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Canada and Australia did. What was the first thing and as to the principles of his opponents. He for which India would demand protection ? Clearly thought that Mr. Maclean had altogether missed cotton. Therefore, the excise duty would have to be the line of argument which would be followed by taken off the Indian production of cotton, and they those who were in favour of the treatment of India would have to treat the English importation of according to the proposed policy. The principle of cotton piece-goods, and yarns, in such a manner as the unofficial programme would be to examine every to give the Indian producers an advantage over article of mutual commerce and see how an alteration Lancashire. India was by far the largest purchaser of the tariffs would benefit either country. There of the cotton productions of Lancashire. She took were certain articles as to which an alteration of the 40 per cent. of the cotton piece-goods and 20 per tariff would seemingly do good both to India and cent. of the cotton yams. If the Indian trade was to England. Mr. Maclean stated that England had destroyed, what would become of Lancashire ? There already a commercial federation with India, but he would be more unemployed in that district than there denied there was anything of the kind. That country were now in the whole country. But it would never was treated with the most absolute indifference. Sir come to that, for he absolutely declined to believe Henry Fowler had spoken with great justice of that when the voters of Lancashire saw the risk of the admirable policy of absolute free trade introduced preferential treatment in favour of Indian cotton by Sir John Strachey twenty years ago ;

but mills, they would accept the policy for a single there was no reciprocity on the part of England, instant. Let those who favoured the proposals come England never thought of taking off the duty forward with a precise scheme. He wanted to see a on tea and coffee because India had taken off closely-reasoned argument, showing precisely how the the duty on all imports from this country. Each tariff reformers proposed to deal with this apparently country acted independently of the other. Then, insuperable difficulty. A great many people were again, whenever he dealt with facts, Mr. Maclean inclined to support the new policy on the ground was inaccurate. For instance, with regard to tea, that it would be a step towards absolute free trade Mr. Maclean had said that if the duty on Indian within the British Empire. But it was, in fact, a tea was reduced, and that on China tea kept up, step in an absolutely opposite direction. The present China would turn round and stop the Indian opium. obstacle to free trade was the protective wall of But the value of tea imports from China was now Canada and Australia ; and by the action which was only about half a million, against eight millions from taken in agreeing to the maintenance of that India and Ceylon. Would the loss of so small a wall England not only perpetuated and strength- quantity of trade agitate China much ? Even if it ened its establishment in the colonies where did, Mr. Maclean knew that China had tried its it existed, but directly promoted the establishment level best to stop the opium trade and had absolutely of protective tariffs in colonies which now had free failed to do so. Again, he said, there was a contrade. That was called a step towards a general siderable trade with Russia in tea, and that Russia English Zollverein. No policy which was adopted could stop this trade at once if ber oil was penalised. by this country should be based upon a partial or But Russia had always done her utmost to stop the imsectional diagnosis, Let the whole matte be viewed portation of Indian trade. Mr. Maclean could hardly in its entirety. Otherwise we might be landed in a have forgotten how, about 25 years ago, there suddenly policy of which the immediate effect in one direction sprang up a great trade in green tea through Afghanmight be good, but of which the ultimate effect, istan into Central Asia. All the planters in Kangra, upon a larger scale, would be disastrous. A policy Dehra Dun, and Kumaun thougbt the millennium had adopted without a full discussion of its bearings upon come, and turned their whole attention to making every single unit of the British Empire would lead to green tea, and for a couple of years they made great action which was not in harmony either with profits. Then Russia stepped in, imposed a heavy economic and commercial advantage or with political duty, and utterly crushed the trade. As to the “ wisdom.

siderable traffic by sea to Batoum,” probably Mr.

