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PUBLIC RECORD OFFICE

Reference

TTIC.O. 882

لسيحا

لبسك

PUBLIC RECORD OFFICE, LONDON

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of the revenue.

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and elasticity this very necessary and desirable condition precludes the possibility of adopting a land tax fixed in perpetuity, and if a land tax were adopted at all renders it imperative to make it an assessed land tax subject to the revision at certain periods of moderate duration, and we may remark, incidentally, that a land tax on this principle is open to all the objections which are urged in the following extract from the "Wealth of Nations" :-

Recapitulation

of principal points for eansideration.

“A land tax assessed according to a general survey and valuation how equal soever it may be at first, must, in the course of a very moderate period of time, become unequal. To prevent it becoming so would require the continual and painful attention of Govern- ment to all the variations in the state and produce of every different farm in the country. The Government of Prussia, of Bohemia, of Sardinia, and the Duchy of Milan, actually exert an attention of this kind, an attention so unsuitable to the nature of government that it is not likely to be of long continuance; and which if continued will probably in the long run cause much more trouble and vexation than it can possibly bring relief to the cultivator." -Smith's “ Wealth of Nations," paragraphs 286–7.

In conclusion we will briefly recapitulate the principal points which we desire to submit for your Excellency's consideration.

1. Historical inquiry shows that the so-called taxes on home-grown grain are not taxes but are rents reserved to the Crown, on alienation of the land by the Crown, or on relinquishment of services due to the Crown.

2. These taxes are borne willingly by the people, and are neither oppressive nor unjust.

3. The import duties on grain enable the Government to reach those classes which otherwise would pay no tax at all in a way which they do not feel, owing to the large margin in their favour between the cost of living and the rate of wages.

4. The great object for the Government to accomplish is to make the country produce enough grain for its native and immigrant population, and to accomplish this it is desirable to continue on a larger scale than hitherto the restoration and improvement of the ancient irrigation works throughout the country.

5. It is more to the interest both of the native population and of the European planter to extend irrigation and to improve the means of communication between the coast and the interior, and throughout the interior of the island, than to remit or reduce taxation.

6. The present renting system is indefensible in principle, is capable of abuse, and in some parts has actually led to abuse. A system of compulsory commutation should be substituted for it.

Colombo, October 1877.

GRAIN TAX COMMISSION.-RESOLUTIONS.

I. Mr. Wall moves that, "In view of the circumstance of the country it is not "advisable to remit the grain taxes in such manner as materially to affect the revenue.' -Passed nem. con.

II. Mr. Cayley moves, "That the present mode of collecting the paddy tithe by the "renting system is susceptible of abuse, and has been abused to the disadvantage of the cultivator, and ought therefore to be superseded by some other system."--Passed

nem. con.

III. Mr. Cayley moves, "That although some of the evils of the renting system would "be obviated by cultivators purchasing the rent of their own tithe, the Commission are "of opinion that to make such mode of collecting the tithe compulsorily would be "impracticable; and if it is to be made optional, the retention of many of the present " evils would result."--Passed nem. con.

IV. Mr. Wall moves that, "The dry-grain cultivation which is exempt from tax in " certain provinces, and the revenue derived from which is inconsiderable, should be "hereafter exempted throughout the island."-Carried by 5 to 3.

Mr. Cayley moves an amendment, "That the consideration of the advisability of "hereafter exempting dry grain from tax be postponed for the present.”—Lost by

5 to 3.

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V. Mr. Dickson moves that, In place of the renting system there be substituted s compulsory commutation based on a careful field-to-field assessment, determined after considering the circumstances of each field, its yield, soil, water supply, facilities for "market, &c., by taking the value of the Government share of the produce at the local Mr. Wall "market price of paddy on the average of 20 years.”—Carried nêm, con. abstaining, but not dissenting.

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VI. Mr. Wall moves, "That paddy lands which have not been cultivable for a space " of seven years shall be exempted from present assessment, but shall be liable in any * future assessment if in the meantime they shall have been productive.”—-Carried

nem. con.

VII. Mr. Cayley moves that, “The first compulsory commutation be revised at the "expiration of seven years.”—Carried nem, con.

No. 7.

The EARL OF CARNARVON to GOVERNOR SIR J. LONGDEN, K.O.M.G.

(Confidential.)

Downing Street, December 13, 1877.

SIR,

I HAVE the honour to acknowledge the receipt of your despatch confidential of the 23rd of October."

I shall await the conclusion of the labours of the Grain Tax Commission and the receipt of such observations as you may have to offer on the matter.

I observe with satisfaction that this important question is receiving the attentive consideration which it deserves.

No. 8.

I

am,

&c.

(Signed) CARNARVON.

GOVERNOR SIR J. R. LONGDON, K.C.M.G., to the EARL OF CARNARVON, (Received January 21, 1878.)

(No. 86.-Miscellaneous.) MY LORD,

Queen's House, Colombo, Ceylon,

December 18, 1877.

I HAVE the honour to forward herewith the report, with appendices, of the Com- missioners appointed in January last to inquire into the taxes on home-grown grain, and the Customs duties on imported grain.

2. The Commission was composed of the five European and five native gentlemen named in the margin,f but one of the Europeans, Sir Charles Layard, returned to England before the report was considered, and therefore the enclosed report may be taken as the opinion of five native gentlemen (perhaps the best in the Island qualified to form a judgment on the question) and four Europeans.

3. The primary question in relation to these taxes on food of course is to what extent, if any, do they injuriously affect the welfare of the people? The answer will be found in the report. As regard the Customs duty on imported rice, the Commissioners podat out that a great portion of the imported rice is carried into the interior for the use of the Indian Coolie population employed upon the coffee plantations, and that the duty which is at the rate of 7d. per bushel bears such a very small proportion to the cost of the carriage that the repeal of it would not appreciably affect the price of the small quantities bought by the Coolies for their daily consumption. Moreover, whatever the price of the rice may be, the coffee planters must give a money-wage sufficient not only for the Coolies to buy what rice they require, but also to leave a margin above the cont of living for the Coolie to put by, without which inducement he will not leave India for Ceylon. To a considerable extent, therefore, this duty falls upon employers more than upon labourers, and to this extent the repeal of the duty would only benefit the employer. On the whole question, the Commissioners have pronounced the opiniod that the Custom duties on grain "do not affect consumption in any material"degree," and statistics show that the duty has not restricted the importation.

4. The tax or tithe on home-grown gram is declared by the Commissioners to be conformable with ancient usage and acquiesced in generally by the people." And they add that "the native cultivator in the East universally recognises the right of the

• No. 6.

↑ The Hon. A. N. Birak; the Hon. H. Dias, the Hon. M. Cayley; the Hon. Sir C. P. Layard; Sir M. Coomarnowamy; the Hon. J. Alwia ; J. F. Dickson, Kaq.; G. Well, Jing, J. A. Puss Madaliyar; Dullewe Loku Baude.

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