I am grateful to Chris Baker, Chris Bayly, Sabyasachi Bhattacharya, Jayati Ghosh, and Ruchira Chatterji whose comments and editorial help greatly assisted me in preparing this article for publication.

¹ This section is based on material in Chatterji, B., ‘Lancashire Cotton Trade and British Policy in India 1919–39’, Unpublished Ph.D thesis Cambridge 1978, Introduction.Google Scholar

² Ibid., Table A, p. 13.

³ Ibid., Table B, p. 15.

⁴ Ibid., Table C, p. 16; and Maizels, Alfred, Industrial Growth and World Trade (Cambridge, 1963), p. 226. Maizels' study shows that Britain's loss due to import subsititution was small compared to those of France and Germany.Google Scholar

⁵ Chatterji, , ‘Lancashire Cotton Trade’, Table D, p. 18. Cf. Aldcroft and Richardson, The British Economy (1969), p. 267.Google Scholar

⁶ Chatterji, B., ‘Lancashire Cotton Trade’, pp. 12–18.Google Scholar

⁷ See Moggridge, , British Monetary Policy (1972), pp. 126–9.Google Scholar

⁸ See Statistical Abstracts of the British Empire.Google Scholar

⁹ Chatterji 'Lancashire Cotton Trade, Tables G and H, pp 23–4.Google Scholar

¹⁰ Ibid., Table J, p. 27.

¹¹ See, for example, Aldcroft, ‘Economic Growth in Britain in the inter-war years—a reassessment’, Economic History Review, XX (1967); Aldcroft and Richardson, The British Economy, Chs 6 and 7.Google Scholar

¹² See, Alford, B. W. E., Depression and Recovery ? British Economic Growth, 1918–1939 (1972).Google Scholar

¹³ See Feinstein, C. H., ‘Production and Productivity 1920–63’, London and Cambridge Economic Bulletin (1963), Table I;Google ScholarDeane, P. and Cole, W., British Economic Growth (1967), Table 40, p. 175, Table 79, p. 299;Google ScholarRobson, R., The Cotton Industry in Britain (1957), Table p. 355;Google ScholarMitchell, B. R. and Deane, P., Abstract of British Historical Statistics (1962), pp. 304–6.Google Scholar

¹⁴ See Chatterji, ‘Lancashire Cotton Trade’; Cf. Ian Drummond, British Economic Policy and the Empire 1919–1939 (1972), Ch. IV; Dewey, Clive, ‘The eclipse of the Lancashire Lobby and the concession of fiscal autonomy to India’, in Dewey, and Hopkins, (ed.) The Imperial Impact (1978).Google Scholar

¹⁵ See Chatterji ‘Lancashire Cotton Trade’, Chs 2, 3 and 4.Google Scholar

¹⁶ Although in the mid-1920s India's exports boomed and there was some expansion of industries, the 1920s cannot be regarded as a period of unqualified stability and growth. Agricultural prices, internal and external, began to fall from 1926. In the inter-war period as a whole, there was a considerable growth of population, while agricultural production seems to have been relatively stagnant. The rural economy was therefore highly vulnerable.Google Scholar

¹⁷ The position of particular industries, for example the Bombay cotton industry, varied.Google Scholar

¹⁸ ‘Mark my words’, Linlithgow as chairman of the Royal Commission of Agriculture had written to Baldwin in 1927, ‘our troubles in India are due at root far more to economic causes than many of the clever ones suppose. Unless by good dminstration we secure to the cultivator ‘a fair share of the good things of life” (probably you remember your own words), we shall lose our jobs and we shall deserve to’. Linlithgow to Baldwin, 4 November 1927. Baldwin MSS 102. Regarding the labour situation the Viceroy wrote to the S/S ‘… the most effective way to remove industrial unrest is improvement of labour conditions. The nettle has to be grasped some time and what better time is there likely to be than now when… it is important to show that measures for maintenance of order do not mean want of sympathy with labour’. S/S toViceroy, Pvt. Tel. 13 September 1928, Halifax MSS 9.Google Scholar

¹⁹ Indeed, Gandhi regarded the outbursts of violence to be the ‘froth coming to the surface in an agitated liquid’. ‘The Cult of the Bomb’, Young India, 2 January 1930, Collected Work [C.W.] 42, p. 361.Google Scholar Constitution making, he regarded ‘a good pastime under healthy conditions. But it is deceptive and ruinous when the patient for whom a new constitution is prescribed is about to die’. ‘Borderland of Insolvency’, Young India, 27 February 1930. Ibid., p. 422. When the Congress refused to participate in the First Round Table Conference, Gandhi's strategy was to make Congress abstention a source of pressure on the British Government to make generous concessions. At the same time Gandhi disassociated himself completely from those who took to violence. He summed up his dislike for violence as follows: ‘From violence done to the foreign ruler violence to our own people whom we may consider to be obstructing the country' progress is an easy natural step’. ‘The Cult of the Bomb’, ibid., p. 362. Civil disobedience alone in his opinion could save the country from ‘impending lawlessness and secret crime’. As he explained to C. F. Andrews ‘To sit still at this juncture is stupid… I have made up my mind to run the boldest risks. I have arrived at this definite conclusion as a result of deep and powerful thinking. Lahore revealed it all to me. The nature of the action is not yet clear to me. It has to be Civil Disobedience.’ Gandhi to C. F. Andrews 9 February 1930, ibid., p. 444.

²⁰ ‘If it is true’, Benn wrote to Irwin, ‘that the Youth leagues and Terrorist organisations have really got control of the situation… it might be that even Gandhi's support, with his doctrine of, and possible belief in, non-violence might be worth having, and even necessary, to rally those who are yet untouched by what is becoming an ordinary, violent nationalist insurrection’. He hoped that Hindu aversion to violence and the coming of the rains would ease the situation and wanted steps to be taken to get to the Conference Table ‘somebody whose name and influence will win the support of millions’. Benn to Irwin, Pvt. Letter, 20 June 1930, Halifax MSS 6. See also Benn to Irwin, Pvt. Letter, 29 May 1930, ibid. See also CAB 24/213, C.P. 214(30), Memo by S/S C.P. 274(30), C.P. 289(30), CAB 24/213, C.P.242(30) and CAB 27/470 BDG(30) passim. Meanwhile, concerned over the spread of indiscipline among platoons of Indian infantry, military bosses in London prepared to order a general mobilization. See CAB 27/422 I.U. (Committee on Indian Unrest), especially 1st Meeting, 30 April 1930.

