The Online Library of Liberty

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• Preface
• Editorial Note
• I.: Biographical Sketch
• II.: Early Economic Writings: 1804-1808
• An Essay of the Impolicy of a Bounty On the Exportation of Grain
• Introduction
• Essay On the Corn Laws
• Chap. I: Of the History of the Corn Laws
• Chap. II: Influence of the Principle of Population Upon the Corn Trade
• Chap. III: Effects of the Bounty On the Rent of Land
• Chap. IV: Effects of the Bounty On the Profits of the Farmer
• Chap. V: Effects of the Bounty On the Value of Silver
• Chap. VI: Exportation
• Chap. VII: Importation
• Chap. VIII: Landlords, Farmers, and Corn-dealers
• Postscript to Essay On Impolicy
• Commerce Defended.
• Introduction
• Chapter I: On the Security Or Insecurity of the British Commerce
• Chapter II: On Land, As a Source of Wealth
• Chapter III: Of the Definition of the Terms Wealth and Prosperity
• Chapter IV: Of Manufactures
• Chapter V: Commerce
• Chapter VI: Consumption
• Chapter VII: Of the National Debt
• Chapter VIII: General Reflections
• Smith On Money and Exchange
• III.: James Mill and David Ricardo
• Elements of Political Economy,
• Preface
• Preface (to the 2nd Edn.)
• Introduction the Subject—its Limits—and Division
• Chapter I: Production
• Chapter II: Distribution
• Chapter III: Interchange
• Chapter IV: Consumption
• Mill On Scope and Method
• Whether Political Economy Is Useful London Review, Jan. 1836, Vol. Ii, Pp. 553–572.
• V.: James Mill and India
• Book Ii of the Hindus
• Chapter I: Chronology and Ancient History of the Hindus
• Chapter II: Classification and Distribution of the People
• Chapter III: The Form of Government
• Chapter IV: The Laws
• Chapter V: The Taxes
• Bibliography

BOOK II OF THE HINDUS

CHAPTER I

Chronology and Ancient History of the Hindus

[The chapter opens with a warning against the extravagant claims to antique heritage commonly made by backward peoples. In order to establish an accurate picture of the state of manners, society and knowledge attained by the Hindus in the past, these ficitious accounts must be discounted.]

With regard to the Ancient history of India, we are still not without resources. The meritorious researches of the modern Europeans, who have explored the institutions, the laws, the manners, the arts, occupations and maxims of this ancient people, have enabled philosophy to draw the picture of society, which they have presented, through a long revolution of years. We cannot describe the lives of their kings, or the circumstances and results of a train of battles. But we can show how they lived together as members of the community, and of families; how they were arranged in society; what arts they practised, what tenets they believed, what manners they displayed; under what species of government they existed; and what character, as human beings, they possessed. This is by far the most useful and important part of history; and if it be true, as an acute and eloquent historian has remarked, ‘that the sudden, violent, and unprepared revolutions incident to barbarians, are so much guided by caprice, and terminate so often in cruelty, that they disgust us by the uniformity of their appearance, and it is rather fortunate for letters that they are buried in silence and oblivion,’1 we have perhaps but little to regret in the total absence of Hindu records.

Whatever theory we adopt with regard to the origin of mankind, and the first peopling of the world, it is natural to suppose, that countries were at first inhabited by a very small number of people. When a very small number of men inhabit a boundless country, and have intercourse only among themselves, they are by necessary consequence barbarians. If one family, or a small number of families, are under the necessity of providing for themselves all the commodities which they consume, they can have but few accommodations, and these imperfect and rude. In those circumstances the exigencies of life are too incessant, and too pressing, to allow time or inclination for the prosecution of knowledge. The very ideas of law and government, which suppose a large society, have no existence: men are unavoidably ignorant and unrefined; and, if much pressed with difficulties, they become savage and brutal.

If we suppose that India began to be inhabited at a very early stage in the peopling of the world, its first inhabitants must have been few, ignorant, and rude. Uncivilized and ignorant men, transported in small numbers, into an uninhabited country of boundless extent, must wander for many ages before any great improvement can take place. Till they have multiplied so far as to be assembled in numbers large enough to permit the benefits of social intercourse, and of some division of labour, their circumstances seem not susceptible of amelioration. We find, accordingly, that all those ancient nations, whose history can be most depended upon, trace themselves up to a period of rudeness. The families who first wandered into Greece, Italy, and the eastern regions of Europe, were confessedly ignorant and barbarous. The influence of dispersion was no doubt most baneful, where the natural disadvantages were the greatest. In a country overgrown with forest, which denies pasture to cattle, and precludes husbandry, by surpassing the power of single families to clear the land for their support, the wretched inhabitants are reduced to all the hardships of the hunter's life, and becomes savages. The difficulties with which those families had to struggle who first came into Europe, seem to have thrown them into a situation but few degrees removed from the lowest stage of society. The advantages of India in soil and climate are so great, that those by whom it was originally peopled might sustain no farther depression than what seems inherent to a state of dispersion. They wandered probably for ages in the immense plains and valleys of that productive region, living on fruits, and the produce of their flocks and herds, and not associated beyond the limits of a particular family. Until the country became considerably peopled, it is not even likely that they would be formed into small tribes. As soon as a young man became, in his turn, the head of a family, and the master of cattle, he would find a more plentiful subsistence beyond the range of his father's flocks. It could only happen, after all the most valuable ground was occupied, that disputes would arise, and that the policy of defence would render it an object for the different branches of a family to remain united together, and to acknowledge a common head.

When this arrangement takes place, we have arrived at a new stage in the progress of civil society. The condition of mankind, when divided into tribes, exhibits considerable variety, from that patriarchal association which is examplified in the history of Abraham, to such combinations as are found among the Tartars, or that distribution into clans, which, at no distant period, distinguished the people of Europe. The rapidity with which nations advance through these several states of society chiefly depends on the circumstances which promote population. Where a small number of people range over extensive districts, a very numerous association is neither natural nor convenient. Some visible boundary, as a mountain or a river, marks out the limits of a common interest; and jealousy or enmity is the sentiment with which every tribe is regarded by every other. When any people has multiplied so far as to compose a body, too large and unwieldy to be managed by the simple expedients which connected the tribe, the first rude form of a monarchy or political system is devised. Though we have no materials from the Hindus, which yield us the smallest assistance in discovering the time which elapsed in their progress to this point of maturity, we may so far accede to their claims of antiquity, as to allow that they passed through this first stage in the way to civilization very quickly; and perhaps they acquired the first rude form of a national polity at fully as early a period as any portion of the race. It was probably at no great distance from the time of this important change that those institutions were devised, which have been distinguished by a durability so extraordinary; and which present a spectacle so instructive to those, who would understand the human mind, and the laws which, amid all the different forms of civil society, invariably preside over its progress.

CHAPTER II

Classification and Distribution of the People

The transition from the state of tribes to the more regulated and artificial system of a monarchy and laws is not sudden; it is the result of a gradual preparation and improvement. That loose independence, which suits a small number of men, bound together by an obvious utility, scattered over an extensive district, and subject to few interferences of inclination or interest, is found productive of many inconveniences, as they advance in numbers, as their intercourse becomes more close and complicated, and as their interests and passions more frequently clash. When quarrels arise, no authority exists to which the parties are under the necessity of referring their disputes. The punishment of delinquents is provided for by no preconcerted regulation. When subsistence, by the multiplication of consumers, can no longer be obtained without considerable labour, the desire to encroach upon one another adds extremely to the occasions of discord: and the evils and miseries, which prevail, excite at least a desire for a better regulation of their common affairs. But slow is the progress, made by the human understanding, in its rude and ignorant state. No little time is spent; first, in maturing the conviction that a great reformation is necessary; and next, in conceiving the plan which the exigency requires. Many partial remedies are thought of and applied; many failures experienced; evils meanwhile increase, and press more severly; at last men become weary and disgusted with the condition of things, and prepared for any plausible change which may be suggested to them. In every society there are superior spirits, capable of seizing the best ideas of their times, and, if they are not opposed by circumstances, of accelerating the progress of the community to which they belong. The records of ancient nations give us reason to believe that some individual of this description, exalted to authority by his wisdom and virtue, has generally accomplished the important task of first establishing among a rude people a system of government and laws.

It may be regarded as a characteristic of this primary institution of government, that it is founded upon divine authority. The superstition of a rude people is peculiarly suited to such a pretension. While ignorant and solitary, men are perpetually haunted with the apprehension of invisible powers; and, as in this state only they can be imposed upon by the assumption of a divine character and commission, so it is evidently the most effectual means which a great man, full of the spirit of improvement, can employ, to induce a people, jealous and impatient of all restraint, to forego their boundless liberty, and submit to the curb of authority.

No where among mankind have the laws and ordinances been more exclusively referred to the Divinity, than by those who instituted the theocracy of Hindustan. The plan of society and government, the rights of persons and things, even the customs, arrangements, and manners, of private and domestic life; every thing, in short, is established by divine prescription. The first legislator of the Hindus, whose name it is impossible to trace, appears to have represented himself as the republisher of the will of God. He informed his countrymen that, at the beginning of the world, the Creator revealed his duties to man, in four sacred books, entitled Vedas; that during the first age, of immense duration, mankind obeyed them, and were happy; that during the second and third they only partially obeyed, and their happiness was proportionally diminished; that since the commencement of the fourth age disobedience and misery had totally prevailed, till the Vedas were forgotten and lost; that now, however, he was commissioned to reveal them anew to his countrymen, and to claim their obedience.

The leading institutions of the Hindus bear evidence that they were devised at a very remote period, when society yet retained its rudest and simplest form. So long as men roam in the pastoral state, no division of classes or of labour is known. Every individual is a shepherd, and every family provides for itself commodities with which it is supplied. As soon as the cultivation of land, which yields a more secure and plentiful subsistence, occupies a great share of the common attention, the inconvenience of this universal mixture of employments is speedily felt. The labours of the field are neglected, while the cultivator is engaged at the loom, or repelling the incursions of an enemy. His clothing and lodging are inadequately provided for, while the attention of himself and his family are engrossed by the plough. Men quit not easily, however, the practices to which they have been accustomed; and a great change in their manners and affairs does not readily suggest itself as a remedy for the evils which they endure. When the Hindus were lingering in this uneasy situation, it would appear that there arose among them one of those superior men, who are capable of accelerating the improvement of society. Perceiving the advantage which would accrue to his countrymen from a division of employments, he conceived the design of overcoming at once the obstacles by which this regulation was retarded; and clothing himself with a Divine character, established as a positive law, under the sanction of Heaven, the classification of the people, and the distribution of occupations. Nor was it enough to introduce this vast improvement; it was right to secure that the original members of the different classes should be supplied with successors, and that the community should not revert to its former confusion. The human race are not destined to make many steps in improvement at once. Ignorant that professions, when once separated, were in no danger of being confounded, he established a law, which the circumstances of the time very naturally suggested, but which erected a barrier against further progress; that the children of those who were assigned to each of the classes, into which he distributed the people, should invariably follow the occupation of their father through all generations.

The classification instituted by the author of the Hindu laws is the first and simplest form of the division of labour and employments. The priest is a character found among the rudest tribes; by whom he is always regarded as of the highest importance. As soon as men begin to have property, and to cultivate the ground, the necessity of defenders is powerfully felt; a class, therefore, of soldiers, as well as a class of husbandmen, becomes an obvious arrangement. There are other services, auxiliary to these, and necessary to the well-being of man, for which it still remains necessary to provide. In a state of great simplicity, however, these other services are few, and easily performed. We find accordingly that the Hindu legislator assigned but one class of the community to this department. The Hindus were thus divided into four orders or castes. The first were the Brahmens or priests; the second, the Cshatriyas or soldiers; the third, the husbandmen or Vaisyas; and the fourth, the Sudras, the servants and labourers.2 On this division of the peole, and the privileges or disadvantages annexed to the several castes, the whole frame of Hindu society so much depends, that it is an object of primary importance, and merits a full elucidation.

