timber and other produce from the Government forests; but the greater part of it is spent on forest conservancy and other charges, and the net income was only 383,000l. Before the transfer of the Government to the Crown, practically nothing had been done towards the preservation of the forests of India, which are very extensive and valuable, and their destruction was rapidly going on. In 1861 a separate Forest department was created. Up to 1885 about 50,000 square miles of forests had been demarcated, and strictly reserved for the benefit of the State, under the management of officers who have received special scientific instruction in forestry in Europe. The creation and development of this department, for the protection of a valuable source of the public wealth, must be counted among the important reforms of modern times in India.

The Tributes and contributions from Native States are fixed by treaties, and yield nearly 700,000l. a year. They are chiefly paid for the maintenance of troops locally required. The Government of India is responsible for the preservation of peace throughout the whole of India, and the contributions that it receives from the Native States are an insignificant return for the services that it renders.

The revenue yielded by the Post Office and Telegraphs is slightly exceeded by the expenditure. The Government has not aimed at making a profit from the Post Office. The receipts have increased from 177,000l. in 1856-57 to 1,154,000l. in 1886-87, but they have been largely devoted to the improvement of the postal service. There is no country where the rates of postage are so low, or where the Post Office is better managed. The number of letters, newspapers, and parcels passing through the post was 38,000,000 in

1856 and 239,000,000 in 1886. There could hardly be a more striking illustration of the progress of the country.

The construction of telegraph lines was commenced in 1850. In 1886 there were 82,000 miles of wire in India, and more than 2,000,000 messages were delivered. The net receipts from the telegraphs now give a fair return on the capital expended in their construction.

LECTURE IV.

TAXATION IN INDIA-FOREIGN TRADE-IIOME CHARGES.

REVENUE DERIVED FROM TAXATION-THE SALT TAX-SOURCES OF SUPPLY OF SALT-FORMER SYSTEM OF LEVYING DUTIES-THE INLAND CUSTOMS LINE --ITS ABOLITION-THE PRESENT SYSTEM-RESULTS OF RECENT REFORMS -THE POLICY THAT SHOULD BE FOLLOWED-THE STAMP REVENUEEXCISE ON SPIRITS AND DRUGS-MISREPRESENTATIONS ON THIS SUBJECT -PRINCIPLES OF EXCISE ADMINISTRATION-ASSESSED TAXES THE INCOME TAX-REGISTRATION-CUSTOMS DUTIES-THE DUTIES ON COTTON GOODSFREE TRADE IN INDIA-ABOLITION OF IMPORT DUTIES-THE RESULTS— EFFECT OF REMISSION OF DUTIES ON COTTON GOODS-EXPORT DUTY ON RICE THE GROWTH OF THE FOREIGN TRADE OF INDIA-CONDITIONS UNDER WHICH THE TRADE IS CARRIED ON-IMPORTS OF GOLD AND SILVER-EXCESS OF EXPORTS OVER IMPORTS-CHARGES IN ENGLAND ON ACCOUNT OF INDIA--THE MANNER IN WHICH THESE CHARGES ARE MET -THE CURRENCY-FALL IN THE GOLD VALUE OF SILVER-THE LOSS BY EXCHANGE-SERIOUS CONSEQUENCES AND CAUSES FOR ANXIETY.

TAXES, properly so-called, yielded altogether in India, in 1886-87, a gross revenue of 20,684,000l. Among them the most important is the tax on salt. It gave in 1886-87 a gross amount of 6,658,000l.

The system under which the Salt duties are levied varies in different parts of India. Bengal and Assam, with more than 70,000,000 of people, obtain nearly the whole of their salt from England. There are hardly any local sources of supply for these provinces except the sea, but on the greater part of the coasts of Bengal salt cannot be made cheaply by solar evaporation; the climate is damp, and the difficulty is increased by the vast quantity of fresh water brought to

the Bay of Bengal by the Ganges and Bráhmaputra. There are no protective duties, and the locally produced salt cannot compete with that imported from Cheshire. Owing to the fact that the exports from India are largely in excess of the imports, freights to India are very low, and salt costs little to import. The tax in Bengal is levied as an import duty at the port of entry.

In Madras and Bombay, on the other hand, although the facilities for communication with England are equally great, English salt does not compete with that produced locally, for the manufacture of salt from the sea is an easy process. The duty in Madras is collected partly under an excise system, and partly under a monopoly, by which all salt is manufactured for the Government and sold at a price which gives a profit equal to the duty. In Bombay the duty is levied as an excise.

The North-Western Provinces and Oudh, and parts of the Central Provinces and of the Punjab, derive their chief supply of salt from lakes or springs impregnated with salt in the Native States of Rájputána. The salt is prepared by solar evaporation at works controlled by the Government. Further north, the greater part of the Punjab is supplied from rock-salt, which is found in inexhaustible quantities. The salt is extracted and sold by the Government, the duty being included in the selling price.

Until 1882-83, the amount of duty varied in different provinces. It was higher in the Bengal Presidency than in Madras and Bombay. So long as there were no railways and few roads, the inconvenience of these different rates was not much felt; but as communication improved, it became more and more impossible to prevent salt taxed at a lower rate from coming into

provinces where the tax was higher, and a system gradually grew up in India to which, for extraordinary folly, it would be hard to find a parallel.1

In 1843 the establishment of a customs line was commenced, and by 1870 it had extended itself across the whole of India from a point north of Attock, on the Indus, to the Máhánadi, on the borders of Madras, a distance of 2,500 miles. Along the greater part of its length it was a huge material barrier, which Sir M. E. Grant Duff, speaking from personal observation, said could be compared to nothing else in the world except the Great Wall of China; it consisted principally of an immense impenetrable hedge of thorny trees and bushes, supplemented by stone walls and ditches, across which no human being or beast of burden or vehicle could pass without being subjected to detention and search. If this customs line had been put down in Europe, it would have stretched, in 1869, from Moscow to Gibraltar; as late as 1879, when it was abolished, it was still more than 1,500 miles long, a distance as great as that from London to Constantinople. It was guarded by an army of officers and men, some 12,000 in number, divided into beats which were constantly patrolled by night and day, and watched from 1,700 guard-posts. It may easily be imagined what obstruction to trade, what abuses and oppression, what annoyance and harassment to individuals, took place. The interference was not confined to the traffic passing into the British provinces, for an export duty of a most objectionable character, not abolished until 1878, was levied on all sugar passing from British territory into Native States, and sometimes from one part of British territory to

1 The following account of the Inland Customs line is taken from The Finances and Public Works of India.