²¹ Witness the attitude of the Bombay millowners and the Marwari piece goods importers of Calcutta during the Swadeshi movement in 1905. See S. Sarkar, The Seadeshi Movement in Bengal 1903–1908 (1973), pp. 142–3; A. P. Kannangara, ‘Indian Millowners and Indian Nationalism’, Past and Present, No. 40 (July 1968). During the first non-cooperation movement most big industrialists held themselves aloof and some of them set up the Anti-Non-Cooperation Society. See Purshottamdas Thakurdas [P.T.] MSS 24 (1–3). In Thakurdas's view ‘the classes that have no stake in the country are mustering strong about Gandhi. The commercial classes are naturally more thoughtful and more anxious about the wisdom of such action’. Many businessmen wanted non-cooperation to be eradicated ‘root and branch and bring around the people to sanity and sober common sense’. Thakurdas to T. Holland, 16 October 1920; Adarji Dalal to Thakurdas, 19 October 1920, P.T. MSS 24/11.Google Scholar

²² The greatest battle that businessmen fought with the Government was over the rupee ratio question. It was around this issue that businessmen built up a comprehensive argument against British economic policies in India and their disastrous consequences for the Indian economy. There were other issues which engaged the business classes in bitter conflict with the Government, among them protection to the cotton textile industry, the struggle for mastery between Indian and British jute interests in eastern India, Scindia Steam Navigation's efforts to oust Lord Inchcape's BISCO. To fight their battle with the Government the businessmen had increasingly to seek the support of the nationalist movement.Google Scholar

²³ See Irwin to Thakurdas, 26 October 1929, P.T. MSS 91.Google Scholar

²⁴ The Congress expected a Round Table Conference ‘not to discuss when Dominion Status was to be established, but to frame a Dominion Constitution for India’. It expected that political prisoners would be released and that it would send the majority of the Indian delegates to the Conference.Google Scholar

²⁵ Birla was surprised at the Bombay leaders issuing their own statement and even more surprised ‘how a cautious and shrewd man like you [Thakurdas] could have committed such a haste … Birla himself was in favour of accepting the government's offer of a Round Table Conference especially since ‘the Viceroy seems to be sincere and … I think his hands ought to be strengthened’, but on conditions implied by the Delhi Manifesto. Birla to Thakurdas, 30 October 1929, P.T. MSS 91. But he warned that ‘the Viceroy alone is not the deciding factor; there are others more powerful than the Viceroy, and what guarantee is there that a differnt … interpretation [of the purpose of the Round Table Conference] may not be put …’. Indeed his discussions with the Viceroy had confirmed his misgivings. ‘In Englishmen we are dealing with the best … displomats of the world. The Viceroy and Cabinet are bent upon placating us, not because they have got a soft corner in their hearts for India but because they realist the gravity of the situation, and I am sure that we should not make ourselves unduly cheap because we don't gain anything by that’. So Birla along with Ambalal Sarabhai underlined the dangers of not keeping in step with the Congress on the question of constitutional reforms. The Delhi Manifesto was a ‘good one’ with the invaluable advantage of carrying ‘with us extremists like Jawaharlal Nehru and others’. Birla to Thakurdas, undater, early November 1929; 3 November 1929; Thakurdas to Birla, 5 November 1929; Sarabhai to Thakurdas, 5 November 1929, P. T. MSS 91.Google Scholar

²⁶ Thakurdas to Sapru, 27 December 1929; Thakurdas to Malaviya 14 January 1930, P.T. MSS 91.Google Scholar

²⁷ If concessions were made he assured Campbell Rhodes that ‘British interests in India would be treated … with a certain sanctity…’. Thakurdas to C. Rhodes, 6 February 1930. See also Thakurdas to Sapru, 8 January 1930, where he argued that Sapru's efforts to rally people in favour of the Round Table Conference would not stand any chance of success if he insisted on demanding that Indians be made masters in their own home. P.T. MSS 91.Google Scholar

²⁸ ‘The present form of Government and its sins of commission and omission are greatly responsible for the present state of affairs and particularly for Gandhiji's movement. Unless there is a general improvement in the economic condition of the people and the cultivators have a stake in the country, Bolshevik propaganda will find fertile soil in India’. Ambalal Sarabhai to Thakurdas, 28 March 1930, P.T. MSS 91.Google Scholar

²⁹ Gandhi's ‘Eleven Point Programme’ was an attempt to incorporate the basic economic demands of the capitalists and was to represent the ‘body’ of independence. As Lalji Naranji put it: ‘I in my commercial way of thinking, believe more in Gandhiji's policy… Gandhiji's 11 points or demands are more of economic nature than of mere political nature. It is therefore that commercial community have put more explicit faith in Gandhiji or his organizations.’ Quoted in Sarkar, S., ‘The Logic of Gandhian Nationalism: Civil Disobedience and the Gandhi-Irwin Pact (1930–1931)’, Indian Historical Review Vol. III, No. 1 (1976), p. 123.Google Scholar

³⁰ Naranji to Thakurdas, 28 March 1930. See also Sarabhai to Thakurdas, 28 March 1930, P.T. MSS 91.Google Scholar

³¹ For Government's concern about the situation, see Halifax MSS 1 6 passim, especially Viceroy to S/S, 30 July, 2 13 August, 12, 29 September, 18, 31 December 1930. For the officials’ view of rural trouble in Madras, Bihar, Punjab, U.P., N.W.P., and Bengal see Halifax MSS 24, 25 passim.Google Scholar

³² See Sarkar, ‘The Logic of Gandhian Nationalism’.Google Scholar

³³ Thakurdas to Schuster, 30 May 1930, P.T. MSS 91. Thakurdas expressed the dilemma of the businessman thus: ‘The position in the country, and especially amongst the Commercial classes is getting more and more entangled, and there is not the slightest hope of this state of affairs improving without the political situation settling down. I am getting more nervous about a crop of insolvencies and consequent disaster’. But at the same time, ‘I have never overlooked the fact that the Viceroy must come to an understanding with the Mahatma before we can have peace’. Thakurdas to Rangaswamy, Editor of The Hindu, 4 June 1930. See also Thakurdas to Motilal Nehru, 4 June 1930, ibid.

³⁴ Interview to the Press, 16 March 1931. C.W. 45, pp. 261–2.Google Scholar

³⁵ The happier state of affairs in Ahmedabad had as much to do with the millowners' prosperity as with Gandhi's influence over the working class. For the affairs of Bombay industry in this period, see Chatterji ‘Lancashire Cotton Trades, Chs 3 and 4.Google Scholar

³⁶ Bombay proved to be the stronghold of the boycott movement. The merchants dealing in foreign piece-goods joined the movement in large numbers for the same reasons as in 1921–1922. So strong was their support for Gandhi's movement that the rank and file of the Indian Merchant's Chamber forced Thakurdas to resign from the Legislative Assembly. See S. Kochanek, Business and Politics in India (1974), pp. 145–9.Google Scholar

³⁷ See Benn to Irwin, Pvt. letter 17 November 1930, enclosing letter from H. N. Brailsford, Halifax MSS 6. See also Sarkar, ‘The Logic of Gandhian Nationalism’.Google Scholar

³⁸ Governor Sykes also sounded worried: ‘Here we have the focus of the movement, and whatever may be true of the rest of India it cannot be tackled here on the theory that we are dealing with a limited political clique supported by only a section of the public. In Bombay city and most of Gujerat we have practically a mass movement’. Sykes to Irwin, 20 June 1930, Sykes MSS 2.Google Scholar

