PUBLIC RECORD OFFICE
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PUBLIC RECORD OFFICE, LONDON
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Ceylon have presented difficulties with which the renters have not attempted to grapple, save by occasional prosecutions, and a more or less general system of exacting unauthorized dues from the illicit dealers. Toddy, licit or illicit, has always been forthcoming where there was a demand for it; and in these circumstances there was scant reason for any one who found to difficulty in obtaining his supply to make complaints of the kind suggested by the Memorialists.
15. With regard to the third statement quoted in paragrapli 10 above, I fully admit that the measure in question is one which, in practice, may at first be attended by some difficulty. Collusion between the arrack and the toddy renters may be attempted, but any renter embarking upon such an attempt will be exposing himself to very grave risks.
Both the arrack and the toddy rents have been sold on the condition that the vendor has no interest, direct or indirect, in the sale of more than one of the two country liquors, and any breach of this condition will be punished by forfeiture of the rent and the renter's deposit. Even if legal proof he not forth- coming, any renter who is reasonably suspected of having violated this essential condition of his contract will be placed upon the black list, and no future tender from him will be considered Apart from this, a method has been devised which will come into operation at the next sales, but which I do not propose in this place more particularly to describe, which will render such collusion extremely difficult, if not impossible and year by year, as the efficiency of the new Excise Department increases. the risk which the renter will incur by breaking this condition of his contract with Government will become greater and less tempting. Therefore, while recognizing the difficulties of the situation, I do not regard them as insuperable, and I see no reason to be daunted by them.
16. With regard to the fourth statement, that no opposition has come from the arrack renters to the separation of the vend of arrack and toddy, and that "the majority" of the toddy rents have been secretly purchased by them, I am not aware of the grounds upon which these two dogmatic assertions are made. The first is not in accordance with fact. At the sales of arrack rents held in March and April last very strong and united opposition to the separation of arrack and toddy was offered by the renters. This was followed up by numerous petitions from individual renters; and finally, one of the leading arrack renters addressed Government, asking to be allowed to pay twice the amount offered by any hidder for toddy rights in his area, if the separation might in his case be suspended. I need hardly say that this offer was rejected.
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17. I am equally unaware of the grounds upon which the statement that "the majority of the toddy rents have been secretly purchased by agents of the arrack renters is based', Mr. James Peiris professed to have reliable information on the subject, but, when questioned, declined to substantiate his statements, on the grounds that his information was of a confidential character; and it was not, I gather from his letter enclosed, obtained directly from the renters themselves. His information may or may not be correct; but I regard it as highly improbable that" the majority "of the toddy rents have been secured by agents of the arrack renters, and would point out that the Memorialists have contented themselves with a bare assertion, and have declined, even confidentially, to make any attempt to substantiate it. In paragraph 15 I have already dealt with the steps which Government will take if collusion between the arrack and toddy renters is proved, or if there be reasonable suspicion of such collusion having been attempted.
18. Referring to paragraph 5 of the Memorial, I would draw your attention to the fact that, as shown in paragraphs 6 to 9 of this despatch, the statement that Government has authorized the establishment of "1,300 new toddy taverns" is an exceedingly misleading way of describing the true facts.
19 As you are aware, the separation of arrack from toddy is a measure which was effected under the old Excise Ordinance. Whether the new Ordinance had been passed or not, that measure would have been none the less taken by the Government, no new powers for its adoption having to be sought from the Legislative Council in this connection. I have already stated the reasons which led me and
my
advisers to regard this step as the first and most essential to be taken in the direction of any reform. The alternative was to perpetuate the old combined system of renting; and this the Government was not prepared to do, in any case. The Memorialists state that " a strong feeling of indignation has been aroused "throughout the country," because this executive action, sanctioned by existing laws, was adopted before a new Ordinance, which in this respect gave similar, but somewhat more
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effective powers, was brought forward. It is probable that the measure in question would have aroused “ a strong feeling of indignation," not throughout the country, but among certain sections of the population, whenever its adoption had been decided upon. The indignation would be felt by those who, apparently, are unable to under- stand the real factors governing the situation, and by those who understand them very thoroughly, and view with apprehension the ending of the old, pernicious, but profitable renting system. From the point of view of the Government it was at once wiser and more fair that a step the unpopularity of which was fully appreciated ere ever it was determined upon should be taken before the new Ordinance was brought before the Council, since I and my advisers were agreed that the step must, in the interest of public sobriety, be taken, whether the new law were approved or rejected.
