Fortunately for us the favourable accounts given of Matabele and Mashona Lands hold out the prospect of a prolonged stimulation of British commerce from the recent settlements in these regions. As, in some cases, however, trade that is really carried on with foreign countries gets entered in our returns as trade with a British colony,1 so it may happen that much of the trade with these new British settlements may appear in these returns as trade with a foreign country.

Passing over the minor colonies of the temperate zone, let us now turn our attention to the principal tropical colonies and dependencies. The most important group is of course that of the British East Indies, and the most important constituent of that group, India itself. In several respects the external trade of India is highly remarkable. It consists mainly in the exchange of tropical and sub-tropical products of agriculture for manufactured and mineral products of the temperate zone. certain economists accordingly its external trade would be regarded as the very ideal of commerce. tropical produce is the largest in the world. Its export trade in tropical and sub

By

Further, the population of India is the largest in the world whose external trade is regulated on a free-trade basis. The officials who control the government of India being thoroughly imbued with the free-trade ideas which dominate the commercial policy of our own country, have arranged the tariff of India on the same principle. External trade is not exactly free. which an export duty is levied. But the import tariff is as limited as There is still one article (rice) on our own, and is obviously designed for revenue purposes only.

for

The increase in the amount and value of the external trade of India many years has also been very remarkable, as is shown by the following figures, which give in millions and decimals of millions of Rx. (tens of rupees) the average value of the sea-borne trade (the great bulk of the whole) for periods of five years ending the 31st of March. The figures relate to merchandise only, including government stores, but excluding coin and bullion:

92.68

These figures may be taken as representing fairly well the growth in volume of the trade of India in the period, but owing to the fall in gold prices, including that of silver, which has taken place in the interval, they are not suitable for comparison with the figures given above (p. 402) for the trade of the United Kingdom. I have accordingly calculated the value of the Indian trade in pounds sterling in accordance with the average rate of exchange of the rupee for each year. follow: The results here

:

1 For that reason a line has been introduced into all our diagrams showing the proportion of trade with the British colonies and dependencies, exclusive of that with Hong-Kong, this latter trade being virtually trade with a foreign country.

Indian Sea-borne Commerce.

Average value in millions and decimals of a million £.

1871-5.

31.68

53.66

1876-80. 1881-5.

33.67

43.40

53.42

67.30

1886-90.

45.58

65.83

Imports, . Exports, . These figures may be compared with those for the United Kingdom above referred to, and the comparison shows that in India the advance, on the whole, has been much greater and much better sustained than in our own country-a fact by no means surprising when we consider that within the period in question India added 11,000 miles to her railway system (thus more than trebling its length at the beginning of the period), and that the development of the traffic through the Suez Canal, which affects a much larger proportion of the commerce of India than of that of the United Kingdom, also belongs principally to this period.

Several features of the lines exhibiting the proportion of the commerce with India in the whole trade of the United Kingdom are worthy of particular attention. First, we may note the great rise in the proportion both of imports from India and exports to India, but especially in the former, at the beginning of the period included in our diagrams. This rise belongs to a period in the history of Indian commerce which illustrates in a striking manner the disadvantage of having trade excessively stimulated from temporary causes. The commerce so created is difficult or impossible to retain. The prosperity, or apparent prosperity, thus brought about is invariably followed by a period of adversity, the character of which differs according to circumstances. In some cases it may be a period of long and gradual decline; in others it may come in the form of sudden disaster. In the commerce of India the abnormal rise to which we are now referring was a consequence of the civil war in America, when the supply of raw cotton was so greatly reduced that the cultivation of this crop was entered on with great eagerness in all parts of the world with a suitable climate and a favourable situation for exporting the product. India was the country most powerfully affected by the crisis. Its cotton production was suddenly increased to an enormous extent. During the course of the crisis its exporting power was greatly increased by the completion (in 1863) of the railway from Bombay up the Bhor Ghát, a railway affording a greatly improved outlet for the most productive cotton-growing districts of the Indian table-land. The great rise in the proportion of the imports from India during this period was due not only to the increased amount of Indian cotton exported to this country, but also to the rise in value of the commodity. The prosperity lasted only to the end of the American war. "It led," says Sir William Hunter, " to much wild speculation. The collapse came in 1865. . . . The bubble schemes and financial companies in Bombay city burst one after the other, and brought down in the general ruin the quasi-official Bank of Bombay." In 1865-6 the quantity of raw cotton exported was nearly three-fifths more than in 1864-5, but the total value was about £2,000,000 less. Since 1865-6 the total export of raw cotton from India has only in one year (1871-2) exceeded the amount then exported, and in several years it has sunk below the amount reached before the period of abnormal but temporary prosperity.

