ciple in the Madras operations. We will quote one significant passage from the first of these minutes.1

SIR LOUIS MALLET'S MINUTE.

"In a return to the House of Commons in 1857 on Indian Land Tenures, signed by Mr. John S. Mill, I find the following general statement: 'Land throughout India is generally private property subject to the payment of revenue, the mode and system of assessment differing materially in various parts.'

"On the occasion to which I have already referred, viz., the correspondence with Madras in 1856, the Court of Directors emphatically repudiated the doctrine of State proprietorship, and affirmed the principle that the assessment was revenue and not rent; the revenue being levied upon rent, as the most convenient and customary way of raising the necessary taxation, which in a self-contained country, possessed of vast undeveloped agricultural resources, is perhaps the soundest, simplest, and justest of all fiscal systems.

"Sir C. Wood, in 1864, reaffirmed this principle, but went beyond the Court by fixing the rate of assessment at 50 per cent. of the nett produce, fully recognising, however, that this was merely a general rule, and that in practice the greatest possible latitude must be given.

"The principle thus established appears to rest, then, upon a solid, scientific ground; but launched, as it necessarily was, in language and under circumstances which really almost reduced it to an abstract proposition, (for the application of the principle was entirely left to the judgment of the Settlement Officers, and the tasks given them altogether beyond the power of any human beings to discharge, except in the roughest manner), one cannot wonder that the whole administration has drifted into the chaos in which these papers show it now to be.

1 Dated February 3, 1875. The italics are our own.

"One is tempted to ask if rent-economic rent, pure and simple is alone to be taxed; why, instead of the costly, cumbrous, capricious, and when all is said, most ineffectual settlement system, we cannot leave the assessments to take care of themselves, and take whatever percentage on the rental of the land we want, wherever we find it. I can only suppose that the answer would be, that in truth the 50 per cent. of the nett produce has been a mere paper instruction, a fiction which has had very little to do with the actual facts of the administration, and that in practice the rates levied have often absorbed the whole rental, and not infrequently, I suspect, encroached on profits also."

CHAPTER VII

LAND SETTLEMENTS IN BOMBAY

THE first general Land Settlement of Bombay, commenced in 1836, has been described in an early chapter of this work. It was conducted with considerate judgment by Sir George Wingate; and as it was concluded for thirty years, it gave the cultivators much relief after the frequent and severe assessments of preceding years. But its essential defect was that the assessment was left entirely at the discretion of the Survey Officer; and cultivators were not protected against undue enhancements at future revisions.

Before the expiry of the first thirty years' settlement the question of a Permanent Settlement came up for the consideration of the Bombay Government. Colonel Baird Smith's proposal of 1861 was forwarded by Lord Canning to the Governor of Bombay. The Governor, while rejecting the proposal, accepted the principle of basing the assessment on "a just and moderate proportion of the gross produce."1

PROPOSED PERMANENT SETTLEMENT.

"It is a maxim of the Natives of this country that the perfection of financial administration may be measured by the extent to which an equitable land tax is made to contribute to the support of the State, and that the excellency of a Government may be estimated by the absence of direct and indirect taxation.

"2. I have never doubted the truth of this opinion, seeing that the Native feels that, in return for the payment 1 Minute dated March 3, 1862.

which he makes to the State, he acquires the right to occupy or possess his land, and that in that right he receives an equivalent which to his mind deprives his payment of the essential characteristics of a tax.

"3. This financial system is one of the most ancient institutions of this country, and is founded on the right of the State to a share in the produce of the land; a right which is proved not only by the universality of the practice, but by the fact that exemption from the obligation to pay is regarded as a much cherished privilege, which has either been forcibly acquired in olden times, or has been directly conferred by the State upon the possessor as a reward.

"4. It is frequently the case that the title of the holders or occupants of the land to enjoy the usufruct of the soil has become more or less complete, and their rights of occupancy more or less permanent, according to usage and a variety of circumstances. But exemption from payment of a share of the produce is nowhere the rule, but the exception; and I consider it would be generally impolitic, by fixing permanently at their present money value the demand of the State on the land, to transgress a principle of finance so sound and correct as the one I have adverted to, because it is the tendency of prices and wages to increase, consequently the expenses of administration must increase. If, therefore, the income of Government from the land be stationary, or nearly so, which, by fixing the assessment permanently, must be the case, recourse must be had to increased taxation, both direct and indirect.

"5. It will be perceived that in these observations I advert only to the fixity of settlement in respect to the money demand, and I desire it to be understood that I do not advocate any variation in the just and moderate proportion of the gross produce on which the present assessments are based. But, as the prices of produce are yearly increasing, I see no infringement of the original conditions

of the settlement, nor will it be so felt by the ryot, if, on the expiration of this experimental settlement, the Government Land Tax should be readjusted according to those increased prices and to other circumstances, provided that no revision is made within such long period of time, or otherwise than on considerations of the most sound character, and upon well-established facts.

"6. This a thirty years' settlement, such as has been introduced into a considerable portion of this Presidency, and is in progress throughout the rest of it, fulfils. The moderation with which the assessment has been fixed, has given the right of occupancy a high marketable value; and, under the settlement in some districts, the prosperity of the people has increased in a marked degree. But I do not concur with the late Colonel Baird Smith, that to intensify these results, which are similar to those described by him as having taken place under the settlement of the North-West Provinces, we should here have recourse to a Permanent Settlement of the Land Tax; and it appears to me that more is due to those other elements of our settlements which he enumerates, viz., 'security of titles, moderation of assessment,' and, above all, 'the recognition and careful record of rights,' than to the mere 'protracted fixity of the public demand.'

7. For in this Presidency it had long been sought to perfect a Ryotwari system by acknowledging no others than the Government and the poor peasant, and imposing on the latter all the burdens that he could stagger under in support of the former. That system naturally proved

detrimental to the lands and all their inhabitants, excepting here and there the usurer. The result was that which must infallibly ensue under any Government which itself lives from hand to mouth, keeps no surplus money for advances, and maintains no stores for use, when in hard times seed corn is needed. Constant remissions, and still further decline of villages, became the ordinary characteristics of provinces which had already undergone the