and France respectively, inspite of the destruction that they worked in both 29 countries. Bryce would therefore conclude that the present international war, despite all its incidental injuries, might result in better international unification. Truly the proverb says," It is darkest before dawn." PRACTICAL STEPS. As a matter of fact there already exist the germs of an international government in the Hague Conferences and Courts, and in similar inter-governmental instruments like the Postal Union. We have, too, a code of International Law and a judicial and administrative apparatus, but their sanctions are quite imperfect and have already failed to perform even the first function of government, which is to keep public peace. The grand problem now before us is, "How to provide the present International Code with the requisite sanctions and thereby render impossible the outbreak of war. Evidently this is the most difficult of problems, and no amount of argument will solve it unless an essential change takes place in the outlook of the leading nations. Many schemes have been suggested for effecting this change, of which we will examine only two of the most prominent. Mr. Lowes Dickinson lays it down that there must be a general treaty by which the signatory states shall submit all differences to arbitration. In the event of nations refusing the award, the signatory states must take joint action, diplomatic, economic and forcible against such refractory state or states. This scheme evidently still leaves nations to develop competing armaments and warfare will still go on with all its accompanying attrocities. It does not strike at the root of the present evils. Mr. J. A. Hobson, a very keen writer upon sociological subjects, would not be contented with such half-way steps. No good result can be achieved unless we make it impossible for rations to take up arms. He says: "An international arrangement that meets our requirements must be strong enough to reverse the motives, aggressive and defensive, which in the past have caused nations to arm, Nations will not pile up armaments if they believe that they will have no need or opportunity to use them. To produce this belief in the uselessness of national armies and navies is therefore a prime object of international policy. The successful establishment of this belief involves, however, a change of disposition among national governments amounting to the process known in religious circles as conversion. They must be induced to forego that right of war which according to past statecraft has been the brightest jewel in the crown of sovereignty." This is indeed the very crux of the problem. Only by impairing a substantial part of national sovereignty shall we be able to effectively guarantee the peace of the world. The early confederation of the United States left the sovereignty of the various states practically unimpaired, and the result was internal insecurity and external humi JANUARY 1919 liation. But when the real "Federal" State was formed in 1789 the states were deprived of many of their important powers, but the commonwealth became strong and effective both for home government and for foreign diplomacy. The same process will probably have to be undergone in the federalisation of the world. We have already got almost a confederation and the administrative machinery above-mentioned; but its sanctions are imperfect and it failed to prevent war. The present organisation will probably be strengthened after the war and gradually what may be called a world-state may finally evolve, capable of withstanding war and internal catastrophes. If there is really working an evolution in the world's history, such an organisation must be the inevitable culmination of that process of evolution. Such is the "Parliament of Man, the Federation of the World," which has been the dream of seers and savants of every age and in every clime. Indian Industrial and Economic Problems BY MR. JEHANGIR BOMANJI PETIT POVERTY OF INDIA T is a fact which cannot be denied that India is one of the poorest countries in the world and that her economic resources are of the scantiest character. The fabulous wealth of India which formed the topics of the historians of old, and attracted traders and plunderers alike to her unguarded and hospitable shores, is now, for all practical purposes, a thing of the past. Whether it be by her own folly or as the result of the heavy drain which necessarily accompanies a costly foreign Government, which unduly largely employs foreign agencies in every department of the Government and remits to England as much as the annual yield of the whole country from land, by way of home and other charges, and that too from an almost entirely agricultural country like India; whether it be by some artificial or natural cause beyond the control of the Government and the people, or as the result of a policy of unequal and unrighteous distribution of the burdens of State; the stern fact remains and cannot be gainsaid that even today, after 150 years of British rule, India-in spite of her enormous wealth of raw products is the poorest country in the world with only an annual average income of £2 per head; and that her resources for industrial and other developments, are therefore necessarily almost nil. The need for supplementing them by all possible means open to the Government and the people, is consequently proportionately greater and more urgent than any other. It is equally true that a great many industries that could be started with success and for which the