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PUBLIC RECORD OFFICE

Reference :-

C.O. 882

5 PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NOT TO

Jnder the present dametances of

ngonne can be

spensed with.

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establish the production of the food of the people on a satisfactory busia."

Of men who are really great authorities on the subject, Sir F. Dickson seems to be the most san- guine of the possibility of eventually abolishing the tax. His views are quoted below, and he would certainly not advocate inmediate abolition.

4. The present condition of Ceylon is a serious. one financially. The military contribution is being on, no item of largely increased; the present and prospective debt of the Colony in the matter of railways is heavy; it would be cruel to break faith with the peasantry in regard to irrigation, and it would be impolitic to do so because increased irrigation means reduction of the almost annual expenditure caused by droughts and consequent relief works. Further, the late crisis, as Sir Arthur Gordon so constantly pointed out, left behind it arrears of public works to be made good.

cl. 2.

|pudely culti

an be kept

by the grain

bern, No. 26, $84-5.

"

But the important point to bear in mind is, that Ceylon is still, as it has for so many years been, de- pendent on a single industry; and a crisis in the tea cultivation similar to that which occurred a few years ago in coffee would mean a terrible falling off in the revenue. Under such circumstances not only would it be very unwise to repeal any tax without finding a substitute, but it is highly desirable to keep in reserve some sources of taxation and not to use them all up in abolishing one tax. This policy has been strongly advocated by Mr. O'Brien, and personally I shall be surprised if, in a few years time, there is not another breakdown in the Colony, though not to such an extent as before.

With reference to the increase of the military contribution, Mr. O'Brien, in answering certain queries of the Governor as to possible substitutes for the grain tax, writes: "If our military contribu- "tion be increased to anything like the extent contemplated, your Excellency and everybody else may dismiss the subject at once, for in that

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case you will not only require every penny of available revenue from every existing source, but will have to impose fresh taxation." It is quite certain that the contribution will be increased; that the grain tax cannot be abolished without finding an ample substitute; and that in view of the future it would be very unwise to use up all possible sources of additional taxation in order to abolish this one tax.

5. In considering what truth there is in the allegation that paddy cultivation had been kept back by the grain tax, it must be borne in mind that the statistics of cultivated area in Ceylon are most untrustworthy, and the Blue Book figures are apparently made up from estimates furnished by headmen. There is really therefore little more than opinion to go by.

Sir A. Birch dealt with this point in a memoran- dum drawn up in 1878 for the Secretary of State.

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́ I do not admit,” he wrote, “that the tithe or rent- charge has tended to interfere with the cultiva-

" of rice," and he supported his view by instanding that paddy cultivation had not progfessed to any

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greator astent upon the untaxed temple lands than #pon others which were subject to the tax.

Sessional Pa

The question whether of late years the area under paddy cultivation has extended or not, in of 1880, pp. discussed at length by the Irrigation Report for &c. 1888; and refersmos should also be made to para- graph 53 of the Select Committee's Report and to Appendix F., from which it appears that in the districts of the Island, which were brought under

the operation of the 1878 Ordinance, 36,727 acres were brought into fresh cultivation since 1878, whereas no lands regularly cultivated before that date in the same districts had subsequently gone out

of cultivation.

Mr. O'Brien states his belief, based mainly on 2792, Encl. revenue returns, that paddy cultivation has not decreased during the British occupation and is not decreasing, and he asserts that the large increase in 2847, p. 4. the revenue from this source, as compared with that

received in older times, is due in part "to an enor-

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mous increase in the amount of paddy pro- . “duced."

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p. 12.

Mr. Elliott, Government Agent of the Eastern- 8792, Encl. the chief grain-producing province, states that "the payment of the grain tax has had no deterrent "effect whatever" upon cultivation; and Mr. Wace, Government Agent of the very poor province of p. 21. Sabaragamuwa, says that the tax has not had the effect of restricting cultivation in any district of “which I have had charge," and that, wherever irrigation is available, a Native will always take up paddy land subject to tax rather than untaxed dry land. There seems no evidence to the effect that in normal times the tax has driven land out of cultivation; and it must be borns in mind (1) that the suggestion that it has had this result has been based upon the disastrous ten years 1878-1888; (2) that the Ordinance of 1878 has reduced the revenue from the grain tax, which reduction gives rise to the idea that the area of cultivation has been diminished; and (3) that, supposing paddy land to have gone out of cultivation, such a result might be due simply to the spread of other products irre- spective of the effects of the tax. Mr. Elliott, a.g., says, "Natives have only in comparatively recent "times taken to agriculture other than paddy and chena cultivation, and it is desirable this should "be fostered and encouraged."

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It has even been contended, with at least some show of reason, that the tax in some districts has had the effect of bringing land into cultivation; for, if the villagers were not called upon to pay the tax, they would do less work and oultivate less ground.

In his letter on the subject of the grain tax Mr. 2847, p. 8. O'Brien points out that "for the more fertile paddy "felds landlords have no diffoulty in finding

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tenanta at a rent of one-half share; and Govern- **ment Agents are constantly receiving applications "for land at a rent of one-half share of the pro- "duce." He also points out that the irrigated lands at Anuradhapura are being bought up and laid out in paddy cultivation by the Moorman, the great traders of the Island. This does not look as though the tithe blighted the industry of rice

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