• I. The priesthood is generally found to usurp the greatest authority, in the lowest state of society. Knowledge, and refined conceptions of the Divine nature, are altogether incompatible with the supposition, that the Deity makes favourites of a particular class of mankind, or is pleased with those who perform a ceremonial service to himself, than with those who discharge with fidelity the various and difficult duties of life. It is only in rude and ignorant times that men are so overwhelmed with the power of superstition as to pay unbounded veneration and obedience to those who artfully clothe themselves with the terrors of religion. The Brahmens among the Hindus have acquired and maintained an authority, more exalted, more commanding, and extensive, than the priests have been able to engross among any other portion of mankind. As great a distance as there is between the Brahmen and the Divinity, so great a distance is there between the Brahmen and the rest of his species ...
• II. Among the castes of the Hindus, the next in dignity and rank to the priestly tribe, is that of the Cshatriyas, or the military class. In the rude and early state of society, as man has provided few securities against the evils with which he is assailed, and his wisdom has enabled him to draw few general rules respecting the order of their recurrence, he lives in a perpetual expectation of unhappy events, as well from nature, as from his fellow men; and fear is the passion which chiefly usurps the government of his mind. The priest soothes his imagination, in regard to the first and most awful source of his apprehensions, by undertaking to procure from him the favour of the mysterious powers of nature. The soldier, from whom he expects protection against the ravages of hostile men, is the second object of his veneration and gratitude; and in the history of society, it will be generally found, that the rank and influence of the military order are high, in proportion as the civilization of the people is low. To all but the Brahmens, the caste of Cshatriyas are an object of unbounded respect. They are as much elevated above the classes below them, as the Brahmens stand exalted above the rest of human kind ...
• III. The Vaisyas are the third caste of the Hindus. Their duties are to tend cattle, to carry on merchandize, and to cultivate the ground. They are superior only to the Sudras, who owe to them, however, the same awful respect and submission, which it is incumbent on them to pay to the military class.
• IV. As much as the Brahmen is an object of intense veneration, so much is the Sudra an object of contempt, and even of abhorrence, to the other classes of his countrymen. The business of the Sudras is servile labour, and their degradation inhuman. Not only is the most abject and grovelling submission imposed upon them as a religious duty, but they are driven from their just and equal share in all the advantages of the social institution ...

This distribution of the whole people into four classes only, and the appropriation of them to four species of employment; an arrangement which, in the very simple state of society in which it must have been introduced, was a great step in improvement, must have been productive of innumerable inconveniences, as the wants of society multiplied. The bare necessaries of life, with a small number of its rudest accommodations, are all it prepares to meet the desires of man. As those desires, speedily extend beyond such narrow limits, a struggle must have early ensued between the first principles of human nature and those of the political establishment ...

CHAPTER III

The Form of Government

After the division of the people into ranks and occupations, the great circumstance by which their condition, character, and operations are determined, is the political establishment; the system of actions by which the social order is preserved. Among the Hindus, according to the Asiatic model, the government was monarchical, and, with the usual exception of religion and its ministers, absolute. No idea of any system of rule, different from the will of a single person, appears to have entered the minds of them, or their legislators ...

The plan, according to which the power of the sovereign was exercised in the government of the country, resembled that which has almost universally prevailed in the monarchies of Asia, and was a contrivance extremely simple and rude. In the more skilful governments of Europe, officers are appointed for the discharge of particular duties in the different provinces of the empire; some for the decision of causes, some for the control of violence, some for collecting the contingents of the subjects, for the expense of the state; while the powers of all center immediately in the head of the government, and all together act as connected and subordinate wheels in one complicated and artful machine. Among the less instructed and less civilized inhabitants of Asia, no other plan has ever occurred to the monarch, for the administration of his dominions, than simply divide his own authority and power into pieces or fragments, as numerous as the provinces into which it was deemed convenient to distribute the empire. To each of the provinces a vicegerent was dispatched, who carried with him the the undivided authority and jurisdiction of his master. Whatever powers the sovereign exercised over the whole kingdom, the vicegerent exercised in the province allotted to him; and the same plan which the sovereign adopted for the government of the whole, was exactly followed by the vicegerent in the government of a part. If the province committed to his sway was too extensive for his personal inspection and control, he subdivided it into parts, and assigned a governor to each, whom he intrusted with the same absolute powers in his district, as he himself possessed in the administration of the greater department. Even this inferior deputy often divided his authority, in the same manner, among the governors, whom he appointed, of the townships or villages under his control. Every one of those rulers, whether the sphere of his command was narrow or extensive, was absolute within it, and possessed the whole power of the sovereign, to levy taxes, to raise and command troops, and to decide upon the lives and property of the subjects ...

[Mill proceeds to an examination of the duties of the Hindu monarch: defence against external foes and preservation of internal order though judicial system.]

In the first stage of society, the leader in war is also the judge in peace; and the regal and judicial functions are united in the same person. Various circumstances tend to produce this arrangement. In the first place, there are hardly any laws: and he alone is entitled to judge, who is entitled to legislate, since he must make a law for every occasion. In the next place, a rude people, unused to obedience, would hardly respect inferior authority. In the third place, the business of judicature is so badly performed as to interrupt but little the business or pleasures of the king; and a decision is rather an exercise of arbitrary will and power, than the result of an accurate investigation. In the fourth place, the people are so much accustomed to terminate their own disputes, by their own cunning, or force, that the number of applications for judicature is comparatively small. As society advances, a set of circumstances, opposite to these, are gradually introduced: laws are made which the judge has nothing to do but apply: the people learn the advantage of submitting to inferior authority: a more accurate administration of justice is demanded, and cannot be performed without a great application both of attention and of time: the people learn that it is for the good of the community, that they should not terminate, and that they should not be allowed to terminate, either by force or fraud, their own disputes: the administration of justice is then too laborious to be either agreeable to the king, or consistent with the other services which he is expected to render: and the exercise of judicature becomes a separate employment, the exclusive function of a particular order of men ...

[So far as the duty to legislate is concerned, Mill points out that since the Hindus believe their public as well as private affairs to be governed by a divinely-ordained system, the power of legislation belongs to the priesthood; the monarch becomes the tool of his religious advisors, the Brahmens. Nevertheless, by retaining other powers, the Hindu monarchs had succeeded in keeping the balance in their favour.]

They had two engines entrusted to them, the power of which their history serves remarkably to display; they were masters of the army; and they were masters of the public revenue. These two circumstances, it appears, were sufficient to counter-balance the legislative, and the judicative, and even a great part of the executive power, reinforced by all the authority of an overbearing superstition, lodged in the hands of ‘the Brahmens. These threw around the sovereign an external lustre with which the eyes of uncultivated men are easily dazzled. In dangerous and disorderly times, when every thing which the nation values depends upon the sword, the military commander exercises unlimited authority by universal consent; and so frequently is this the situation of a rude and uncivilized people, surrounded on all sides by rapacious and turbulent neighbours, that it becomes, in a great measure, the habitual order of things. The Hindu king, by commanding both the force, and the revenue of the state, had in his hands the distribution of gifts and favours; the potent instrument, in short, of patronage; and the jealousy and rivalship of the different sets of competitors would of their own accord give him a great influence over the Brahmens themselves. The distribution of gifts and favours is an engine of so much power, that the man who enjoys it to a certain extent is absolute, with whatever checks he may appear to be surrounded.

CHAPTER IV

The Laws

[The subject matter of this chapter was of great interest to Mill as a Benthamite; it was here that Bentham and Mill saw the most farreaching possibilities for implementing their views (see e.g. Mill's remark quoted above, p. 19). The subject also interested Mill as a philosophical historian, and at one time he hoped to write a history of English law tracing ‘the expedients of the several ages to the state of the human mind, and the circumstances of society in those different ages, and to show their concord and discord with the standard of perfection’. (Letter to MacVey Napier, 5 Aug. 1818, in Bain, op. cit., p. 173.) Most of the chapter consists of a detailed critique of the shortcomings, in terms of completeness, exactness, efficiency and humanity, of the Hindu system of law. There is room here only for a short section dealing with the law of property.]

It is needless to remark, that the sources of acquisition, by occupancy, by labour, by contract, by donation, by descent; which are recognised in almost all states of society, are recognised in Hindustan. It is in the accuracy with which the intended effects of these incidents are defined, and in the efficiency of the means taken to secure the benefits they convey, that the excellence of one system above another is more particularly observed.

Though property, in the first stage of its existence, was probably measured by occupancy, and the one ceased with the other, the privilege was early conferred of alienating for a valuable consideration, or of transferring by purchase and sale. As this is a very simple compact, it appears to admit of little variety in the various stages of human improvement. In an age, however, in which the means of detecting fraudulent acquisitions, and of proving the good faith of contracts and bargains, are imperfectly known, purchases and sales, made in public, are alone considered valid. The laws of our Saxon ancestors prohibited the sale of very thing above the value of twenty-pence, except in open market; and it is with a pleasing kind of surprise we find, that similar circumstances have suggested a similar expedient to the people of Hindustan ... The right, however, conveyed by a bonâ fide purchase is not, among the Hindus, carried to that extent, which is found requisite in a commercial and highly civilized society. If the goods were not the property of the person by whom they were sold, the right of the purchaser becomes absolute only if he can produce the vendor ... This is quite sufficient to throw so much uncertainty into the great class of transactions by purchase and sale, as would prove, in a civilized state of society, a ruinous obstruction of business. A manufacturer purchases a quantity of the raw material, and works it up; he would lose, in a mischievous proportion, if the owner of that material could demand the identical substance, on tendering the half of its price. In many cases, the identical substance is exported; in many it is consumed; and cannot possibly be restored. Among children, and among rude people, little accustomed to take their decisions upon full and mature consideration, nothing is more common than to repent of their bargains, and wish to revoke them: Among the Hindus this has been found an affair of sufficient importance to constitute an entire head in the classification of their laws. A variety of cases are enumerated, in which, if dissatisfied with his bargain, a man may insist upon having it annulled; and in general any sale and purchase of things, not perishable, may be rescinded within ten days, at the will of either of the parties: another law, altogether incompatible with an age in which the divisions and refinements of industry have multiplied the number of exchanges. The regulation, which fixes the price of things, instead of leaving it to the natural and beneficient laws of competition, conveys not a high idea of the knowledge of the Hindus ...

The peculiar species of transfer which is known by the name of loan is an object of great importance in the jurisprudence of all nations ... In an improved state of society, where the efficiency of laws, the diffusion of wealth, and the accommodations of business, have created a mutual confidence, loans are generally contracted on the security of law, without the actual custody or deposit of the property on which they may be secured. It is only in that extremely confined and degraded species of lending, abandoned to pawnbrokers, that pledges form a regular and component part. In the more early and imperfect states of the social union, circumstances are very different. Law is both feeble and inaccurate, poverty reigns, violence prevails; and the man who is able to discharge his debts to-day may stript of all his possessions to-morrow. In these circumstances, the security of law upon the person or property of the debtor is seldom sufficient; and the deposit of some equivalent property, as a pledge, is the obvious, and, in point of fact, the common resource. The doctrine of pledges forms one of the most considerable branches of this part of the Hindu code ...

We have now reviewed the great peculiarities of the Hindu law, in regard to those transfers of property which partake of the nature of exchange, and in which some sort of an equivalent is given and received; it remains for us to consider those, in which the property passes from one owner to another without any return.

The most extensive class of this species of transactions are those occasioned by the death of the owner. Men had considerably strengthened the chain by which they were connected with property, before they ceased to consider death as the cause of a perfect separation, and as leaving their possessions free to the earliest occupier. A right of succession in the children suggests itself, however, at a very early period in the progress of civilization. It is recommended by so many motives, it so happily accords with some of the strongest impulses of human nature, and is so easily engrafted upon the previous order of things, that it could not fail to be an early institution. The children, being naturally the nearest to their parent at the moment of his death, were generally able to avail themselves of the right of occupancy, and to exclude other successors by prior possession. It was the usual arrangement in early stages of society, that the different members of a family should live together; and possess the property in common. The father was rather the head of a number of partners, than the sole proprietor. When he died, it was not so much a transfer of property, as a continued possession; and the co-partnership was only deprived of one of its members. The laws of inheritance among the Hindus are almost entirely founded upon this patriarchal arrangement ...