raw materials and other facilities are near at hand, could not be started in this country for want of the requisite funds. This is not only true in the case of such gigantic industries as the production of steel, sugar, colour, dyes and oils, but also in the case of a great many minor industries such as the manufacture of glass, 'candle, soap, matches, etc. It is now a matter of common knowledge that in a large majority of cases in which industrial interprises have collapsed, the main cause of the failure is want of capitial to begin with and in some cases, insufficient resources not only for current expenses but even for obtaining urgent expert advice and technical knowledge. That this should be so in a country which is not industrial to any very appreciable extent in the sense in which many of the great European countries are, and in which money under normal conditions ought not, therefore, to be difficult to find, is itself an important factor for very careful and serious consideration. The fact, however, is there, that it is so. Although I am prepared to admit that as a rule, capital in this country is shy, slow to move and unwilling to flow in untrodden paths, it cannot still be denied that it is difficult to raise money in India for industrial purposes first, because the country is poor and there is not much capital in it; and secondly, because there are no efficient banking organizations which can mobilize the financial forces of the country and make capital easily accessible. When the industrial development of a country is dependent upon capital, acquired largely through the gathering of small sums, special industrial banks like those in Japan and Germany or similar organizations, should be stablished with large capitals and numerous branches, designed to afford financial support to industries for longer periods and on less restricted security than is within the power or practice of existing banks. Such banks or organizations must, of course, require a large measure of Government support, although they need not necessarily be brought under rigid Government control. I am emphatically of opinion that Government should lend its whole-hearted sup. port to such banks and place very large funds at their disposal, if possible, without interest; but in no case at a rate higher than 2 or 3 per cent. These banks should be included in the list of approved banks or financial concerns, in which trustees should be allowed to deposit Government funds. Remittances to these banks should be accepted by to the district treasuries and the presidency banks; and they should be allowed to issue bonds for a limited period of not longer than 10 years to the extent of at least double paid-up capitals. Fixed deposits for shorter periods than 2 years should not be received; and no current accounts should be opened in these banks, excepting for parties whom they finance. I fail to see why the large reserves in India and those held in England on account of this country under various heads, cannot also be partly utilized for the industrial development of the country and placed at the disposal of such banks as I have described, if necessary even under stringent Government control. There is the large gold standard reserve, amounting to over Rs. 50 crores. Then, there are the paper currency reserves which go considerably over this figure; and the large cash balances. We may assume that the last two may be required at any moment and cannot, therefore, safely be utilized for any other purpose. We may not ever speak of the gold ordinarily held in India which had gone down from about £6 million to about £100,000 on the 1st April, 1917, but no part of which is now held in India. But I cannot under stand why a substantial portion, say about Rs. 10 or Rs. 15 crores out of the 50 crores of the gold standard reserve cannot be utilized for industrial purposes. I have seen and heard various objections urged against this and similar proposals but am sorry to have to say that I have not yet heard of a single really convincing argument advanced against this suggestion. First of all this gold standard reserve has no business to be in England. One of the recommendations of the Fowler Committee laid down that the gold standard reserve should be held in gold and in India. This has not been done; and instead, about £ 5 to 6 millions are usually lent out to private borrowers in England at short notice; and the balance is invariably invested in Exchequer Bonds, Exchange Bills, and British and Colonial Government Securities. There is no cogent reason why this should be so; and I am of opinion that a substantial portion of it can certainly be made available for industrial purposes in this country, with reasonable safeguards. FINANCIAL ASSISTANCE. There are other methods both direct and indirect by which financial assistance can be given for industrial purposes and is being given in some countries of the world, such as, money grants in aid, bounties and subsidies, guaranteed dividends, supply of machinery and plant on the hire purchase system, guaranteed or perferential Government purchase of products for limited periods and exemption from income tax, import duties and other cesses during the initial stages of newly-established and infant industries. Some of these are undoubtedly likely to be beneficial, and are even recommended in the report of the Commission; but, for various reasons I against money grants-in-aid, bounties and subsidies, and guaranteed dividends except on very special grounds. am I cannot help saying that the