The main issue involved may be broadly stated in the following terms.  Up to the present time the fiscal policy of the Indian Government has been based on Free Trade principles.  Customs duties are collected for revenue purposes.  A general 5 per cent ad valorem duty is imposed on imports.  Cotton goods pay a duty of 31/2 per cent.  An excise duty of a similar amount is imposed on cotton woven at Indian mills.  A duty of three annas a maund is paid on exported rice.  Sir Roper Lethbridge and those who concur with him now propose that this system should undergo a radical change.  The main features of their proposal, if the writer of the present article understands them correctly, seem to be that the duty on cotton goods imported from the United Kingdom, as also the corresponding excise duty levied in India, should be altogether abolished; that the duties raised on goods—­apparently of all descriptions—­imported into India from non-British ports should be raised; that a preference should be accorded in British ports to Indian tea, coffee, sugar, tobacco, etc.; and that an export duty should be levied at Indian ports on certain products, notably on jute and lac.  This new duty would not, however, be levied on goods sent to the United Kingdom.

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