A Glimpse into the Appalling and Unparalleled Economic Bleeding of India by the British

Editor’s Note: This excerpt is part of a history initiative at The Dharma Dispatch, which aims to educate and inform our readers about both little-known and well-known aspects of Indian history drawn entirely from primary sources. The aim and purpose of this initiative is to evoke interest in our readers to explore these topics further or in-depth. The first such episode was A Case for India: A Glimpse into how the British Plundered India and Destroyed a Great Civilisation.

This episode presents another excerpt from the same book by Will Durant. Apart from exploding the myth that the colonial British institutions like Railways, Postal services and bureaucracy were beneficial to India, this episode gives painful numbers and staggering details of the sheer heartless manner in which England literally bled India economically on a scale that has no precedent or parallel in human history.  

Emphases have been added.

It might have been supposed that the building of 30,000 miles of railways would have brought a measure of prosperity to India. But these railways were built not for India but for England; not for the benefit of the Hindu, but for the purposes of the British army and British trade. If this seems doubtful, observe their operation. Their greatest revenue comes, not, as in America, from the transport of goods (for the British trader controls the rates), but from the third-class passengers—the Hindus. But these passengers are herded into almost barren coaches like animals bound for the slaughter, twenty or more in one compartment. The railroads are entirely in European hands, and the Government has refused to appoint even one Hindu to the Railway Board. The railways lose money year after year, and are helped by the Government out of the revenues of the people; these loans to date total over $100,000,000. The Government guarantees a minimum rate of interest on railway investments; the British companies who built the roads ran no risk whatever. No play or encouragement is given to initiative, competition, or private enterprise; the worst evils of a state monopoly are in force. All the losses are borne by the people; all the gains are gathered by the trader. So much for the railways.

Commerce on the sea is monopolized by the British even more than transport on land. The Hindus are not permitted to organize a merchant marine of their own; all Indian goods must be carried in British bottoms, as an additional strain on the starving nation’s purse; and the building of ships, which once gave employment to thousands of Hindus, is prohibited.

To this ruining of the land with taxation, this ruining of industry with tariffs, and this ruining of commerce with foreign control, add the drainage of millions upon millions of dollars from India year after year and the attempt to explain India’s poverty as the result of her superstitions becomes a dastardly deception practised upon a world too busy to be well informed. This drain having been denied, it is only necessary to state the facts…

Consider first the drain on India through trade. Not merely is this carried in British ships; far worse than that, there is an astounding surplus of exports over imports. In the happy years of the [East India] Company there were such balances as $30,000,000 exports and $3,000,000 imports; latterly the indecency has been reduced, and the excess of goods taken from India over goods brought into India now a moderate one-third. In 1927, e.g., imports were $651,600,000, exports were $892,800,000; the excess of exports, $241,200,000. Where goes the money that pays for this excess? We are asked to believe that it takes the form of silver or gold imported and hoarded by the Hindus, but no man that has seen their poverty can believe so shameless a myth. Doubtless there is some hoarding, above all by the native princes, for India cannot be expected to put full faith in a banking system controlled by foreign masters. But it is the officials, the merchants and the manufacturers (most of whom are British) who take the great bulk of this profit, and return it to their countries in one form or another. As an East Indian merchant said in a Parliamentary report in 1853, when this process of bleeding was on a comparatively modest scale: “Generally up to 1847, the imports were about $30,000,000 and the exports about $47,500,000. The difference is the tribute which the Company received from the country.”

Consider…the drain through fortunes, dividends and profits made in India and spent abroad. The British come as officials or soldiers or traders; they make their money and return to Great Britain…

Consider…the drain through salaries and pensions derived from India and spent abroad. In 1927 Lord Winterton showed, in the House of Commons, that there were then some 7500 retired officials in Great Britain drawing annually $17,500,000 in pensions from the Indian revenue; Ramsay MacDonald put the figure at $20,000,000 a year. When England, which is almost as over-populated as Bengal, sends its sons to India, she requires of them twenty-four years of service, reduced by four years of furloughs; she then retires them for life on a generous pension, paid by the Hindu people. Even during their service these officials send their families or their children to live for the most part in England; and they support them there with funds derived from India. Almost everything bought by the British in India, except the more perishable foods, is purchased from abroad.

As early as 1783 Edmund Burke predicted that the annual drain of Indian resources to England without equivalent return would eventually destroy India. From Plassey to Waterloo, fifty-seven years, the drain of India’s wealth to England is computed by Brooks Adams at two-and- a-half to five billion dollars…what Macaulay suggested long ago, that it was this stolen wealth from India which supplied England with free capital for the development of mechanical inventions, and so made possible the Industrial Revolution. Montgomery Martin, estimating the drain at $15,000,000 year in 1838, calculated that these annual sums, retained and gathering interest in India, would amount in half a century to $40,000,000,000. Though it may seem merely spectacular to juggle such figures, it is highly probable that the total wealth drained from India since 1757, if it had all been left and invested in India, would now amount, at a low rate of interest, to $400,000,000,000. Allow for money reinvested in India, and a sum remains easily equivalent to the difference between the poorest and the richest nations in the world…

Sir Wilfred Seawen Blunt sums it up from the point of view of a true Englishman:

India’s famines have been severer and more frequent, its agricultural poverty has deepened, its rural population has become more hopelessly in debt, their despair more desperate. The system of constantly enhancing the land values (i.e. raising the valuation and assessment) has not been altered. The salt tax… still robs the very poor. What was bad twenty- five years ago is worse now. At any rate there is the same drain of India’s food to alien mouths. Endemic famines and endemic plagues are facts no official statistics can explain away. Though myself a good Conservative…I own to being shocked at the bondage in which the Indian people are held;… and I have come to the conclusion that if we go on developing the country at the present rate, the inhabitants, sooner or later, will have to resort to cannibalism, for there will be nothing left for them to eat.