Chapter 19

There does not appear to be any absolute necessity for dealing with this question at once, but Sir Roper Lethbridge is quite justified in calling attention to it, for it is not only conceivable, but even probable, that at no very remote period the Government of India will have to deal with a problem which, it may readily be admitted, will tax their statesmanship to the very utmost. It is no exaggeration to say that since the Crown took over the direct management of Indian affairs no issue of greater magnitude has been raised. Moreover, although Lord Crewe had an easy task in showing that in some respects the difficulties attendant on any solution would be enhanced rather than diminished if the fiscal policy of the British Government in the United Kingdom underwent a radical change, it is none the less true that those difficulties will remain of a very formidable character even if no such change is effected.

It is essential to bear in mind that the difficulties which beset this question are not solely fiscal, but also political. This feature is almost invariably characteristic of Oriental finance, and nowhere is it more prominent than in India. The writer of the present article can speak with some special knowledge of the circumstances attendant on the great Free Trade measures introduced in India under the auspices of Lord Ripon. He can state very confidently that, although Lord Ripon and all the leading members of his Government were convinced Free Traders, it was the political to a far greater extent than the fiscal arguments which led them to the conclusion that the Indian Customs barriers should be abolished. They foresaw that the rival commercial interests of India and Lancashire would cause a rankling and persistent sore which might do infinite political harm. They wished, therefore, to apply a timely remedy, and it cannot be doubted that, so long as it lasted, the remedy was effective. In most respects the fiscal policy adopted then and that now advocated by Sir Roper Lethbridge and his coadjutors are the poles asunder. Nevertheless, in one respect they coincide. Sir Roper Lethbridge places in the forefront of his proposals the abolition both of the import duty on cotton goods and the corresponding excise duty levied in India. He is unquestionably right. That is an ideal which both Free Traders and Protectionists may very reasonably seek to attain. It is, in fact, the only really satisfactory solution of the main point at issue. The difficulty is to realise this ideal without doing more than an equivalent amount of injury to Indian interests in other directions.

The chief arguments by which Sir Roper Lethbridge defends the special proposals which he advances are three in number. They are (1) that the nascent industries of India require protection; (2) that it is necessary to raise more revenue, and that the suggestions now made afford an unobjectionable method for achieving this object; and (3) that the economic facts connected with India afford special facilities for the adoption of a policy of retaliation.

From a purely economic point of view the first of these three pleas is singularly inconclusive.

It was refuted by Sir Fleetwood Wilson, whom both Mr. Austen Chamberlain, in the introduction which he has written to Sir Roper Lethbridge's book, and Sir Roper Lethbridge himself seem to regard, on grounds which are apparently somewhat insufficient, as a partial convert to their views. It may be said without exaggeration that if any country in the world is likely to benefit by the adoption of Free Trade principles that country is India. Industries cannot, as Sir Fleetwood Wilson very truly said, be "encouraged" by means of a protective tariff without raising home prices. Without going over all the well-trodden ground on this subject, which must be familiar to all who have taken part in the fiscal controversy, and without, moreover, denying that nascent industries have in some countries been successfully encouraged by the adoption of a protective system, it will be sufficient to say that, looking at all the economic facts existent in India, the period of partial transition from agriculture to industries, during which the process of encouragement will have to be maintained, will almost certainly last much longer than even in America or Germany, and that during the whole of that lengthy period the mass of the population, who are very poor and who are engaged in agricultural pursuits, will not benefit from the protection, although they will at the same time suffer grievously from the rise in prices.

