Transcriber's Note:

Obvious printer errors have been corrected. Hyphenation has been
rationalised.

Small capitals have been replaced by full capitals. Italics are
indicated by _underscores_.

Very wide tables have been split into two.




RICHES AND POVERTY




BRITISH INCOMES IN 1908-9

 +--------------+------------------------------------------+
 |    RICH      |                                          |
 |  1,400,000   |             COMFORTABLE                  |
 |   persons    |          4,100,000 persons               |
 | £634,000,000 |            £275,000,000                  |
 +--------------+------------------------------------------+
 |                                                         |
 |                                                         |
 |                                                         |
 |                                                         |
 |                                                         |
 |                                                         |
 |                                                         |
 |                          POOR                           |
 |                                                         |
 |                                                         |
 |                   39,000,000 persons                    |
 |                                                         |
 |                                                         |
 |                      £935,000,000                       |
 |                                                         |
 |                                                         |
 |                                                         |
 |                                                         |
 |                                                         |
 |                                                         |
 |                                                         |
 |                                                         |
 |                                                         |
 |                                                         |
 +---------------------------------------------------------+

_The Aggregate Income of the 44,600,000 people of the United Kingdom in
1908-9 was approximately £1,844,000,000. 1,400,000 persons took
£634,000,000; 4,100,000 persons took £275,000,000; 39,000,000 persons
took £935,000,000. (See Chapters 2 and 3.)_




 RICHES AND POVERTY

 (1910)

 BY

 L. G. CHIOZZA MONEY, M.P.

 ELEVENTH EDITION

 METHUEN & CO. LTD.
 36 ESSEX STREET W.C.
 LONDON


 _First Published_ (_5s. net_)                _October 1905_
 _Second Edition_                             _December 1905_
 _Third Edition_                              _July 1906_
 _Fourth and Cheaper Edition_ (_1s. net_)     _January 1908_
 _Fifth Edition_ (_1s. net_)                  _February 1908_
 _Sixth and Seventh Editions_ (_1s. net_)     _March 1908_
 _Eighth Edition_ (_1s. net_)                 _May 1908_
 _Ninth Edition_ (_1s. net_)                  _December 1909_
 _Tenth Edition, Revised_ (_5s. net_)         _March 1911_
 _New and Cheaper Issue_ (_1s. net_)          _June 1913_
 _Eleventh Edition_ (_5s. net_)               _March 1914_




TO MY WIFE




 PREFACE TO THE TENTH (REVISED)
 EDITION, 1910


The present edition of "Riches and Poverty" revises my estimates of the
distribution of the wealth of the United Kingdom down to the year 1908.
The effect of the revision is to show that in the five years that have
elapsed since this work was first published, the distribution of wealth
has grown even more unequal. The comparative stationariness of money
wages of late years is a fact upon which the labourers themselves, and
not less the nation of which they form by far the greater part, are to
be commiserated. I write at a time when a great deal of discontent is
becoming evident amongst large masses of the population; it may be well
for those, and they are many, who have written in condemnation of that
discontent, to ponder the following pages, and in particular to compare
the profits recorded by the Inland Revenue Commissioners with the
evidence as to wages collected by the Labour Department of the Board of
Trade.

My own view of the subject is, that the massing of capital in large
units has so considerably strengthened the hand of capital in its
dealings with labour that in recent years Trade Unions have
comparatively lost much ground. To-day the masters in many of our
industries can exercise collective powers much more effectively than
Trade Unions. Combination amongst employers in some trades has reached a
point at which it has become possible to rule alike the price of
products and the price of labour.

While since 1900 nominal or money wages have been at a standstill, the
cost of living has continued to rise. The retail cost of food in London
rose 9 per cent. in 1900-1908. Therefore British real or commodity wages
have fallen heavily since 1900. A London platelayer, when he has the
privilege of working seven days a week, can earn 21s. a week in 1910 as
in 1900, but the real value of the 21s. has fallen by about 9 per cent.;
in effect, that is, he earns 1s. 10d. a week less than in 1900. Now 19s.
2d. is not a just wage for a London platelayer.

The statements which were made in the 1905 edition of "Riches and
Poverty" proved to be uncomfortable reading for many, and I have now a
great many books on my shelves in which they have been discussed. The
attempts to refute them have entirely failed. It is now generally
accepted that the number of Income Tax payers is approximately what I
stated it to be, and the increase of Income Tax assessments indicates
that my estimates of the income of the rich did not err on the side of
liberality.

