This pleased him too, but when we reached his long room upstairs we turned from idols to the main interest of his life. On bookshelves round the walls, and heaped upon the floor and tables, were hundreds of volumes and pamphlets crammed with figures. It seemed as if the owner had collected every book and essay ever written upon the economics of India, and year by year had filtered them into his mind. He had the instinct for averages which I take to be the economist’s instinct. He thought of women and children in terms of addition; he saw men as columns walking. He watched the rising and falling curves of revenue, expenditure, and population as others watch the curves of beauty. Any line of figures was welcome to his spirit, and though he had made his living by teaching little Indians to read “Robinson Crusoe,” his chief study seemed to lie in the scripture called the “Statistical Abstract relating to British India.” Upon this careful piece of literature he meditated day and night; or, if his mind required a change, he relaxed it on theology.
I have called the “Statistical Abstract” literature, and to him it was so. To him it was as pleasing as a poem to know that under the heading of “Priests and others engaged in religion,” the number of “total supported” was 2,728,812, among whom 178,656 females were classified as “actual workers”; or that the total supported by “indefinite and disreputable occupations” was 737,033, and in this class alone the male and female “actual workers” were approximately equal. He liked to meditate on the daily average of prisoners in the various provinces, and on the infirmities of population according to residence and according to age. It was good to know that there were about 6,000,000 more males than females in the country, but 18,000,000 more widows than widowers, and 391,000 widows under fifteen. These were the lyrics or realistic ballads of his reading, but he took higher interest in the figures that move with something of epic grandeur. To him there was a splendour and æsthetic satisfaction in knowing that the total of India’s population, including the Native States, was 294,361,056 in 1901, and that of this number 207,050,557 were Hindus like himself; while agriculture supported 191,691,731—close upon two-thirds, or 65·16 per cent., as he put it—and 15,686,421 (including nearly 1,000,000 females) could write and read, a total of 1,125,231 being “literate in English.”
But I think, after all, it was the great passage headed “Finance” that he enjoyed with the most delicate appreciation for style. Perhaps it depended on his mood whether he more admired the lines of the “Gross Revenue and Expenditure” or of the “Net Revenue and Expenditure.” It was sonorous as a hexameter to read aloud that the total gross revenue in India and England for 1905-6 was £84,997,685, and the total gross expenditure charged to revenue was £82,905,831. But the net statements of revenue at £48,539,680, and expenditure at £46,447,826, were trim as a sonnet. It was a dubious point, but for details he certainly preferred the gross, thinking them more realistic, and his favourite passage was that beginning, “Principal heads of Revenue, Land Revenue, £18,862,169, for 1905-6.” Against this he would set, as a kind of antiphone, the gross expenditure on army services (excluding Marine and Military Works) of £19,267,130.[19]
There were two passages also from which he appeared to derive the kind of savage pleasure most men seek in tragedy or satire. One was that the gross expenditure on education by the Government of India amounted to less than £1,700,000 in 1905-6, and he worked out the State expenditure for education for the current year (1907-8) at 1½d. per head in India, as against 5s. 4d. per head in France. The other was that the Hindus, Mohammedans, Sikhs, Jains, Buddhists, and Animists contributed out of their labour during the year of grace which we had just survived (1906-7) the sum of £125,906 in order that the British residents might not be devoid of the consolations of religion as represented by Bishops and Anglican chaplains, Roman priests, Presbyterian divines, and cemeteries.
For myself, there was, of course, a certain ironic interest in the endowment of an Anglo-Indian’s Christianity by the natives around him, and for the first time I was inclined to favour a system of payment by results. But, in regard to Finance, all such things are insignificant in comparison with the one main question of the tax upon the cultivator.[20]
An immemorial custom in India, consolidated in the Laws of Manu, gave the ruler a share in all crops—a fraction fluctuating according to the soil, but not higher than one quarter. Probably this was a tribute levied upon the village community in return for protection, or simply as a penalty for conquest. It was paid in kind, so much grain from so much crop, and as the proportion was always the same on the same ground, the peasant did not feel the variation in quantity much. But having inherited the custom, the British rulers found it more convenient and uniform to collect the tax in cash, and to levy the rate, not in proportion to each year’s crop, but on a valuation that remains unaltered for long terms of years—usually thirty years in Madras and Bombay, but twenty years in other places, for instance in the Punjab. This process of valuation is called the Settlement, and Settlement Officers are almost continually engaged in drawing up a kind of progressive Doomsday Book upon the fields, pastures, woods, and wells of each village. It is hardly possible to ascertain the exact proportion of value fixed by the Settlement Officers as the tax. Throughout India there is a general understanding that “about one-half of the well-ascertained net assets should be the Government demand.”[21] This income tax of ten shillings in the pound is, however, in reality a fairly steady minimum, and the tax often goes higher, to say nothing of the “cesses” or local taxes nominally levied for roads and education.
Whether the money is called tax or rent, would not seem at first sight to make much difference; for it has to be paid and the people who pay it have no voice in its levy or in its expenditure. If it is a tax, it is a large income tax on land, fixed for some years and collected from the smallest landowners as well as the largest. If it is a rent, the system is partial land-nationalization without national control and without economic freedom. But as a matter of practice, the difference in the use of words is vital, and it cannot be put more plainly than in the Minute written by Lord Salisbury when he was Secretary of State for India in 1875:—
“If we say that it is rent, the modern Indian statesman will hold the Government in strictness entitled to all that remains after wages and profits have been paid, and he will do what he can to hasten the advent of the day when the State shall no longer be kept by any weak compromises from the enjoyment of its undoubted rights. If we persuade him that it is revenue, he will note the vast disproportion of its incidence compared to that of other taxes, and his efforts will tend to remedy the inequality, and to lay upon other classes and interests a more equitable share of the fiscal burden. I prefer the latter tendency to the former.”[22]
The average Indian official does not agree with Lord Salisbury. He prefers the rent theory to the tax theory, and when the cultivator has been allowed his subsistence off the holding, together with what the official estimates as profit, the rent is taken in the name of revenue, but under the excuse of rent, and I have often heard officials urge the theory of land nationalization in their defence. It is, however, as I said, a nationalization in which the conditions of political and economic freedom are absent.
The new assessment, which in Bombay lasts for thirty years, depends almost entirely on the discretion of the Settlement Officer. His decision is supervised by higher authorities, but it usually stands, and the only fixed rule for his guidance is that he may not increase the revenue of a Taluka (group of villages) by more than 33 per cent., nor that of a single village by more than 66 per cent., nor that of a single holding by more than 100 per cent. This leaves him plenty of margin, and in fifteen large districts of the Bombay Presidency we find that the average increase was 30·4 per cent. at the last assessment (1899).[23] This increase is assessed, not on the yield of the ground, but on the “capabilities” of the ground, and “capabilities” are calculated upon the quality of the soil, the average rainfall, the market, the railway, and other elements of “unearned increment.” Mr. Vaughan Nash’s account of the matter expresses what happens:—