The main importance of this argument, however, is not to be derived from its economic value, but rather from the important political fact that it is one which finds favour with a large and influential body of Indian opinion. Sir Roper Lethbridge claims that the leaders of Indian thought are almost to a man Protectionists, and in his work he gives, as an example of their views, the very able speech delivered by Sir Gangadhar Chitnavis in the Calcutta Legislative Council last March.[96] He is probably right; neither is anything to be gained by ignoring the gravity of the situation which is thus created. Whether the Indian Protectionists be right or wrong as to the fiscal policy which is best adapted to Indian interests, there is no denying the fact that with Protection flourishing in the self-governing colonies, with the recent enlargement of the scope and functions of representative institutions in India, and with the grievance created by the sacrifice of the opium revenue on the altar of British vicarious philanthropy, it is a serious matter for the British Government to assert their own views if those views run diametrically counter to the wishes expressed by the only representatives of Indian opinion who are in a position to make their voices heard. Nevertheless, there are two limitations on the extent to which concessions can or ought to be made to Indian opinion. The first is based on the necessities of English internal politics. It cannot be doubted that although Sir Gangadhar Chitnavis and those who agree with him may perhaps be willing, as a _pis aller_, to accept Sir Roper Lethbridge's preferential plan, what they really want is not Preference but Protection against England, and this they cannot have, because, in Sir Roper Lethbridge's words, "no British Government that offered India Protection against Lancashire would live for a week." The second limitation is based on less egotistical and, therefore, nobler grounds. In spite of recent concessions, India is still, politically speaking, _in statu pupillari_, neither do the concessions recently made in the direction of granting self-governing institutions dispense the British Government from the duty of looking to the interests of the masses, who are at present very inadequately represented. It must be remembered that in India, perhaps even more than elsewhere, the voice of the consumer is hushed, whilst that of the producer is loud and strident.

The second of Sir Roper Lethbridge's arguments is based on the alleged necessity of raising more revenue. He, as also Sir Gangadhar Chitnavis, take it for granted that this necessity has already arisen. It would be essential, before taking any practical steps to give effect to the proposals now under discussion, to ascertain beyond any manner of doubt whether this statement is correct, and also, if correct, what alternatives exist to the plan proposed by Sir Roper Lethbridge. Sir Fleetwood Wilson carefully abstained from pledging himself to the accuracy of Sir Gangadhar Chitnavis's view on this point. "There is," he said, "much room for the development of India's other resources, and it has yet to be shown that there is no room for further economies in our administration." In the meanwhile, it would tend to the elucidation of the subject if Sir Roper Lethbridge and those who agree with him would lay before the world a carefully prepared and detailed estimate of the financial results which they consider would accrue from the adoption of their proposals. We are told, for instance, that raw jute to the value of £13,000,000 is exported annually from Bengal, of which only £3,000,000 worth is worked up in Great Britain, and that "a moderate duty" on this article would produce two millions a year. The prospect of obtaining a revenue of £2,000,000 in the manner proposed by Sir Roper Lethbridge appears at first sight somewhat illusory. In the first place, the tax would, on the basis of Sir Roper Lethbridge's figures, amount to 20 per cent, which can scarcely be called "moderate." In the second place, unless an equivalent export duty were imposed at British ports it would appear probable that the process of re-export for the benefit of "the lucky artisans of foreign protected nations" would not merely continue unchecked, but would even be encouraged, for those artisans would certainly not be supplied direct from India with the duty-laden raw material, but would draw their supplies from the jute sent to the ports of the United Kingdom, which would have paid no duty. Is it, moreover, quite certain that a duty such as that proposed by Sir Roper Lethbridge would be insufficient, as he alleges, "to bring in any competing fibres in the world"? These and other cognate points manifestly require further elucidation.

The third argument adduced by Sir Roper Lethbridge is based on the allegation that India is in a specially favourable position to adopt a policy of retaliation. It is unnecessary to go into the general arguments for and against retaliatory duties. They have been exhausted in the very remarkable and frigidly impartial book written on this subject by Professor Dietzel. It will be sufficient to say that here Sir Roper Lethbridge is on stronger ground. The main argument against retaliation in the United Kingdom is that foreign nations, by stopping our supplies of raw material, could check our manufactures. We are, therefore, in a singularly unfavourable position for engaging in a tariff war. The case of India is wholly different. Foreign nations cannot, it is alleged, dispense with the raw material which India supplies. There is, therefore, a good _prima facie_ case for supposing that India has relatively little to fear from retaliation on their part.

It would be impossible within the limits of the present article to deal fully with all the aspects of this vitally important question. Attention may, however, be drawn to the very weighty remarks of Sir Fleetwood Wilson when he speaks of "the great alteration which a tariff war in India would effect in the balance of our trade, in the arrangements that now exist for the payment of our external debt, and in the whole of our exchange policy. This aspect of the question is one of extraordinary complexity, as well as of no small speculation." On the whole, although the proposals made by Sir Roper Lethbridge and his associates deserve full and fair consideration, it is most earnestly to be hoped that party leaders in this country will insist on their elaboration in full detail, and will then study every aspect of the question with the utmost care before giving even a qualified pledge to afford them support. The situation is already sufficiently difficult and complicated. It is not improbable that the difficulties and complications, far from being mitigated, would be increased by the pursuit into the economic wilderness of the _ignis fatuus_ involved in the idea that it is possible for a nation to impose a tax on itself and then make the inhabitants of other countries pay the whole or the greater part of it.

