make the excess value of Indian exports during the twentytwo years, 1860-1881, 428 millions.1 To obviate all doubt, let ten per cent be only added; that will leave the deficit 365 millions, or nearly 17 millions per annum.

But there is another more definite addition required to India's unsettled balance, namely, the public debt incurred abroad (almost all in England) during the period. It is difficult without special official aid to state the exact sum of this factor. But it is plain that during the period a total of 83 millions was added to the debt of India. Of this amount, one account before us gives 27 millions as incurred in England; to which may properly be added, as affecting the imports of 1860, some portion of over eight millions loan, taken up in England in 1858-59, making say 30 millions; though from the Statistical Abstract, it would appear that 32 millions were added to the debt in England during the years 1872 to 1881. Then it must be remembered that, of the loans issued in India, a large proportion was supplied by English bankers and investors; so that, of the total 83 millions incurred during our twenty-two years, quite 50 millions have been supplied from Europe.2 Again, in the same period there has been a large addition to the railway and public works debt of India. The increase of railway debt in the period

takes great care (section 4) to estimate the share due to England for the "service of conveyance." On his method this plainly requires an addition to be made to the Indian export values: and that is the course that has long been taken by myself and others in dealing with Indian trade statistics. It is true that, according to the formula given by Mr. Giffen (foot-note p. 207), “A non-carrying nation . . . ought to show in its accounts an equality between imports at the place of arrival and exports at the place of departure." India is exactly an instance of "a non-carrying nation; " but, as pointed out in the text, such formal equality in the accounts between imports and exports is per se impracticable.

1 Fifteen per cent of 1,254,280,000 188,142,000. 188,142,000+239,880,000 = 428,022,000.

2 A direct confirmation of this estimate of Indian loan funds advanced by English investors or transferred to Europe in the period, especially as regards the latter portion of it (1873-1881), is afforded by the official returns, which show nine millions' worth of "rupee paper" as transferred from India to England in those seven years. This sum would go back through the imports into India, either as specie or merchandise, and therefore must be deducted from the figure of imports, as not constituting any commercial recompense for exports; or it should be added to exports, as additional debt due to India.

was close on 47 millions. Most of this amount passed through the import valuations in the shape of railway material, etc.; but we need not deduct this from the import totals, or add the same to the balance of exports, since it exists (most of it) in the productive form of railway lines. Thus the account of India's commercial transactions with the outer world for the period we have taken will stand thus:

Exports of British India, 1860-81 inclusive.

Merchandise and treasure

Add ten per cent as representing freight and trade profits claimable

Add for public debt taken up in Europe and local debt transferred from India

£1,254,280,000

125,430,000

50,000,000

It is appropriate to notice that both the earlier and later portions of the period under notice were peculiarly affected by "the disturbing influence of great economic events." For at least two of the earlier years, the demands of the Home government on the Indian treasuries were almost suspended, debt being incurred instead; while, during the first five or six years, the exceptional value given to Indian produce by the American war enhanced the figure of the exports more rapidly than that of imports. On the other hand, the large influx of railway capital swelled the figure of imports, especially of bullion, this for the time reducing and almost suspending India's chronic trade deficit. Again, during the later years, the cessation of railway payments in, and the heavy enhancements of "Home charges" paid out, have swelled the deficit.

It may be well to look at a more recent period of Indian trade returns, for this will bring us more directly face to face

with the great fact of India's chronic commercial deficit. Such returns are given, in very compendious form, in a recent official review of which Mr. J. S. O'Conor is the editor. He sets out the excess of exports (taking treasure into account on both sides) in the ten years, 1873-83. The list begins with 19 crores 2 of rupees in 1873-4; but the years vary- owing to causes well known to those who are familiar with the subject from 10% in 1877-8 to nearly 21 crores in 1882-3. The total excess of exports in the ten years is shown to be 182, 16,92,440 rupees; which may be rendered in sterling either at the conventional ten rupees to the pound, which gives £182,169,244, or, if The Economist's rate (of twelve rupees) be applied, the deficit shown is the sufficiently astounding sum of £151,807,700, or over 15 millions sterling per annum, for which India has no material return a balance of trade to which it is bitter irony to apply the conventional phrase "in her favor," for it is a balance that is never adjusted. Be it noted that these 15 millions represent the minimum, without the adjusting enhancements of the export figures which are really required, as already shown; and, therefore, that 15 millions per annum represent a fact beyond all question or cavil.

As still later figures are now available, it may be well to add them. They cover the four years ending with March, 1887, and are as follows:

1,00,000, i.e. one lakh 100,000.

1,00,00,000, i.e. one crore one hundred lakhs = 10,000,000.

Excess value of exports for the four years = Rs. 67,85,53,4101

At the conventional rate of Rs. 10 to the £ this = £16,963,835

per annum.

In proceeding to point out of what this unredressed balance consists, it may be assumed that this part of my subject is so far a matter of common knowledge that it need not be dwelt upon at any length. During the period of twenty-two years examined above, the sums received by the Secretary of State, for his bills drawn on the Indian treasuries, present an aggregate of rather over 207 millions sterling (about 350 crores of rupees). This aggregate would have been 30 millions more, had not Indian loans to that extent been taken up in England. Moreover the greater part of the 47 millions of railway capital subscribed in the period, being paid into the Secretary of State's account in London, kept down his drafts by that amount; but, as we have said, most of that railway capital is represented in the imports of the period, and so cannot be counted again as representing part of the deficit. For the rest of the 415 millions, an amount nearly as much again as the sum of the Council drafts,-explanation must be sought in the remittances of the Indian government's (European) servants, civil and military, and of soldiers; in the profits of merchants and

1 In this period over ten millions sterling has been added to public debt borrowed on England; and that sum may be regarded as, in effect, an addition to the excess of exports as shown above.

other European traders (other than freight on exports); in profits on factories and other industrial enterprises; and in the numberless ways in which Great Britain, powerful in its command of capital, inevitably lays its dependency, weak in its impecuniosity, under contribution.

Though the topic does not strictly pertain to the question before us, it is pertinent here to remind Englishmen that by far the greater part of India's deficit comes to swell the surplus of the United Kingdom's annual profits and to sustain those accumulations to which British statisticians often point with excusable pride. Let any one accustomed to trace the streams of profit that flow towards the seats of capital and the centre of political power, consider fully and fairly the vast balances shown in the preceding tables,-400 millions in the twentytwo years and 150 to 180 in the ten years, and some just realization, some clearer conception of the value of India to England may thereby be obtained.

II.

And now, for any student of social statistics, the practical question that arises out of the facts stated is: What effect is produced on the condition of the people of India by this excess of exports, this balance of trade that is never settled, this continued drain of resources never compensated from without? The force of this question becomes much accentuated when we take into account the low industrial efficiency of India as compared with Europe or the United States, where we find highly organized labor and marvellous mechanical forces. Moreover, the deficiencies of India in the materials of modern productive power contrast strongly with the enormous stores of coal and iron possessed by Great Britain and the United States, the latter having, also, vast available resources of virgin soil.

It must be remarked that, while a considerable portion of India's unrecompensed exports is the result of voluntary payment of interest on capital and for skilled management, the major portion has to be yielded up under the compulsion of