³⁹ See Bombay Chronicle [B.C.] 2 September 1930. ‘The economic distress is increasing’, wrote a perturbed Sarabhai, ‘… the purchasing power of the people has gone down… Hungry masses will do anything. It is for those who have a stake in the country to come to the rescue of the poor, if not in the interests of the poor but to save themselves’. Sarabhai to Thakurdas, 17 November 1930, P.T. MSS 42 (VII). Many alleged that Ahmedabad was feeding the movement to take business away from Bombay.See India Textile Journal, 09 1930, p. 541.Google Scholar The Indian Industries Association formed in mid- 1930 and organized by Ness Wadia and Cowasjee Jahangir issued pamphlets telling the workers that unemployment was due to the Civil Disobedience Movement and Boycott.See B.C. October 1930. This kind of propaganda found active support from the Bombay Government and the pro-British press in India. See, for example,Times of India, 04–10 1930,Google Scholar passim. Cf. B.C. particularly 17 March 1930, 5 July 1930, 12 August 1930. See also Sykes to Irwin, 8 September 1930. Sykes held confidential discussion with various professional people and was informed that commercial opinion was growing anti-Congress: ‘… I am doing what I can to foster such a spirit’. Sykes MSS 2.

⁴⁰ See Chatterji, ‘Lancashire Cotton Trade’, Ch. 4.Google Scholar

⁴¹ The Congress re-export scheme, formulated in 1931, whereby it was decided to set up a syndicate of millowners under Ness Wadia to buy up foreign cloth stocks in Bombay and re-export them, despite the horror it created in Lancashire, failed. Governor Bombay to S/S, 20 March 1931, L/PO/52.Google Scholar

⁴² Sykes reported to Willingdon that communist influence was at work, ‘and that the pressure brought to bear upon cotton merchants has in addition to the usual expression of anti-British and racial feeling, an anti-capitalist aspect’. Sykes to Willingdon, 13 May 1932, L/PO/50.Google Scholar

⁴³ See, for example, ‘Bombay and the Political Situation in India’, Full Report of the proceedings of an Extraordinary General Meeting of the European Association and its sympathizers held in Bombay, 2 October 1917; Addresses presented to the Viceroy and the Secretary of State, 1918 Cd. 9178 Parliamentary Papers [P.P.] XVIII.Google Scholar

⁴⁴ See B. R. Tomlinson in this volume.Google Scholar

⁴⁵ Some leading European businessmen contemplated going into partnership with Indians. Reflecting on his long-term business alternatives in India, Benthall noted in his diary that ‘three courses seem possible: either to go into partnership with some rich Indian group (politics may make this desirable), always keeping the master hand myself or to go in with some other British firm in India (e.g. Andrew Yule), enhancing the position of both and remaining in active management, or to sell out the whole or part of the Indian interest—last course only as a “last resort”.’ Diary, 24 January 1928, Benthall MSS XII.Google Scholar

⁴⁶ Even if a constitutional solution proved impossible ‘we have sufficient wit’ Benthall felt, ‘to look after our interests by force of arms if the worst came to the worst. We mayhave a gigantic Hindu bloc against us but we have potential allies in the Mussalmans and the States and even with a Labour government and with a further swing of opinion against imperialism and towards nationalism, I am confident that India will remain within the Empire, and the greatest of Great Britain's customers, and the cornerstone of our Empire. Granted a period of peace and granted this solidity of India, nothing can prevent the country going steadily ahead as a field for merchant adventure…’. Diary, 25 December 1928, Benthall MSS XII.Google Scholar

⁴⁷ In his discussion with Birla in May 1930, Benthall formed the opinion that Birla was definitely not out for any settlement of the political problem, ‘but intended to go on obstructing until the last… he seems to forget there is anyone else in India except the Birla party’. Diary, 9 May 1930, Benthall MSS XII. Benthall with his multiple points of contact with the official world schemed to split ‘the Birla party's’ influence among Indian businessmen. 8 June 1930, 7 June 1930, discussion with Schuster. Diary, Ibid.

⁴⁸ ‘There appears to me’, Benthall noted, ‘to be real danger of a serious agrarian upheaval in spite of his [sic] pathetic contentment. The Ryot must turn some time and it is difficult to see how he can bear the burden of his loss with prices as they are’. Diary, 17 December 1930, Benthall MSS XII.Google Scholar

⁴⁹ Benthall recorded his conversations with Birla: ‘He [Birla] explained that for the last ten years of his life he had been taking up an attitude of opposition which was more often than not of a bitter nature, because it was the only way in which he could bring pressure to bear upon the subjects he had in mind. But that henceforward he desired to work in collaboration and to drop all this hostility’, Memo to ASSOCHAM, 4 October 1931, Benthall MSS XI.Google Scholar

⁵⁰ Many younger British businessmen in India felt ‘that the senior businessmen were content to buy appeasement in their time at any price which would afford peace in their time of service’. Benthall MSS XII.Google Scholar

⁵¹ Writing about his role in these uncertain times he noted with satisfaction ‘… Looking back, I have no doubt that the policy followed by the leaders of British business throughout this anxious time was right, for the responsible line we took over the twenty years leading up to the Independence capped of course by HMG to grant that Independence, prepared the way for the fair manner in which the Congress dealt with us when they came into power’. Undated note by Benthall, Benthall MSS XI, ‘File on Gandhi’.Google Scholar

⁵² ‘The basis of business and of rule among Eastern peoples’, he told the Conservatives in England in March 1931, ‘is to keep your word …’. He repeatedly reiterated his belief in ‘association of Indian capital and management together in business…’. Benthall MSS XIV.Google Scholar

⁵³ ‘Order of the Day’ (1953), p. 191. See also Halifax, Fullness of Days (1957), p. 151.Google Scholar

⁵⁴ See notes on his conversations with Teggart, Willingdon and Schuster in Benthall MSS XII.Google Scholar

⁵⁵ See Memo for ASSOCHAM, Benthall MSS XIV. ‘I would ask you never to forget that it is Mohammedans who have stood by the Government of India in these last months of crisis, which, but for them, might have been as bad or worse than the crisis of 1919–21’. His colleague, Hubert Carr, had ‘regular conversations with Aga Khan’. He regarded Wedgwood Benn as a ‘criminal’ for being ‘Hinduised’. Diary 19 and 21 January 1931, Benthall MSS XII. The Muslims not being prominent in business in Bengal could be easy and useful allies.Google Scholar Benthall to Godfrey, 21 January 1931, ibid. T. Benthall to Godfrey, Ibid. ‘Aga Khan has impressed upon the Bengal Muslims that they must organise and get together with the Europeans’. ‘The Aga Khan says that the Princes paid £100,000 into the Labour party funds—I wonder!!’. In provincial Autonomy he saw the possibility of preoccupying nationalist politicians with administrative affairs and providing ‘time to estimate the truly selfish aims of those who have been guiding Indian politics hitherto’. Provincial Autonomy would develop provincial interests and this would help British interests, especially in Bengal where they were most numerous. Speech to Conservative Committee, 16 March 1931, ‘British Business and Indian Reforms’, Benthall MSS XIV.

