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that under tlie monopoly system it is possible for Government to 

 have control over the price of salt. This assumption, as I have 

 above shown, is unfounded. It seems to me that if the salt tax 'is 

 an evil, it is an aggravation of that evil to levy it under the monopoly 

 system. The Government has, however, with a view to prevent an 

 undue enhancement of price by combinations of traders, accumu- 

 lated reserve stocks, and these stocks have completely fulfilled their 

 purpose. The necessity for this arrangement arose from the sudden 

 substitution of the excise for the monopoly system which was in 

 existence for over three-quarters of a century, and I believe that 

 in the course of a few years more, their maintenance will be found 

 to be. unnecessary. The object is not to drive capitalists out of the 

 salt trade ; what is desired is that there should be sufiicient competi- 

 tion among them. There is not likely to be any danger of extensive 

 combinations among the capitalists, such as that which arose at 

 Madras in 1885 and 1886 under very special circumstances. Tempo- 

 rary local combinations may of course occasionally occur, but their 

 effect will be evanescent. The danger now seems to be rather in the 

 direction of Salt Department imposing unnecessary restrictions on the 

 prices charged by salt manufacturers or of bringing the reserve stocks 

 to sale with a view to reduce prices below what they would be under 

 natural conditions when there is full competition, instead of keeping 

 the reserve for use as a heroic remedy on extraordinary occasions, 

 such as, for instance, would justify Government in importing grain to 

 tracts sufi'eriug from distress. Government reserve stocks under the 

 excise system, though objectionable on principle and justifiable only 

 as a temporary expedient to repair mistakes committed in the past, 

 have not practically operated to the prejudice of the excise manu- 

 facturers, because the Government has not hitherto interfered with 

 the course of salt trade and has allowed traders a large range of 

 prices to base their calculations upon. The loss incurred by Govern- 

 ment by maintaining the stocks is also very trifling when compared 

 with the revenue derived by Government from the salt duty. If, how- 

 ever. Government were to enter into direct competitioa with excise 

 manufacturers, it would simply lead to the extinction of the excise 

 and to the rehabilitation of the monopoly system, which is a consum- 

 mation greatly to be regretted in the interests of the public for the 

 reasons I have already explained. 



15. There are three conditions essential for the proper working of 

 the excise system, viz., first, the restrictions imposed on manufacturers 

 should nofc be greater than are absolutely necessary for the protection 

 of the revenue ; secondly, there should be no obstacles interposed to 

 the opening of new pans, and additional storage room should be 

 provided on a liberal scale under adequate guarantees in all factories ; 

 thirdly, small traders should receive the same countenance and 

 assistance as large traders from both salt and Railway officials when 

 they want to purchase salt and send them by the railway. I do not 

 know what the policy of the Salt Department in respect of these 

 matters latterly has been, but I have no doubt that, if they are looked 

 at from the point of view of the convenience of the producers as well 

 as of the Salt Department and adequately provided for, the excise 

 system will in the course of a few years be able to stand on i^'-a own 