Maclean did not know that this traffic had amounted Sir CHARLES ELLIOTT, K.C.S.I., said that he to £200,000 in 1897, but had fallen to £35,000 in addressed the audience with some diffidence, because 1901-2. And it is for fear of the stoppage of this Mr. Maclean had written in his paper that no pro- insignificant trade that he warns us against irritating posals made on this subject, that he had seen, deserved Russia! This is a typical instance of the arguments the attention of reasonable men-so that he stood of the old school. They are always saying, Don't condemned already as devoid of reason. But he strike back, or the other country will kick you harder. thought Mr. Maclean, with his long experience, They won't understand that the other countries are ought to know that the first duty of a controversialist kicking us as hard as they can, without hurting themwas to understand the views he opposed, and the selves, already; and that the result of our striking failure to do that was often due to not having given back will be that they will kick us less hard, them due attention and consideration. This appa- not harder. Similarly, with regard to wheat, rently was Mr. Maclean's case, for his paper showed he agreed entirely with the Chairman that Mr. that he was equally at sea as to the facts of the case, Maclean had missed the real point. There was.

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petroleum in preference to their own cocoa-nut oil, on account of its cheapness, and Sir Charles Elliott would benefit the people by putting a duty upon it. That was a very good sample of the arguments in favour of protection. Sir Charles Elliott said that we were going to let India severely alone, though making arrangements with the rest of the Empire. That would be indeed treating her as the Cinderella of the Empire.

Sir CHARLES ELLIOTT said that what he said was not that India should be left alone, but that the arrangements made with India would be made separately and apart from the arrangements made with the colonies.

On the motion of the CHAIRMAN, a hearty vote of thanks was accorded to Mr. Maclean for his paper.

a vast area in the Punjab which would come under irrigation when the schemes of the Irrigation Commission were carried out, and which could produce wheat, and that wheat would be almost safe from drought. The supply would be uncertain, and England could not rely on it, but it would be an enormous benefit to India to have that wheat as a reserve to fall back on in case of famine. It had been said, that if we taxed Russia's petroleum, Russia would pay us out somehow. But Russia was already paying us out to the best of its power. It taxed our exports 50 per cent., and we taxed nothing in return. If England had the £2,000,000 worth of petroleum to deal with, England would have an implement against Russia, which it had not now. He held that India had nothing whatever to do with retaliation, and the principle would not apply there, because no country is taxing Indian exports like they are taxing ours. He did not agree with Sir Edgar Vincent, that every country must be treated in reference to other countries. The whole system would, he believed, be simply one of bargaining, and each case would be treated on its own merits. There was a great deal that England could give India, and that India could give England. He entirely repudiated the doctrine that the arrangements which were being talked of now with regard to favouring the colonies would affect our relation to India. No claim to a new system of protection could arise in India. No doubt a good deal of protection would have been popular in India long ago, but it was marvellous that the cotton mills had so grown up without protection. There was an enormous wealth of minerals in India, but they made no steel or iron there. Those things would grow up much more quickly in India under protection, but the history of the cotton and jute mills showed that they could grow without it. He abandoned the suggestion he had made in the correspondence in The Times with the Chairman that the cotton duty in India could be removed and the countervailing excise duty kept up. He believed that from a revenue point of view would be quite practicable to abolish both. He believed that the policy of the unofficial programme if carried would be highly beneficial India. Arrangements between India and England as to preferential rates might be beneficial to both countries.

Sir FREDERICK YOUNG writes:-As I had not an opportunity of taking part in the discussion of the paper which was read by Mr. J. M. Maclean before the Indian Section of the Society of Arts, I crave your indulgence to make one or two comments upon it. The title of the paper on the invitation card, as sent to me, was as follows:-“ India's Place in an Imperial Federation." As one who, for so many years, has taken a prominent part in advocating the principle of this great national question, I attended the meeting under the impression that it would be treated by the author on the basis of the formula, advocated by its supporters, of the kind of represensation which would be given to India, as forming so important a part of it, in an Imperial Senate, or Parliament, or Council of the Empire. I was, of course, surprised to find that this initial important ingredient of the political scheme which is recognised by the term Imperial Federation was not the real subject of the paper. It was, instead, an essay on the aspects of the present and the proposed fiscal policy as affecting the Indian Empire. From the author's very pronounced views on the subject, the paper was an interesting and able one. While disagreeing with many of his points, I listened to it with much pleasure. As one who has studied the subject of Imperial Federation, and given expression to my opinions upon it for many years past, I feel bound, however, to enter my protest against the title given by Mr. Maclean to his paper, which was most misleading and incorrect. I consess I anticipated that, considering the title of it, he would have propounded his views on the question of the representation of India on the proposed Imperial Assembly, and not on the aspects of the fiscal policy at present agitating the nation, on this occasion. On the actual paper itself, there was evidently a wide difference of opinion among the speakers who discussed it. Had I done so myself, I should certainly

