doubled. In 1870 a further rise to fully three and an eighth per cent occurred; but with better times the rate fell in 1871 to one and one-twenty-fourth per cent, with a limit of Rs. 750, and in 1872 the limit was further relaxed to Rs. 1,000 and upward. In 1873 came a second period of total abolition, to be succeeded from 1877 to 1878 by the new series of acts. Along with the changes in rate and incidence just described came changes in name, form, classification, and procedure. With one object or another, twentythree acts on the subject have been passed since 1860."
An income tax at a low rate, at present existing in India, grants an exemption of 500 rupees on all incomes, and exempts from taxation all income from the ownership of land or the sale of the products of land, and from property solely employed for religious or charitable purposes. It is thus assessable mainly on salaries, pensions, the income of companies, and of the ordinary trades and professions. Its existence is the cause of considerable friction with the officials who administer it, and constant appeals from their decisions are made from all parts of the country. In fact, this tax, at its present low rate, is universally detested, and the receipts from it are comparatively so inconsiderable—only 1,717,627 Rx. ($8,588,135) in 1894-that it may be regarded as a fiscal failure. Its whole experience in India furthermore reaffirms what is worthy of being regarded as an economic principle, namely, that when an income tax ceases to be regarded as generally oppressive it ceases also to be remunerative to the state.
One other point in this connection is especially worthy of notice. For a long period of years India has been characterized as a "sink-hole" of the precious metals, or, in other words, there has been for many years a continuous flow of the precious metals—gold and silver—into India, where they have to a large extent disappeared, undoubtedly by burial under ground for the purpose of hoarding and concealment. The motive for this under the Mogul and native rulers was unquestionably to escape direct plunder or confiscation; but under British rule these hoards, amounting unquestionably to many hundreds of millions, are not taxed, mainly by reason of their inaccessibility, and partly by the recognized policy of the Government to avoid direct taxation of active capital, and encourage, by making safe its employment, the tendency of these buried treasures to come to light and enter into the channels of trade. And that this policy has been a wise one is shown by the fact that within recent years there has been an increasing disposition on the part of the Indian owners of concealed treasures—especially the Indian princes or rajahs—to withdraw them from their hoarding places and invest them in Government bonds, or other desirable, interest-bearing securities; and in this way a very great addition to the world's active stock.
