Dadabhai Naoroji Counted the Drain of Indian Wealth in 1876, Won Finsbury Central by Five Votes in 1892 and Presided Over the Indian National Congress Three Times

On 6 July 1892 the returning officer for Central Finsbury, a working-class district of north London, declared Dadabhai Naoroji elected to the House of Commons. Three votes was the margin on the declaration; an official recount lifted it to five. A petition filed by the defeated Conservative gives 6 July as the day of the election. At 66, a Parsi from Bombay, Naoroji became the first Indian to be elected to the House.

His papers on what he called the drain of wealth gave Indian nationalists a set of figures to argue with, and the Indian National Congress made him its president three times. Mohandas Gandhi wrote the foreword to a 1939 biography and says there that Dadabhai “became real Dada” to him.

A mathematics professor who went into trade

English Heritage gives his birth as 4 September 1825 in Khadak, a suburb of Bombay, to a Parsi priestly family. Elphinstone College made him its first Indian professor, in 1854. A year later he sailed to England to open a London branch of the Cama mercantile house, the first Indian firm with a base in Britain. University College London also employed him, as Professor of Gujarati from 1856 to 1865.

Politics began for him with meetings. Masani records that the East India Association was inaugurated on 1 December 1866, with Naoroji’s help, so that Englishmen and Indians could share one platform and air Indian grievances. English Heritage counts seven trips to England and more than three decades in London in all.

What the 1876 papers counted

In 1876 Naoroji read papers titled “The Poverty of India” before the Bombay branch of the East India Association. His opening sentence disclaims any wish to belittle British rule: “I do not for a moment mean to ignore the very bright side of British rule”. Money was his complaint.

Official figures supplied his numbers. Total production for British India came to about Rs 20 a head a year, he wrote, and the mass of the people got less than that average, because the upper classes took more than their share and the total included the output of foreign planters. Beside it he set M. E. Grant Duff’s 1871 budget speech, which Naoroji quotes in his book. Grant Duff had guessed the income of British India at £300 million a year, about £1 a head, against about £30 a head in the United Kingdom.

Trade came next. India’s exports from 1835 to 1872 were about £1,120 million. Allowing 15 percent for ordinary commercial profit, and adding the loans India had taken on, Naoroji argued that imports should have come to about £1,430 million. Actual imports were about £943 million. A balance of roughly £500 million was what he called the drain: wealth that left India and came back in no form. A table of yearly averages in the same paper rises from about £5.3 million in 1835 to 1839 to about £27.4 million in 1870 to 1872.

Two groups of remittances made up the drain, in his account. European officials sent home their savings, drew pensions and salaries paid in England, and ran up government spending in England. Non-official Europeans made similar remittances. Because the drain stopped India from building capital, British capital came in and took “almost a monopoly” of trade and industry. For the wider argument in short form, see how Britain drained India.

The book of 1901

London’s Swan Sonnenschein published the collected papers in 1901 as Poverty and Un-British Rule in India. Its contents run from the 1876 papers through Commons speeches and letters to Lord Welby to a set of addresses, one titled “India must be Bled”.

A single sentence in the introduction explains the title: the system of government was “destructive and despotic to the Indians and un-British and suicidal to Britain”. By 1901, the introduction says, the drain was nearly or above £30 million a year, and nearer £40 million once the unrecorded profits on exports, freight and insurance were counted. The same pages give credit. Naoroji lists the end of sati and infanticide, English education, law and order, and freedom of speech and the press among the benefits of British rule.

Lord Salisbury appears in the introduction as well. As Secretary of State for India, in a minute dated 26 April 1875, Salisbury wrote that “As India must be bled the lancet should be directed to the parts where the blood is congested”. Reprinting the sentence in 1901, Naoroji answered that the farming population was now so short of blood that famines and plagues were killing the masses.

The remark that made him famous

Holborn was Naoroji’s first try at Parliament. In 1886 he stood there as the Liberal candidate and lost. On 30 November 1888 Lord Salisbury, by then Prime Minister, spoke at Edinburgh about a smaller Conservative majority in the Holborn contest. Masani gives the sentence: “I doubt if we have yet got to that point of view where a British constituency would elect a black man”. Salisbury added that the man was “of another race”. He meant Naoroji.

Newspapers took it up, and “Salisbury’s black man” became a campaign slogan. On the night of the 1892 results, a London correspondent reported, crowds outside a club on the Embankment were shouting “Three cheers for Salisbury’s black man”. William Gladstone, speaking at West Calder, said that the man Salisbury called a black man had “just been returned, to my great satisfaction”.