Work such as is attempted in these pages ought, of course, to be
entrusted to the hands of a permanent Census Department, empowered to
collect information, and instructed to analyse and diffuse it. In the
absence of such a Department, and in the lamentable condition of our
national statistical records, the conclusions of a private investigator
are only too likely to be called in question by those who do not stomach
what he has to say. It may be said that the disagreeable estimates I
have presented in the frontispiece of this volume rest upon private
authority, and that they cannot be accepted without great reservation. I
should like to direct attention, therefore, to a series of facts which
_are_ official, which _cannot_ be denied, and which rest upon the basis
that they _represent masses of property actually taxed_.

I refer to the estates which pass at death in the United Kingdom year by
year, and which are valued for the purposes of the death duties. The
following facts, to which I called attention for the first time in
"Riches and Poverty," can be easily memorized, and every one ought to
know them.

Year by year, as regularly as the seasons, properties pass at death in
the United Kingdom, free of all debts, absolutely net, to the value of,
in round figures, £300,000,000. Of this £300,000,000, the aggregate of
approximately 80,000 separate estates, as much as £200,000,000, or
thereabouts, is left by about FOUR THOUSAND (4000) PERSONS.

I repeat that these figures are not my estimates, but the official
figures ascertained and published by the Inland Revenue Commissioners.
They can be verified by any reader of this book by reference to the
latest Official Report of the Commissioners of His Majesty's Inland
Revenue (Cd. 4868. Price 1s. 7d.).

Those who are acquainted with the facts know, as Mr Balfour recognized
in reply to me in a debate in the House of Commons on September 13th,
1909, that the official figures I have quoted would be larger but for
the passing of property _inter vivos_ in avoidance of the death duties.
But, to take the figures as they are, an under statement of the wealth
of the rich, I put this question to those who come to consider the
estimates I have made:

_If, in the United Kingdom, out of £300,000,000 a year passing at death,
as much as £200,000,000, or two-thirds of the whole, is left by only
4000 persons, does it not follow, as the night the day, that the
distribution of the national income must necessarily proceed on some
such lines as those estimated in the frontispiece to this volume?_

And with that question I once more issue these pages to the public.

 L. G. CHIOZZA MONEY

 CHALDON, SURREY
 _October 1910_




CONTENTS

                                                                    PAGE
 BOOK I
 THE ERROR OF DISTRIBUTION

 CHAPTER I
 THOUGHTS ARISING OUT OF A GREAT CONTROVERSY

 The false assumption that customs duties can determine prosperity     3
 Evidences of riches and poverty as "arguments"                        4
 "Thirty per cent. of our population underfed"                         5
 A question of distribution                                            7


 CHAPTER II
 THE NATIONAL INCOME

 The total product consists of goods and services                      8
 The exchanged product can be measured                                 9
 Income Tax assessments; my 1905 estimate confirmed                   11
 The income eluding taxation                                          13
 Income from abroad                                                   15
 Aggregate of incomes exceeding £160 per annum                        16
 Growth of Income Tax income in five years                            17
 Aggregate of small incomes lying between Income Tax payers
   and wage-earning classes                                           20
 Aggregate of incomes of manual workers                               29
 Aggregate of the national income                                     31
 The Income Tax exemption limit bisects the total product             31


 CHAPTER III
 DISTRIBUTION OF THE NATIONAL INCOME

 The average family income                                            32
 Investigation of number of Income Tax payers                         33
 Number of incomes under £700                                         39
 Number of incomes over £700 measured by number of large houses       43
 Approximate number of Income Tax payers                              44
 Persons with respectively more and less than £160 per annum          47
 One-half of entire product taken by 12 per cent. of the population   47
 One-third of entire product taken by one-thirtieth of population     48
 A poor people thinly veneered by the well-to-do                      49
 The movement in 1903-1908                                            50


 CHAPTER IV
 THE ESTATES OF RICH AND POOR

 The graduated Estate Duty of Sir William Harcourt                    51
 Deaths per annum in the United Kingdom                               54
 Numbers and values of estates passing at death in recent years       55
 Savings of the poor                                                  57
 Rich and poor estates in an average year                             59


 CHAPTER V
 THE NATIONAL ACCUMULATION

 Estimate of the accumulated wealth of the United Kingdom             62
 Public property, Imperial and local                                  65
 The national and local debts private mortgages upon public
   assets                                                             67
 British wealth in private hands                                      68
 Foreign wealth in British hands                                      71
 Average wealth per head                                              71