⁵⁶ In November 1930 the Labour government had set up a committee to prepare for the economic conference to be held at Ottawa. For the minutes and memoranda of this Committee see CAB 27/441. The Committee was reconstituted by the new government in 1931. In its first report, the Committee recorded that ‘the failure of the Ottawa Conference to reach agreement on the large questions of policy remitted to it would be a fatal blow to Imperial interests, and that it is accordingly imperative that every effort should be made beforehand to ensure the success of the Conference’. Proceedings of the Committee, 1st Conclusion O.C. (31) 11 November 1931 and C.P. 288 (31) CAB 27/473. See also Memo by S/S Dominions, ‘Questions for the Conference’ 13 November 1931 O.C. (31)2, Ibid.

⁵⁷ FBI, Industry and the Empire (1932)‘… Great Britain has the possibility of creating (with her empire) an economic group of unlimited possibilities’; without it her competitive position would be ‘extremely disadvantageous’. FBI, Industry and the Nation (1931), circulated to the Cabinet as O.C.(31) 72 CAB 27/475.Google Scholar

⁵⁸ See FBI, Report to the British Preparatory Committee to the Imperial Conference, ‘British Economic Policy with Regard to the Dominions’, CAB 58/6; The EAC Committee Report on Empire Trade, 12 June 1930, CAB 58/5 and 3 July 1930 CAB 24/213 C.P. 228(30). For the TUC's support for a scheme of inter-imperial economic cooperation see CAB 24/215 C.P. 17(30). See also Inter-Departmental Committee on Inter-Imperial trade, O.C. (30)28 CAB 27/473; Federation of Chambers of Commerce of British Empire, Report of the 12th Congress 1930, Copy in Benthall MSS XVI.Google Scholar

⁵⁹ FBI, Industry and the Empire.Google Scholar

⁶⁰ This point is of vital importance for the understanding of the Ottawa Agreements. See in this connection Memorandum by Henderson, H. D., as Secretary of the Cabinet's Economic Advisory Council, ‘Sterling and the Balance of Trade’, 28 January 1932, reprinted in Henry, Clay (ed.), The Inter- War Years and Other Papers—A Selection from the Writings of Hubert Douglas Henderson (1955).Google Scholar See also Amery, L. S., My Political Life, Vol. III (1955), p. 31. Undoubtedly by giving preference to the products of the Empire countries in the U.K. market, the Ottawa Agreements helped to reduce the impact of the depression on those countries.Google Scholar

⁶¹ See ‘India and the Management of the Pound Sterling’ Memo. for the use of the Delegates of India at Ottawa, undated 1932, Templewood MSS See also Statement made by Sir George Schuster at a Meeting of the Committee on Monetary and Financial Questions, 28 July 1932, L/PO/271.Google Scholar

⁶² ‘Unless we can restore the agricultural position’, Willingdon warned, ‘revolutionary action stands a real chance of success’. Willingdon to Hoare, Pvt Letter 28 September 1931, Templewood MSS 5. See also ‘India and the Management of Pound Sterling’ undated 1932. By 1932, the situation in U.P., Bengal, Bihar and Gujerat was critical. See Hailey to Hoare, 28 February 1932, Templewood MSS 15 Hoare to Willingdon stating views of Anderson, Governor of Bengal, 27 October 1932, Templewood MSS 2. The possible spread of discontent to the Punjab was viewed with the greatest concern, even by the financial wizards of London. The Punjab peasantry provided the bulk of the Indian army and if present conditions prevailed ‘that way lay disaster’. See Note by R. A. Mant and H. Strakosch, 8 February 1932, ‘The Effect on India of the Fall in Prices and British Monetary Policy’, Enclosed with Hoare to Willingdon, Pvt letter 26 February 1932, Templewood MSS 1.Google Scholar

⁶³ See Hoare to Willingdon, Pvt letter 29 September 1932, enclosing a confidential report on discussions of monetary and financial questions at Ottawa between Henry Schuster and Henry Strakosch and the British delegation at Ottawa, Templewood MSS I. Statement by Strakosch to the ‘Committee on Monetary and Financial Questions’ 28 July 1932 and Statement by Chamberlain, 29 July 1932. L/PO/271.Google Scholar

⁶⁴ See CAB 27/520 C.I. (32) 15th Meeting, 15 October 1932, 29th meeting, 1 December 1932; CAB 27/521 CI. (32)51; L/PO/270, L/PO/282 passim; Hoare to Willingdon, Pvt Tel. 19 February 1932, Templewood MSS 11.Google Scholar

⁶⁵ For the official discussion about how to ensure the political success of Ottawa, see CAB 27/473, Proceedings of the Committee on Proposed Imperial Conference, 5th conclusion, O.C. (31) 28 March 1932. L/PO/271 passim; Hoare to Willingdon correspondence February–March 1932, Templewood MSS 11.Google Scholar

⁶⁶ Hoare to Willingdon, Pvt tel. 5 March 1932. Templewood MSS 11.Google Scholar

⁶⁷ Birla also informed Hoare that he would continue his efforts to arrive at closer cooperation with European businessmen. See Hoare to Birla, 27 January 1932, Birla to Hoare 14 February 1932, L/PO/271, reproduced in Birla, In the Shadow of the Mahatma (1953), pp. 45–6.Google Scholar

⁶⁸ Birla to Lothian, 14 May 1932, ibid, p. 55.

⁶⁹ Birla told Hoare in no uncertain terms why he stood by Gandhi. ‘I need hardly say that I am a great admirer of Gandhiji. In fact, if I may say so, I am one of his pet children. I have liberally financed his khaddar producing and untouchability activities. I have never taken any part in the Civil Disobedience Movement… I wish I could convert the authorities to the view that Gandhiji and men of his type are not only friends of India, hut also of Great Britain, and that Gandhiji is the greatest force on the side of peace and order. He alone is responsible for keeping the left wing in check. To strengthen his hands is, in my opinion, therefore, to strengthen the bond of friendship between the two countries… Probably the best way to success in this discussion is to give you our cooperation as far as possible… If you think I can be of any use in bringing about happy relations between the two countries you can always rely on my humble services’. Birla to Hoare, 14 March 1932. In the Shadow of the Mahatma, pp. 46–9.Google Scholar

⁷⁰ Willingdon to Hoare, Pvt letter 21 March 1932. Templewood MSS 5. Willingdon's view found support from L.J. Kershaw. See Tel. Federal Finance Committee to S/S, 27 March 1932. (From Kershaw for S. F. Stewart) L/PO/271.Google Scholar

⁷¹ Willingdon suggested the names of A. Chatterji (leader), G. Rainy, P. Ginwala, Shanmukham Chetty and Haji Abdullah Haroon. Willingdon to Hoare, Pvt tel. 2 March 1932, Templewood MSS 11.Google Scholar

⁷² Willingdon to Hoare, Pvt tel. 17 March 1932, Templewood MSS 11.Google Scholar

⁷³ Hoare to Willingdon, Pvt tel. 22 March 1932, Templewood MSS 11.Google Scholar

⁷⁴ Birla to Hoare, 2 November 1932, In the Shadow of the Mahatma.Google Scholar

⁷⁵ Birla to Lothian, 14 May 1932, ibid, p. 55.