The idea of a joint interest in the property of the family, while it early established the right of succession in the children, served to exclude the right of devising by will. As the property belonged to the parent in common only with his offspring, it could not be regarded as just, that he should have the power of giving it away from them after his death. It is only in stages of society, considerably advanced, that the rights of property are so far enlarged as to include the power of nominating, at the discretion of the owner, the person who is to enjoy it after his death. It was first introduced among the Athenians by a law of Solon, and among the Romans, probably, by the twelve tables. The Hindus have, through all ages, remained in a state of society too near the simplicity and rudeness of the most ancient times, to have stretched their ideas of property so far. The power of disposing of a man's possessions, by testament, is altogether unknown to their laws ...

CHAPTER V

The Taxes

The form of the government is one, the nature of the laws for the administration of justice is the other, of the two circumstances by which the condition of the people in all countries is chiefly determined. Of these two primary causes no result to a greater degree ensures the happiness or misery of the people, than the mode of providing for the pecuniary wants of the government, and the extent to which the agents of government, of whatever kind, are enabled to divide among themselves and their creatures, the annual produce of the land and labour of the community.

The matters of detail, which by their number and uncertainty have so exceedingly perplexed the servants of the Company, in the financial operations of the Indian government, cannot here be described. The general outline, and the more important effects, of that system of taxation which is described in the ancient books, are all that falls within the design of an account of the ancient state of the people. 1. ‘Of grain’, says the ordinance of Menu, ‘an eighth part, a sixth, or a twelfth may be taken by the king;’ to be determined, adds the gloss of the commentator Culluca, ‘by the difference of the soil, and the labour necessary to cultivate it.’ 2. ‘He may also take a sixth part of the clear annual increase of trees, flesh-meat, honey, clarified butter, perfumes, medical substances, liquids, flowers, roots and fruit, of gathered leaves, potherbs, grass, utensils made with leather or cane, earthen pots, and all things made of stone.’ 3. ‘Of cattle, of gems, of gold and silver, added each year to the capital stock, a fiftieth part may be taken by the king.’ 4. ‘Having ascertained the rules of purchase and sale,’ says the law, ‘the length of the way, the expenses of food and of condiments, the charges of securing the goods carried, and the neat profits of trade, let the king oblige traders to pay taxes on their saleable commodities; after full consideration, let a king so levy those taxes continually in his dominions, that both he and the merchant may receive a just compensation for their several acts.’ 5. ‘Let the king order a mere trifle to be paid, in the name of the annual tax, by the meaner inhabitants of his realm who subsist by petty traffic: 6. By low handicraftsmen, artificers, and servile men, who support themselves by labour, the king may cause work to be done for a day in each month.’ It is added; 7. ‘A military king, who takes even a fourth part of the crops of his realm at a time of urgent necessity, as of war or invasion, and protects his people to the utmost of his power, commits no sin. 8. The tax on the mercantile class, which in times of prosperity must be only a twelfth part of their crops, and a fiftieth of their personal profits, may be an eighth of their crops in a time of distress, or a sixth, which is the medium, or even a fourth in great public adversity; but a twentieth of their gains on money and other moveables is the highest tax: serving men, artisans, and mechanics, must assist by their labour, but at no time pay taxes.’

In these several articles is found an enumeration of all the objects of taxation; and a general expression of the modes and degrees of impost. We perceive taxes on the produce of land, taxes on the produce of labour, a tax on accumulation, a tax on sales, and poll taxes. In article 1., is exhibited a tax on the produce of land; In article 2., a tax both on the produce of land, and on the produce of labour; In article 3., is a tax on accumulation, at least in certain commodities; In article 4., is a tax on purchases and sales; In article 5., is one sort of poll tax; In article 6., another.

There are two primary qualities desirable in a system of taxation; and in them every thing is included.

The First is, to take from the people the smallest quantity possible of their annual produce.

The Second is, to take from them that which is taken with the smallest possible hurt or uneasiness.

• I. Of taking from the people more than enough of the matter of wealth, the causes are two; 1st. When the government consumes beyond the smallest amount sufficient to obtain the services which it yields; 2d. When the collection of the taxes themselves costs more than the lowest sum at which, without sacrificing greater advantages, it is capable of being performed.
• II. Of the hurt and uneasiness, beyond the loss of what is taken away, which a system of taxation is liable to produce, the causes seem to be; 1. Uncertainty; 2. Inequality; 3, Impediment to production; 4. Injury to the good qualities, bodily or mental, of the people.3

Of the first head and its subdivisions, no illustration is necessary; and a few words will suffice for the second.

• 1. Uncertainty may arise from two sources; 1. Uncertainty in the meaning of the words, by which the tax is defined; 2. Uncertainty in the circumstances upon which the amount of the tax is made to depend; as if it were made to depend upon the weather, or the state of a man's health. Uncertainty in the meaning of the words opens a door to oppression and fraud, on the part of the collector. He will exact the largest sum consistent with the words, if he is not bribed; the lowest, if he is. Uncertainty, from whatever source, is a cause of uneasiness. The mind is continually haunted with the idea of the worst, and with all the fears which attend it; fears, often very great and tormenting. As often as a source of chicanery is opened about the amount which the contributor should pay, a source of extortion is opened, and a source of oppression, necessary to effect the extortion.
• 2. Of the unequal partition of taxes, the necessary consequence is, a greater quantity of suffering, than the same amount of taxes would produce, if more equally imposed; because the pain of the man who pays too much is out of all proportion greater than the pleasure of the man who pays too little. To make the burthen of taxes equal, it should be made to press with equal severity upon every individual. This is not effected by a mere numerical proportion. The man who is taxed to the amount of one tenth, and still more the man who is taxed to the amount of one fifth or one half, of an income of 100l. per annum, is taxed far more severely, than the man who is taxed to an equal proportion of an income of 1000l. and to a prodigious degree more severely than the man who is taxed to an equal proportion of 10,000l. per annum.4
• 3. On the mischievousness of all taxes which impede production, it is needless to enlarge. It is only necessary to make them known, or rather acknowledged. 1. Of this sort, are all taxes which take away any part of that property which has been already employed, as capital because there is always more or less of difficulty in replacing it from the fund destined for immediate consumption. 2. Of this sort also are all taxes which create any encouragement whatsoever, or any discouragement whatsoever, to any particular employment of capital in respect to other employments; for as capital is always carried by a strong impulse to that employment which is the most productive, every thing which turns it out of the course which it would take of its own accord, turns so much of it out of a more, into a less productive channel.
• 4. That all taxes ought to be shunned which tend to lessen the amount of useful qualities in the people, will not be contradicted. Taxes upon medicines have a tendency to diminish health and strength. Taxes upon innocent amusements, as the sports of the field, have a tendency to drive the people to others that are hurtful. Taxes upon articles of consumption not hurtful, which have a tendency to supplant others that are, as tea and sugar to supplant intoxicating liquors, prompt to the consumption of the hurtful. Taxes upon law proceedings are a premium upon the practice of every species of iniquity. Lotteries are a direct encouragement to a habit of mind, with which no useful tendency can easily co-exist. And all taxes, of which the quantity due is not clear and certain, train the people, by continual practice, to a state of hardened perfection in mendacity, fraud, and perjury.

• 1. In the above list of the sacred ordinances concerning taxes, the first relates entirely to the tax on the produce of the soil. It offends against the rule of certainty to a high degree. The amount varies as one to one half; and the variation is made to depend upon circumstances the uncertainty of which opens a boundless field to all the wretched arts of chicanery and fraud on the part of the people, and all the evils of oppression on the part of the collectors. As the determination of the circumstances on which the amount of the assessment depends belongs of course, in such a state of society as that of the Hindus, to the agents of the treasury, a free career is afforded to all the baneful operations of favour and disfavour, of bribery and corruption. Whenever an option is granted between a less exaction and a greater, the violent propensity of all imperfect governments to excess is sure in time to establish the greater. It would appear accordingly that a sixth part of the produce became the uniform tax in Hindustan; and that the indulgence in favour of the barren soils was extinguished ...
• 2. In the second of these fiscal ordinances, a variety of products are enumerated, which, in a rude age, are either the spontaneous produce of the soil, as flowers, roots, grass; or obtained from the spontaneous produce, by some very simple process; as perfumes and medical substances, by expression; flesh-meat and honey, by killing the animals which produce them; and these, as costing little in point of labour, are all taxed at the highest rate imposed upon grain. By one of those capricious arrangements which abound in the institutions of a rude people, utensils made of leather, cane, earth, and stone, in the production of which labour is the principal agent, are placed under the same exaction as the spontaneous productions of the soil. The consequence must have been to render these commodities proportionably dear. In the execution of this ordinance, there must have been excessive uncertainty, and excessive expense. What is meant by ‘the annual increase?’ The ‘annual produce of trees’ is an absurd expression: trees grow not by the year. What shall be said of such expressions, as ‘the annual produce,’ of ‘clarified butter,’ ‘of flesh-meat,’ ‘of flowers?’ These are not commodities, which continue accumulating, till the amount of the annual produce is seen entire at the end of the year: but commodities daily brought into existence and daily consumed. To collect the tax upon such commodities, a daily visit in every family would hardly suffice. In the execution of this ordinance, the temptation to the incessant practice of all the arts of fraud, on the part of the people, and the powers of oppression bestowed upon the collectors, were well calculated to fill society with immorality and suffering.
• 3. In the third of the above ordinances are enumerated the principal classes of moveables known to the Hindus. It seems to be the addition made in any year to the previous stock, and not the previous stock itself, of which one fiftieth is taken in the way of tax. In a society, full of knowledge and industry, this would have been a tax upon capital, and therefore mischievous: in Hindustan, where gold, silver and gems, were most commonly hoarded, and not devoted to production, it would not have been easy to find a less objectionable tax. Unless in a state of society rapidly progressive, or a state in which there is excessive fluctuation of fortunes, that is, excessive misery, it would be a very unproductive tax.
• 4. In the words of the fourth ordinance is described a tax on all purchases and sales. The circumstances on which the amount is made to depend are so uncertain, as to constitute a great seminary of fraud on the one hand, and a great office of oppression on the other. The tax is also hurtful to production, by impeding circulation; that is, the passage of property from a situation in which it is less, to one in which it is more useful. The mode in which, at least in modern times, it was chiefly raised, that of transit duties, mutliplied to excess, obstructed all that encouragement to industry which is afforded by the interchange of commodities, not only between different countries, but one province and another of the same country. As often as property which has been, and is to be employed as capital, is bought and sold, it is a tax upon capital.
• 5. A poll tax, when paid in money, or any other common measure of value, is chiefly objectionable on account of its inequality; as the same sum is a very different burthen to different persons.
• 6. A poll tax paid in labour is somewhat less objectionable in point of equality, though the same portion of his time may be a much greater burthen upon one man than it is upon another. It is chiefly objectionable on account of the loss of time, and of property, which it occasions to those who have it to pay. In a well-ordered society, accordingly, where every man's time and labour are disposed of to the best advantage, it has no place ...

In this system of taxation, other sources are of small importance; the revenue of the sovereign arises almost wholly from the artificial produce of the land. To understand in what manner the people of Hindustan were affected by taxation, the circumstances of this impost are all that require to be very minutely explored.

The tenure of land in Hindustan has been the source of violent controversies among the servants of the Company; and between them and other Europeans. They first sprung up amid the disputes between Mr Hastings and Mr Francis, respecting the best mode of taxing Bengal. And they have been carried on with great warmth, and sometimes with great acrimony, ever since. Of these controversies the account will be due, at the periods when they occur. At present it will suffice to bring to light the circumstances which appear to ascertain the ancient state of the country, in respect to the distribution of property in the land.

In a state of society resembling our own, in which property is secure, and involves very extensive rights or privileges, the affections which it excites are so strong, and give such a force to the associations, by which the idea of it is compacted and formed, that in minds of little range, whose habits are blind and obstinate, the particulars combined together under the idea of property appear to be connected by nature, and not, without extreme injustice, to be made to exist apart.

