We have seen that, at the least, the Government proposes to impose, and will impose if it can force up the exchange, an export tax (or what is practically an export tax) of 7 per cent., which is to be ultimately raised to 21 per cent.  And we have now to follow out the effects of this on the producers, the people generally, and the financial prospects of the State.

The producers in India of articles for foreign export either, as the planters generally do, send their produce for sale to London, or, as the main body of producers do, sell them to merchants who export the goods.  Both these classes of producers are of course much benefited by a low rate of exchange—­the former when they sell in gold and remit money to India to pay for the up-keep of their estates, and the latter when they find that the merchant can afford to pay more rupees than they could when exchange was higher.  If then, to put the case in a more precise way, the Government succeeds in forcing up the gold value of the rupee, and the merchant is thereby compelled to turn his sovereign into 15 rupees instead of 16 rupees, it is obvious that to make the same profit as before he must give the seller of produce one rupee less.  Now let me take the business with which, as a planter, I am most familiar.  I have roughly estimated the total value of the coffee annually produced in Mysore at L870,000, and if, for the sake of even numbers, we knock off L70,000, a 7 per cent. export duty on this will amount to L56,000, and if the Government could raise, as it proposes, the rupee to 1s. 6d., L168,000 a year would be the price that the measure would entail on a portion of the inhabitants of the native state of Mysore on this single article of export.  But this direct cash loss is far from being all; and if the reader will turn back to the Introductory Chapter, and to that on Coffee Planting in Coorg, he will there find an explanation of the extraordinary effect produced by the introduction of capital into the rural districts of India, and of the remarkable effects it produces on the prosperity of the people, the development of the agricultural resources of the country, and the finances of the Government.  But, for the convenience of the reader, I may briefly repeat here what I have pointed out in greater detail in the chapters alluded to.

From the estimate given of the profits of well-managed European plantations which have been formed on the best land (vide chapters on Coffee Planting in Coorg, and in Mysore), it is evident that, though these would be greatly injured by the exchange being forced up, they could still make fair profits; and, indeed, it is conceivable that, from the losses that the Government measure would entail, they might ultimately be in as good a position as they are now; for there are large amounts of poor lands which, if the Government policy is pursued, would be thrown out of cultivation, either partially or entirely, and the diminished production