⁷⁶ Britain received preferences on about £55 million worth of her exports to India and granted preferences on about £47 million worth of imports from India (both figures at 1929–1930 values). For details and analysis, see Adarkar, B. N., ‘The Ottawa Pact’, in Mukherjee, R. (ed.), Economic Problems of Modern India, Vol. I (1939). For the gains to Britain on particular goods see T. M. Ainscough, Conditions and Prospects of U.K. Trade in India (1933).Google Scholar See also Lindsay, H. A. F., ‘Recent Tendencies in Indian Trade’, Journal of the Royal Society of Arts [J.R.S.A.] LXXXI (1933);Google ScholarGinwala, P., ‘India and the Ottawa Conference, J.R.S.A., LXXXI (November 1932).Google Scholar

⁷⁷ Hoare to Willingdon, Pvt tel. 5 August 1932, Templewood MSS 11.Google Scholar

⁷⁸ Hoare to Willingdon, Pvt letter 10 November 1932, Templewood MSS 2. Its rejection by the Indian Assembly could ‘damage the whole reputation of the Conference. The Chancellor of Exchequer in particular takes a most serious view upon this point’. Hoare to Willingdon, Pvt tel. 11 October 1932, L/PO/270.Google Scholar

⁷⁹ Willingdon to Hoare, Pvt letter 13 November 1932. See also Willingdon to Hoare, Pvt letter 6 November 1932, Templewood MSS 6.Google Scholar

⁸⁰ Hoare to Willingdon, Pvt tel. 11 October 1932 L/PO/270.Google Scholar

⁸¹ Schuster reported that it was Shanmukham Chetty who was chiefly responsible for the Government's success. Chetty's eloquence had ‘split… the ranks of the Nationalists…there are signs now of a cleavage in the commercial ranks and there is a chance of making a real split and detaching an important section to the side of cooperation and constructive work’. Schuster to Hoare, 12 December 1932, L/PO/271.Google Scholar

⁸² Churchill had chosen ‘wisely and well’. ‘To surrender our Empire in India! To give way to sedition! How many true Conservatives breathe with soul so dead as to be deaf to such an appeal such as this’. Economist, 1 July 1933, quoted in G. Peele, ‘Revolt Over India’, in G. Peele and C. Cook, The Politics of Reappraisal (1975), p. 123.Google Scholar See also Ghosh, S. C., ‘Decision-making and Power in the British Conservative Party: A Case Study of the Indian Problem 1929–1934’, Political Studies, XII (1965). It would be simplistic to view the Conservative diehard opposition to the Indian reforms as merely reflecting inter-party strife. Although nobody in the Conservative Party wished to lose India, there were fundamental ideological conflicts regarding the most effective means of maintaining this control. There was a consistency in Churchill's attitude towards imperial affairs. For an account of diehard opposition within the Conservative Party, see G. Peele ‘Revolt over India’ S. Haxey, The Tory M.P. (1939); R. R. James, Memoirs of a Conservative: J. C. C. Davidson's Memoirs and Papers 1910–1937 (1967). For Churchill's attitude and for examples of his sonorous prose about Britain's imperial mission, see H. Pelling, Winston Churchill (1974), pp. 345–65. See also Dennis Bardens, Churchill in Parliament (1967), pp. 173ff. The furore in Lancashire over the question of Indian reforms was more the result of a general nervousness felt by an acutely depressed industry straining to rationalize rather than a result of neglect of her interests in India. In the discussions over commercial safeguards Lancashire's interests were being specifically looked after by Lord Derby and J. Nail. See Templewood MSS 6,, L/PO/270 and L/E/9/1 150 passim; see also Baldwin MSS 105 passim. For a study of the problems of ‘rationalization’ of the Lancashire cotton industry, see Chatterji, ‘Lancashire Cotton Trade’, Ch. 1.Google Scholar

⁸³ Tomlinson, B. R., ‘Britain and the Indian Currency Crisis 1930–32’, Economic History Review, Vol. XXXII, No. 1 (February 1979), pp. 88–99.Google Scholar

⁸⁴ For the Bank of England's and Treasury's concern with maintaining overseas remittances necessitated by the deteriorating balance of payments and the consequent pressure on sterling from early 1930 see D. E. Moggridge ‘The Financial Crisis—A new View’, The Banker (1970); British Monetary Policy (1972); S/S to Viceroy, 24 January 1930, Halifax MSS 11.Google Scholar

⁸⁵ In 1930 cotton duties were raised from 11% to 15%along with a 5% protective duty with a minimum of 3½ annas per lb on ‘plain grey’ goods and on all cotton goods from outside the U.K. Under the Finance Act of 1931, cotton duties became 20% on British and 25% on ‘foreign’ goods. Later in the year an emergency surcharge was imposed making the rates on British goods 25% and 31·25%on foreign goods. For a detailed analysis of the events of 1930–1931 concerning cotton duties, see Chatterji, ‘Lancashire Cotton Trade’, ch., sec. 3.Google Scholar

⁸⁶ See Proceedings of the Manchester Chamber of Commerce, India Section, April 1930, pp. 242–4. 9, 15, 22, 26 May and 5 June 1930, pp. 250–70, L/PO/289passim. For the nature and extent of the agitation in Lancashire and official response see Chatterji, ‘Lancashire Cotton Trade’, Chs 1 and 5.Google Scholar

⁸⁷ Proceedings, India Section, 10 April 1931, pp. 167–8; 20 April 1931 and 1 May 1931, pp. 170–9; B.T. 56/35, CIA 1768/61 passim.Google Scholar

⁸⁸ Proceedings, India Section, 13 May 1931, pp. 201–16 and 2 June 1931, pp.217–21.Google Scholar

⁸⁹ C. F. Andrews to Benn, 20 June 1931, L/PO/50.Google Scholar

⁹⁰ Officials felt that if Lancashire treated ‘Indian representatives as representatives of a civilised power, good might ensue’. Board of Trade Note, ‘Cotton Industry: Visit to Lancashire of Indian Representatives’, undated July 1931; W. Graham to Benn 31 July 1931, B.T. 56/36 CIA 1768/82.Google Scholar

⁹¹ See W. D. Croft of the India Office to Director, Joint Committee of Cotton Trade Organization (JCCTO) 7 August 1931, L/PO/50.Google Scholar

⁹² See H. G. Hughes (of theJCCTO), G. L. Watkinson (of the B.T.) correspondence, 26, 28 August and 10 September 1931, Note by Watkinson 15 September 1931, B.T. 56/36 CIA 1768/82.Google Scholar

⁹³ Barnes to Horace Hamilton B.T. 29 September 1931, Ibid.