out

to

Mr. MACLEAN, in reply, said that they had had a purely protectionist speech from Sir Charles Elliott, but he really did not know what line Sir Charles proposed to take. Did he or did he not propose to do away with the Indian duties on the manufactures of Lancashire ? If that was his scheme what would he substitute for the revenue which the Indian Government' now made upon cotton goods ? Sir Charles Elliott bad told the meeting that it would be a very good thing for India to put a tax on Russian petroleum oil. But would that be for the benefit of the Indian people ? The people bought the Russian

have joined in differing from many of the points which the author urged would follow, most injuriously to India, from the adoption of any change in the present fiscal policy, and the substitution of a preferential tariff for every portion of the trade, India included, of the British Empire.

recommendation also has not been adopted ; and the consequence is, that the Indian Government, both at Westminster and Calcutta, are out of touch with Indian opinion, and at a serious disadvantage in dealing with questions affecting the economic and social welfare of the people. There remains the unofficial organisation of the Indian National Congress, which will shortly meet at Madras. If the Government would be pleased to ask the views of this representative body, such a reference would elicit a valuable expression of independent public opinion drawn from all the provinces of India.

FIFTH ORDINARY MEETING.

Wednesday, December 16, 1903 ; SIR ROBERT GIFFEN, K.C.B., LL.D., F.R.S., Member of the Council, in the chair.

Sir RICHARD TEMPLE writes :- Time did not permit me to make the only observation I have upon Mr. Maclean's remarks. The whole discussion strikes me, from a practical point of view, to be premature. India, under a Government subordinate to Parliament, depends entirely upon Parliament for its Imperial policy. The Imperial policy of Parliament from time to time is the outcome of the elections, and, in my judgment, we may take it for granted that, at the elections, India will not be considered. Therefore, it is the result of the situation that the position of India is not of itself considered in such questions as free trade, protection, preferential tariffs, and retaliation, when these are before Parliament as matters of Imperial policy. The only practical question, then, that Indian statesmen and thinkers have to consider is, how to meet and act under the conditions resulting from any particular decision of Par. liament in such matiers as these. It is true that the effect on India of a general proposed policy may be considered in the preliminary discussions thereon, but such consideration must perforce be acadentical until the proposals take a definite turn. There is nothing before the Indian Government and the Indian people to practically consider until some concrete point of detail is actually before Parliament for decision. It may be taken for granted that any such point in such a question as fiscal reform will be before Parliament for a long wbile, and there will be plenty of time to make representations to Parliament if a proposal involved in it is likely to operate adversely to India. To consider the position of India as matters stand now is very like crying out before you are hurt, for no one knows at present exactly what is going to be done.

The following candidates were proposed for election as members of the Society :Barzano, Carlo, 6, S. Andrea, Milan, Italy. Read, William, A.I.N.A., Camber Slip, Ports

mouth. White, Samuel, Dorset-house, Clifton, Bristol.

The following candidates were balloted for and duly elected members of the Society :Acker, Charles E., Acker Process Company, Niagara

Falls, New York, U.S.A. Baldwin, Harold 0., 3, Blurton-road, Fenton, Staf

fordshire. Furse, Captain A. D., F.R.G.S., Glenwood, Chel

verton-road, Putney, S.W. Gauntlett, Paul E., 6, Rood.lane, E.C. Green, George, J.P., Methven, Balshagray-avenue,

Partick, Glasgow. Ham, Frederic George Sison, A.M.I.Mech.E., 13,

Grosvenor-road, Westminster, S.W. Hills, David, Rosetta, Brackley-road, Beckenham,

and 2, Bayer-street, Golden-lane, E.C. O'Neill, James Joseph, M.I.N.A., 19, Roxburgh

street, Hillhead, Glasgow. Wall, Frank, Globe Works, Grays, Essex. Williams, Alfred, 13, Hillcroft-crescent, Ealing, W.