 CHAPTER VI
 THE MONOPOLY OF CAPITAL

 Living property owners estimated from Death Duty records             73
 Growing avoidance of Death Duties                                    77
 120,000 persons own two-thirds of the national capital               79
 The alleged "capital" of the working classes                         80
 Those rule who own                                                   80


 CHAPTER VII
 THE AREA OF THE UNITED KINGDOM

 Area the fundamental attribute of land                               81
 Almost the entire area in private hands                              82
 One-half the area owned by 2,500 persons                             83
 The number of landlords                                              84
 Estimate of land rents                                               86
 Why the aggregate of land rents is relatively small                  87
 The cheapening of food                                               87
 The small areas of the town                                          88
 The rent-charge formed by local rates                                90


 CHAPTER VIII
 THOSE WHO WORK AND WHOSE WHO WAIT

 Effect of congestion of capital upon distribution                    93
 Practical examples of the distributive process                       94
 Capital largely divorced from business ability                       99
 Schedule D profits compared with paid-up capitals                   100
 Effect of appreciation of securities upon position of the
 wage-earners                                                        101
 Railway profits and railway wages                                   102
 Calculating the labour factor                                       103
 Capital takes the lion's share                                      106


 CHAPTER IX
 PROFITS, BAD TRADE AND UNEMPLOYMENT

 Growth of profits in recent years                                   107
 Rise and fall of wages in recent years                              108
 Growth of profits compared with rise and fall in wages              110
 Labour bears the brunt of depression                                115
 Records of unemployment of Trade Union members                      116
 The Trade Union unemployment rate probably representative           119
 How Trade Unions keep the tools sharpened                           121
 The great majority of the British people lack security of tenure
   of employment                                                     122
 "Remedies" for unemployment                                         123
 Insurance against unemployment                                      123
 Labour Exchanges no remedy                                          124


 CHAPTER X
 PART OF THEIR WAGES

 Accident and disease concomitants of wages                          125
 Laxity of factory inspection                                        127
 Accidents in factories and workshops                                127
 Diseases of occupations in factories and workshops                  129
 Accidents in mines and quarries                                     130
 Accidents on railways                                               136
 Accidents on ships                                                  137
 Accidents in certain engineering works                              137
 Aggregate of reported accidents and cases of industrial
   disease                                                           138
 Phthisis as an industrial disease                                   139
 Physical deterioration not an accident                              140


 CHAPTER XI
 CONSEQUENCES

 The governance of the rich                                          141
 The direction of life and labour through expenditure                143
 The cotton trade and the fate of its products                       144
 The demand for woollens                                             145
 The call for boots                                                  147
 The waste of labour of nominally useful workmen                     149
 The parable of the temporary supper-room                            149
 The parable of the Ascot frock                                      151
 Mr Rowntree's primary poverty line                                  153
 The possible call for commodities by the poor                       154
 The agricultural labourer's call                                    155
 The boot employee as a customer for the textile employee            156
 The Error of Distribution connotes the misdirection and
   degradation of labour                                             156


 CHAPTER XII
 THE WASTE OF CAPITAL

 The national accumulations small in relation to the national
   income                                                            159
 More evidences of poverty than of wealth                            159
 The moral of oversea investments                                    160
 Six thousand millions of capital wasted in forty years              163
 The demand for luxuries misdirects capital                          164
 The waste of capital in the game of competition                     166
 The waste of capital in weak and bogus company promotion            166


 BOOK II
 TOWARDS ORGANIZATION

 CHAPTER XIII
 THE GOLDEN KEY

 More trade and a better distribution                                171
 The social problem must be discussed with reference to the
   Error of Distribution                                             172


 CHAPTER XIV
 THE NATION'S CHILDREN

 The renewal of the race                                             173
 The verdict of anthropology                                         173
 Injustice before birth and after                                    176
 The innocence of the Factory Act                                    178
 The Physical Deterioration Committee on reasonable care of
   the infant                                                        180
 The mothers of the future                                           181
 The mothers of the present                                          181
 Women health inspectors                                             182
 The public medical service                                          183
 The small cost of a public maternity fund                           184
 A Jewish example                                                    185
 The birth of a child a matter of national moment                    187
 Neglectful parents must be punished                                 187
 The segregation of the unfit                                        187
 Twenty-five million births in twenty years                          189