⁹⁴ Proceedings, India Section, 29 September 1931, pp. 241–2.Google Scholar

⁹⁵ See Campbell Rhodes-Sam Hoare correspondence and Note by W. D. Croft, I. O. 18 November 1931, L/PO/50; Note by Campbell Rhodes, 27 December 1931, L/PO/52.Google Scholar

⁹⁶ CAB 21/367.Google Scholar

⁹⁷ See Proceedings, India Section, 12 April 1932, pp. 221–2; Hoare to Willingdon Pvt letter 20 February 1932, Templewood MSS 1; Memo to HMG ‘Lancashire Cotton Trade with India and the Ottawa Policy’, CAB 21/367.Google Scholar

⁹⁸ CAB 27/475 O.C. (31)88, Memo by the Indian delegation, 6 July 1932.Google Scholar

⁹⁹ Draft note by the President B.T. undated, January 1931; B.T. Note on the Report, 14 January 1931, B.T. 11/163 CRT 413.Google Scholar

¹⁰⁰ Willingdon wanted his ‘Manchester friends to keep their mouths shut’ to save his government's reputation. Willingdon to Hoare, Pvt letter 12 June 1933, Templewood MSS 3. These movements dovetailed with Britain's commercial and diplomatic relations with Japan. See Ann Trotter, Britain and East Asia 1933–1937 (1975). For a study of Indo-Japanese negotiations concerning cotton, see Chatterji, ‘Lancashire Cotton Trade’, Ch. 6.Google Scholar

¹⁰¹ For details see ibid.

¹⁰² Benthall to Mothersill, 10 July 1933; Benthall to Cleminson, 10 July 1933, Benthall MSS XV. The Association of British Chambers of Commerce offered its offices for bringing millowners from Bombay and Manchester together. See Proceedings, India Section, July 1933, p. 65.Google Scholar

¹⁰³ Lord Derby of Lancashire along with Hoare and Benthall played a very prominent role in the entire episode. Their task was difficult. The diehard wing of the Manchester Chamber of Commerce continued to bark and even Derby found the Chamber a ‘difficult horse to ride’, while Benthall lamented the ‘incredible stupidity of its members’. See Derby to Hoare, 19 July 1933; Derby to Raymond Streat, 19 July Hoare to Derby, 21 July 1933; Derby to Hoare, 26 July 1933 L/PO/51; Benthall to J. S. Henderson, 25 July 1933, Benthall MSS XV.Google Scholar

¹⁰⁴ The Indian delegation was composed of eight millowners from Bombay, four from Ahmedabad and one each from Bengal, Kanpur, Baroda and Madurai. Millowners from outside Bombay could not bring themselves to agree to Lancashire's terms. Ahmedabad millowners in particular made it clear that the immediate objective of Indian industry was to supply the full requirements of the home market. Soon Mody came into open conflict with Kasturbhai Lalbhai and Mody managed to get the Bombay millowners to conclude an agreement with Lancashire. The ‘pact’ agreed that under the existing conditions, the Indian industry required a higher level of protection against foreign countries than against the U.K. Secondly, it laid down that when the revenue position of the GOI made it possible to remove the revenue surcharge of 5%, Bombay would not oppose the action. Finally it promised Indian support for tariff concessions on U.K. cotton yarns and artificial silk goods and established the principle of dealing in future with common problems affecting the two industries by direct discussions. Indian piece goods were to share any tariff advantages that Britain secured in Empire and overseas markets and the mission agreed to recommend ‘effective action’ to increase Lancashire's offtake of Indian cotton. The ‘pact’ was to remain in force until 31 December 1935.Google Scholar

¹⁰⁵ For the making of the Lees-Mody Pact and subsequent developments, see Chatterji, ‘Lancashire Cotton Trade’, Ch.6.Google Scholar

¹⁰⁶ When Lancashire pressed the Government of India to incorporate the Lees–Mody Pact within the scope of the Ottawa Agreement, Birla felt perturbed.‘… Unless the matter is taken up seriously I fear a great mischief would be done’. Birla to Kasturbhai Lalbhai, 14 November 1934. See also Birla to Thakurdas: ‘The Mody-Lees though concluded with good intentions, was a great blunder, but I think Lancashire has now tasted the human blood and they are no longer satisfied with the pact’. 10 November 1934, P.T. MSS 126. Labour leaders like N. M. Joshi complained that it was wrong in principle for the Government to accept an agreement entered into by private organizations while many others questioned the right of the Bombay millowners to speak for the whole textile industry of India.Google Scholar See Annual Register (ed. Mitra, N.), I, 1934, pp. 60–1, 116, 127–30, 148–52.Google Scholar

¹⁰⁷ He was knighted soon afterwards.Google Scholar

¹⁰⁸ In bitterly attacking the Ottawa Agreement, the FICCI did not oppose its principle. But it wanted India's foreign trade to be diversified in terms of trading partners and wanted India to enter into a network of economic understanding with non-empire countries, as indeed the U.K. herself had done. See President's speech, Annual Conference of the FICCI, 1934. Annual Register, I, 1934, p. 41. The FICCI's arguments were elegant. However, given the conditions of world markets for India's exports and their fears of the disastrous potentialities of continued depression, one might have expected them to be thankful for what had been achieved at Ottawa. Their attitude may be explained by their calculation that if the Agreement was rejected by the Assembly, the Government would probably be forced to negotiate a new, more favourable agreement and might even be tempted to make greater concessions in the political field.Google Scholar

¹⁰⁹ Viceroy to S/S, Pvt. tel. 11 April 1936, L/E/9/1123.Google Scholar

¹¹⁰ Note by G. Schuster, ‘Economic Relations between the U.K. and India’, 27 June 1934; Note by H. A. F. Lindsay of the B.T., ‘Indo-U.K. Trade in the light of the Ottawa Agreement’, July 1934; Note by Hoare, 30 June 1934, L/E/9/1147. See also Lindsay, , ‘Recent Tendencies of Indian Trade’ J.R.S.A. LXXI (1933);Google ScholarMeek, D. B. ‘India's External Trade’ J.R.S.A., LXXXIV (1936).Google Scholar

¹¹¹ Raymond Streat, ‘Cooperation between the U.K. and India: Indian Businessmen and Congress Party: The Future of Ottawa: Reactions of Economic Cooperation on Political Outlook… Possibilities and Probabilities’, 16 January 1936. L/E/9/1038.Google Scholar

¹¹² E. C. Benthall of ASSOCHAM and Dr Subbarayan were the other members of the Panel of ‘unofficial advisers’.Google Scholar

¹¹³ ‘… If Gandhi is leading a disturbance they will do very well from a business pointof view and … Nehru will be content to go at Gandhi's pace… so that they will kill two birds with one stone’. Grigg to Chamberlain, 30 March 1936, Grigg Papers (2/2/1a).Google Scholar

¹¹⁴ Ibid. During the course of the negotiations, Grigg was to reiterate these objections.

