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and to enhance the tax wherever it is found that consumption is 

 increasing. The idea was borrowed from Bombay, but in working it 

 care has been taken here to avoid the mistake which was committed in 

 that Presidency of attempting to levy the duty not only on raw toddy 

 but also on toddy spirit by means of the tree-tax. This necessitated 

 the imposition of the tree-tax at rates so high (Rs. 18 annually per 

 cocoanut tree) that they, had the effect of suppressing the consumption 

 of raw toddy altogether and compelling classes of the population 

 accustomed to this beverage to drink spirit. The correct principle 

 for working the tree-tax was stated by Mr. Galton when Abkdri 

 Commissioner in the following terms : " The true principle appears 

 to be that the taxation in the form of a tree-tax should not exceed 

 what the people can afford to pay upon the beverage, and where, as in 

 some parts of Malabar, toddy constitutes an article of diet and is in 

 fact the ordinary morning meal of some of the laboring classes, tax- 

 ation must be moderate, or such classes would be deprived of their 

 food. Shop rents serve to enhance the tax on toddy used as an 

 intoxicant and when toddy is used for distillation taxation must be 

 supplemented by other means; if possible by a still-head duty.^' The 

 tree-tax in the portions of the Presidency in which it has been intro- 

 duced has been worked strictly on the lines above indicated. The tax 

 imposed, excepting in the town of Madras, amounts to Rs. 3 per 

 cocoanut tree. The tree-tax at this rate is hardly equivalent to a duty 

 of one anna per gallon of fermented toddy which contains sometimes 

 as much as 8 per cent, of alcohol. When palm juice is drawn in 

 vessels coated with lime, fermentation is prevented and the toddy 

 thus drawn is used either for food or for the manufacture of crude 

 sugar. This description of toddy is not taxed. In the Madras town 

 the tree-tax is at the rate of Rs. 6 per cocoanut tree. This rate is not 

 an unduly heavy one for the town of Madras, where considerable 

 quantities of toddy are drunk for purposes of intoxication, and it is 

 desirable to check consumption by raising the price of toddy. The 

 tax was- originally at the rate of Rs. 3 per tree and subsequently 

 enhanced to Rs. 4-8-0 ; this enhancement did not cause any rise in the 

 price of the beverage, but only reduced the profits of the toddy 

 drawers. It has, therefore, been still further enhanced to Rs. 6 per 

 annum during the current year in the town of Madras. It is believed 

 that the increase in the duty levied on country spirit and consequent 

 enhancement of its price have tended to increase the co'nsuraption of 

 toddy and that this tendency requires to be checked to some extent. 

 The tree-tax system, which is the only satisfactory system for taxing 

 toddy ou sound principles, is being gradually introduced. It has now 

 worked well in the portions of the Presidency in which it is in force 

 and its extension throughout the whole of the Presidency is only a 

 question of time. It requires considerable establishments for marking 

 the trees on which the tax is to be levied, and as the organization of 

 the establishments entails considerable labour on the Abkari depart- 

 ment the work has to be done gradually. In the tracts in which the 

 tree-tax system is in force the toddy-shops are sold by auction every 

 year, excepting in the Madras town and the Malabar district, where 

 fixed fees are levied. In South Canara a regular tree-tax system has 

 not been introduced, but the toddy-drawers are granted licenses to 

 tap any number of trees they like on payment of fixed fees ; the 



