The announcement made by Mr. Godfrey Phillips, Secretary and Commissioner-General of the Shanghai Municipal Council, that it has been decided {o appoint a committee to investigate the question of unequal taxation will be welcomed by those who have all along felt that this was a matter which required serious attention. The Council has acted wisely in selecting for the personnel of this committee men who may be regarded as expert in the matter, and it is expected that they will be able to produce a report for consideration at the annual meeting of ratepayers. That they will have to work swiftly to finish their labours in time goes without saying, and the result of their work will be awaited with considerable interest. It needs to be emphasized for the benefit of those who happen to have different ideas as to who should or should not be appointed to the committee, that the fullest opportunity will be accorded to all who wish to lay their views on the subject of unequal taxation before the committee, for what is desired by all parties is that the investigation shall be as complete as possible, ensuring that the decisions of the committee shall be based on all the in formation available.
Mr. Phillips's perfectly frank talk to the local Press dealt with other points beside the question of this committee, and the remarks he made deserve the earnest consideration el the ratepayers. Thus, on the suggested extension of the scope of taxation, he stated that for years past the Council had been advised by its lawyers that its taxing powers are limited to the collection of wharfage dues, #Hcence fees, land tax, and rates on buildings.
It has generally been assumed that this advice is correct, and close inspection of the Land Regulations supports that view. That in the main is due to the fact that when those Regulations were drawn up there were who could foresee the tremendous development of the place, and certainly none who would be expected to anticipate and provide against the emergency with which this city is now faced. Although it is axiomatic, it is nevertheless necessary to remember that no community can hope to exist Upon taxation unenforceable in the courts, and taxes which cannot be justified by the [Tana Regulations will most certainly not commend themselves to the favourable consideration of the judges in Shanghai. That contention answers the argument that revenue might be obtained by a tax on income from business profits. If the terms of the "Land Regulations do not permit of this being done, no move in this direction is possible without amendment of the regulations, and that in existing circumstances must be accepted as out of the question.
the subject of taxing Stock Exchange there is a grave danger that those favouring this scheme have been dazzled.by the figures indicating the large turnovers which have prevailed for some time past. That is not normal, and there is no justification for believing that any steady income from year to year could be derived therefrom. It is a fact that in times of slump—and the last one is not even now so far back—such taxation would be productive of next to nothing, and a budgetting' system which placed any great reliance upon income from such a source would be essentially unsound.
On the subject of the Western Area Special Police Force Mr. Phillips said something which so many of those who so light heartedly criticise the Council fail to remember. It is perfecty true that the Council has been dealing with de facto authorities in the environs of the International Settlement, Its conduct would be most reprehensible and liable to the severest criticism if it had not, for it is its manifest duty to keep orderly conditions going for the millions of Chinese and thousands of foreigners in Shanghai. It would be the height of foolishness to follow any policy founded on the belief that the foreign areas of Shanghai could be administered as an enclave completely isolated from the surrounding districts, and the Council has been adopting a wise course when it has sought to cooperate with the authorities responsible for the good order of the whole area. It can with safety be alleged that if this policy had not been followed conditions here would not only have been very much worse than they are now, but would in all probability by now have "reached a state of complete chaos.
Text read from the printed page and cleaned; old type leaves the occasional error.