26 OCTOBER 1861, Page 14

THE INDIAN CONTRACT LAW.

T"public scarcely understand even yet the true difficulty in the way of an Indian contract law. They are told, justly enough, that without it Europeans cannot grow cotton on any great scale ; they hear, truly enough, that to make breach of contract a criminal offence would be an effective provision ; and then they learn with surprise that Sir Charles Wood declines to allow this effective provision to be even tried. Sir Charles Wood is in the right, and it may be worth while, in a matter which so gravely affects our future, to anticipate the certain Parliamentary verdict. The system of cultivation in India for all staples, and in all provinces, is that which prevails in Belgium and most of the departments of France. The peasant owns the land, subject to a quit-rent, and farms it himself, in any manner, on any rotation, and with any crop which may be pleasing in his own eyes. There is no coercion whatever, no guidance, and, except in the irrigated lands, very little co-operation. As the hold- ing is rarely more than two acres, the peasant, of course, has little capital, and that little be chooses to hoard against a rainy day. Accordingly, in a native village he goes to the money-dealer, and sells him the crop in advance, sometimes at a fixed price, more usually with a stipulation for the market rate of the day. The loan, of course, bears interest, varying with local circumstances and personal credit, but the absolute minimum is sixteen per cent., or, in native phrase, " an anna in the rupee per month." If on a cotton-field, lie does exactly the same, getting his money, however, from the cotton-factor; and if attached to an indigo factory, he goes to the Englishman's head-clerk, and in this case he always pledges himself to a fixed price, but in return he pays no in- terest. The advance buys the seed, keeps the cattle, perhaps hires a little extra labour, and, above all, pays the rent. The harvest secured, the money-lender must be paid first, and the peasant's troubles begin. He never knows what he owes, never can calculate interest, and never dare push the money-dealer too bard for fear of his refusing the next advance. If his crop is unusually good he gets through well enough, minus his waste of interest, but if it is a bad one he must take another advance, allow the old debt to run on with its crushing accu- mulation, and next year "work the dead horse." So terrible are the combined effects of this reckless borrowing and heavy interest, that there are districts in which the whole popula- tion pass their lives in working off debt, and never retain out of all their earnings more than their bare food. So bitter is the irritation thus caused, that the first task of the villagers in any commotion—a bread riot, a military outbreak, or an insurrection—is to burn the dealers' books, and hang up the dealers themselves by way of example. Of course, whenever the price of the staple leaves but a small margin over the peasant's food and the cost of cultiva- tion, the annoyance of working without any profit to receive becomes unusually great. The peasant is always in debt, conceives a very bitter dislike of his task, and racks his brains for a chance of evasion. In the rice trade he rarely succeeds. The grain dealer has not many clients ; he knows all about them ; he can employ a social compulsion ; he can and does beat them, or, as a last resort, he can sue them. Till he is hanged he always gets his money, and we have known judges complain that they have been compelled to decree judgment for moneys originally lent at seventy-five per cent., allowed to run over the year, and then renewed with interest added to capital every month. In other words, a defaulting peasant pays often 150 per cent. for more time. With the European planter, however, the case is altered. He also can beat, if he likes the risk, and can sue one or two tenants, but the other sources of influence are closed to him, and when opposed by a combination, be is powerless. The manager, for example, of the Indigo Company's estates may have 19,000 separate advances out in one year. He can sue one or ten, or even a hundred defaulters, but if they all refuse to supply the plant, he is a ruined man. There is but one court to apply to, and if there were twenty, they could not get through 19,000 suits, each conducted like a Chancery suit, by written pleadings, plea, answer, rejoinder and surrejoinder, and his costs are unattainable. He must either yield to his fate or appeal for a more stringent protec- tion, which, for reasons we will explain, the Legislature is unwilling to give.

