PUBLIC RECORD OFFICE
15. To Tε Iz IT
سلنيسا
Reference :--
C.O. 882
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO
5 PUBLIC RECORD OFFICE, LONDON
1. "Sum- inary of
Mr.O'Brien's letter."
II. Para. 2.
Para. 8.
Para. 4.
l'ara. 5.
Para 7.
l'arn. 10.
III. Para. 1.
IV. Para. 2.
Para. 5.
9654.
MR. LUCAS,
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No. 24.
G. T. M. O'BRIEN, Esq., to COLONIAL OFFICE.
CEYLON PADDY TAX.
81, Chester Square, May 8, 1891. I APPEND some remarks on Mr. Le Mesurier's printed letter of April 3rd, 1891, to Sir A. Havelock. For convenience of reference, I follow the numbering of his paragraphs; wherever I pass by a paragraph without notice, it is because it appears to me to be either irrelevant or not likely to mislead any one who has read the previous papers with any attention. If his letter has suggested any points to you on which you desire further information, I shall be happy to afford it at any time you may mention.
Mr. Le Mesurier apparently expects me to show that the tax is a good thing per se. I have shown that it is not unjust, that the revenue it produces cannot be spared (vide report of Select Committee), that its abolition would involve the abolition of the import duty on rice, and that, if it were abolished, the taxes that would have to be substituted would bear far more heavily on the people by reason of additional cost of collection and other considerations which I have stated elsewhere. Can more be shown against abolishing any other tax in Ceylon?
There is an “
army of informers "
under the arrack renting system because the renters have a great many retainers, mostly unpaid, to watch their interests. With the substitution of an excise for the renting system this army would disappear, and a costly, though less effective army, would have to be hired by Government.
In my opinion, it would not require a large addition to the price of arrack to induce very considerable illicit production.
Government could not work nearly as cheaply as the renters; instead of gaining the assumed 10 per cent., in practice it would lose heavily.
If additional revenue were indispensably required, I should see no objection to increasing the import duty on spirits, &c. by 10 per cent. The increase, however, would produce little, and it is bad policy to use up margins (that should be reserved for emergencies) in order to facilitate the abolition of an existing source of revenue.
The proposal applies only to future sales of land, and, of course, if it were adopted, the sums realised by such sales would be proportionately reduced. It may, or may not be, a good thing to do-probably it would lead to complications hereafter; but in any case, as a means of raising additional revenue, it is chimerical. What you gained under "Rent" you would lose under "Land Sales."
The costliness of a general land tax in Ceylon, and the practical impossibility of imposing and collecting such a tax there, have been sufficiently demonstrated in the report of the Select Committee, and in my printed letter to his Excellency. It is also shown there how very disastrous the imposition of such a tax, if it were practicable, would be to the people.
Mr. Le Mesurfer is wrong in his support of Mr. Christie. When the export duties were abolished, cocoanuts, cinnamon, and coffee (not to mention other products), were largely cultivated by persons, inter alios, who did not own paddy land. But the point is hardly of more than academic interest,
The paragraph is apparently intended to justify "protection"; even if it were correct, which it is not, it would be "nihil ad rem.' (My statement is, I submit, perfectly correct. I may observe, parenthetically, that, strange as it may appear, the price of labour in Ceylon does not in any one and the same district fluctuate with the price of rice.
The price of rice in Colombo, for example, fluctuates from month to month and from year to year; but the price of labour there does not fluctuate correspondingly. This is the case in the other districts also, though I admit that the price of labour, and of rice, is permanently higher in some districts than in others.)
Every sentence in this is misleading :—(1.) "The abolition of the inland paddy tax would give the poor agricultural classes so much more rice to eat.' By no means.
It would, in the case of all paddy lands not owned by the persons who cultivate them, do nothing more than increase the incomes of the landlords. In the case of an owner cultivating his own land himself, the cultivator (being also the owner) would have more rice at his disposal for his own purposes; whether he would eat more is another question probably he would not, but would dispose of the additional rice in other ways. (2.) "They do not grow enough for their own consumption," loses sight of the
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fact that all cultivators of paddy cultivate other articles of food also. (3.) "The share they now give the Crown would then go into their own stomachs." See above (1) and
(2). In very many cases, i.e., in the case of all who cultivate the land of others, it would go into their landlord's pockets.
