No measure has done greater injury to the cause of Free Trade in India or more permanent discredit to British rule than this Excise duty on Indian manufactured cotton, for none has done more to undermine Indian faith in the principles of justice upon which British rule claims, and, on the whole, most legitimately claims, to be based. In obedience to British Free Trade principles, all import duties were finally abolished in India at the beginning of the eighties, except on liquors and on salt, which were subject to an internal Excise duty. In 1894, however, the Government of India were compelled by financial stress to revive the greater part of the old 5 per cent tariff on imports, excluding cottons, until the end of the year when cottons were included and under pressure from England. Lord Elgin's Government had to agree to levy a countervailing Excise duty of 5 per cent on cotton fabrics manufactured in Indian power mills. After a good deal of heated correspondence the Government of India were induced in February, 1896, to reduce the duty on cotton manufactured goods imported from abroad to 3-1/2 per cent., with the same reduction of the Indian Excise duty, whilst cotton yarns were altogether freed from duty. This arrangement is still in force. Rightly or wrongly, every Indian believes that the Excise duty was imposed upon India for the selfish benefit of the British cotton manufacturer and under the pressure of British party politics. He believes, as was once sarcastically remarked by an Indian member of the Viceroy's Legislative Council, that, so long as Lancashire sends 60 members to Westminster, the British Government will always have 60 reasons for maintaining the Excise duty. To the English argument that the duty is "only a small one" the Indian reply is that, according to the results of an elaborate statistical inquiry conducted at the instance of the late Mr. Jamsetjee N. Tata, a 3-1/2 per cent Excise duty on cotton cloth is equivalent to a 7 per cent duty on capital invested in weaving under Indian conditions. The profits are very fluctuating and the depreciation of plant is considerable. Equally fallacious is another argument that the duty is in reality paid by Englishmen. The capital engaged in the Indian cotton industry is, it is contended, not British, but almost exclusively Indian, and a large proportion is held by not over-affluent Indian shareholders.