Considered from the British point of view, Indian trade is in one respect at least highly satisfactory. India is the most important part of the empire as a market for British produce. Plate III. shows a decline in relative importance in this respect after the abnormal rise in 1863-4, due indirectly to the same cause as the rise in the imports from India just considered; but after 1872 there was, on the whole, a prolonged rise, and a high relative value has been maintained to the last. It must be remembered, moreover, that the diagrams, exhibiting as they do only relative values, do not necessarily imply fluctuations in the total actual value of the trade corresponding with the variations in the lines there drawn. To test whether this is so or not, we must have recourse to the figures showing the actual values, and when this is done the result turns out to be more satisfactory than that which seems to be presented by the diagram now under consideration. Taking from Indian returns the average of the five years ending March 31st, 1890, we find that the total value of the merchandise imported from the United Kingdom in that period was nearly four-fifths (78.5 per cent.) of the total value imported from all countries, a proportion in excess of that of at least the three previous periods of equal length. A further examination of the figures shows, too, that this advance in British commerce with India is not due to any increased export to India of foreign and colonial produce from the United Kingdom. It shows a real growth in the value of the Indian market for British produce.

The Import Diagram, Plate I., conveys the impression of a less satisfactory state of matters from the point of view of the British merchant, and in this case a closer study of the figures confirms, and even strengthens, that impression. In the period of five years ending March 31st, 1875, the value of the exports by sea from British India was about onehalf the total value. In each subsequent period of five years there was a considerable decline in this proportion until in the last period (ending March 31st, 1890) the proportion was less than two-fifths (394 per cent.). This cannot be regarded as anything else than an inevitable consequence of the opening of the Suez Canal. The tropical and sub-tropical produce of India is of a kind required more or less in all temperate countries. Previously to the opening of the Suez Canal, Great Britain was the one distributing centre for this produce. Since that event it has, however, become less and less so. Much of it is now discharged directly at Mediterranean ports on the route from India to Great Britain by way of that canal. The countries that have thereby principally increased their direct trade with India hitherto are Egypt, Austro-Hungary, Italy, and France. In quite recent years Germany also has greatly increased this branch of its trade. Though the imports from Germany into India still remain small, the exports from India to Germany have increased about sevenfold in the four years 1885-6 to 1886-90-in gold values from about £300,000 to about £2,000,000. Possibly this result also is one of the more indirect consequences of the opening of the Suez Canal. But even though that event has undoubtedly led to the diversion of a certain proportion of Indian and other commerce from British ports, it is to be hoped that no one will jump to the conclusion that it has been, on the whole, injurious to our commerce. It has so greatly increased the

magnitude of international commerce generally that the British gain therefrom has assuredly been greater than its loss.

So much with regard to the countries trading with India. With respect to the commodities in which Indian trade is carried on there are also one or two matters well worthy of attention. We have said that the exports of India consist mainly of tropical and sub-tropical produce. But there are some notable exceptions to this rule. In the first place, there is a large part of India in which the cool season of the year corresponds with the only productive season of certain parts of the temperate zone, and in which, accordingly, the products of that season are not tropical. From this region England has, since the beginning of last decade, derived large quantities of wheat, and for a few years the amount of this export increased so rapidly as to excite the greatest alarm among the agricultural population of this country. There is, in fact, no reason to believe that this export has reached its limit, but the statistics of recent years have shown that at the price to which wheat fell, partly in consequence of this new contribution to the English wheat market, the export from India was not capable of the continuous expansion that was at one time apprehended. Down to 1890 inclusive, the maximum import of Indian wheat into the United Kingdom was that of the year 1885.