 CHAPTER XV
 THE SCHOOL

 The Error of Distribution and the heritage of the child             191
 The nation loses the bulk of its intelligence and genius            191
 The school must be a preparation for life                           192
 The doctor in the school                                            193
 The school children of Bradford                                     194
 "The child has got to be fed"                                       196
 Observation and expression                                          199
 The study of systematized knowledge                                 202
 The teaching of hygiene and temperance                              204
 Compulsory continuation schools for both boys and girls             204
 Can we afford to make our schools what we desire them to be?        207


 CHAPTER XVI
 THE HOME

 An increasing population in a diminishing number of centres         209
 Our many poorhouses                                                 210
 The years taken from the lives of the poor                          211
 Crowding and overcrowding                                           212
 Tenement statistics                                                 212
 Overcrowding on area has increased                                  213
 Not only death and disease but ugliness to be fought                215
 Where further building should be prevented                          217
 The housing question as a land question and as a capital
   question                                                          218
 The community should be landlord                                    218
 The taxation of land on its selling value would assist
   in municipalizing area                                            219
 The small area needed to rehouse our city populations               220
 The municipality must plan its extensions in advance                221
 Some examples from Germany                                          222
 An example in the United Kingdom                                    223
 How land and capital enter into the housing problem                 229
 National housing loans needed                                       231


 CHAPTER XVII
 THE EMPTY COUNTRY

 The migration from the country to the towns                         234
 The decrease in agricultural employment and its causes              240
 Agriculture must be an increasingly limited field
   for employment                                                    240
 The cheap land outside the towns                                    243
 Is control of area worth half a year's income?                      243
 The community can acquire cheap land and make it valuable           244
 Rising food prices                                                  247
 Neglected afforestation                                             248
 Imperial questions must be treated on an Imperial scale             249


 CHAPTER XVIII
 ORGANIZATION

 An insufficient production of ponderable commodities                250
 The small stream of ponderable things is made the subject of
   unnecessary services                                              251
 Present production is wasteful                                      252
 The waste of labour in competition                                  252
 The waste of labour in distribution, etc                            253
 So called "natural" monopolies                                      255
 Monopoly necessary if labour is to be fully economized              256
 Power distribution and public control                               256
 The problem of monopoly illustrated by the milk trade               259
 The milk trade typical of many other services                       262
 Municipal and joint-stock direction contrasted                      263
 The management of our railway companies                             263
 The prevalence of nepotism in private enterprise                    264
 The Belgian State railways                                          265
 Coal production and distribution                                    267
 The private trust the only alternative to public ownership          269
 Public ownership of capital the only remedy for unemployment        270
 Those govern who employ                                             271


 CHAPTER XIX
 THE AGED POOR

 Two million persons over 65 years of age and most of them poor      272
 Mr Thomas Burt's return of aged paupers                             273
 Mr Ritchie's return of number of paupers relieved during a year     275
 Of the population aged 65 and over, one in three is a pauper        277
 Probable number of aged paupers                                     278
 Length of the working life                                          280
 The Charity Organization Society and cost                           283
 Mr Asquith's Old Age Pension Act                                    284
 First year's working of Old Age Pensions                            285
 Old Age Pensions at 65                                              286
 Invalidity Insurance                                                286


 CHAPTER XX
 ADAM SMITH'S FIRST MAXIM OF TAXATION

 The famous first maxim self-contradictory                           287
 Taxation in relation to the Error of Distribution                   288
 The doctrine of equality of sacrifice                               288
 An unanswerable case for repeal of all food duties                  289
 The duties on liquors and tobacco should remain                     289


 CHAPTER XXI
 THE MAIN INSTRUMENT OF TAXATION

 Through an Income Tax taxation can be applied according to
   "ability"                                                         291
 The British Income Tax an ancient impost                            291
 The so-called "Land" Tax of 1692 was an income tax                  292
 The "Land" Tax of 1692 and the present Income Tax compared          295
 A graduated Income Tax taxes unearned increment                     296
 The Income Tax in 1905 described                                    297
 The "Abatements"                                                    297
 Schedule A described                                                298
 Schedule B    "                                                     299
 Schedule C    "                                                     300
 Schedule D    "                                                     300
 Schedule E    "                                                     302
 The Inhabited House Duty a second Income Tax                        302
 The Finance Act of 1907 introduced differentiation between
   earned and unearned income                                        303
 The Finance Act of 1909. Mr Lloyd George's reform of the
   Income Tax                                                        303
 Mr Asquith's differentiation illustrated                            304
 The Super-Tax                                                       305
 The Super-Tax as it really is                                       305
 The Income Tax summarized                                           306
 The Income Tax in effect                                            307
 The Inhabited House Duty should be abolished                        308
 Simplification needed                                               308
 Without a Census of Income the Income Tax cannot be properly
   enforced                                                          310
 Masters compelled to reveal employees' incomes                      311
 Taxation at the source might remain                                 312
 The family man's allowance                                          314
 Is an annual Budget debate necessary?                               315
 Mill and Bentham on Ethics of Taxation                              317
 A Plain Bill for the citizens' subscription to the
   National Club                                                     318