¹¹⁵ See in this connection A. K. Bagchi, Private Investment in India 1900–1939 (1972), p. 199. Cf. Michael Kidron, Foreign Investment in India (1965), pp. 19–26.Google Scholar

¹¹⁶ Bagchi, Private Investment in India, pp. 192–5; Kidron, Foreign Investment in India, pp. 3–11.Google Scholar

¹¹⁷ See Bagchi, Private Investment in India, pp. 89–90.Google Scholar

¹¹⁸ Between 1933 and 1939 the total paid up capital of Joint Stock Companies rose by about 12%; Indian joint stock Bank deposits rose from Rs 66.2 crores in 1931 to Rs 108.6 in 1937; new assured business of India insuarance companies increased from Rs 17.8 crores in 1931 to 41.7 crores in 1937. See S. Subramaniam and P. W. R. Homfray, Recent Social and Economic Trends in India (1946). Industrial employment also increased at a high rate. See Sastry, N. S. R., A Statistical Study of India's Industrial Development (1943), Ch. II esp. pp. 20–2, and pp. 40–1, and C.I.S.D., Large Scale Industrial Establishments in India, 1931–1937 (Biennial).Google Scholar

¹¹⁹ Thus in 1934 while N. R. Sarkar (President of the FICCI) railed against theshortcomings of the Government's economic and political policies, he was careful to note that all was not as he thought it should be among the nationalists themselves. He considered that ‘in examining the Civil Disobedience Movement’ one ought not to rely completely on its ‘saintly originator’ but ponder deeply about the possibility of the movement getting into the hands of those who advocated revolution…As businessmen we cannot risk the creation of an atmosphere of national confusion and disintegration…This is the simple and understandable position of Indian businessmen’. He appealed to Gandhi to follow a path such that ‘every man who loves his country will have an opportunity to make some contribution… Do not exclude us by taking a route we cannot follow or prescribing methods we cannot use’. Annual Register, I, 1934, 451–2.Google Scholar

¹²⁰ Before the Constitution of 1935 was ready, ‘nationalist’ business opinion was bitterly critical of the devices to retain British control in India. But they had begun to clear the way for accepting whatever they got. Thus while the President of the FICCI derided those who were willing to work the new constitution even before all its contents were known, he was himself at pains to extol the virtues of expediency. ‘Political tactics often necessitate the adoption of several weapons at the same time …’, he rationalized, ‘tenacious loyalty to a given method… may become a handicap to political progress…A river in its course to the sea encounters many obstacles. If it encounters a hill…it circumvents and continues. So should it be with our politics’. Ibid.

¹²¹ The number of Trade Unions increased and their membership multiplied. For figures see C. Revri, The Indian Trade Union Movement: An Outline History 1880–1947 (1972), p. 233; See also Bagchi, Private Investment in India, pp. 142–3.Google Scholar

¹²² In the mid 1930s the growth of Kisan Sabhas was phenomenal, particularly in the U.P., Bihar and Andhra Pradesh.Google Scholar

¹²³ Vallabhai Patel had confided to Thakurdas that not everything was right within the Congress party. Thakurdas to Birla, 31 July 1934, P.T. MSS 126.Google Scholar

¹²⁴ As Birla wrote to Walchand Hirachand (one of the signatories of the Manifesto): ‘I must say you have been instrumental in creating further opposition to capitalism. You have rendered no service to your caste men’. He criticized the shortsightedness of the signatory businessmen and urged that the best strategy was to ‘help’ men within the Congress ‘who are fighting socialism’. ‘It looks very crude for a man with property’, admonished Birla, ‘to say that he is opposed to expropriation in the wider interests of the country… Let those who have given up property say what you want to say. If we can only strengthen their hands we can help everyone’. Birla to Walchand, 26 May 1936. See also Birla to Thakurdas 18 April and 1 June 1938, P.T. MSS 177. For a detailed study of the response of the Capitalists to the developments in this period, see Chandra, Bipan, ‘Jawaharlal Nehru and the Capitalist Class, 1936’, Economic and Political Weekly, X, 33–5, Special Number (1975).Google Scholar

¹²⁵ Gandhi (and the ‘right wingers’ in the Congress) was regarded by Birla as ‘his man’ not because Gandhi was the capitalist’ ‘henchman’ or ‘tool’ (as Benthall once described him. Benthall Diary to Diary 10 April 1936, Benthall MSS 12), but because the practical and ideological limits to his politics were eminently suited to the objective interests of the capitalists.Google Scholar

¹²⁶ See L/E/9/1124, especially Note by E. J. Turner, 18 November 1936.Google Scholar

¹²⁷ Report of the ‘Unofficial Advisers’, No. II, 9 December 1936. The ‘Unofficial Advisers’ reports have been consulted from various Files in P.T. MSS.Google Scholar

¹²⁸ The Government of India pointed out that grant of preferences on the scale demanded was impossible since ‘we cannot accept any appreciable loss of revenue…’ The point was accepted without further comment by the B.T. See GOI to S/S, 26 December 1936; S/S to GOI, 14 February 1937. Copies in P.T. MSS 182.Google Scholar

¹²⁹ See Note on Meeting between the Indian ‘unofficial advisers’ and Lancashire representatives held at the B.T., 24 July 1937, Proceedings, India Section, 24 July 1937 pp. 107–16; ‘unofficial advisers’ report No. 8, 31 July 1937.Google Scholar

¹³⁰ For Lancashire's willingness to settle for a 15% duty see Zetland to Linlithgow, Pvt Letter, 23 May 1936, Linlithgow MSS 3. On the Indian side, Thakurdas felt that if HMG agreed to the ‘unofficial advisers’ proposals in every other respect, and if Lancashire agreed to buy one lakh bales of raw cotton it would be worth reducing the importduty to 15%: ‘Kasturbhai and Birla think that a reduction… [10 15 %] will do no harm at all.’ No concession to Lancashire could mean no Agreement while another Tariff Board enquiry in 1939 could give greater preference ‘by the backdoor’. See Note by Thakurdas, 31 July 1937; Note by R. G. Saraya, 11 August 1937. P.T. MSS 201.Google Scholar

¹³¹ Note by R. G. Saraya, 11 August 1937. P.T. MSS 201.Google Scholar

¹³² See CAB 24/271 C.P. 219 (37) ‘Indian Trade Negotiations’, Memo by President, B.T. 25 September 1937; CAB 23/89 35/37 10, 29 September 1937, (37) 15, 9 October 1937; Note by President, B.T. 30 September 1937 for the Indian delegation, delivered on 9 October, P.T. MSS. 183.Google Scholar

