PRINCIPLES OF TAXATION. 293 



the receipts of revenue to the extent of about $30,000,000, and 

 represented an annual deficit to that extent.* 



The sources of revenue in India are mainly seven, but all of 

 them, using the term in its ordinary signification, can not be 

 characterized as " taxation." 



The first and most important of them is the taxation of land, 

 with which the Asiatic people have been familiar from a most 

 remote period, and the justice of which is least questioned by 

 them. In fact, reliance upon land revenue was a feature of the 

 Indian governments long before England had any control over 

 India. The native rulers maintained themselves for centuries by 

 exacting shares of crops and cash contributions from cultiva- 

 tors of the soil. Taxation of land in India has therefore been 

 retained, and not instituted by the present (British) Govern- 

 ment. The entire land of India was nationalized centuries ago, 

 and now as formerly (and as is the case in China) the primary 

 title to all land inheres in the state or Government, and the cul- 

 tivators of land pay a certain rent in respect to their tenancy. 



There are two methods of land assessment in India, which in- 

 volve a somewhat curious history. A hundred years ago, under 

 the administration of Lord Cornwallis, an . arrangement or treaty 

 was made, which then and forever fixed the rate which the ten- 

 ants of land in the government of Bengal representing about one 

 fourth of the present area of British India should pay the state 

 for their occupancy, and which then was regarded as a fair rental ; 

 and although since that arrangement was made, the land in ques- 

 tion, owing to increased population, new industries, and state ex- 

 penditures on roads and railroads, has greatly increased in value, 

 and yields to the representatives of the primary lessees three- 

 fold or more rental, the British Government has to this day 

 strictly respected its treaty and fulfilled its agreement. The for- 

 tunate controllers of the land thus rented the zemindars, or na- 

 tive capitalists having, however, improved their opportunities 

 to oppress (rackrent) their subtenants, the Indian Government, 

 since 1885, has undertaken to remedy this evil, and with a consid- 

 erable degree of success. Land throughout India is divided into 

 provinces, and the provinces themselves are divided and subdi- 

 vided in such way that taxation in each locality is under the 

 direction of an officer familiar with all the matters that must be 

 taken into consideration in taxing justly. A multiplicity of 



* " The gross revenue and the gross expenditure of India are very different things from 

 the real revenue and real expenditure. In the gross revenue is included the entire receipts, 

 and in the gross expenditure is included the entire expenditure of the whole railway system 

 of India, the whole of the canal system, and of the irrigation works." Speech of Mr. H. 

 Fowler, Secretary of State for India, introducing into Parliament the Budget for India, 

 August 15, 1894. 