[Footnote 96: It may be noted that Sir Gangadhar Chitnavis's idea of Preference differs widely from that entertained by Sir Roper Lethbridge. The former apparently wishes to abolish the excise duty on Indian cotton goods, but to maintain that levied on similar goods imported from the United Kingdom, whilst levying a still higher duty on goods from other countries.]

XXI

ROME AND MUNICIPAL GOVERNMENT[97]

_"The Spectator," July 19, 1913_

In spite of the obvious danger of establishing doubtful analogies and of making insufficient allowance for differences, the history of Imperial Rome can never cease to be of more than academic interest to the statesmen and politicians of Imperial England. Rome bequeathed to us much that is of inestimable value, both in the way of precept and example. She also bequeathed to us a word of ill omen--the word "Imperialism." The attempt to embody the broad outlines of a policy in a single word or phrase has at times exercised great influence in deciding the fate of nations. M. Vandal[98] says with truth, "Nul ne comprendra la Révolution s'il ne tient compte de l'extraordinaire empire exercé à cette époque par les mots et les formules." Imperialism, though infinitely preferable to its quasi-synonym Caesarism, is, in fact, a term which, although not absolutely incorrect, is at the same time, by reason of its historical associations, misleading when applied to the mild and beneficent hegemony exercised by the rulers and people of England over their scattered transmarine dominions. It affords a convenient peg on which hostile critics, such as Mr. Mallik, whose work was reviewed last week in these columns,[99] as also those ultra-cosmopolitan Englishmen who are the friends of every country but their own, may hang partisan homilies dwelling on the brutality of conquest and on all the harsh features of alien rule, whilst they leave sedulously in the background that aspect of the case which Polybius, parodying a famous saying of Themistocles, embodied in a phrase which he attributes to the Greeks after they had been absorbed into the Roman Empire, "If we had not been quickly ruined, we should not have been saved." This pessimistic aspect of Imperialism has certainly to some extent an historical basis. It is founded on the procedure generally believed to have been adopted in the process by which Rome acquired the dominion of the world. The careful attention given of late years to the study of inscriptions, and generally the results obtained by the co-operation established between historians and those who have more especially studied other branches of science, such as archaeology, epigraphy, and numismatics, have, however, now enabled us to approach the question of Roman expansion with far greater advantages than those possessed by writers even so late as the days of Mommsen. We are able to reply with a greater degree of confidence than at any previous period to the question of how far Roman policy was really associated with those principles and practices which many are accustomed to designate as Imperial. The valuable and erudite work which Mr. Reid has now given to the world comes opportunely to remind us of a very obvious and commonplace consideration. It is that although Roman expansion not only began, but was far advanced during the days of the Republic, Roman Imperialism did not exist before the creation of Roman Emperors, and did not in any considerable degree develop the vices generally, and sometimes rightly, attributed to the system until some while after Republican had given way to Imperial sway. "The residuary impression of the ancient world," Mr. Reid says in his preface, "left by a classical education comprises commonly the idea that the Romans ran, so to speak, a sort of political steam-roller over the ancient world. This has a semblance of truth for the period of decline, but none for the earlier days."

The fundamental idea which ran through the whole of Roman policy during the earliest, which was also the wisest and most statesmanlike stage of expansion, was not any desire to ensure the detailed and direct government of a number of outlying districts from one all-powerful centre, but rather to adopt every possible means calculated to maintain local autonomy, and to minimise the interference of the central authority. Herself originally a city-state, Rome aspired to become the predominant partner in a federation of municipalities, to which autonomy was granted even to the extent of waiving that prerogative which has generally been considered the distinctive mark of sovereignty, viz. the right of coinage. Broadly speaking, the only conditions imposed were very similar to those now forming the basis of the relations between the British Government and the Native States of India. These were (1) that the various commonwealths should keep the peace between each other; and (2) that their foreign policy should be dictated by Rome. It is often tacitly assumed, Mr. Reid says, that "in dealing with conquered peoples, the Romans were animated from the first by a passion for immediate domination and for grinding uniformity." This idea is not merely false; it is the very reverse of the truth. The most distinctive feature of Roman rule during the early period of expansion was its marvellous elasticity and pliability. Everywhere local customs were scrupulously respected. Everywhere the maintenance of whatever autonomous institutions existed at the time of conquest was secured. Everywhere the allies were treated with what the Greeks termed ἐπιμέλεια, which may be rendered into English by the word "consideration." Nowhere was the fatal mistake made of endeavouring to stamp out by force a local language or dialect, whilst until the Romans were brought into contact with the stubborn monotheism of the Jews, the easy-going pantheistic ideas current in the ancient world readily obviated the occurrence of any serious difficulties based on religious belief or ritual.