With regard to paragraph 6 of the Memorial, I am unable to share the opinion of the Memorialists that the exertions of a preventive staff-unaided by the Letter regulation of the manufacture and sale of toddy which the separation of the vend of arrack and toddy will help Government to secure--would have effected all that was needed in order to cope with the illicit traffic in the liquor.
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21. The second part of paragraph 6 imputes blame to the Government or so it would seem on the grounds that our "scheme includes neither any appreciable increase in the number of arrack taverns, although illicit traffic in arrack is consider able and undoubtedly much more extensive than the illicit traffic in toddy, nor any additional toddy taverns on the seaboard between Panadure and Hikkaduwa (a distance of over 40 miles), the area within which the bulk of the arrack used in Ceylon is distilled, and toddy trees are tapped for that purpose, and where it is admitted that there is a very extensive illicit traffic."
22. The first part of this sentence, I regret to have to observe, is either highly disingenuous, or else is the result of an almost bewildering unfamiliarity with the conditions and circumstances governing the situation. It is admitted that there has hitherto been a considerable illicit traffic in arrack, though the unsupported statement of the Memorialists that this traffic has exceeded the illicit traffic in toddy cannot be accepted without reserve. The two illicit traffics, however, as is well known to every student of the question, resemble one another only in the fact that they are both conducted in defiance of the law. The illicit traffic in arrack has been carried on, not by private distillers or by interlopers of any description, but by the agents of the renters themselves. It is they who have provided the arrack which, with their knowledge and practically on their behalf, has been sold in localities remote from their licensed taverns; or which has been offered for sale secretly after closing hours in the neighbourhood of their taverns; or which, again, has been sold surrepti- tiously to persons of alleged respectability, who feared loss of reputation if they were seen frequenting a tavern. In the manufacture of toddy, on the other hand, the renters, except in a few localities, have had, as a rule, no hand whatsoever. They would have preferred to see no toddy manufactured at all within their areas, or, at any rate, no toddy that was not to be sold at their taverns; but the ubiquity of the toddy-producing tree has presented difficulties with which they have not found it possible to cope, and, in the absence of a strong preventive staff of renters' peons, they have exacted what dues they could from the illicit manufacturer and seller of fermented toddy in the manner already described in paragraphs 11 and 14 of this despatch. In other words, in the case of the illicit traffic in arrack, the enter has always had direct control over the supply. In the case of the illicit traffic in toddy, the supply has been altogether beyond the control of the renter.
In these circumstances, the steps taken to impose a check upon these two wholly different kinds of illicit traffic necessarily bear no resemblance to one another. A redistribution of arrack taverns on a more scientific basis has been made, with a view to supplying the legitimate demand for the spirit, so that the renter may in future he freed from the temptation of encouraging illicit sales at places remote from his licensed taverns. For the rest, the operations of the new Excise Department and its preventive staff will, it is hoped, check the sale of arrack illicitly after closing hours, or in illicit places of sale in the neighbourhood of licensed taverns. The accounts which the renters are now required to keep of all their transactions, which will be subjected to frequent inspection, will also tend to check this illicit traffic, which has drawn its supply from the renters themselves. As the Memorialists observe, the redistribution of taverns above referred to has resulted in a comparatively small increase in their number throughout the Colony; but I am, in the light of the facts as here explained, unable to see what argument opposed to the separation of arrack
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