In July, 1877, the House of Commons passed a resolution: that "The duties now levied upon cotton manufactures imported into India, being protective in their nature, are contrary to sound commercial policy, and ought to be repealed without delay as soon as. the financial condition of India will permit."

In 1878 the Government of India exempted from import duty cer-tain coarser kinds of cotton manufactures which were found to be specially subject to competition from similar goods manufactured in India. In March, 1879, the exemption was carried further, and was made applicable to "all cotton goods containing no yarn of a higher number than thirties." In April, 1879, the House of Commons passed a second resolution that-" The Indian import duty on cotton goods being unjust alike to the Indian consumer and the English producer, ought to be abolished; and this House accepts the recent reduction in these duties as a step towards their total abolition, to which Her Majesty's Government are pledged." Much difficulty and some hardship occurred in the practical working of the exemptions. Manufacturers in Lancashire were driven to making for the Indian market goods coming within the exemptions; a revolution was effected in the trade; the proportion of exempted quickly rose from a small fraction to nearly the whole of the importations in certain classes of fabrics, and the customs revenue yielded by duties on cotton goods greatly declined. In March, 1882, a considerable surplus of revenue enabled the Government of India to abandon all import duties, including the duty on cotton manufactures, and no attempt was made for the next twelve years to re-impose them.

In 1894, in order to meet the increased necessities of the Indian Exchequer, it was suggested by the Indian authorities that the duties should be re-imposed. At the outset this proposal was not received with favour by Her Majesty's Government: they decided that duties should not at any rate be imposed upon cotton manufactures; and the large representative deputation from Lancashire which waited. upon Lord Kimberley, heard with relief his strong views upon the subject.

While giving a decision, in accordance with these views, to the Viceroy, Lord Kimberley further remarked that, if after an interval sufficient to judge of the financial position as affected by the Tariff Act, the course of exchange and other circumstances, there was no improvement, Her Majesty's Government would be prepared to receive a further representation from the Government of India on the subject of imposing import duties upon cotton manufactures.

I may here refer to what Lancashire has regarded to be a slight to herself in the events following upon this speech of Lord Kimberley to the deputation, which was felt by Lancashire to be so eminently

satisfactory. While the Indian authorities sought and received information from the mill-owners of Bombay. Lord Kimberley's successor could not see his way to receive a deputation from the accredited representatives of the trade in Lancashire. As Mr. Whitaker, addressing Lord George Hamilton at the meeting at the India Office, on the 11th of December, 1895, said: "One great complaint they had was that when the duties were reimposed, Sir Henry Fowler did not sufficiently consult Lancashire on the matter. He believed, as a matter of fact, Sir Henry Fowler did consult one or two gentlemen, whose names remained a secret ; but, on the other hand, Sir James Westland said he had taken every possible step to keep Chambers of Commerce and the mill-owners of Bombay informed of the measures being taken."

How diligent was Sir James Westland, and what a different view he took of the obligations incumbent upon him as the advocate of Indian interests, may be gathered in part from the concluding paragraph of his minute, dated 14th July, 1894,

Finally, I have not in my statement of the facts entered, so far as I am aware, upon any controversial matter. I had not, while in Bombay, to investigate conflicting evidence or reconcile opposing interests. I applied to the best sources, both on the importing and on the mill-owners' sides, for the information I required. I met on both sides with the greatest courtesy and the utmost readiness to give information; and I believe I may say that there is at least no doubt as to the facts."

Having regard to the importance of the issues involved, it is a distinct misfortune that Sir James Westland had not the Lancashire statement before him prior to the passing of the Bill; if he had, his opinion as to the "facts" might possibly have been modified. One story is good only till the other is told, and it is always an advantage to the legislator if he hears both sides before drafting a Bill which deals with opposing interests. It is certain, especially when commercial questions are involved, that the party considering itself aggrieved will ultimately force a hearing; and any rectification of errors, either of principle or detail, any removal of misconceptions, any admission of possible improvements, can be effected far more easily at the time, with less fear of friction than in the other case, when arrangements but recently made have again to be readjusted. But the authorities did not follow this wise plan, for, as a matter of fact, there was no consultation with Lancashire, and the import duties were once more imposed on cotton yarns and cotton goods exported to India. This time, however, at Sir Henry Fowler's special request, a new departure was taken in a countervailing excise on yarns made in India. To do the Government of the day justice, I am sure that Sir Henry

Fowler fully believed that this would meet the case of Lancashire and prevent any grievance, which only proves my point as to the folly of neglecting to ascertain the views of Lancashire beforehand. But the question of the excise is treated fully later on.

