m 



good ^nd bad seasons come so mucli Id cycles that many years 

 are required to afford a trustworthy average of harvests and 

 prices ; and in those many years, the industrial environment, 

 e.g., the local demand for the produce, the facilities for 

 selling it in distant markets, and for competitors from a 

 distance to compete in local markets, may have all changed. 

 Facilities of communication especially, by equalizing prices, 

 decrease the advantages enjoyed by such districts as Tanjore, 

 Malabar and South Canara, and enhance the values of rich 

 soils in the districts which had been less favorably circum- 

 stanced owing to the difficulty of access to markets. Secondly 

 the possibility of determining the "economic rent" pre- 

 supposes the existence of alternative occupations and the 

 possibility of movement ot farming capital and labour to them 

 to admit of the ascertainment of the " normal farming profits " 

 and " normal wages." These conditions are almost entirely 

 absent in this country, both because land can be worked as a 

 practical monopoly in the hands of Government which has 

 the power of enhancing the land assessments at its will, and 

 because the manufacturing industries in this country are, 

 relatively to agriculture, of little importance.^® Thirdly, the 

 question as to whether the funds required for public purposes 

 are taken out of rent or raised by taxation is of far less import- 

 ance here than in England. In England, the bulk of the land 

 is owned by a comparatively small number of persons who have 

 benefited by the enormous ^^ rise in rent at the expense of the 



8^ It is the absence of alternative occupations that makes it necessary that a liberal 

 margin should be allowed in settlement calculations for farming profits and labourer's 

 subsistence. Professor Marshall observes: "In the greater part of India the cultivator 

 holds lands directly from the Government under a lease the terms of which can be 

 revised at intervals. And the principle on which these leases are arranged, especially 

 in the North- West and North-East where new land is being settled, is to adjust the 

 annual payments due for it to the probable surplus produce of the land after deducting 

 the cultivator's necessaries and his little luxuries, according to the customary standard 

 of the place, on the supposition that he cultivates with the energy and skill that are 

 normal in the place. Thus as between man and man in the same place the charge is of 

 the nature of economic rent. But, since unequal charges will be levied in two districts 

 of equal fertility, of which one is cultivated by a vigorous and the other by a feeble 

 population, its method of adjustment as between different districts is rather that of taje, 

 than a rewt. For, taxes are supposed to be apportioned to the net income which actually 

 is earned, and rent to that which wou\d be earned by an individual of normal ability j a 

 successful trader will pay on ten times as large an actual income ten times as large a tax 

 as his neighbour who lives in equally advantageous premises and pays equal rents." Aa 

 holdings consist of lands of different qualities, it is not by anymeans easy to adjust the 

 land assessment on the principle above stated, and moreover, over and above the cost of 

 subsistence of the peasants, a margin for profit with a view to accumulate savings to 

 tide over bad seasons has to be allowed for. 



^^ It has been estimated by Sir James Caird that the rental of land in England, 

 owing to the increased competition of foreign corn due to improvements in ocean trans- 

 port, fell from 1876 to 1886 by 20 millions sterling. If, therefore, the proposal of the 

 Land Tenure Association in 1870 of buying up the land- lord's rights and of nationalizing 

 land with a view to secure for the State the futare "unearned increnlent" had been 

 carried out, the loss to the country would have been 20 millions sterling annually, which 

 capitalized at 33 years' purchase would have amounted to 660 ni'lljons, a sum nearly 

 equal to the national debt of the United Kingdom. 