The paper read was

Sir WILLIAM WEDDERBURN writes : - In the debate which followed Mr. Maclean's paper on " Imperial Federation ” all the speakers were agreed on one point, viz., the injustice and absurdity of leaving India out of consideration in any wide scheme of fiscal change. How will the authorised and the unauthorised programmes affect India ? And what are the feelings and wishes of the Indian people regarding them? It is certainly important that we should know, but unfortunately there exists no official machinery for obtaining, at first hand, a representative opinion on these points. The Secretary of State for India might, under the existing law, appoint one or more representative Indians upon his Council, but he has never done so, although a recommendation to that effect was made in the minority report of the Royal Commission on Indian Expenditure. The same report advised that there should always be an Indian member on the Viceroy's executive council, but this

THE SCIENCE OF TAXATION AND

BUSINESS. BY SIR WILLIAM PREECE, K.C.B., F.R.S.

In the address which I had the honour to deliver to the Society as Chairman of the Council on November 21st, 1902, I dealt with the causes which result in successful or disastrous financial undertakings, and I endeavoured to show that there was a true science in

business. By science I mean not only the and Retail Prices in the United Kingdom in systematised and organised conclusions of 1902,” issued August 6th, 1903: “Memoranda, common sense, but the careful sifting and Statistical Tables and Charts bearing on British comparison of facts, and of the lessons of and Foreign Trade and Industrial Conditions," experience and observation. Laws have to be issued on August 20th, 1903 : The Board of deduced from these facts and experiments, Trade Journal, which is issued monthly. and when these laws are confirmed by verifi. These returns are authoritative and unquescation and anticipated by prediction then it tionable. The deductions from these facts can be said that we have established a science. may be disputable.

Science is a term commonly applied to the The business of Goverament is purely a discovery, development, and narration of the commercial matter. It should be outside laws of nature, but here I use it to indicate polemical politics. It is a question of £ s. d., the laws developed by the ordinary events of and ought to be entirely free from party bias man's life, collected in numbers as a nation, and platform acrimony. I am not a politician to render living healthy, comfortable, lucrative, myself. I spent thirty years in the Government and secure. It, therefore, considers property, service, and not one of my political chiefs could commerce, defence and government.

say that I belonged to one party or the other. The science of business is based on statistics I

purpose therefore to endeavour to consider which when tabulated and graphically recorded this question from a neutral point of view. as curves or charts indicate facts from which The neutral citizen has this immense ad. laws can be deduced. In my address of vantage, that he is able to read dispassionately last year I dealt in this manner with the each side of a question, and to deduce from special industries of water, gas, railways, rival statements his own conclusions. He is and telegraphs. I purpose now to deal with sure to learn all that can be said in favour of a the business of government, but only with certain proposition, and all that can be said that part of it which deals with the provision against it. The leaders op both sides sumof ways and means, which embraces what is marise the pros and cons. The Press, as a called our fiscal system, and which is unfolded rule, is very impartial in its publication of to the public every spring by the Chancellor speeches, both in and out of Parliament. Thus of the Exchequer in the annual balance- every one can form his own opinion. It is sheet submitted to Parliament, known as the quite certain that if the business principles Budget.

involved comply with the scientific requireThe chief aim of the ordinary business ments of truth they will appeal favourably to man is to raise an income to meet his the average intelligence of the country, and that just wants, but we all have a hankering will ensure their ultimate acceptance whichever after something else and that is the accu- party is in power. The fiscal system of the mulation of wealth. The business manager country appeals not only to the patriotism of of a great Empire has the same prime every Briton, but to his reason and his business object before him without the additional in- acumen. It is either right, or it is wrong. If centive of creating fortune and securing right it will be maintained, if wrong it will be worldly luxury and retired ease by pursuing reformed. How far does it comply with the profession, commerce, industry, literature, or scientific principles of business ? speculation. On the contrary his object is to reduce by every means in his power the

DEFINITIONS. incidence of taxation upon his masters—the public.