Government in the past has not only neglected to develop the natural and other resources of the country but has also in a variety of ways, including huge protective tariff walls levied against Indian goods in England contrived to crush our nascent industries. The action of the East India Company with regard to Indian industries is sad reading and must form one of the blackest pages of British history. In recent years, the imposition of the excise duty on the cloth made in India at the dictation of Lancashire, and the more recent and artificial raising of the rate of exchange between England and India for wiping out the balance of trade in favour of India even as a special war measure. must also condemn England in the judgment of an impartial posterity. FISCAL AUTONOMY. We must also set our face against the proposal of what is called Imperial and Allied Preference, unless meanwhile India is given fiscal autonomy and full control over her tariffs. In our present helpless economic and industrial condition we cannot possibly afford to be charitable to others out of sentimental considerations. To a student of our trade returns it is painfully evident that at present India is almost entirely an exporter of raw materials and a heavy importer of nearly all her requirements of finished products. In a word, therefore, the compulsory inclusion of India in any such scheme of perference will be tantamount to forcing India to sell her raw materials to the different parts of the Empire or her Allies, cheaper than she can sell them elsewhere; and compelling her to buy her entire requirements of finished products from England and her Colonies and allies, at rates higher than those prevalent elsewhere. In order that such and similar iniquities may not again be perpetrated in the future in the name and under the excuse of Imperial exigencies and in order that we may be enabled to adjust our own tariffs to suit the peculiar requirements and conditions of our country, it is absolutely necessary that India should have complete fiscal autonomy.-Presidential Address to the Indian Industrial Conference. (A Story of Mediæval India). BY MR. RAGHUPATHI SAHAI, M.A. BROTHER AND SISTER. OWN the skirts of the Arravelis, on the verge of a rivulet which winded through the thick jungles was sitting Champavati, daughter of the exile King, Rana Pratap. Close by sat her little brother Sunder Singh. Champavati was eleven and her brother four years of age. Fortune stands on a restless globe, and though born amid the glories and grandeurs of an imperial court, these delicate scions of royalty were now sharing the hard fates of their heroic parents in the dreary regions of the Arravelis where, having sustained defeat after defeat at the hands of Akbar, they were living in exile with the few surviving followers, the shattered remnants of a once mighty confederacy. There driven to bay by the triumphant forces of the Moghal, they were gathering the wreckage of their broken army for a last desperate dash which might, perchance, win back their lost empire and restore the vanished glory of Rajasthan. But the storm of troubles through which Champavati and Sunder Singh had to pass in this up-hill, heroic struggle for freedom had dried up the vital essences within them, and though supremely handsome, they looked, alas, like two drooping flowers, like two pathetic spots, as it were, amid the gaieties of the scene. It was a lovely spring. The place all round was covered with a luxuriant growth of trees and plants looking exceedingly beautiful in emerald paraphernalia over which the golden rays of the setting sun spread a matchless lustre. their In the midst of this scene when nature seemed marvelling at her own great release of energy and her lavish bounties which transformed the valley into a dream of beauty, sat Champavati and Sunder Singh like two small speaks of sorrow 5 lurking behind nature's joy, like two stifled soba that throbbed imperceptibly in the breast of nature. Once more nature's laughter was an awful irony on the sorrows of these two frail human creatures. Champavati sitting on a smooth rock near one of the flower-beds was weaving with her emaciated hands a garland of flowers for her brother who, sitting beside her was playing with the pebbles which lay scattered in heaps on the rock. Occasonally he would pick up one of these pebbles and fling it into the stream where the water splashing up into a ripple would break into a series of expanding circles, until kissing the margin of the pool, they would, one by one, disappear altogether. This making and remaking and at last the vanishing of the ripples the child noticed with excited glee and his rapt tiny face was a symbol of the irony of human joys in which self-unconscious sorrow is blended as if to uphold and sustain its very antithesis. For this child of four who lived but for the present, whose life-stream seemed to consist of but successive surges of momentary conscious states, and who was endeavouring to mimic nature's joy and played with delight, was sad, though he did not know it. After a while he turned round, and looking up into his sister's face told her that he was hungry. But Champavati had nothing with which to appease her brother's hunger. She affectionately kissed him, and in order to beguile him, began to relate a story to which he listened with the rapt attention of a child. 66 Once upon a time," she said, "there lived a king who had lost his kingdom and was living in a forest. One day he was hungry and took out a cake to eat, but just then a crow came down |