6. In the provinces of Madras and Bombay, the principle of State proprietorship has been respected in its entirety. There hasbeen no one intermediate between the cultivators and the Government. The right of each cultivator is clearly defined: andwhat he has to pay is either a portion of the produce, varying with the nature of the crop and commutable for amoneypayment, or a sum of money fixed for a term of thirty years. The State takes the rent directly from each holder oflands, without the intermediate joint responsibility of the village, (10) or the intervention of Zemindars, who have heredisappeared. This agrarian organization is known as the "ryotwar system." The State being the sole proprietor, alluncultivated land is regarded as belonging to it, and grants are made to such persons as wish to bring it into cultivation.
Although the rent demanded by the State was too bigh, hardly leaving the cultivators the means of subsistence,the ryotwarsystem, as every one allows, has led to excellent results. (11) The cultivator is not at the mercy of a rapacious proprietor. Therent which he has to pay is determined by the price of commodities, and he has an absolute security for thirty years together,whereas in Europe the tenant is ordinarily liable to an increase of rent every six or nine years.
In an article published (12) by Mr Mill, combating the project of compelling all corporations to sell their landed property, thisgreat economist extolled the system, in which, as in India or Java, the State retains possession of the soil. The rent taken byit (13) might be made high enough to replace every other impost, and then the inhabitants would, in fact, cease to pay anycontribution. It is easy to see the increased facility for all kinds of industrial and commercial transactions which would resultfrom the entire suppression of all taxes. Circumstances would be easier, at the same time as salaries would be lower, becausethey would no longer be subject to the deduction imposed by existing taxation. The system would present no difficulty inpractice. The whole economic organization would continue to operate as at present, under the action of the law of supplyand demand. The only difference would be the raising of the land-tax to the level of the present rent, or of a fair rentdetermined by the price of produce, and leaving a sufficient margin to recompense the cultivators for their labour, and toallow them to reap the benefit of improvements effected by them. Just as under the Ryotwar system, the tenants of the Statewould hold in perpetuity, at a fair rental.
The nationalization of land, thus understood, would not entail any radical modification of the existing organization ofsociety. It would merely allow the application to purposes of the State, the provinces or communes, of the net produce ofthe soil, which now serves to support a certain number of individuals who render no service in return for what they receive.
Mr Fawcett (14) is of opinion that the effect of a system replacing the State in possession of the soil would be to weaken themotive of personal interest, and so to put an end to all attempts at improvement. It is easily shewn that this objection is notwell founded; for in a district belonging to an English nobleman and passing with the title, the conditions are precisely thesame as they would be if the State were the real proprietor and the nobleman only a collector of the rent. In the province ofBengal the state has placed the soil in the hands of large proprietors; in Bombay, it has recognised no rights in theZemindars. The stimulus to labour has not been weakened in the latter province any more than in the former. On thecontrary, the soil is better cultivated under the ryotwar system than under that of the Zemindarate. When the"nationalization" of land merely signifies that the State reserves to itself the rent in the form of a land tax, without modifyingthe laws which regulate the division of capital and the distribution of profits, I confess I can see no serious objection to it asregards economic laws.
Mr Fawcett also asserts that the purchase of the soil would be disastrous as a financial operation, because the State wouldpay at least 3?per cent. for the money it would have to borrow, while it would only receive 2?per cent. as revenue fromthe land. The observation is correct. But, admitting that the State should be placed in possession of the soil so as to receivethe rent of it as revenue, this should not be effected by way of purchase. To attain its object gradually and withoutoccasioning the least disturbance, all that is necessary is to limit collateral succession to the degree of first cousin; and tohave a tax on successions generally, which should be set aside for the purpose of buying up landed property as it comes intothe market. As for difficulties of administration, they would not exist. The right of persons occupying land would betransformed into a lease; and the receivers of revenue would collect the rent in place of the existing tax. In that part of theWest End of London, which belongs to the Duke of Westminster, the property is managed very much in this way. Supposethe Duke's agents nominated by the Crown, and handing over their receipts to the national exchequer, and there would be noappreciable change.
England, the country where property, tied up in the hands of a few great families, is as little at the disposal of those whocultivate it as if it belonged to the State, is at the same time the country where the motive of industrial activity is mostdeveloped. It cannot, therefore, be maintained, in the face of these facts, that the nationalization of the land would weakenthis motive. The system would simply be the application of the theory of the physiocrats, a single tax assessed on the soil.