At different times, however, very different rights and advantages are included under the idea of property. At very early periods of society it included very few: originally, nothing more perhaps than use during occupancy, the commodity being liable to be taken by another, the moment it was relinquished by the hand which held it: but one privilege is added to another as society advances: and it is not till a considerable progress has been made in civilization, that the right of property involves all the powers which are ultimately bestowed upon it.

It is hardly necessary to add, that the different combinations of benefits which are included under the idea of property, at different periods of society, are all equally arbitrary; that they are not the offspring of nature, but the creatures of will; determined, and chosen by the society, as that arrangement with regard to useful objects, which is, or is pretended to be, the best for all.

It is worthy of remark, that property in moveables was established; and that it conveyed most of the powers which are at any time assigned to it; while, as yet, property in land had no existence. So long as men continue to derive their subsistence from hunting; so long, indeed, as they continue to derive it from their flocks and herds, the land is enjoyed in common. Even when they begin to derive it partly from the ground, though the man who has cultivated a field is regarded as possessing in it a property till he has reaped his crop, he has no better title to it than another for the succeeding year.

In prosecuting the advantages which are found to spring from the newly-invented method of deriving the means of subsistence from the ground, experience in time discovers, that much obstruction is created by restricting the right of ownership to a single year; and that food would be provided in greater abundance, if, by a greater permanence, men were encouraged to a more careful cultivation. To make, however, that belong to one man, which formerly belonged to all, is a change, to which men do not easily reconcile their minds. In a thing of so much importance as the land, the change is a great revolution. To overcome the popular resistance, that expedient which appears to have been the most generally successful, is, to vest the sovereign, as the representative of the society, with that property in the land which belongs to the society; and the sovereign parcels it out to individuals, with all those powers of ownership, which are regarded as most favourable to the extraction from the land of those benefits which it is calculated to yield. When a sovereign takes possession of a country by conquest, he naturally appropriates to himself all the benefits, which the ideas of his soldiers permit ...

To those who contemplate the prevalence of this institution, among nations contiguous to the Hindus, and resembling them in the state of civilization, it cannot appear surprising, that among them, too, the sovereign was the lord of the soil ...

The cultivators were left a bare compensation, often not so much as a bare compensation, for the labour and cost of cultivation: they got the benefit of their labour: all the benefit of the land went to the king.

[Mill goes on to quote the description given by the Select Committee of the House of Commons on E. Indian Affairs (1810) of the system of municipal government and communal division of labour in Indian villages at the time.]

The state of taxation is described by the same committee, in the following terms: ‘By the custom of the Hindu government, the cultivators were entitled to one half of the paddy produce (that is, grain in the husk) depending on the periodical rains. Of the crops from the dry grain lands, watered by artificial means, the share of the cultivator was about two thirds. Before the harvest commenced, the quantity of the crop was ascertained, in the presence of the inhabitants and village servants, by the survey of persons, unconnected with the village, who, from habit, were particularly skilful and expert, in judging of the amount of the produce, and who, in the adjustment of this business, were materially aided by a reference to the produce of former years, as recorded by the accountants of the villages. The quantity which belonged to the government being thus ascertained, it was received in kind, or in money.’ Of garden produce, of which the culture was more difficult, a smaller portion was taken; because, if field culture was taxed as much as it could bear, it seems to have been supposed that garden culture, at an equal rate of taxation, could not have been carried on.

‘Such,’ continue the committee, ‘were the rights of the ryots, according to the ancient usage of the country. In consequence, however, of the changes introduced by the Mahomedan conquest, and the many abuses which later times had established, the share really enjoyed by the ryots was often reduced to a sixth, and but seldom exceeded a fifth. The assessments had no bounds but those which limited the supposed ability of the husbandmen. The effects of this unjust system were considerably augmented by the custom, which had become common with the Zemindars, of sub-renting their lands to farmers, whom they armed with unrestricted powers of collection, and who were thus enabled to disregard, whenever it suited their purpose, the engagements they entered into with the ryots; besides practising every species of oppression, which an unfeeling motive of self-interest could suggest. If they agreed with the cultivators at the commencement of the year, for a rent in money, and the season proved an abundant one, they then insisted on receiving their dues in kind. When they did take their rents in specie, they hardly ever failed to collect a part of them before the harvest time had arrived and the crops were cut; which reduced the ryots to the necessity of borrowing from money lenders, at a heavy interest of 3, 4, and 5 per cent, per month, the sums requisite to make good the anticipated payments that were demanded of them. If, from calamity or other cause, the ryots were the least remiss in the discharge of their rents, the officers of the renters were instantly quartered upon them; and these officers they were obliged to maintain, until they might be recalled on the demand being satisfied. It was also a frequent practice with the renters to remove the inhabitants from fertile lands, in order to bestow them on their friends and favourites; and to oblige the ryots to assist them, where they happened to be farmers, in the tilling of their lands; and to furnish them gratuitously with labourers, bullocks, carts, and straw.’

The two terms, Ryot and Zemindar, introduced into this passage, are of frequent recurrence in the history of India, and require to be explained. By ryots, are always denoted the husbandmen; the immediate cultivators of the ground. The Persian term Zemindar, introduced by the Mahomedan conquerors, was in Bengal, and certain other parts of India, the name of a certain sort of middleman, between the cultivator who raised the crop, and the king who received the greater part of the net produce. Into the controversy respecting the nature of the interest which the Zemindar possessed in the land with respect to which he performed his function of middle-man, I shall not at present enter. Another occasion will present itself for the examination of that subject. It is here sufficient to say, that in districts, sometimes of less extent, a person, under the title of Zemindar, received the share of the produce, which was exacted from the ryot; either by himself, or the persons to whom he farmed the receipts; and paid it over to the sovereign, reserving a prescribed portion to himself. The Zemindar was thus, whatever else he might be, the collector of the revenue, for the district to which he belonged. As the receipt of revenue, in a rude state of government, is a business most dear to the governors, the Zemindar, in order the better to secure this favourite end, was vested with a great share of the powers of government. He was allowed the use of a military force; the police of the district was placed in his hands; and he was vested with the civil branch of judicature. When his district was large, he was a sort of a petty prince. In various places in India, however, the collection of the revenue had never become fixed and hereditary, in the hands of an individual, and the business was transacted between the immediate cultivators, and a man who possessed none but the characteristics of an immediate officer of government.

The committee say, that a rate of taxation much more severe than that which existed under the Hindu governments was introduced by the Mahomedan rulers, and amid the abuses of modern times. For this opinion they have no authority whatsoever. It is, therefore, a mere prejudice. The rate which they mention goes far beyond the scale of the ancient ordinances: And what reason is there to believe that the ancient Hindu governments did not, as the Mohamedan, levy assessments to the utmost limits of the supposed ability of the ryots? In those parts of India which Europeans have found still remaining under Hindu governments, the state of the people is worse, if there is any difference, than where they have been subject to the Mohamedan sway.

The rate established in the ancient ordinances has been regarded as evidence of mild taxation, that is, of good government. It only proves that agriculture was in its earliest, and most unproductive state; and though it paid little, could not afford to pay any more. We may assume it as a principle, in which there is no room for mistake, that a government constituted and circumstanced as that of the Hindus had only one limit to its exactions, the non-existence of any thing further to take. Another thing is certain, that under any state of cultivation, but the very worst, if the whole except a sixth of the produce of a soil, so rich as that of Hindustan, had been left with the cultivator, he must have had the means of acquiring wealth, and of attaining rank and consequence; but these it is well ascertained that the ryots in India never enjoyed.5

Notwithstanding these proofs that the ownership in the land was reserved to the king, this conclusion has been disputed, in favour, 1st of the Zemindars, and 2dly, of the Ryots. The question with regard to the Zemindars may be reserved till that period of the history, when it was agitated for the sake of practical proceedings on the part of the government. The question with regard to the Ryots belongs peculiarly to this part of the work.

The circumstances, which appear to have misled the intelligent Europeans who have misinterpreted this part of the Hindu institutions, are two; first, the tenure of the ryot or husbandman; and secondly, the humane and honourable anxiety, lest the interests and the happiness of the most numerous class of the population should be sacrificed, if the sovereign were acknowledged as owner of the soil.

But, if this acknowledgment were ever so complete, it is inconsistent neither with the tenure which is claimed in favour of the ryots, nor with the means of their prosperity and happiness. And if it were, the acknowledgment of its previous existence would be no bar to a preferable arrangement; since the sovereign can have a right to nothing which is injurious to his people.

In a situation in which the revenue of the sovereign was increased in proportion to the number of cultivators, and in which a great proportion of the land continued void of cultivators, there would be a competition, not of cultivators for the land, but of the land for cultivators. If a ryot cultivated a piece of ground, and punctually paid his assessment, the sovereign would be far from any wish to remove him because it would be difficult to supply his place. If the ryot sold the ground to another ryot, or left it to a successor, that is, put another in his place who would fulfil the wishes of the sovereign, he, whose source of fear was the want of a cultivator, had still cause for satisfaction; and seldom, if ever, interfered.

By custom, the possession of the ryot became, in this manner, a permanent possession; whence he was not removed except when he failed to pay his assessment or rent; a possession which he could sell during his life; or leave by inheritance when he died. As far as rights can be established by prescription, these rights were established in India in favour of the ryots. And no violation of property is more flagrant than that by which the tenure of the ryot is annulled.

But, according even to European ideas, a right to cultivate the land under these, and still greater advantages, is not understood to transfer the ownership of the land. The great estates in Ireland, for example, let under leases perpetually renewable, are vendible and inheritable by the leaseholders, without affecting the ownership of their lords; subject, moreover, to a very important restriction, from which the sovereigns in India were free; the lords of such estates cannot raise their rents at pleasure; the sovereigns in India enjoyed this privilege, and abused it to excess. The sovereigns in India had not only the ownership, but all the benefit of the land; the ryots had merely the privilege of employing their labour always upon the same soil, and of transferring that privilege to some other person; the sovereign claimed a right to as much of the produce as he pleased, and seldom left to the ryots more than a very scanty reward for their labour.

That ownership in the land justified this extent of exaction, or implies a valid title to any power at variance with the interests of the ryots, is an erroneous inference. Without violating its obligations to the people, a government cannot spend any sum, beyond what is strictly necessary for the performance of the services, which it is destined to render; and it is justified in taking even this sum exclusively from the cultivators of the land, only if that is the mode in which all the qualities desirable in a financial system are the most completely realized.

Those who contend for the privileges of the ryots would no doubt observe, that in this mode of interpretation, we reduce the ownership of the sovereign to an empty name; and that to the admission of it, thus understood, they see nothing to object. The controversy is then at a close. The ownership of the sovereign in the soil, wherever it exists, is, by the principles which constitute the very foundation of government, reduced to the limits above described. And it is no less certain, that all which is valuable in the soil, after the deduction of what is due to the sovereign, belongs of incontestable right to the Indian husbandman.

The Hindu mode of raising the revenue of the state, wholly, or almost wholly, by taking as much as necessary of the rent of the land, while it is the obvious expedient which first presents itself to the rudest minds, has no inconsiderable recommendation from science itself. Previous to allotment, the productive powers of the soil are the joint property of the community; and hence are a fund peculiarly adapted to the joint or common purposes and demands. If the whole of what is strictly rent were taken away, the application of labour and capital to the land would resemble the application of labour and capital to the land would resemble the application of labour and capital to wood or iron; and the same principles, in both cases, would determine their reward.

But as the expense required for the services of government exceeds not a very small portion of the rent of the land, unless where the quantity is very minute, the greatest possible benefit is derived from the productive powers of the soil, when it is the property of individuals. The benefits of the soil have accordingly, over the greater part of the globe, been employed, first, to supply in whole, or for the greater part, the necessities of government, next to enrich the individual occupant. The most remarkable exception to this rule is in modern Europe. After the conquests of the Gothic nations, the land was thrown in great portions into the hands of the leading men; and they had power to make the taxes fall where they chose; they took care accordingly that they should fall any where rather than upon the land; that is, upon any body rather than themselves. Further, as their influence over the sovereign made him glad to share with them what he derived from the taxes, they not only threw the burden off their own shoulders, but taxed, as they have continued to do, and sometimes on a progressive ratio, to the present hour, the rest of the community for their benefit.