Three votes became five on the recount. Captain Penton, the defeated Conservative, petitioned for a scrutiny, a check of the voting papers. After votes had been struck out on both sides, the two men were level, and Penton withdrew his petition on 14 December 1892. Naoroji kept the seat. English Heritage records that the press called him “Narrow-majority”.

Three years in the Commons

Many accounts call him the first Asian MP, and the London Museum is careful about that. It names David Ochterlony Dyce Sombre, elected in Suffolk in 1841, as the first MP of South Asian heritage, and Naoroji as the second and the first for London. Both the History of Parliament and English Heritage call Naoroji the first Indian to be elected.

On 2 June 1893 the House debated a resolution to hold the open competitive examinations for the Indian Civil Service in India as well as in England, with candidates ranked on a single list. Herbert Paul moved it and Naoroji seconded. Parliament had repeatedly promised Indians equal admission to the Crown’s service, he argued, and the promises had been broken. His closing contrast: “Be just and fear not” had been the policy of Parliament, and “Fear and be unjust” the policy of the Anglo-Indian system.

The government opposed. George Russell, the Under-Secretary for India, argued that India’s regional and racial diversity made simultaneous examinations risky. George Curzon, then member for Southport and later Viceroy of India, said the motion affected only 950 posts. After a division on the wording, the House agreed the amended resolution, which reads that the examinations “shall henceforth be held simultaneously both in India and England”.

Masani is blunt about what came next. A private members’ night had caught the government unprepared, he writes, and it seemed probable that the resolution would stay inoperative. Naoroji wrote to friends in India asking for petitions from every district.

On attendance, Masani quotes Naoroji’s 1895 election address as saying he voted in 304 of the 310 divisions in the first part of the 1893 to 1894 session. July 1895 brought heavy Liberal losses across the country, and Central Finsbury went to the Hon. W. F. B. Massey Mainwaring by 805 votes, 3,588 to 2,783. Mancherjee Bhownaggree, a Conservative, won Bethnal Green North-East that same year.

The Welby Commission

A Royal Warrant of 24 May 1895 set up a Royal Commission under Lord Welby on the administration of expenditure in India and on how charges were split between the British and Indian governments. Masani writes that Naoroji was its only Indian member. Two British members, Sir William Wedderburn and Caine, shared his view, and from the start he feared that the three of them would be outvoted. That fear proved right, Masani says.

Masani traces the demand for such a commission to the first Congress session, ten years before. Welby received a series of numbered notes from Naoroji, the first on 17 October. All are reprinted in the 1901 book as “Letters to Lord Welby”.

Congress, three times

Delegates at the second Congress session, held at Calcutta in December 1886, elected him president. He asked whether the body was “a nursery for sedition and rebellion against the British Government”, and the hall answered no. Lahore hosted him again in December 1893, for the ninth session, and Calcutta once more in December 1906, when he was 81.

A dispute over the chair settled the 1906 choice. A large majority of the Bengal delegates favoured Bal Gangadhar Tilak, Masani says, until Surendranath Banerjea and Bhupendranath Basu cabled Naoroji to ask whether he would accept the chair. Tilak’s supporters then agreed to back him. In the address, Naoroji reminded delegates that the wounds of the partition of Bengal were still sore.

Swaraj was the keynote, according to Masani, who calls it the first time the demand was made from the Congress platform, though Tilak and others had been pressing it elsewhere. His label for it is swaraj under British paramountcy, with advice to keep to constitutional methods. Reaction split. The Bengalee newspaper hailed the address as the political gospel of a new era, and the extremist daily Bande Mataram shed tears over what it called “the great refusal”.

A debate that is still open

Economists still argue about the drain. A 2020 discussion paper for the Centre for Economic Policy Research, by Pilar Nogues-Marco, used East India Company budgets for 1757 to 1858 and concluded that the available figures support the claim that a drain of wealth occurred, through land taxes, spending on the army and civil administration, and unrequited exports. Animesh Gadre, in a 2021 paper, reviews the literature and finds that the theory’s core suppositions “remain unsubstantiated”, while seeing stronger support for deindustrialisation in Bengal and Bihar in the early nineteenth century.

Bombay became his home again in 1907, according to the History of Parliament, and there he died on 30 June 1917 at Palitana House on Cumballa Hill, aged 91. A blue plaque from English Heritage, unveiled in 2022, marks his London house at 72 Anerley Park, where he lived from 1897 to about 1904.

Gandhi’s foreword gives the closing detail. Sailing for London on 4 September 1888 with a letter of introduction to Naoroji, he later wrote, he found that every letter he sent from South Africa was answered in Naoroji’s own hand, never typed.