Commodities imported into this country or We have to deal with facts, and these facts

exported from it are classified as :must be exact and reliable. If any doubt is

1. Raw material. entertained as to their truth they must be dis

2. Food. carded for verification, and no deduction is

3. Partly manufactured articles. permissible on questionable facts. There are

4. Wholly manufactured articles. facts which are historical and facts which are statistical. The former I will confine to the

These may be imported or exported Free or period embraced by my own life, the latter to

Taxed. They may be taxed forthe elaborate returns that have been collected

1. Revenue. and published recently by the Board of Trade.

2. Protection. The returns are :-"Report on Wholesale

3. Prohibition.

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Protection is the imposition of a tax not for country. The potato disease appeared in the purpose of obtaining revenue solely but for Ireland with its terrible accompaniment, restricting unfair foreign competition, for main- famine. The agriculturist was the dominant taining the activity of home manufactures and power-protected by prohibitive taxation. The industries, and for defensive purposes.

manufacturer was beginning to assert himself. Prohibition means the incidence of a tax so Steam and the steam engine multiplied the high as to exclude goods entirely from home means of production. Railways expedited markets.

and economised transport. Raw materials The principles that determine the various and coal were more abundant and cheapened. incidences of taxation form the Fiscal Policy The Penny Post faciliated correspondence and of the country.

intercourse between supplier and consumer. This policy may be

The Bank system was placed on a per1. Free Trade.

manent and unassailable position. The Tele2. Restricted Trade.

graph was introduced in 1837 and became

later a greater innovator in the transactions Free Trade, the child of Adam Smith (1776) of commerce than even Rowland Hill's is a term very generally but improperly applied mails.

mails. The mode of conducting business to free importation only, but it is more correctly was revolutionised. The battle was between applied to the free interchange of imported agriculture and manufacture, and Peel, the or exported commodities between different

son of a great and successful manufacturer, countries. It was in the former sense that it who had amassed immense wealth by the loom, was used by Peel in 1842, anu in the latter decided the contest against the former. The sense by Pitt in 1787, and by Cobden and Corn Laws were repealed in 1846. his followers in 1846. It has never been The command of the sea acquired in the adopted in the latter sense by any country, not great Napoleonic wars, and the sailor instincts even by the United Kingdom. It is, however, of the nation placed the carrying trade of the in existence between the various constituent world in British hands. The introduction of States of the United States of America, and the screw propeller, and the marvellous imbetween the various units of the Empire of

provements in the production of iron and Germany. The policy adopted by the United

steel have, since Peel's day, revolutionised Kingdom is that of free imports and these only

the construction of ships—their size is impartially applied.

mense, their speed prodigious. Watt, ArkThe amount of taxation imposed upon wright, Stephenson, Faraday, Whitworth, different commodities is called a tariff, and Armstrong, and Bessemer were pioneers of our this tariff is preferential when it is relaxed in marvellous industrial productions, of the great favour of any particular country. Peel recog. trade of this country, and of its immense dised preference with our colonies in 1842. It wealth. Bessemer reduced the cost of the prowas abolished in 1846.

duction of steel from £50 a ton to £5! .

Gigantic steamers and high speeds have reHISTORICAL FACTS.

duced the cost of freight of corn across the Sir Robert Peel was the greatest Finance

Atlantic from 75. per quarter in 1873, to rod. in Minister that ever handled the fiscal system of

1901. What has the politician done compared this country. He was Prime Minister in the with this in economical policy ? The abolition year I was born, 1834, but he was in office for

of the Corn Laws in 1846 did not affect the price only a few months. The political parties were

of bread. The price of corn was in 1842, then called Whigs and Tories. Peel led the

735. per quarter, but in 1846 it was 543. 8d., Tories who were beginning to assume the title

and in 1873, 58s. 8d.! It is now 255. iod. of Conservatives. He came into office again

It is thus clear that the great reduction as Premier in 1841 and remained in power until

in price in this principal article of food has 1846. The great excitement of the period was

very little to do with fiscal policy, but everythe Corn Laws. There was great depression of

thing to do with scientific application, inventrade and much distress and even riot in the

tive genius, and engineering skill. Prices are determined by the vicissitudes of trade and by

the markets of the world, and not by legis-, • Although I have read the debates of 1842 and 1846 it lation. is to the admirable study on " Peel ” in “ English Men of Letters," by Thursfield, that I am indebted for much that

These great engineering operations, and not I say about that great statesman.

mere fiscal changes, have revolutionised the

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