The objections to the Hindu system of providing for the expenses of government, arise rather from the mode, than the essence.

By aiming at the receipt of a prescribed portion of the crop of each year; and with a very imperfect distinction of the lands of different powers, the Hindus incurred most of the evils which a bad method of raising tax is liable to produce. They rendered the amount of the tax always uncertain, and its pressure very unequal; they rendered necessary a perfect host of tax-gatherers; and opened a boundless inlet to partiality and oppression on the one hand; to fraud and mendacity on the other. A tax consisting of any portion of the gross produce of the soil, raises the price of that produce; because the tax raised from the poorest of the cultivated land must be returned, along with the expense of cultivation, in the exchangeable value of its produce. In this manner a tax is levied upon the consumers of corn, which surpasses the sum paid to the government, and enriches the owners of the best land at the expense of the community6 ...

Extracts from Oral Evidence and Memoranda submitted by James Mill to the Select Committee on the Affairs of the East India Company 1831 and 1832

(a) Land Revenue

Minutes of Evidence, Parliamentary Papers, 1831, vol. V

2 Aug.

3133. You have stated that it is always the practice in India that the principal source of revenue should be the land; is that a practice which we have maintained?—It is.

3134. Do you conceive it is possible to avoid following that system, or do you think it is an advisable system?—I should not think it either possible or advisable to avoid it; not possible, because there is really no other adequate source of revenue in India. India is a country exceedingly poor. There are few sources of industry different from labour upon the land. If you were therefore to abandon the land revenue, there is no other means that I am aware of, of obtaining a revenue. You might, to be sure, proceed by indirect means, but it would come to the same thing; you must either go without the revenue, or you must take it where it is to be had. I conceive, however, that the peculiarity of India, in deriving a large proportion of its revenue from the land, is a very great advantage. Nine-tenths probably of the revenue of the government in India is derived from the rent of land, never appropriated to individuals, and always considered to be the property of government; and to me that appears to be one of the most fortunate circumstances that can occur in any country; because in consequence of this the wants of the state are supplied really and truly without taxation. As far as this source goes, the people of the country remain untaxed. The wants of government are supplied without any drain either upon the produce of any man's labour, or the produce of any man's capital.

3135. You have described various systems of collecting the land revenue; which of those do you think is the most advantageous for the people?—I conceive that as matters are at present settled in India, by far the best security for the inferior people is, that the assessment should be made and should be collected from them by the officers of government, without the intervention of a middle-man. It appears to me that the interest of the ryot is much more likely to be protected if he transacts with the officer of government under all responsibility to which he is liable, than if he transacts with the other species of middle-man; and I should say that the experience of India goes to that conclusion. With respect to village settlement, the villages being a sort of fraternity, very often claiming to be relations, and in some cases calling themselves brethren, it was sometimes thought that the inferior ryots would be under an equitable and kind management if the assessment was distributed upon them by the heads of the village; but experience has gone very much to the contrary: it has been found that those heads of villages are in almost all cases oppressors of the inferior ryots.

3136. What do you suppose to have been the object for which the permanent settlement was introduced?—I believe the permanent settlement was introduced with the best of all possible motives, with a view to the protection of the whole mass of the agricultural population. That appears to me, from the proclamations of government at the time, and other documents, to have been the object in view. From our want of expeience, great abuses had before that time been practised by the different sorts of people whom we employed in the collection of the revenue. The detail of the business was so great, that it frightened Lord Cornwallis and the government of the day, and they conceived that no better method for the protection of the ryots could be invented, than to create a species of landlords, from which they expected much benefit to arise. The ground upon which their reasoning principally went was this, that those zemindars having a permanent interest in the land assigned to them, would feel an interest in the prosperity of the ryots, in the same manner as a landlord in England feels an interest in the prosperity of his tenants. This was expected to produce two good effects; to create a landed aristocracy in the country, and, above all, to afford protection to the ryots from this kind of paternal feeling that was expected to pervade the zemindars. Unhappily that last expectation has been found to be very far from corresponding with the facts, they little understood the nature of the men with whom they were transacting ...

3138. To what extent do you believe that the permanent settlement did affect the rights of the ryots?—I believe that, in practice, the effect of it has been most injurious. The most remarkable circumstance, and that by which all the rest seem to have been introduced, was the interpretation put upon the effect of the sales of land, particularly public sales that were made for recovering arrears of revenue. The idea came to be entertained, that the purchasers at those sales were proprietors. They were denominated proprietors: a man that purchased an estate was considered to be the proprietor of that estate; and in consequence of this notion of proprietorship, and the great powers that are annexed to it, in the mind of an Englishman, an idea seems to have been entertained that the purchaser of this estate purchased the rights over it, as completely as a man would purchase rights over an estate, by purchasing it at a public sale in England. Those auction purchasers, as they were called, proceeded to act upon this assumption, to impose new rates upon the ryots, and even to oust them wherever they found it convenient. When applications were made to the courts, and they were not early made, because the people are exceedingly passive, the judges for the most part, coincided in opinion with those auction purchasers, and decided that their rights included every thing, and that the ryots were in the condition of tenants at will. This has proceeded to a very considerable length; because during the first year of the operation of the permanent settlement, a very great transfer of property took place. It appears also, that the same sort of feeling as to the rights of the ryots, which was thus spread by the interpretation of this act of purchasing, has pervaded also the other properties which had not changed hands, and even those cases of transfer which took place by private bargain; and that generally in Bengal now there is hardly any right recognized as belonging to those inferior holders.

3139. Do you conceive that at present the transfer of property by any means is held to give the new acquirer a complete right over the cultivators?—I believe so: the thing is not so distinctly made out upon the records in other cases as in that of the auction purchasers, but there is every reason to infer that the same sort of feeling that was generated in the case of those estates that were sold, now pervades the whole of them. There is a very remarkable expression in one of the despatches from the government of Bengal, that the rights of the ryots in Bengal, under the operation of the permanent settlement, had passed away sub silentio ...

3144. Are you of opinion that at present the ryots have no rights at all in the land?—Generally that is the case; they are mere tenants at will of the zemindars in the permanently-settled provinces.

3145. Could the government by any process now return to the rights which existed in the year 1793?—There is one mode which has long appeared to me an unexceptionable one, and requiring only time for the full benefit of it: it is this; that whenever any zemindary property shall come to be sold, it shall be purchased on account of government, and re-settled with the ryots upon their old hereditary principle. This has been strongly recommended by the home authorities.

3146. How are those old hereditary rights to be ascertained?—The great thing is to confirm them in their possessions as hereditary occupants. The object is, that government should never hand them over to the zemindars again, but that they should remain the ryots of government, from whom the government collector will collect individually. In other words, those estates are to become ryotwar ...

4 Aug.

3161. In those cases in which government, having purchased those estates, may be said to have introduced the ryotwar system, on what principle was the property assessed?—On the principle commonly adopted, that of taking all the evidence that can be obtained of what is the real value of the land; what, from its productive powers, it can afford to pay.

3162. Could that assessment secure the fair rights of the ryots, unless there is a regular survey?—The great difficulty in raising a revenue from the land in India is, the difficulty of ascertaining correctly the value of the land. Approximation is all that can be obtained. The instruction for many years sent from home, and impressed upon the governments of India is, that in no case can more be taken than the rent of the land, without both injustice and permanent injury to the country; not only injury to the individual cultivators, but injury to the government itself. And in all doubtful cases the instruction has been, to take special care to err on the side of lenity rather than on the side of severity; to take less than the rent rather than more.

3163. What proportion of the gross produce do you consider a mere rent?—I think that no proportion of the gross produce can ever be assigned as a standard of rent, because rent depends wholly upon the fertility of the land. In some cases, I conceive there is land that may be cultivated, and can afford no rent; there is land that may yield something, but very little beyond what is necessary to repay the expense of cultivation. There is other land that may afford a very large surplus beyond the expense of cultivation. My own conception is, that a good deal of mischief has been incurred in India by supposing that a certain proportion of the produce might with propriety be assigned as a standard of rent or revenue. This was the standard taken by the rude governments which preceded ours. One of its tendencies must have been to prevent all but land of a certain degree of fertility from being cultivated at all, and it must have operated as rent most unequally in all other cases.

3164. If this system of the purchase of lands permanently to remain in the hands of the government is to continue, is it not a mode of getting rid of the zemindary system, and of substituting ryotwar generally in those provinces?—if it is persevered in, that would be the ultimate effect of it.

3165. On what principle do you suppose that the Court of Directors gave those orders; was it upon a conviction of the mischiefs of the existing system?—My opinion is, that the Court were merely influenced by the consideration of the ryots, who had been divested of the rights they considered to belong to them; the desire that the ryots of Bengal should be restored to the situation they held formerly, or that now held by the ryots in other parts of India.

3166. Do you think that is quite reconcileable with the declarations of the first government, and with the faith of government to those whom they then constituted proprietors?—I conceive that it is perfectly reconcileable. The original engagement with those proprietors was to give them the benefit of a permanent assessment, but when those individuals who now hold the property have sold it, they are divested of all right and concern in it. The government, who purchases in that case, stands in the place of the zemindar, and holding the land in that capacity, may settle with its tenants in what way it pleases.

9 Aug.

3343. What effect do you think the zemindary settlement has upon the creation of capital?—I should think the operation of it was by no means favourable to the creation of capital in any respect; if it affects the accumulation of capital in any degree, it must either be the capital in the hands of the zemindars themselves or that in the hands of the under-tenants, and in my view of the matter it has no peculiar tendency to create capital in either case. The zemindars are notoriously not accumulators. The zemindars of the interior, those originally constituted, are a class habitually and even proverbially improvident and spendthrift; they are, with scarcely any exception, prodigal men, who waste whatever they have as fast as they can obtain it. The case is different, to a certain degree, with those men not connected with the land, who have purchased estates and live in Calcutta. They are capitalists, and as far as that class are concerned, it is very likely there is accumulation in their hands.

3344. Do you think that it tends to create a landed interest?—In Bengal it certainly has not had that effect. To a very great degree the original possessors have, from their own improvidence and other causes, lost their estates. Few of the old zemindars now exist. The men who now hold the property are not resident; they are capitalists who reside in the towns, and manage by their agents.

3345. Are not those evils owing to the circumstance of the zemindars being defective in their personal character, and not the best qualified; or are they part of the system?—They are not saving men; and I think that may be predicted generally of the persons that live upon rent. I know no country in which the class of men whose income is derived from rent can be considered as accumulators; they are men who spend their incomes, with a very moderate portion of exceptions.

3346. Is it generally true that the more prosperous the upper classes are that live by rents, the chance is that there will be more prosperity in the other classes?—The question turns upon the effect of their expenditure. Now the effect of their expenditure upon the accumulation of capital is in my opinion very little indeed, if any thing at all; because their consumption is all dead consumption; it is not reproductive consumption in the smallest degree. The only consumption that is a source of accumulation, is the consumption that takes place for the sake of reproduction. I do not conceive that a country is considered the richer for the expenses of an army for example: and for the same reason it is not the richer for the expense of those who spend their incomes.

3347. Is it not the fact that the cultivation has extended in those provinces where the zemindary system prevails?—I believe that is the fact.

3348. To what do you ascribe that?—There can be no doubt that this extension of cultivation implies an increase both of population and of capital. In order to enable the country to extend its cultivation further, capital must have been applied to it, unless old land at the same time had gone out of cultivation. I have no doubt that there has been in Bengal considerable increase of capital and extension of cultivation; but it is another question whether that has been owing to the zemindary system.

3349. Would you not ascribe that accumulation of capital in any degree to the zemindary system?—I should ascribe it in no degree whatever, because I have no idea that the zemindary system is favourable to the accumulation of capital in the hands of the ryots, and there is express evidence of the fact, that it is the ryots and not the zemindars who have extended the cultivation.