¹³³ E. C. Benthall left to attend to his business affairs and Dr Subbarayan to take up a portfolio in the Madras Cabinet.Google Scholar

¹³⁴ These two gentlemen stood forth as champions of agricultural interests and strongly argued for concessions which would be ‘considered by the U.K. to be attractive enough for her to increase her purchase of Indian agricultural products … or at least to maintain them at their present level’. Minutes of Meetings of ‘unofficial advisers’ 2 December 1937, and Minutes of Meeting with the Commerce Member, December 1937, P.T. MSS 187.Google Scholar

¹³⁵ This figure did not include the ‘differential duties’ which gave preference to U.K. cotton and steel goods.Google Scholar

¹³⁶ Zafrullah Khan's (the Commerce Member) optimism was based on his discussions with Frederick Whyte of the B.T.; Birla's own discussions with officials at the B.T. gave him the impression that the gulf was too wide. Grigg shared this impression and remarked: ‘Frederick Whyte is a bloody fool’. See Birla to Thakurdas, 4 January 1938, P.T. MSS 181 (4). See also Note of Discussion on 18 February between Zafrullah Khan and Horace J. Wilson, 19 February 1938, PREM. 1/290.Google Scholar

¹³⁷ CAB 24/276 C.P. 40(38) ‘U.K.–India Trade Negotiations’, Memo. by the President B.T. 18 February 1938. See also W. B. Brown to Thakurdas 26 February 1938 in forming the latter that Indian proposals were unlikely to be accepted readily. ‘I can see great difficulties for a minister in commending to the House an agreement based on the present proposals’. P.T. MSS. 181 (V).Google Scholar

¹³⁸ Note for the P.M. by H. J. Wilson, ‘U.K.–India Trade’, 19 February 1938;Treasury brief for the P.M., 18 February 1938, PREM 1/290; Notes on Memo by the President, B.T. by A. Dibdin and C. Kisch, 22 February 1938, L/P/D/291; cf. I. Drummond, British Economic Policy and the Empire 1919–1939 (1972), pp. 138–40.Google Scholar

¹³⁹ CAB.23/92, 10(38)8, 2 March 1938; Note by W. B. Brown, 3 March 1938, PREM 1/290.Google Scholar

¹⁴⁰ Birla to Thakurdas, 21 March 1938; Thakurdas to Birla and Kasturbhai, 18 March 1938, P.T. MSS 181 (V).Google Scholar

¹⁴¹ See Thakurdas to H. Dow (Comm. Dept. GOI), 24 March 1938, Thakurdas to Zafrullah Khan, 3 April 1938, P.T. MSS 181 (V); Linlithgow to Zetland Pvt tel. 2 April 1938, Linlithgow MSS 17.

¹⁴² ‘Your viewpoint and mine are quite different… I cannot see any economic agreement independent of political issues’. He had, however, advised Birla to continue his efforts by concentrating on the economic aspects and added ‘My opinion will probably coincide with yours’. Gandhi to Birla, 18 August 1937, C.W. LXVI.Google Scholar

¹⁴³ Gandhi to Birla, 25 August 1937, ibid.

¹⁴⁴ Gandhi to Birla, 18 August 1937, ibid.

¹⁴⁵ Birla to Gandhi, 17 April 1938; Gandhi to Birla (in Hindi), 20 April 1938, P.T. MSS 181 (VI).

¹⁴⁶ As Birla put it: ‘Purely from the economic point of view, we would not think of giving a free gift of 5%’. Birla to Gandhi, 17 April and 22 April 1938, Ibid.

¹⁴⁷ Birla to Gandhi, 22 April 1938, Ibid. If on political grounds there was to be no agreement, then Birla wanted the Congress to announce its position publicly. ‘Only then’, he told Gandhi, ‘can the Indian negotiations save face…’.

¹⁴⁸ Thakurdas to Gandhi, 23 April 1938, Ibid.

¹⁴⁹ Note by Thakurdas on conversation with Gandhi and Patel, 30 April 1938, Ibid.

¹⁵⁰ Gandhi to Birla, 25 August 1937, C.W. LXVI.Google Scholar

¹⁵¹ Lancashire's scheme of tariff reductions: the minimum revenue duty was assumed to be 7½% and the maximum limit oftariffincreases 17½%. To start with, this duty was to be reduced to 11%. If in any year imports from Lancashire fell below 333 million yards, the duty was to be reduced by 2½%. If in the following year imports continued to remain below 333 million there was to be further reduction by 1% only, since the minimum revenue duty was assumed to be 7½%. The duty would be increased by 2½% only when Lancashire's exports to India exceeded 666 million yards. A. D. Campbell to Thakurdas, 19 May 1938, Annexure VII ‘unofficial advisers’ Report No. 13.Google Scholar

¹⁵² Birla and Thakurdas countered the influence of the representatives of cotton growers (whose attitude they regarded as ‘more a pleading for Lancashire’) by enlisting the support of other representatives of cotton growers like Prof. Aney and Bcttigery from Bombay. Prof. Roberts complained that Birla prevented the circulation of his minute of dissent. See Note dealing with Note of dissent, enclosed with ‘unofficial advisers’ report No. 13; Birla to Thakurdas 13 June 1938, P.T. MSS 185 and 181 (VII).Google Scholar

¹⁵³ Linlithgow sympathized with his Lancashire delegates, found Thakurdas ‘somewhat ashamed of himself and suspected Birla of duplicity for plotting against a settlement. See Linlithgow to Zetland, Pvt letter 24 May 1938, Linlithgow MSS 5.Google Scholar

¹⁵⁴ The GOI's final terms: an immediate reduction of the duty to 17% on printed piece-goods and 15% on others. The duty was to be further reduced by 2% if U.K. exports fell below 350 million yards, and to be increased above 15% if they exceeded above 500 million yards. If Lancashire's offtake of raw cotton exceeded 750,000 bales, duty on ‘prints’ was to be reduced to 15% as well. CAB 24/278, C.P. 186, Memo by President, B.T. ‘Anglo-Indian Trade Negotiations’, 27 July 1938.Google Scholar

¹⁵⁵ Note by Horace J. Wilson of the B.T. for the P.M., 26 and 27 July 1938, PREM 1/290; CAB 23/94 36(38)4, 28 July 1938; Proceedings, India Section, 2 August 1938, pp. 163–4.Google Scholar

¹⁵⁶ See Patel to Thakurdas, Tel. 2 September 1938, P.T. MSS 216; ‘unofficial advisers’ report No. 14, 5 September 1938.Google Scholar

¹⁵⁷ CAB.23/98, 15 March 1939.Google Scholar

¹⁵⁸ For information and analysis of the effects of preference on India's exports and imports see Madan, B. K., India and Imperial Preference (1939), pp. 228–39, esp.Google Scholar Table L 111, p. 229. For the importance attached to goods on which preference was retained see see Wilson, W. H., British Empire: A Concise Handbook of the Markets of the British Empire (1938), pp. 102–8.Google Scholar