That this system produced results which were, from a political point of view, eminently satisfactory cannot for a moment be doubted. Mr. Reid says--and it were well that those who are interested in the cause of British Imperial Federation should note the remark--"In history the lightest bonds have often proved to be the strongest." The loosely compacted alliance of the Italic states withstood all the efforts of Hannibal to rend it asunder. The Roman system, in fact, created a double patriotism, that which attached itself to the locality, and that which broadened out into devotion to the metropolis. Neither was the one allegiance destructive of the other. When Ennius made his famous boast he did not mean that he spurned Rudiae and that he would for the future look exclusively to Rome as his mother-country, but rather that both the smaller and the larger patriotism would continue to exist side by side. "English local life," it has been truly said, "was the source and safeguard of English liberty."[100] It may be said with equal truth that the notion of constituting self-governing town communities as the basis of Empire, which, Mr. Reid tells us, "was deeply ingrained in the Roman consciousness," stood Rome in good stead during some of the most stormy periods of her history. The process of voluntary Romanisation was so speedy that the natives of any province which, to use the Roman expression, had been but recently "pacated," became in a very short time loyal and zealous Roman subjects, and rarely if ever took advantage of distress elsewhere to vindicate their independence by seeking to cast off the light shackles which had been imposed on them.

"So long as municipal liberty maintained its vigour, the empire flourished." This is the fundamental fact to be borne in mind in dealing with the history of Roman expansion. Mr. Reid then takes us, step by step and province by province, through the pitiful history of subsequent deterioration and decay. After the Hannibalic war, Roman hegemony in Italy began to pass into domination. A policy of unwise exclusion applied to the federated states and cities, coupled with the assertion of irritating privileges on behalf of Roman citizens, led to the cataclysm of the Great Social War, at the close of which burgess rights were reluctantly conceded to all Italic communities who had not joined the rebels. Then followed the era of the great Julius, who probably--though of this we cannot be quite certain--wished to create a "world-state" with Rome as its head; Augustus, to whose genius and administrative ability tardy justice is now being done, and who, albeit he continued the policy of his uncle, possibly leant rather more to the idea, realised eighteen centuries later by Cavour, of a united Italy; Adrian, who aimed above all things at the consolidation of the Empire; and many others. Consolidation in whatsoever form almost necessarily connoted the insistence on some degree of uniformity, and "when the Emperors pressed uniformity upon the imperial system, it rapidly went to pieces." Finally, we get to the stage of Imperial penury and extravagance, accompanied by centralisation _in extremis_, when "hordes of official locusts, military and civil," were let loose on the land, and the tax-gatherers destroyed the main sources of the public revenues, with the result that the tax-payers were utterly ruined. The municipal system possessed wonderful vitality, and displayed remarkable aptitude for offering a passive resistance to the attacks directed against it. It survived longer than might have been expected. But when it became clear that the only function which the _curiales_ were expected to perform was to emulate the Danaides by pouring gold into the bottomless cask of the Imperial Treasury,[101] they naturally rejected the dubious honours conferred on them, and fled either to be the companions of the monks in the desert or elsewhere so as to be safe from the crushing load of Imperial distinction. Mr. Hodgkin and others have pointed out that the diversion of local funds to the Imperial Exchequer was one of the proximate causes which led to the downfall of the empire. Whilst the municipal system lasted, it produced admirable results. Dealing with Northern Africa, whose progress was eventually arrested by the withering hand of Islam, Mr. Reid speaks of "the contrast between the Roman civilisation and the culture which exists in the same regions to-day; flourishing cities, villages, and farms abounded in districts which are now sterile and deserted."