olviii 



12. What after all is the increase of cost of excise salt at present? 

 The cost is 4 annas a maund for the whole Presidency as compared 

 with the hypothetical 3 annas under the monopoly system. In the 

 Masulipatam division it is only 2 annas 8 pies. It seems to me that, 

 making sufficient allowance for the considerations above pointed out, 

 prices are really cheaper now than under the monopoly system. A 

 comparison of retail prices in 1889 with the prices before 1880 shows 

 that retail prices are in most places lower now than under the monopoly 

 system. Moreover, a difference of one anna per maund of 80 lb. 

 makes no difference in retail prices, as these are quoted at so much 

 per Madras measure of say 4 lb., and the increase of one anna per 

 maund would be equivalent to only an increase of price of a Madras 

 measure by less than one-half of a pie. This fact should be borne in 

 mind in judging of the real effect of a sudden temporary pressure of 

 demand on inadequate stocks and consequent rise of prices, which 

 pressure of demand, be it noted, must happen quite as frequently as, 

 if not more frequently, under the monopoly than under the excise 

 system. 



13. It is now unnecessary to advert to the circumstances which 

 led to the enhancement of the price of salt in 1885 and 1886, soon 

 after the introduction of the excise system. The causes of the rise 

 in price were fully investigated by Government in 1888, and though 

 the views of the Salt Department have been at variance with those of 

 Government on this subject, I am not aware that a single argument 

 has been brought forward tending in any way to shake the conclu- 

 sions arrived at by Government after full enquiry. As regards the 

 measures adopted by Government to remedy the evils that had arisen, 

 there can be but one opinion, viz., that the measures have been emi- 

 nently successful. The retail price of salt to the consumer has not 

 increased beyond what it was under the monopoly system. On the 

 contrary, if an exact calculation were possible, it would probably be 

 found that prices have gone below what they would be at the 

 present time under the monopoly system. A fairer distribution of 

 profits between the manufacturers and the traders has been 'brought 

 about and the profits of middlemen have to some extent been cut 

 down. The old argument that capitalists restrict production has been 

 shown to be entirely unfounded, the " dittam '' or regulation of the 

 quantity manufactured being now found to have been fixed with a 

 view to secure the maximwin production and not with a view to restrict 

 it. Many licensees work their salt pans independently of capitalists 

 and store and sell salt on their own account. There is full competi- 

 tion among the capitalists themselves. This, I believe, is the case 

 even in Madras where the average price is 5 annas 2 pies a maund. 

 Salt at this station always costs more than the monopoly price of 3 

 annas, and the additional 2 annas and 2 pies includes this excess as 

 well as the extra value of light as well as of good salt as already 

 explained. I do not think therefore that any material reduction in 

 the price of salt at Madras can be looked for. 



14. The monopoly system is sometimes defended on the ground 

 that as the Government levies on salt a duty amounting to nearly 20 

 times the cost price, it is bound to see that the cost to the consumer is 

 not unduly enhanced. The assumption underlying this statement is 