Secondly, the export of certain manufactures from India has increased of late years very considerably-in one case with quite remarkable steadiness and rapidity. The export referred to in this case is that of cotton yarn, which is principally sent to China and Japan. It indicates the growth of an industry in direct competition with one of the industries of Lancashire, and the figures showing the severity of this competition are very striking. The export of cotton yarn from British India to the countries mentioned increased year by year, without exception, from somewhat less than 8,000,000 lbs. in the year ending March 31st, 1877, to upwards of 162 million lbs. in the year ending March 31st, 1891. During the same period the amount of the British export of the same commodity to the same destinations varied greatly. It has never reached 48 million lbs., and in recent years it has shown no tendency to increase at all.

Looking to such facts as these, Sir William Hunter has declared that he should not shrink from "the generalisation that the world seemed now to be entering on a new era of competition-the competition between the productive powers of the tropics and of the temperate zone."1 In the case in question, however, it is doubtful whether the greater productiveness of the tropics is an element in the result at all. The chief factor in favour of India in this commerce appears to be that India not only produces the raw material required for the industry, but also lies much nearer than England to the markets of Eastern Asia. India's main advantage is thus geographical, but not the advantage that it derives from being a tropical instead of a temperate country, except in that the raw material in this case happens to be a tropical or sub-tropical

1 Paper on the Industrial Era in India by Sir William Hunter, K.C.S.I., etc., Proceed. Royal Colonial Inst. vol. xix. (1887-8), p. 275.

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yarn ex

product. The advantage of India in this case is analogous to that which Scandinavia has for supplying timber products to Western Europe, and Canada for supplying similar products to the United States. The ported by India is only such as can be made with Indian cotton—that is, coarse yarns, or" low counts," as they are called in Lancashire. While India's export of such yarns has been growing, and has thus put a check on the growth of the export of similar yarns of British manufacture, India's own import of cotton yarn from the United Kingdom has gone on increasing, and that on the whole not slowly. But this increase appears to be in yarns of a better quality. Whereas in 1881 the cotton yarn exported from the United Kingdom to India constituted 15.8 per cent. of the quantity and 19.1 per cent. of the value of the total British export of this commodity, it made up in 1890, 19-2 per cent. of the quantity and 25.7 per cent. of the value. The value of this British export to India has thus grown at a greater rate relatively than the amount, from which it would appear that India is now able to buy from the United Kingdom more expensive yarns than formerly-a fact of no little significance when we consider the importance of this commodity in the consumption of the great bulk of the people.

The only other rising export of importance from India coming under the head of manufactured articles is that of leather. quantities of hides and skins which India exports, a steadily increasing Of the enormous proportion leaves the country in the dressed or tanned form. In this case also geographical facts account for the change. advantages which India enjoys are similar to those possessed by the For this trade the United States-abundant supplies of the raw material and the tanning agents, together with a large industrial population.

But though geographical factors, apart from the greater productiveness of the tropics, account in a large measure for the growth of Indian manufactures, this greater productiveness is, nevertheless, a fact of the highest importance commercially. It gives rise in the first place to a much greater variety in the products utilisable in commerce whether in the shape of raw materials or articles of food, etc. The tropics have thus a geographical advantage for a greater number of products than the temperate zone. It leads also to greater cheapness in the production of food even where the population is dense, and hence causes wages to be relatively lower than in the temperate zone. a tropical situation could tend to give any advantage over other parts of It is only in this way that the world in the working of minerals where they happen to exist. But both these advantages would appear to be counterbalanced to a great extent by the diminished energy of the worker in a tropical climate. regards wages, it was stated in evidence before the committee of inquiry As on Bombay and Lancashire cotton-spinning, appointed by the Manchester

1 No doubt India also derives a certain advantage in carrying on this commerce from the fact that Indian trade with China and Japan is free from the uncertainty attaching to the British commerce with these countries, in consequence of the recent changes in the relative value of gold and silver. It may be noted, however, that the Indian exports here spoken of have increased even more largely in the last two or three years, when the value of silver was rising, than in previous years, when it was falling.

VOL. VII.

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