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PUBLIC RECORD OFFICE

Reference :-

TILICO. 882

لسلسالسا

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

9 PUBLIC RECORD OFFICE, LONDON

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ficient time to admit of their taking any effective action in respect of next year's rent, which, as usual, must be sold as early in the year as possible, and in any case not later than the end of February.

3. His Excellency is anxious, however, that the local opinion shall be freely consulted in the manner suggested in paragraph 31 of the report of the Select Com- mittee on the Excise. Bill, and I am to instruct you, therefore, as soon as you receive the new tavern list from the Excise Commissioner, to proceed according to the en- closed rules. I am to explain that these rules are substantially extracted from the general body of rules which it is proposed to lay before the Legislative Council in due course: until they have been duly confirmed by a resolution of that body in accordance with the provisions of Section 31, they will have no legal validity, but there is, in the meantime, no reason why they should not be acted upon, as they merely indicate the procedure to be adopted in the consultation of local opinion.

4 I am to convey to you His Excellency's express directions to treat this matter as of the first importance. It is imperative that the notice under rule 1 of the

not later than December 20th, 1912. annexure should appear in the "Gazette

I am, Sir, &c.,

L. W. BOOTH,

Acting Colonial Secretary.

RULES REFERRED TO.

1 Whenever it is proposed to open a new tavern in any locality, or to close an existing tavern or to remove a taveru from one locality to another the Government Agent shall give notice of such proposal by advertisement in the "Government Gazette."

2. He shall also in such advertisement fix a date, not less than twenty days from the date of the "Gazette" publication, up to which he will be prepared to receive any written representation and on which at a place stated in the notice he will be prepared to hear any verbal representation regarding the opening, closing or removal of the

tavern.

3. One or more copies of the Gazette Notice in English and the local vernacular shall be posted in a conspicuous place with the locality affected and on the notice board of the Provincial and district Kachcheries, and publication shall also be made by beat of tom-tom in the locality or in such other manner as the Government Agent may direct.

4. A copy of the Gazette Notice shall be sent to all recognised public bodies, such as Municipal Councils, Local Boards, Planters or other local Associations having a local interest in the locality in question.

5. When all questions regarding the opening, closing or transfer of taverns as above have been decided, and as early as possible before the date from which the licences for the next lease period begin to run, the Government shall publish in the

Government Gazette the list of taverns sanctioned for that period.

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6. When a site has to be selected for a new tavern or for a tavern removed from one locality to another, or when the site of an existing tavern is to be changed after sale, notice of the proposed new site shall be given without delay in the following manner :—

(a) A notice in English, Sinhalese, and Tamil shall be drawn up to the effect that it is proposed to open a tavern on the site described in the notice and that the Government Agent will be prepared to receive any written representation up to a given date, not less than one month from the date of the notice, and that on that date and at a place stated in the notice he will be prepared to receive any verbal representation that may be made to him regarding such site.

(b) One copy of this notice shall be posted or affixed on the front of the premises proposed for the tavern site; one copy shall be displayed at the house of the headman of the village in which the tavern is situated; one copy shall be posted on the notice board of the district Kachcheri; and publication shall also be made by beat of tom-tom at the site or in such other manner as the Government Agent may direct.

(No. R. 39.)

THE HONOURABLE

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Enclosure 2 in No. 9.

REPORT REFERRED TO.

THE COLONIAL SECRETARY.

Colombo, 4/6th February, 1913. The memorialists characterise as "a flagrant instance of the misuse of statistical data" the argument of His Excellency's despatch, No. 486, of 1912, that the reduc- tion of the number of arrack taverns in the Kurunegala District, decided on in 1898, was not followed, as the memorialists would appear to maintain it was, by a diminu tion in the consumption of liquor.

2. They further state (paragraph 6)" that the contentions that such an increase of revenue necessarily proves an increased consumption of liquor, and that reduction of liquor licences] should result in a diminution of the aggregate consumption of liquor in a community whose numbers are rapidly increasing and whose general pro- sperity is steadily advancing, are not only erroneous, but once more reveal that unpardonable ignorance of the factors governing the excise problem which has been a conspicuous failing of the advisers of Government throughout the whole contro- versy. I confess I am not clear as to the exact meaning of the second of the above contentions," nor am I aware that any such contention was ever put forward by Government or its advisers.

3. The argument which the mentorialists advance to prove the alleged "misuse of statistical data and the erroneous nature of the Government contentions" is contained in paragraph 7 of the memorial. They state that "the briefest reflection will satisfy you that the amount of revenue derived from liquor sales can be accepted as an index of the amount of liquor consumed only if the Excise duty per gallon remains uniform, and under no other circumstances." To this theorem I am prepared to give an unqualified assent. The following illustrations will exemplify its applica tion. With an Excise duty of Rs. 2 per gallon and a revenue therefrom of Rs. 2,000,000 it is clear that the consumption must have been 1,000,000 gallons. If, with the same Excise duty of Rs. 2 per gallon, the revenue is found in the following year to have risen to Rs. 2,100,000, it is a perfectly sound conclusion that the consumption has risen by 50,000 gallons. Similarly, if in the next following year the Excise duty is raised to Rs. 2/50 per gallon and the revenue amounts to only Rs. 2,500,000, it is quite safe to conclude that consumption has once more fallen, not withstanding the increase of revenue, to 1,000,000 gallons.

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4.

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Now it is quite clear that in paragraph 7 the memorialists use the term Excise duty per gallon " as synonymous with the term "amount of rent paid per "Excise gallon," and they proceed to compare the revenue derived in 1897 from an

"Excise duty" of Rs. 2/27 per gallon with the revenue derived in 1910 from an duty of Rs. 4.74 per gallon. I am quite willing to make this comparison with of 1897 and them, but it will be seen that while they compare the "Excise duties 1910 they do not compare the revenue of 1897 with the revenue of 1910, but they compare the revenue of 1899 with the revenue of 1903, and the increase of "Excise duty" by over 100 per cent. between 1897 and 1910 with the increase of revenue between 1899 and 1903. This is obviously not a proper basis of comparison, nor a

their case.

The correct application of the proposition with which they open following is the true statement :-The " Excise duty" per gallon rose between 1897 and 1910 from Rs. 2.27 to Rs. 4.74 or by 109 per cent. The revenue in the same period rose from Rs. 133,280 to Rs. 301,777, or by 126 per cent., indicating, according to the principle enunciated by the memorialists, an increase of consumption of 17 per cent., so that, using the memorialists' own argument, it is clear that the reduc- tion of the number of taverns in this particular instance was not followed by a diminution of consumption as they maintain, but by an increase, as stated in the Governor's despatch.

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41 amount 5. I have pointed out above that the memorialists have used the terms

as synonymous, and they of rent paid per gallon " and " Excise duty per gallon themselves assert that their proposition as to the relation between revenue and con- sumption is a true one only when that relation rests upon a basis of uniform " Excise If, therefore, it can duty." It can be accepted under no other circumstances."

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be shown that the terms amount of rent paid per gallon" and "Excise duty per gallon " are not synonymous, and that the "amount of rent paid per gallon " is not

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