3350. By what means have the ryots extended the cultivation?—Their numbers have increased; and where an estate of a zemindar borders upon waste land, it has been found that the ryots generally have advanced upon the waste, and have carried on the cultivation by degrees.

3351. Do you think the ryots have accumulated capital?—The ryots cannot have done this without an extension of capital equal to those effects. They have multiplied considerably, and when the families increase, there is a subdivision of the property, and in consequence of the subdivision of the property, there is a stimulus to the members of the family among whom the subdivision has been made to increase their income, by attempting to cultivate the waste.

3352. If the ryots have in any degree accumulated capital, is not that a proof that their situation has somewhat improved?—Of some of them no doubt it has.

3353. Then you would not say that the effect of the zemindary settlement has been unmixed injury to the ryots?—Where the ryots have had an opportunity of obtaining fresh land, under certain advantages, they have been able, under the zemindary system, to extend cultivation; but I conceive that they would have effected it better under another system ...

3433. Supposing that at the time when the permanent settlement was made in Bengal, that settlement had been made with the ryots, and not with the zemindars, is it or not your opinion that a very considerable benefit would have accrued to that country by the establishment of that permanent settlement?—I am of opinion that the prosperity of the ryots would have been much greater, and that in all respects the wealth of the country would have improved in consequence of such an arrangement.

3434. Then your objection is not to the permanent settlement, but to the medium through which the revenue under the permanent settlement is collected?—The sole objection I have to the permanent settlement as permanent is, its being so far an alienation of the great source of the revenue of government.

3435. Are you not of opinion, if the permanent settlement has been of such a description as that the wealth of the country had increased, other sources of revenue would have opened to the government by means of that increase of wealth?—There is no doubt that if wealth had grown in the country, you might have gone to that wealth, and have obtained a portion of it by the operation of taxation.

3436. Supposing the country to have remained in a stationary state, are you of opinion that any considerable increase of revenue could have accrued to the government under a system of land revenue which was variable at their pleasure?—I conceive that if government, without fixing in perpetuity the rent to be demanded from the ryot, were so to manage that they should never take more than the rent from the ryot, still the means of accumulating wealth would remain in the hands of the ryots as much as those of any other producers in any country where the rent of the land is conveyed away, and has become the property of individuals.

11 Aug.

3555. Can you point out shortly, the means by which you think the system might be [so improved as to render the present system of taxation the best that could be devised]?—The means ... must be left, in a great degree, to the intelligence of the local authorities. If we are agreed upon the fundamental principle, that it is the obtaining of a fair rent, the grand endeavour obviously is, to limit the collections to this rent. Now, the doing this is unquestionably a matter of extraordinary difficulty. The difficulty of it must never be overlooked. We have none but very imperfect instruments to employ; with the total absence of a moral feeling in the country to aid us, it is not shameful to be dishonest in a public trust; no discredit attaches to a man in such a situation for robbing either his fellow subjects or the government; and if he does not avail himself of his advantages to make himself rich by any means, he is rather reckoned to have behaved unskilfully than to have behaved honourably. When we consider in addition to these circumstances, how imperfectly any one European with an imperfect knowledge of the natives, their language and circumstances and with a large extent of country to attend to, can watch over the numerous individuals that he employs, it will be easily understood that the difficulty is exceedingly great of limiting the exaction upon the ryot to the rent; but means I have no doubt will be discovered by vigilance and care, and by improvement of the judicial business generally, the great instrument of protection in the long run, aided by those improvements in the education and intellects of the people, which will take place gradually, and which have been taking place; I have no doubt that means will be found of limiting the demand upon the ryot to a moderate rent, and then I conceive that the prosperity of that country will be as fully secured as it can be ...

[When Mill appeared on 18 Aug., the Committee faced him with evidence showing that the revenue from other sources, chiefly from the monopoly of salt and opium, had increased faster than the land revenue; their object was to cast doubt on Mill's view that land represented the only reliable and adequate source of revenue in an underdeveloped country. Mill refused to accept the conclusion that these other sources could replace a properly-constituted land revenue system. On the following day, he was given an opportunity to amplify his earlier remarks (Qq. 3343–6; Q. 3434) on the subject of capital accumulation and permanency of tenure.]

19 Aug.

3971. If it is beneficial to create a right of property to encourage improvement by leases of fifteen, twenty or thirty years, is it not a fortiori more important to give a permanent right to that property as an additional inducement to improvement?—I am not disposed to admit that conclusion; I am by no means of opinion that cases of a sufficient duration are not as effectual in improvement as permanency, and I should say, adverting to the experience of all countries, that improvements have been made by leaseholders, and not by permanent holders, in the great majority of cases.

3972. Will you explain why you consider a lease beneficial upon general principle?—By affording adequate encouragement to the outlay of capital upon the land.

3973. If that is an encouragement by securing the enjoyment of the profits of the application of capital, is it not your opinion that a permanent settlement would be a stronger inducement to improvement than a temporary one?—I think that, practically, it is not.

3974. Can you explain on what grounds you think a permanent security of property not so likely to encourage a man to improve his estate as a right for a limited period?—Because I think, in general, the persons who own rent, and live upon rent, consume it all. That is the rule almost universally with them in India, and very generally, I believe, elsewhere. Accumulation is made by the immediate cultivators, and it is accumulation, and that alone, which is the source of capital.

3975. Do your observations apply to the granting permanently to the zemindar?—Granting permanently to the zemindar, or permanently to anybody, even to the cultivator, because if the permanency of his grant were to exalt him to the character of a zemindar, my observation would apply to him as well as to the present class of zemindars.

3976. Taking into consideration the great extent of cultivation, and the mass of ryots in India, how could the cultivation of a few begahs or of small lots of land, raise them into the character of zemindars, or even proprietors?—Supposing you were to fix a rent at the present moment, an equitable rent, neither more nor less than according to my definition of rent, it ought to be; this, after a lapse of time, after the increase of population and the extension of cultivation, would become something less than the rent; in process of time, something considerably less. After that time, the ryot whose payments were thus rendered permanent, would not be merely a cultivator enjoying the profits of his stock, he would have become a landlord, enjoying also a portion of rent. As soon as he does enjoy a portion of rent sufficiently large to enable him to live upon it, he feels the temptation to let his land to other ryots, and cease cultivating himself.

3977. Is that the case generally in England with the proprietors of very small portions of land, do they not in general cultivate themselves?—I believe in a great many cases not, in others they do, but I believe it is not found that they are better cultivators than the class of leaseholders.

3978. Can it be supposed, in looking at the class of individuals who are to rent the lands in India, that such danger to any extent could take place?—The danger would not be immediate, because the progress of population and cultivation, which would render what would be an adequate rent at this moment, a good deal less than a rent, is a result which it must require many years to bring about. But supposing a payment was to be fixed in perpetuity, at the present moment, and that each of the present cultivating ryots was, after a certain number of years, to be the owner of a certain portion of rent, I should expect the consequence I have now mentioned to take place.

3979. How do you account for the improvements that have taken place in America and in Australia, and which are now taking place in the more densely peopled parts of those countries, except on the principle stated, of the cultivators being also the proprietors?—Those cases I think cannot very properly be brought into comparison with India; the circumstances are essentially different.

3980. Are you not aware, that in America it is not one in twenty cases where any person hires a farm, but that the almost general rule is, that the proprietor cultivates it?—That cannot be the case where the property is extensive. As long as the holding is small, no doubt it is so, but such great proprietors as Jefferson was in Virginia, Washington and others in various places, have their tenants.

3981. Then you are not aware, that the cases of having tenants, are exceptions from the general rule, in any of the States of America?—I have not the least doubt there are many persons in America who continue to accumulate, and to lay out their accumulations upon the cultivation of the land; but I believe that the inducements in America are of a very peculiar kind.

3982. Why should not the same principle operate in India, where so much waste land may be cultivated, as now operates in other parts?—I think the same motives do not exist. The people are in different circumstances. A population of old and rich countries transplanted into a country altogether new, seem to deal with land not as landlords but mercantile adventurers ...

[On 23 Aug., Mill's tenacity was further tested by a series of questions designed to draw from him the admission that increases of revenue in the permanently settled provinces of Bengal and Benares could be attributed to the superiority of the land system. Here is part of Mill's reply.]

4001 ... If the facts, as they are placed in the questions before me were admitted, admitted without any explanation; if no satisfactory account could be rendered why there had been an increase of revenue in the zemindary provinces, and a falling off of revenue in the provinces under temporary settlements, this would, in my opinion, afford no ground whatever for the inference that the zemindary system is preferable to the ryotwar. To me it would still appear, that to bear out this inference, there was nothing whatever in the state of the facts but this one circumstance, that they had existed concomitantly ... It does not by any means follow, because the zemindary system was contemporary with prosperity in the one case, the detailed and temporary settlement, with the want of prosperity in the other cases, that they were respectively the causes of these opposite results.

[In addition to this lesson in elementary reasoning, the Committee were also reminded that the increased ‘productiveness of taxes’ was not an infallible sign of rising standards of living.]

4068 ... In proof of this I may appeal to Ireland; the progress of revenue has been very great in Ireland, and there is no portion perhaps of the British empire which has exhibited more rapid improvement in all the sources of wealth than Ireland; but I should not think it safe to infer from this that the population of Ireland has increased in felicity or in wealth, individually taken.

(b) Other Sources of Revenue

[When the Select Committee was re-convened in 1832, a questionaire was sent by T. Hyde Villiers to James Mill, which enabled Mill to summarise his views on the Company's methods of raising revenue. The following extracts from Mill's replies are taken from Parliamentary Papers, 1832, vol. XI, pp. 278–81.]

[Question] V. To explain the system of raising revenue from Salt in the Provinces with which you are acquainted and from which the monopoly of the manufacture, and first sale of the article by Government have had on the agricultural and general commerce of the country; upon the personal interests of the people, and upon the Government revenue, as contrasted with the probable effects of any alteration in the system of managing this branch of revenue, which it may occur to you to suggest.

I do not think a tax upon salt, considered in itself, is calculated to have any peculiar effects either upon the agricultural or commercial interests of the country.

Neither do I think that the mode of levying that tax in India, through the medium of a monopoly, has any tendency to affect those interests.

The amount of the tax, no doubt, affects the personal interests of the people as payers, in proportion to its amount, just as any other payment of equal amount would do.

I am not aware of any hardship there is in making the payment through the price of salt, which adds peculiarly to the burthen of the payment.

Whether the best mode of raising a revenue through the price of salt be that of a monopoly, is a controverted question, and one upon which, for want of decisive evidence, it is not easy to come to a satisfactory conclusion.

The mode to be compared with it is, that of allowing the free manufacture, and free importation of salt, the manufacture subject to excise duties, the importation to custom duties.

In comparing the two modes, the principal question to be solved is, in which of the two the difficulties of preventing smuggling would be the greatest.

Under the present system, when the manufacture is in the hand of government exclusively, and limited to a few districts, and all importation is on account of government, the difficulty of preventing smuggling seems to be reduced to its lowest terms.

What would be the increase of difficulty, (for it seems clear there would be increase) in the case of free manufacture, can only be estimated by experienced and judicious men upon the spot.

The means necessary to be employed to overcome any very considerable difficulties in the prevention of smuggling are very undesirable; they are at once expensive, and apt to create great evils among the people.

To compensate these evils, the only material advantage, I think, which any body can promise himself from the system of freedom, is, the reduction of price which he may anticipate from this mode of supply, without diminishing the revenue of government.

This would, no doubt, be a most desirable effect, if it be one which can be counted upon. But government must be cautious of encountering the certain evils of a greater scope to smuggling, for an advantage which is doubtful in any considerable degree.

The present price to the consumer may be considered as made up of two portions: first the duty to government; second the prime cost of the article.

In what way is either of these to be reduced by the system of freedom?

It may be said that the rate of duty may be lowered, if the quantity sold is increased, and yet the amount of revenue remain the same.

