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latter paid a rent to the former and had the privilege of mortgaging, selling, or transferring the top-soil rights. Surviving contracts reveal that these parties were referred to by different names, but the terms were like those just described.
This tenure arrangement made it possible for the rural people to reclaim land, in which case additional land became farmed by the top-soil claimants which never became registered so no taxes were collected. As a result, a tremendous amount of land was never reported for land tax collection, and agriculture became under-taxed. On the other hand, the tax-paying households with sub-soil rights continued to acquire a fixed rent which enabled them to manage other resources. The consequences were that (1) agriculture developed and more people were accommodated on the land, and (2) countless top-soil claimant households were able to climb the socioeconomic stepladder to higher social status and accumulate more property.
Therefore, we can readily see that when the British and Japanese imposed a new land tax, they were able to garner a much higher land tax revenue, and why the sub-soil claimants would resist having their land rents reduced when their land taxes were being increased. Unless the KMT authorities truly understood this aspect of the land tenure system, their efforts to restructure property rights were bound to fail.
The Japanese in Taiwan stumbled upon the best solution to the problem. They had made use of the Liu Ming-ch'uan survey of the 1870s and initiated new surveys of customary law of their own. In this way they learned about this long-term tenancy system and devised a policy to change it. They first conducted a land survey of the island, using police power to complete that survey, and then they issued bonds to the sub-soil rights' claimants and conferred real ownership rights to the top-soil claimants, but insisting they now pay the land tax, in fact a much higher one. These policies created a new incentive for the new landowners to farm and market a higher surplus to pay the new land tax. But these policies failed to deal with the short-term tenancy conditions which still persisted and would indeed worsen by the second quarter of the twentieth century.