But, it will be said, as the peasant benefits by his advance it is not worth his while to combine against the advancer. That is true when no other means of livelihood is open to him, but the indigo-land, and in a less degree the cotton-land, is well suited to other crops, and if he can shake off his liabi- lity, he takes a new advance from a native, and he begins again comfortably with a new crop. He is not a bad fellow, this B.amgopal ryot, and not by any means the wretch it suits angry men to represent him to be, but he is a very poor, lei- sure-seeking, thriftless, inconsequent Pagan, more like a Tip- perary cottier, as Sir Charles Trevelyan once said, than any other created being. Of course he takes advances as a child takes sweetmeats, spends them, and so being always in debt, and always working for nothing, he is always ready to pay off his debts by a swindle of any sort. He is most ready, too, at combination, and when once a few ryots have combined, the caste system enables them to compel the remainder to follow. To collect debts under such circumstances, is like collecting them in a " Ribbon" village just after a potato famine. Of course the planters, who are thus in the position of Irish landlords, appeal, like them, to the Government. They want breaches of contract made penal, for the police is irresistibly strong, and no combination would atop a magistrate from putting criminal offenders in jail. Such a law well carried out, with military police to put down com- bined resistance, would undoubtedly solve this one diffi- culty. The indigo, or cotton, or safflower, or sugar would be forthcoming, and the planter, relieved from the dread of strikes, would be very speedily rich. But unfortunately it would produce another consequence too. All India would be turned into one colossal sweating-room. Au Indian peasant is a wicked child, and can no more help taking money when offered him than a parrot can help taking hemp-seed, and the law makes it the planter's in- terest to drown him in advances. It is so easy to manage your men when you can put them in prison. The planter is not a bad person, much less a fiend or a slave-driver. He is just an average English employer, with a good deal of kindliness, great readiness to assist when he can, and a very strong determination to have his work done at the price he agreed on. Armed with the power the new law gives him over the man under advances, he would have his work done at the lowest price consistent with life, make a fortune as soon as he could, and forswear India the minute it was made. We ask anybody who favours sharp laws whether he would trust, say, the English Peerage as a body, with the power of imprisoning any of their labourers or tenants for six months at discretion ? That is what this contract law amounts to, for we cannot too often repeat, the peasant will take the advance for the first ceremonial, or holiday, or speculation which attracts him. We say nothing of the political evil of such a system, or the boundless bate it must ultimately pro- duce to our rule ; we simply deny that a British Govern- ment can, for any inducement whatever, establish, or permit any one else to establish, serfage within British dominions. Is the evil, then, we shall be asked, irremediable P Is there no choice between ruining trade, and enslav- ing the peasantry ? The problem will be found, we be-. lieve, the most difficult which ever taxed statesmen, but palliatives undoubtedly may be applied. Sir Charles Wood, in his answer to the planters, writes about swifter Courts ; and that remedy will accomplish something. More, how- ever, will be needed than courts ; and we firmly believe the law which we apply to the rich would be the fairest one for the poor. India wants not a Contract Act, but a far-reaching bankruptcylaw, followed by an Encumbered Estates Act, which shall reach down to estates of the smallest value. Let the holding be the security for the performance of contract, and let the peasant who cannot pay, surrender, like the rich man who cannot pay, all that he has. It is quite certain that, so long as he can, the peasant will fulfil his contract rather than lose his land. It is quite certain, also, that an examination. under a Bankrupt Act would give him time to show the two all-important pleas, the true extent of the debt, and that it was incurred of his own free will. Under a criminal law he cannot show either, the fact of non-fulfilment being reason enough for punishment. This, however, would be but a minor effect of the law. The real and permanent consequence would be to break up the cottier tenure, the curse of Madras and Bengal, and change the peasants, without oppression or violence, from pauperized peasant proprietors into labourers earning wages. The moment the laud had been sold the landlord must re- place the peasant upon it, paying him weekly wages. lie has not the slightest objection to high farming as high farming, if somebody else finds the capital. He grows tea, and cotton, and coffee, on the wild districts, with the utmost complacency; and the labourers, for example, on the Assam Tea Company's land are twice as rich as the peasantry all around. They earn really—though not nominally—more than sepoys, considerably the highest paid of all unskilled labourers. The mere possibility of combining the efforts of the people over the estate, instead of leaving each cottier to go his own stupid way, would double its produce, and accelerate the tendency to high wages, already so marked. So beneficial would the change prove, that high Indian authorities have recom- mended measures which would effect the result at once.

They are all, however, unjust. The cottier's land is his own, and must be surrendered, if at all, of his own free will ; and a bankruptcy law once extended down to his class, he would in a very few years sink or rise from a pauper proprietor into a man in receipt of wages.