On this however it is to be observed, that this result is equally attainable under the system of monopoly; because, if the quantity sold would be increased by lowering the price, it is only necessary now to augment the sales: so that for this end, no change of system is required.

If it be said that the cost of production would be lowered, for that the salt might be imported cheaper than it can be made.

That advantage also is equally attainable under the present system, as under that of freedom; because, if government could import the article at a lower rate than it can manufacture, the price might be reduced to that extent without any reduction of the rate of duty.

It has appeared to the Court of Directors so probable, that a large portion, if not the whole of the Bengal supply, might be obtained from the coast at a cheaper rate than it can be manufactured in Bengal; that they have frequently urged upon the Bengal Government the expediency of the trail, and have never acknowledged the sufficiency of the reasons upon which they have declined it.

It may be further said, that there would be an advantage to the community in opening this branch of manufacture to their industry.

This resolves itself into the question, whether the cost of production would be less in the hands of individuals, than in the hands of government; I consider that as doubtful, at the least; because, though it may be true that government operations are the reverse of economical, the want of economy is probably more than compensated; in this very peculiar case, by unity of system, concert of operations, and more effectual application of power.

The result of this comparison seems to be in favour of the monopoly; unless the very name monopoly is considered a make-weight, and a counterbalance to real and substantial advantages; advantages gained by it, not as an instrument of commerce, but of taxation, raising great revenue through sale of salt.

Of the monopoly itself there are two modes, and each has its partisans.

In Bengal the salt is sold by government at sales by auction, one per month; and the price is regulated by the quantity put up.

At Madras the price of the article is fixed; and individuals come and purchase at the government stores, at any time, and in any quantity they please.

For my own part I do not see that there is any great balance of advantage on either side.

It is alleged that the periodical sales at Calcutta give advantage to the great capitalists, who alone can purchase the great lots, and are thereby enabled to establish a sort of sub-monopoly in their own favour.

But the large capitalists will always have an advantage; and there is competition enough of large capitals at Calcutta to prevent the rate of profit to the dealers in salt from exceeding that in other departments of trade.

It is also certain that the sale of salt at the stores on the coast is there the great scene of abuse, and it is obvious that such sales cannot easily be protected from abuse, to which periodical sales by auction are much less exposed.

[Question] VI. You are requested to submit similar observations on the operation and effects of the system of levying revenue from Opium in Bengal, should you have had an opportunity of observing its influence on the general interests of the agriculture and the commerce of the country.

I have already ... expressed my opinion that the tax on opium, or the revenue derived from it, is, of all species of taxes, one of the most desirable, as it falls in greatest part, not on the subjects of the government but on foreigners.7

The mode of realizing the revenue is the same in principle as that employed in the case of salt. It is realized through a monopoly and periodical sales ...

I am satisfied that the monopoly of opium has had no injurious effect on the agriculture or commerce of the country.

It has had a favourable effect on the interests of the people, in as far as they are relieved from the burthen of taxation, by the amount of revenue thus derived from foreigners.

The small amount levied on internal consumption, I have never heard objected to.

I do not consider any other mode of raising a large revenue by opium feasible ...

[Question] VIII. Tolls upon navigable rivers and canals.—How far these collections affect commerce, or how far it may be practicable to extend internal navigation, and at the same time to indemnify the government for the expenditure which may be incurred for that purpose?

In as far as such tolls are a source of revenue to government, they are of the nature of transit duties, and liable to the same objections. In as far as tolls for the use of bridges, canals, roads and other expensive accommodations, are only a compensation for the cost of them, they are payments merely for a service rendered, and to this the Indian Governments have been directed to restrain them.

As the benefits of them are local, or at least confined to those who consume the goods which pass them, it seems but reasonable that they should bear the expense, and not the community at large, of whom the greater part do not partake the benefit. When the abuses incident to the collection can be prevented, such tolls therefore seem expedient.

The indemnification of the government for any increase in the extent of internal navigation depends entirely upon the amount of commerce to be conveyed by it, and is the subject of computation in each instance.

[Question] IX. Pilgrim Taxes.—How far these can be considered as identifying the British Government with the superstitious and idolatrous worship at the places where the taxes are levied; and how far the abandonment of such taxes might tend to aggravate the evils that result from the assemblage of large bodies of pilgrims at places, and at periods when their feelings are peculiarly excited?

I cannot enter into the train of thought by which the conclusion is come to, that because we take from the pilgrims resorting to certain religious festivals, the tax which they have always been accustomed to pay, we identify ourselves with the superstitions they go to practise.

I think the case must be, that, in arriving at such conclusion, the receiving of the tax is confounded with the licensing of stews, and gaming houses, by which it is supposed that somehow they are authorized, though why you should refuse to license, or do any thing else calculated to lessen the evils which you cannot prevent, I do not understand.

But at all events the two cases are entirely different. We wish to avoid the appearance of authorizing stews and gaming-houses; but so far are we from wishing to avoid the appearance of authorizing the superstitions of our native subjects in India, that we profess it, nay, are bound to protect those superstitions, so long as the people desire to observe them.

A tax is commonly considered a discouragement; so much so, that if the pilgrim tax had been first imposed by us, it could hardly have failed to be regarded as a blow struck on the national religion, by an impediment thrown in the way of its most solemn ceremonies.

It has been alleged that the imposition of the tax has the effect of increasing the number of pilgrims; desire, it is said, being inflamed by difficulty. Upon this principle we ought to cry out for the abolition of all taxes on ardent spirits, for the purpose of lessening the number of drunkards and for the multiplication of bad houses for the purpose of lessening debauchery.

That much endeavour has been used, and expense incurred to lessen not only the enormities, but the calamities incident to such assemblings of people, the records of the Government afford abundant evidence. That the relaxation of these endeavours would be attended with a great increase of the evils can hardly be doubted. If only the tax were abandoned, and the same endeavours and cost for the prevention of evil were continued, I do not see what other effect the abandonment of the tax would have than that of increasing the number of pilgrims, by lessening the expense of their exploit and bringing it within the means of a great number of persons.

[Question] X. The monopoly of tobacco being peculiar to the provinces of Malabar and Canara, under the government of Fort St. George, it is of importance to ascertain whether there is any thing in the situation of those two provinces to warrant the establishment of a peculiar system of taxation in them, and whether the interests of Government, and of the people, may not be eventually promoted by placing the supply of Malabar and Canara on the same footing as the other provinces of Fort St. George. The expense of management and collection, as contrasted with the levy of ordinary custom or transit duties, and the charge annually incurred in repressing smuggling, and punishing breaches of the peace, will require to be particularly explained in as far as you may be able to do so.

In itself, tobacco seems as unobjectionable a subject of taxation, as any commodity can be.

It is purely a luxury, and not only so, but it is not entirely harmless; its effects are not good, either upon the body or the mind.

There has been a warm controversy between two collectors about the best mode of realizing a revenue from this source; and, as usually happens in warm controversy, there seems to be so much exaggeration as to lessen our confidence in the statements received.

Tobacco in any considerable quantity, is consumed in India only in the provinces of Canara and Malabar, and it is grown in the neighbouring province of Coimbatore. That is the reason why the monopoly is confined to those provinces. The mode of realizing the revenue by monopoly appears to have been resorted to, as in the case of salt and opium, for the greater facility of coping with the smuggler.

It would appear that the means employed have not been successful in the prevention of abuse.

Whether this has arisen from defects which may be remedied, or from the insuperable difficulties of the case, remains to be inquired. If the latter, the tax should be given up.

It is said the people of Malabar and Canara are poor, and already overtaxed. That may be a very good reason for lessening the amount of taxation, without being any reason for abolishing the tax on tobacco. It is no reason for abolishing the tax on whiskey, that the people of Ireland are miserably poor, seeing the consumption of whiskey tends only to make them poorer.

(c) The Employment of Natives in the Company's Service

25 Aug. 1831 (Parliamentary Papers, vol. VII, p. 396)

4193. Would not a considerable advantage accrue to the natives of India by the introduction of a system whereby natives and not Europeans might be largely employed in the collection of the revenue?—The great advantage I should contemplate would be the cheapness. If the payments of the ryots were accurately defined, and there were an adminsitration of justice sufficiently perfect to afford redress to the ryot for every grievance, you might then employ, without danger, the greatest rogues in the world in collecting the revenue.

4194. Would not the people of India derive very considerable benefit from natives being employed in the collection of the revenue, where Europeans are at the present moment employed?—An opinion is very generally entertained, but which I confess I do not participate, that it would be good for the natives of India to be more largely employed in the business of the government than they are now. It appears to me that the great concern of the people of India is, that the business of government should be well and cheaply performed, but that it is of little or no consequence to them who are the people that perform it. The idea generally entertained is, that you would elevate the people of India by giving them a greater share in their own government; but I think that to encourage any people in a train of believing that the grand source of elevation is in being an employé of government, is anything but desirable. The right thing in my opinion, is, to teach people to look for their elevation to their own resources, their industry and economy. Let the means of accumulation be afforded to our Indian subjects; let them grow rich as cultivators, merchants, manufacturers; and not accustom themselves to look for wealth and dignity to successful intriguing for places under government; the benefit from which, whatever it may be, can never extend beyond a very insignificant portion of the whole population.

4195. Do you not conceive that the exclusion of the natives from the higher branches of the revenue employment is looked upon by them, and is in point of fact, a stigma upon them?—I do not believe that they look upon it in that light.

4196. Do you know any country in which it would not be so considered?—I should point to India as a country in which it is not so considered.

4197. Supposing, for example, Englishmen alone were employed in the higher branches of employment in Ireland, do you not conceive that the Irish would consider it a stigma upon them?—I consider that the feeling of degradation, from being governed by foreigners, is a feeling altogether European. I believe it has little or no existence in any part of Asia.

4198. Do you not think that by the greater employment of the natives of India in the higher branches of employment, the character of the natives would be ameliorated?—I should think that such employment would have little effect in that way. The thing of importance, in order to elevate the character of any people is to protect them. Elevation is the natural state of a man who has nothing to fear; and the best riches are the effects of man's own industry; effects which never fail when the protection is good.

21 Feb. 1832 (Parliamentary Papers, vol. IX, p. 56)

400. Is it your opinion that it would be conducive to the amelioration of the system of government in India, if means could be found of gradually introducing native agency to a much greater extent into the various departments of the government?—I would have no exclusion; wherever a fit native appears, he should be considered a proper candidate for employment; and there is one important reason for employing fit natives, that their employment can in general be obtained at a cheaper rate than that of Europeans; but the great object with me is to obtain the fittest instruments, native or not. The mere employment of natives in itself does not appear to me to be a matter of so much importance as it does to some other persons, whose opinions nevertheless I highly respect. It appears to me ten thousand times more important, with respect to the good of the population in general, that the business of the Government should be well done, than that it should be done by any particular class of persons.

BIBLIOGRAPHY

No attempt has been made to compile a complete bibliography of Mill's articles and books. The items listed here are simply the by-products of preparing this volume, and are appended in the hope that they will be of some help to future students of James Mill's work. Mill's writings on all topics are included; those which contain material that may be of special interest to economists are asterisked. Works which are reprinted in this volume are also marked with a dagger. Where authorship is uncertain the items have a question mark against them.

Letters andManuscripts

Of the published letters, by far the largest collection is to be found in Bain's biography of Mill and in Piero Sraffa's edition of Ricardo's Works, volumes VI to IX. Mill letters can also be found in:

• G. WALLAS, Life of Francis Place, London, 1898
• T. CONSTABLE, Archibald Constable and his Literary Correspondence, Edinburgh, 1873 in 3 volumes
• LADY KNUTSFORD, Life and Letters of Zachary Macaulay, London, 1900
• W. SPENCE ROBERTSON, Life of Miranda, London, 1929 in 2 volumes
• Unpublished letters are widely scattered. The following libraries possess Mill letters; the list is by no means exhaustive.
• British Museum, The Place and Napier MSS.
• University College, London, The College Collection and the Bentham and Brougham MSS.
• London School of Economics, The Mill-Taylor Collection.
• Yale University Library
• University of Illinois Library, The Hollander Collection
• Derby Borough Public Library, The Horton MSS.
• National Library of Scotland
• Bibliothéque Publique de Genève, The Dumont MSS.
• Mill's Commonplace Book is in two parts: the bulk (3 volumes) is at the London Library and the rest (1 volume) is with the Mill-Taylor Collection at the London School of Economics.

