Another proposal made in 1879 in connection with the Bombay Irrigation Act, that all lands commanded by the water of canals should be taxed, was similarly rejected by the then Secretary of State for India. And now, in a year of distress and famine in India, the Government of Madras has thought it fit to pass an Act which, in the opinion of the late Duke of Argyll, would either throw on the cultivators the loss consequent on unsuccessful speculations undertaken by the

how prone to become excessive guaranteed expenditure always is and under the provisions of the Bill all expenditure on Government canals would be guaranteed.

4. To this alone there would be no objection if the guarantee were given voluntarily. But here the guarantee is to be extorted compulsorily. The inhabitants of a district are not to be asked beforehand whether they desire irrigation or not. The Government alone is to judge whether irrigation is desirable. It alone is to decide arbitrarily whether an irrigation work shall be constructed; but the landholders, and not the Government, are to be responsible in the event of the latter's committing an error of judgment. There is little analogy between a plan like this, and that under which county cesses are levied in England and Ireland, for those by whom these cesses are imposed, besides being themselves cesspayers, represent theoretically, if not really, the great body of cesspayers who are assumed consequently, to have given their assent by proxy. The outlay to which they are subjected has been undertaken by them voluntarily, and in the event of its proving unproductive, they have no pretext for considering themselves aggrieved.

5. These considerations would, in my opinion, go far towards neutralising any recommendations which the proposed enactment might otherwise possess, but I am greatly in doubt whether it is really calculated to serve any useful end. To force irrigation on the people would be not unlikely to make that unpopular which could otherwise scarcely fail to be regarded as a blessing, and which, as all experience shows, Indian agriculturists, if left to themselves, are sure duly to appreciate, sooner or later, and seldom later than the first season of drought that occurs after irrigation has been placed within their reach.

Government, or would force them to pay for water for which they have no use, or would lead to excessive expenditure under the vicious system of guaranteed profits.

No reason exists for making the water rate compulsory in Madras; for productive irrigation works are paying at the rate of 6.35 per cent. on the capital sunk in all India, and at the higher rate of 7.14 in the

1 Instances have occurred in the past in which the Government has thrown on the cultivators the loss sustained by unsuccessful speculation. The following extracts from Sir George Campbell's "Memoirs of my Indian Career" relate to one such incident which took place in Bengal:

"Sir Arthur had succeeded in forming a large private company in England to establish a great system of irrigation in Orissa; and much progress had been made with the works when there came this famine, which seemed to justify the project. Still, looking to the rarity of rain failure, and the facilities for importing grain, if measures were taken in time, we greatly doubted if such extensive works would ever pay. We suggested a liberal treatment of the company-the offer of assistance in the way of loans, etc.-but we strongly advised the Government not to purchase the works, as had been suggested. A little time after, however, that happened which usually happens when British capitalists have put their money in losing concerns in India, people in London bullied and abused the Government to get the concern taken over, and eventually they were successful. The Government paid out the Company in full, with an additional bonus, and have since expended a great deal more, making upwards of three millions sterling. From that day to this, the concern has hardly ever paid its working expenses, much less a farthing of interest on the capital."-Vol. ii. p. 161.

"The success of the local cess (Road Cess) induced the Government of India, a few years later, to urge upon the Government of Bengal the imposition of a further provincial cess (Public Works Cess). . . It seemed to me that the Government of India sailed a little near the wind in respect of my pledges, in that the fund (Public Works Cess Fund) was, to a large extent, applied to recoup their own bad bargains, to which the Government of Bengal had in no degree assented. I had protested against the purchase of that most losing concern, the Orissa Irrigation Company.”—Vol. ii. p. 213.

Province of Madras.1 No object is gained by forcing on the people the benefits of a system of which they have availed themselves voluntarily as a blessing, and which they will detest as a curse when it is needlessly forced on them. No increase in the total revenue can be expected, for in Madras lands are already overassessed, and responsible administrators will find it necessary, before long, to lighten the burden in that Province and not to add to it. And no endeavours to make the system of irrigation works really useful to the cultivators are likely to be made when the canal officers are sure of their returns in the shape of a compulsory tax over the entire area supposed to be benefited by those works. The blunder made in Madras is likely to spread in other parts of India; and instead of a voluntary rate which the people are willingly paying everywhere in India, they will find that irrigation means another and an odious tax on their limited

savings.

The Act passed by the Government of Madras is another instance of an administrative blunder due to disregarding the opinions of the people; and it is another illustration of John Stuart Mill's maxim, quoted before, that "it is an inherent condition of human affairs that no intention, however sincere, of protecting the interests of others, can make it safe or salutary to tie up their own hands."

1 Report of the Famine Commission of 1898.

FALLACIES CONCERNING THE LAND TAX

OF INDIA

"THE Government in India exercises over a great portion of the soil the same rights of property as those which an English landlord exercises over his own estate. The Government in India takes the place of individual landlords, and the cultivators of the soil rent their land from the Government instead of from private landlords. . . . Hence a land tax is no harder upon the cultivator; nor does this impost cause any loss to the rest of the community."

Thus wrote the late Mr Fawcett in his "Manual of Political Economy"; and as a popular account of the Ryotwari system of Madras and Bombay, the description is intelligible. Public writers and speakers have, however, often chosen to construe this description in a way which is somewhat curious; and they have argued that the land revenue of India-which Mr Fawcett himself calls a land tax-is not a tax at all! It is one of the most favourite fallacies concerning the land revenue of India.

If there is one thing which has come out clearly in the controversies on this subject by responsible officials,1 it is that the land revenue of India is not rent. This was declared by the Court of Directors of the East India Company as distinctly as the English language 1 See Appendices M to R.

could express it. The Court of Directors wrote in their despatch of the 17th December 1856 that the "right of the Government is not a rent which consists of all the surplus produce after paying the cost of cultivation and the profits of agricultural stocks, but a land revenue only." The same thing was repeated by Sir Charles Wood, Secretary of State for India, in his famous despatch of 1864, and he desired to take only a share, generally a half share, of the rent, as the land tax. The question was discussed by Sir Louis Mallet, Sir Bartle Frere, and others in 1875, and Lord Salisbury, then Secretary of State for India, came once more to the conclusion that the land revenue of India was not rent, and was not meant to be rent. Mr Sullivan, a member of the Famine Commission of 1878, has shown that the Government is not the landlord in India, and has to purchase land and pay for it when required for public purposes. And Mr A. Rogers, one of the ablest revenue authorities that the Indian Civil Service has produced, remarks that land revenue in Bombay is a tax on rent.

It would be honest and candid, therefore, to recognise that the land revenue of India is a tax, and a very heavy tax, on the people. But financiers and public men still find it convenient to underestimate the incidence of taxes in India by calling the land revenue a revenue not derived from taxation.” And they quote Mr Fawcett to prove that to be not a tax which Mr Fawcett himself called "a land tax." An error dies hard, especially when it serves the purposes of partisan controversy!