3 oo POPULAR SCIENCE MONTHLY, 



doubled. In 1870 a further rise to fully three and an eighth per 

 cent occurred ; but with better times the rate fell in 1871 to one 

 and one-twenty-fourth per cent, with a limit of Rs. 750, and in 



1872 the limit was further relaxed to Rs. 1,000 and upward. In 



1873 came a second period of total abolition, to be succeeded from 

 1877 to 1878 by the new series of acts. Along with the changes in 

 rate and incidence just described came changes in name, form, 

 classification, and procedure. With one object or another, twenty- 

 three acts on the subject have been passed since 1860." 



An income tax at a low rate, at present existing in India, 

 grants an exemption of 500 rupees on all incomes, and exempts 

 from taxation all income from the ownership of land or the sale 

 of the products of land, and from property solely employed for re- 

 ligious or charitable purposes. It is thus assessable mainly on sal- 

 aries, pensions, the income of companies, and of the ordinary trades 

 and professions. Its existence is the cause of considerable friction 

 with the officials who administer it, and constant appeals from 

 their decisions are made from all parts of the country. In fact, 

 this tax, at its present low rate, is universally detested, and the 

 receipts from it are comparatively so inconsiderable only 1,717,- 

 627 Rx. ($8,588,135) in 1894 that it may be regarded as a fiscal 

 failure. Its whole experience in India furthermore reaffirms what 

 is worthy of being regarded as an economic principle, namely, 

 that when an income tax ceases to be regarded as generally op- 

 pressive it ceases also to be remunerative to the state. 



One other point in this connection is especially worthy of 

 notice. For a long period of years India has been characterized 

 as a " sink-hole " of the precious metals, or, in other words, there 

 has been for many years a continuous flow of the precious metals 

 gold and silver into India, where they have to a large extent 

 disappeared, undoubtedly by burial under ground for the purpose 

 of hoarding and concealment. The motive for this under the 

 Mogul and native rulers was unquestionably to escape direct 

 plunder or confiscation; but under British rule these hoards, 

 amounting unquestionably to many hundreds of millions, are 

 not taxed, mainly by reason of their inaccessibility, and partly 

 by the recognized policy of the Government to avoid direct taxa- 

 tion of active capital, and encourage, by making safe its employ- 

 ment, the tendency of these buried treasures to come to light and 

 enter into the channels of trade. And that this policy has been a 

 wise one is shown by the fact that within recent years there has 

 been an increasing disposition on the part of the Indian owners 

 of concealed treasures especially the Indian princes or rajahs 

 to withdraw them from their hoarding places and invest them in 

 Government bonds, or other desirable, interest-bearing securities ; 

 and in this way a very great addition to the world's active stock, 