Books andPamphlets

• †* An Essay on the Impolicy of a Bounty on the Exportation of Grain, London, 1804
• An Essay on the Spirit and Influence of the Reformation of Luther by C. Villers, translated and illustrated with copious notes by James Mill, London, 1805
• †* Commerce Defended, London, 1807; 2nd edition, 1808
• Schools for All, Not Schools for Churchmen Only, London, 1812

• †* The History of British India, London, 1817 in 6 volumes: 2nd edition, 1821; 3rd edition, 1826
• †* The Elements of Political Economy, London, 1821; 2nd edition, 1823; 3rd edition, 1826, reissued 1844. French translation of 2nd edition in 1823; German translation in 1824. Italian translation in Biblioteca dell'Economista, vol. V, Turin, 1854
• Analysis of the Phenomena of the Human Mind, London, 1829
• Fragment on Mackintosh, London, 1830

Articles

1. Supplement to the 4th, 5th and 6th editions of the Encyclopaedia Britannica, Edinburgh, 1824, 6 volumes.

Half-volumes of this work appeared regularly between 1815 and 1824 and a collection of Mill's contributions which contained the articles on Government, Jurisprudence, Liberty of the Press, Colonies and the Law of Nations was separately reprinted in the early 1820's. The following articles were written by Mill.

2. Parliamentary History and Review, London, 1826

According to John Stuart Mill (Autobiography, pp. 82–83) his father contributed one major article to this journal, probably the ‘Summary View of the Conduct and Measure of the Seventh Imperial Parliament’.

3. Edinburgh Review

In compiling this list I have consulted Mrs Esther R. Houghton, who is assisting in the editing of the Wellesley Index of Victorian Periodicals, shortly to be published; the evidence for the attributions to Mill is omitted here, but will be given in the Wellesley Index.

• ‘Filangeri on the Science of Legislation’, Jan. 1807, vol. IX, pp. 343–73
• †* ‘Smith on Money and Exchange’, Oct. 1808, vol. XIII, pp. 35–48
• ‘Leckie on Foreign Policy of Great Britain’, Oct. 1808, vol. XIII, pp. 186–205
• ‘Emancipation of Spanish America’, Jan. 1809, vol. XIII, pp. 277–311
• ‘Jovellanos on Agriculture and Legislation’, Apr. 1809, vol. XIV, pp. 20–39
• ‘Molina's Account of Chile’, Jul. 1809, vol. XIV, pp. 333–53
• ‘DeGuignes' “Voyages à Peking”’, Jul. 1809, vol. XIV, pp. 407–29
• ‘Bexon's “Code de la Législation Pénale”’, Oct. 1809, vol. 19, pp. 88–109
• ‘Voyage aux Indes Orientales’, Jan. 1810, vol. XV, pp. 363–84
• * ‘Affairs of India’, Apr. 1810, vol. XVI, pp. 128–57
• ‘Sur la Tolération Religieuse’, Aug. 1810, vol. XVI, pp. 412–43
• ‘Mémoires du Prince Eugéne’, Nov. 1810, vol. XVII, pp. 39–57
• ‘Code d'Instruction Criminelle’, Nov. 1810, vol. XVII, pp. 88–114

• ‘Chas. Sur la Souveraineté’, Feb. 1811, vol. XVII, pp. 409–28
• ‘Liberty of the Press’, May 1811, vol. XVIII, pp. 98–123
• ‘Wilke's History of Mysore’, Aug. 1811, vol. XVIII, pp. 343–69
• * ‘East Indian Monopoly’, Nov. 1811, vol. XIX, pp. 229–43
• ‘Letters of Tippoo Sultan’, Feb. 1812, vol. XIX, pp. 363–73
• ‘Malcom on India’, Jul. 1812, vol. XX, pp. 38–54
• * ‘East India Monopoly’, Nov. 1812, vol. XX, pp. 471–93
• ‘Education of the Poor’, Feb. 1813, vol. XXI, pp. 207–19
• ‘Malcom's “Sketch of the Siks”’, Jul. 1813, vol. XXI, pp. 432–43
• ? ‘Neild on Prisons’, Jan. 1814, vol. XXII, pp. 385–400

4. The Westminster Review

• Here again I have had the assistance of Mrs Houghton of the Wellesley Index.
• ‘Edinburgh Review’, Jan. 1824, vol. I, pp. 206–49
• ‘Quarterly Review’, Oct. 1824, vol. II, pp. 463–503
• ‘Robert Southey's Book of the Church’, Jan. 1825, vol. III, pp. 167–213
• ‘Ecclesiastical Establishments’, Apr. 1826, vol. VI, pp. 504–48
• ‘Formation of Opinions’, Jul. 1826, vol. VI, pp. 1–23
• ‘State of the Nation’, Oct. 1826, vol. VI, pp. 249–78
• ‘The Ballot’, Jul. 1830, vol. XVIII, pp. 1–37
• ‘Theory and Practice’, Apr. 1836, vol. XXV, pp. 223–34

5. The London Review

• ‘State of the Nation’, Apr. 1835, vol. I, pp. 1–24
• ‘The Ballot—A Dialogue’, Apr. 1835, vol. I, pp. 201–53
• ‘The Church and its Reform’, Jul. 1835, vol. I, pp. 257–95
• ‘Law Reform’, Oct. 1835, vol. II, pp. 1–51
• ‘Aristocracy’, Jan. 1836, vol. II, pp. 283–306
• †* ‘Whether Political Economy is Useful?’, Jan. 1836, vol. II, pp. 553–72

6. The Monthly Review

Identification of authorship of articles for this journal can be found in B. C. Nangles, The Monthly Review, 2nd Series, 1790–1815, Oxford, 1955. The listing for James Mill does not always seem to be correct owing to possible confusion with another contributor with a similar name. The list given here is based on Nangles but modified where the attribution seemed incorrect.

• ‘Jamieson's “Dictionary of the Scottish Tongue”’, Sep. 1810, vol. LXIII, pp. 11–31
• ‘India’, Dec. 1811, vol. LXVI, pp. 337–52
• ‘Tracts on Education’, May 1812, vol. LXVIII, pp. 83–95
• * ‘East India Company’, Jan. 1813, vol. LXX, pp. 20–37
• * ‘East India Company’, Apr. 1813, vol. LXX, pp. 410–25
• ‘India’, Jan. 1814, vol. LXXIII, pp. 1–17
• * ‘East India Company’, Feb. 1815, vol. LXXVI, p. 137
• ‘India’, Apr. 1815, vol. LXXVI, pp. 399–412
• ‘India’, Jun. 1815, vol. LXXVII, pp. 190–4

7. The Eclectic Review

Except for the last two items the evidence for attribution to Mill is chiefly internal; see above, p. 23.

• * ‘Spence's “Britain Independent of Commerce”’, Dec. 1807, vol. III, pp. 1052–8
• * ‘Wheatley's “Essay on the Theory of Money”’, Jan. 1808, vol. IV, pp. 24–35; Feb. 1808, vol. IV, pp. 130–8; Apr. 1808, vol. IV, pp. 355–62
• * ‘Chalmers’ “Enquiry into National Resources”’, Jul. 1808, vol. IV, pp. 575–89
• * ‘On National Subsistence’, Jan. 1809, vol. V, pp. 50–56
• ?* ‘Ricardo's “High Price of Bullion”’, Mar. 1810, vol. VI, pp. 216–27
• ‘Indian History’, Jan. 1814, vol. I, n.s., pp. 140–55
• * ‘Corn Laws’, Jul. 1814, vol. II, n.s., pp. 1–16

8. The Literary Journal or Universal Review of Literature Domestic and Foreign

Attribution of authorship of articles in this journal which was edited by Mill is particularly difficult. But it seems worthwhile recording some of the interesting articles which appear to bear traces of Mill's hand. See also above, p. 23.

• ‘Millar's “Historical View”’, Oct. 1803, vol. II, pp. 325–33
• * Articles defending the trade of neutral ships, Oct. 1803, vol. II, pp. 366–74; 385–400; 433–41
• * ‘Brougham's “Inquiry into Colonial Policy of European Powers”’, Nov. 1803, vol. II, pp. 513–27
• * ‘Malthus's Essay’, Dec. 1803, vol. II, pp. 577–87
• * ‘Boase's “Observations on Lord King”’, Jun. 1804, vol. III, pp. 627–35; 694–701; 753–60
• * ‘Lauderdale's “Inquiry”’, Jul. 1804, vol. IV, pp. 1–18
• * ‘Foster's “Essay on Exchange”’, Aug. 1804, vol. IV, pp. 137–66
• * ‘Anderson's “Calm Investigation”’, Oct. 1804, vol. IV, pp. 385–402
• * ‘Cook's “Answer to Lord Sheffield”’, Dec. 1804, vol. IV, pp. 137–66
• * ‘Jordan on W. Indies’, Dec. 1804, vol. IV, pp. 583–94
• * ‘Lauderdale on Irish Currency’, Apr. 1805, vol. V, pp. 367–71
• * ‘Say's “Traité”’, Apr. 1805, vol. V, pp. 412–25
• * A series of articles defending the neutral trade appeared beginning Dec. 1805, vol. V, and continued in the issues for Feb., May and Jun. 1806, vol. I (2nd series).
• ‘Tooke's “Diversions of Purley”’, Jan. 1806, I (2nd Series), pp. 1ff.
• * ‘Lord Sheffield's “Strictures”’, Jan. 1806, vol. I (2nd Series), pp. 51–62
• * ‘Sir James Steuart's “Collected Works”’, Mar. 1806, vol. I (2nd Series), pp. 225–35
• * ‘Lord Liverpool's “Treatise on Coins of Realm”’, May 1806, vol. I (2nd Series), pp. 449–59
• ‘Craig on Millar’, Jun. 1806, vol. I (2nd Series), pp. 624ff.
• ‘Filangieri's “Science of Legislation”’, Sep. 1806, vol. II (2nd series), pp. 225–42.

9. Annual Review and History of Literature for 1808, vol. VII

• ‘C. J. Fox's “History of James II”’, pp. 99–101
• ‘Bentham on Scotch Reform’, pp. 198–203

10. The British Review

• ‘Dugald Stewart's “Elements of the Philosophy of Mind”’, Aug. 1815, vol. VI. pp. 170–200

11. Anti-Jacobin Review and Magazine

• ‘Belsham's Logic’, May 1802, vol. XII, pp. 1–13

12. The Philanthropist

• A large number of articles, some of which are identified in Bain's biography.

[1]Hume's History of England, 1, 2.

[2][At this point Mill makes reference in a footnote to John Millar (‘that sagacious contemplator of the progress of society’) on the question of the early Anglo-Saxon division of society into classes. The same point concerning the establishment of the caste system and its rigidity, again based on Millar's treatment of the subject in the Origin of Ranks, is made by Mill in his article on ‘Castes’ for the Supplement to the Encyclopaedia Britannica.]

[3][Mill is following Adam Smith fairly closely here, as did most classical writers on this subject. Cf. Wealth of Nations, bk. V, ch. II, Part II.]

[4][This conclusion in favour of some unspecified form of progressive taxation as opposed to proportional taxation was reversed by John Stuart Mill in his Principles of Political Economy (Ashley ed.), bk. V, ch. II, p. 806. A fuller discussion of what James Mill meant by ‘equality’ in taxation is given in the Elements, above, pp. 348–52.]

[5]The population in India, through so many ages, must have been kept down by excess of exaction. Even in the richest parts of India one half of the soil has never been under cultivation.

[6]See a Dissertation on the Principles of Taxation, the most profound, by far, which has yet been given to the world, by David Ricardo, Esq., in his work ‘On the Principles of Political Economy and Taxation.’

[7][He had given evidence on this question before the Committee on 28th June 1832; see Parliamentary Papers, Vol. XI, pp. 299ff.]