If, however, the ryot must maintain the luxury of his English administrators before his own wants can be supplied, so, too, must he maintain the English trader to the ruin of his own trade. I am repeating native arguments when I complain that the necessity of considering the advantage of Manchester capitalists stands seriously in the way of an honest framer of the Indian Budget, and that, whereas the Finance Minister of every English colony is at liberty to raise money by import duties and generally does so, the Indian Minister is precluded from that source of revenue. I have argued the matter of Free Trade out with the native economists, and they seem to me perfectly to understand it. They know that as applied to England, a manufacturing country which imports its food, Free Trade is considered a necessity of financial life. But they deny that the doctrine applies with equal cogency to India. India, they say, is a produce-exporting country like the United States or the Australian colonies. It imports no single article of prime necessity, iron and coal perhaps excepted, and the cotton and other manufactured goods consumed there are luxuries only used by the rich, and especially by the Europeans. It is certain that no ryot in all India wears any cotton clothing of foreign make, or has his means of existence made one wit cheaper for him by Free Trade. Import duties, then, would tax the rich only, and the rich in India are hardly taxed at all. Yet, because Free Trade is of advantage to England, India must forgo her own advantage. This, the natives say, may be a political necessity, but it is not ruling India financially for India’s good. I confess I do not see where the flaw in their argument lies.
They say, moreover, that Free Trade in manufactured goods has destroyed the native industries and given nothing in their stead. When the hand-looms a hundred years ago were ruined in the English counties, the rural population migrated to the towns and found work in the great factories. But in India this has hardly at all happened. The ryot who used to weave is left without labour of any sort during his spare time, for distances are great and there is little demand for labour in the towns, and he remains of necessity idle, so that it is difficult to avoid the conclusion that a present of his labour has been made by Anglo-Indian finance to his English rival. The doctrine of advantage from buying in the cheapest market does not help him, for he buys nothing cheaper; and if the English manufacturer shares the advantage with any one in India, it is with the town consumer, not with the ryot. Every native economist, therefore, whom I have spoken with on the subject, would impose import duties on manufactured articles except machinery. Thus, they say, a tax would be levied upon the rich; and if it acted as a protection and stimulus to home manufactures, why, so much the better. With protection, factories could be established in the Indian country towns in which the surplus labour of the ryot would find employment, and so the injury done him be in part redressed. If this doctrine is unsound, I shall be glad to hear in what manner; for at present it seems to me to have not a little reason.[15]