So much, I trust, has been made clear that Lancashire objects to any departure from the principle of free trade, and further protests against the manner in which that principle was violated, without an opportunity being afforded for protest. With all due deference to Sir Henry Fowler's opinion, expressed so vigorously in the interview of the 27th May, 1895, Lancashire is not prepared to consider as a "closed question," the levying of import duties. Whether that opinion be right or wrong, time will show. What Lancashire at present is most concerned to repeat is that "this countervailing excise duty is not a countervailing excise duty, and is unfair to them." We contend, as we contended last May, that this excise duty does expose us to unfair competition, and claim that the proof of such a contention is contained in the statement handed to Lord George Hamilton on the 9th July last. That statement was forwarded months ago by Sir Henry Fowler's successor to the authorities at Calcutta. No answer has so far been vouchsafed, and though rumours more or less reliable have been circulated, an official announcement has not yet been made on the subject.

This is a brief outline of the history of the Indian cotton duties, and I propose further to give a summary of the objections contained in the Statement presented to Lord George Hamilton on July 9th,

1895.

The Statement is signed by the official representatives of the manufacturers, spinners, and operatives of Lancashire and district. It is a document, therefore, put forward with authority, and expressly drawn up in answer to Sir Henry Fowler's request for arguments, statistics, and figures in proof of the assertion that the existing Indian excise is not, as it claims to be, a countervailing duty. It opens with the request which is natural enough, considering the rapidly increasing cotton industry of India, that the products of Lancashire shall be under no disadvantage as compared with their Indian competitors. To show how rapid that increase has been it is only necessary to glance at the subjoined table. The figures speak for themselves:

STATEMENT SHOWING INCREASE IN NUMBER OF SPINDLES, LOOMS, AND WORKPEOPLE EMPLOYED IN INDIA.

The Statement then deals with the whole question of the excise in six objections, viz.

"(1) That it secured an immunity from competition in the Indian markets by England in counts 20's and below.

"(2) That the import duty imposed on goods exported from this country made from 20's and below without any countervailing excise duty being imposed on goods made from similar counts in India, is absolutely protective in its character.

"(3) That the 5 per cent. import duty charged on the ad valorem value of our manufactured goods is not completely countervailed by the 5 per cent. excise duty charged on the yarn value of goods made in India from counts above 20's, and that so far as any portion of the value of these goods is not chargeable with excise duty the import duty becomes protective to that extent.

"(4) That the exemption from excise duty of yarns 20's and below will encourage the manufacture of duty-free cloths, as such exemption enables the Indian manufacturer to avoid the excise duty altogether by substituting nonexcisable yarns for excisable yarns in the manufacture of cloths.

"(5) That it is impossible to place a dividing line between the manufactures of Lancashire and India, whereby a duty levied on one, unless completely countervailed, will not afford a protective incidence to one, to the consequent injury of the other.

"(6) That the imposition of these duties has inflicted serious injury on our trade, and will continue to do so unless completely countervailed."

OBJECTION I.

The case for India, so far as the first objection is concerned, rests practically on the assumption that, as India has a monopoly in 20's

yarn and below, and goods made from such counts, no competition exists between the two countries on these numbers, and that, therefore, the exemption from excise is no hardship to Lancashire. The reply to this assumption is as follows:

It is a fallacy to suppose that Lancashire does not spin yarns of 20's and below, for there are no less than 3,000,000 spindles at the present time employed in producing these counts, producing 250 million lbs. weight per year, as against 274 million pounds spun in the whole of India during the year 1893.

Lancashire has no preference in this respect, for yarns of coarse numbers are spun with equal facility as fine numbers, and the production of one or the other is determined by the demand.

The low price at which American cotton was recently obtainable enabled us to produce these coarse yarns at prices sufficiently low to enable us to compete with the products of the Indian mills in their own markets; and although the demand for these yarns from our market was beginning to revive, the imposition of this non-countervailed import duty has made such competition impossible.

The imposition of an import duty on our exports of 20's and below cannot be justified by the amount of revenue that will be derived from it; but the effect of its existence, so long as it remains without any corresponding excise duty, must be to secure to the Indian producer a monopoly of the production of these counts.

The constitution of this monopoly gives protection to the Indian producer for three-fourths of his production, and, in our opinion, is a violation of the principles of free trade.

OBJECTION II.

"That the import duty imposed on goods exported from this country, made from 20's and below without any countervailing excise duty being imposed on goods made from similar counts in India is absolutely protective in its character."

Evidence was submitted to Sir H. Fowler by gentlemen actually engaged in producing the cloths, showing that we export goods containing yarns not exceeding 20's, and that a quantity is shipped every year containing not less than 6,000,000 lbs. weight of yarn of these counts. This weight of yarn represents not less than 25,000,000 yards of cloth, the value of which is about £250,000, on which an import duty of £12,500 is imposed in India, without any countervailing excise duty on goods made from similar yarns in India.

We submit that the imposition of the import duty on these goods, without any countervailing excise duty on goods made from similar yarns in India, is opposed to the principle laid down by Sir H. Fowler when consenting to the inclusion of cotton goods under the Tariff Act, that "there should be no protection."