The reasons for the abolition of the tax on dry grain, and their inapplicability to IV. Para. 5. the paddy tax, are fully set out in my printed letter to his Excellency.
My remarks are strictly correct. The rate of taxation has never been increased Para. 6. under the British administration. That assessments, whether of estimated amount of crop or of the value of paddy, have sometimes been too high is neither here nor there. In some parts of Uva they have, in my opinion; in some parts of the island they have been too low.
As Government is entitled to one-tenth of the crop, one effect (and the only effect Para. 7. with which I was concerned) of a large inorease in the amount of paddy produced would be an increase in the revenue derived from the Government share.
I would ask that the argument of mine to which these paragraphs refer may be Paras. 9 to carefully read. Paragraph 15. It is true that labourers cannot be fed with growing 15. crops, but I fail to see what bearing that has on the question in hand.
In considering the incidence of the tax, it is of importance, and obviously of primary Para. 16. importance, to remember that the cultivation of paddy occupies but a small portion of the year's labour.
I have always contended that Ordinance 11 of 1878 requires amendment. The Paras 17 to adoption of the recommendations of the Select Committee will practically preclude the 19. sale of paddy lands for default of payment of tax; while a general land tax would result in an enormous number of "evictions." The lands sold by the Crown in the past for such default were generally worthless lands (vide report of Select Committee), and it would be interesting to know how the amount of the proceeds of those sales compares with that of lands sold for private debts. (In drawing the comparison it would be essential, in view of the law of mortgage and sale in Ceylon, to set out the amounts of the mortgages on the lands sold for private debts.)
It is not the case that "Government have practically vetoed the sales of land for Para. 20. default during the past four years."
It is convenient here to mention that Mr. Dawson, the Government agent of the Western Province, told me just before I left Ceylon, that he had got in all his paddy tax except Rs. 8 without any distraint, pressure, or difficulty of
any kind.
"
The reasons for abolishing the tax on dry grain are stated in my letter to his Para, 28.
El-wi" being a Excellency.
description of dry grain had necessarily to be exempted when dry grain was exempted.
Paddy growers sell some of their paddy to get money, not only wherewith to pay Par. 2 their taxes, ie, their poll-tas and paddy tax, but also wherewith to pay for various articles for their own use, 6.g., aloth, tobacco, arrack, &o., &c.
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Paddy is a part only of the paddy growers' food; it is also the most convenient of Para. 26. their possessions to sell whenever they require money for any purpose.
Though it is the case that some people in Ceylon eat imported rice only, and some Fars, 27. people Ceylon rice only, the two descriptions of rice do come into competition, and are doing so increasingly with the increased production of rice in Ceylon.
Three hundred thousand bushels (or a little more) is, so far as I know, the largest Para 28. exportation by ses from Batticaloa in any one year. Last year, instanced by Mr. Le Mesurier, was a year of extraordinary drought in the Eastern Province, and Govern- ment had to undertake relief works in several parts of the province. Nevertheless, it would appear from Mr. Le Mesurier's statement that there was still an exportation coast-wise, though a comparatively small one, from Batticaloa in that year. It should also be borne in mind that the Eastern Province in sending away its rios in increasing quantities inland to the Madulsima distriots and elsewhere. Further, it is not the only part of Ceylon that sends a portion of its rice away for sale in other parts of the island.
As the imposition of a general land tax in Ceylon would be at once most wasteful Paras, 83 economically, and most disastrous in its results to the people, it is fortunate that it is and 84. practically impossible.
Sir E. Walker is my authority for saying that no rice is grown, except experimentally, IV. Para. 38. in British Guiana; Sir A. Havelock, for saying that there is a land tax in Natal; official papers, for saying that there are (at least) 650,000 acres under paddy cultiva tion in Ceylon.
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