 CHAPTER XXII
 THE DEATH DUTIES

 The Death Duty Reforms of 1907-9                                    320
 My suggestions of 1905 now law                                      321
 The plain justice of the Lloyd George Scale                         322
 The alleged burden of the Death Duties                              323
 Do our Death Duties waste the national capital?                     323
 Gifts _inter vivos_                                                 324
 President Taft on the dangers of wealth monopoly                    324


 CHAPTER XXIII
 OF REVENUE WITHOUT TAXATION

 A source of revenue not necessarily a source of taxation            326
 A State without revenue                                             327
 Socialism and revenue and taxation                                  327
 The German Governments rich are Governments                         328
 Half the revenue of Prussia is derived from Socialism               328
 Yield of Prussian State Railways                                    329


 CHAPTER XXIV
 CONCLUSION

 Progress in 40 years                                                330
 Some items in material progress, 1867-1903                          332
 What Dudley Baxter wrote in 1867                                    333
 The poor within our borders to-day are as large in number as
   the entire population in 1867                                     338
 The employer the effective schoolmaster                             340
 A poor government is a weak government                              341
 Sir Robert Giffen on taxation                                       341
 We must have regard to both palliatives and remedies                342
 Public ownership of capital must replace private ownership          343
 The substitution of the public shareholder for the private
   shareholder not difficult                                         344
 The uplifting of work through the reduction of toil                 345
 The statesman must take up the tools of the scientist               346
 The appeal to the few                                               348
 The appeal to the people                                            348


 INDEX                                                               351




 RICHES AND POVERTY




 BOOK I
 THE ERROR OF DISTRIBUTION




 CHAPTER I
 THOUGHTS ARISING OUT OF A GREAT CONTROVERSY


During recent years a considerable share of the thoughts of men has been
devoted to the consideration of one part of our fiscal policy,—that part
which is concerned with Customs duties. In public and in private, on
hundreds of platforms and in thousands of homes, the ancient issue has
been debated between those who hold that Customs duties should be
imposed for revenue purposes only and those who contend that Customs
duties may be used as instruments with which to direct wisely the
agricultural, industrial and commercial development of a nation. In the
arguments which have been adduced by both sides in this controversy a
large part has been taken by evidence of the prosperity or want of
prosperity of the United Kingdom, as though Customs policy were the sole
factor in determining the wealth and progress of a people. Blind to the
fact that a wise Customs policy can at best enable a nation to make the
most of its natural advantages, extreme disputants have been engaged on
the one side in piling up incontestable evidences of British wealth and
on the other side in producing equally incontestable evidences of
British poverty. The Free Trader has revelled in import and export,
shipping, banking and revenue statistics, while the Protectionist has
reminded us of the existence of millions on the verge of hunger, of
hundreds of thousands of paupers, and of tens if not hundreds of
thousands of unemployed. The Free Trader has demonstrated that, as a
whole, we are a wealthy and a prosperous people. The Protectionist has
been able to throw doubt upon that wealth and prosperity chiefly because
it is an indisputable fact that, whatever may be true of our accumulated
wealth and total income, every British city has its slums, its paupers
and its out-of-works. The Protectionist has been unable to resist the
Free Trade evidence as to the magnificence of our commerce and shipping
and the increasing national income recorded by the Inland Revenue
Commissioners. The Free Trader has had reluctantly to admit the
existence, in our wealthy country, of social disorders and masses of
extreme poverty which are terrible blots upon our prosperity. If one
side has dwelt almost exclusively upon signs of wealth and the other
side almost exclusively upon evidences of poverty, what else could be
expected when a highly complicated problem became the shuttlecock of
faction? Even honest politicians become afraid to make statements which
may be treated as "admissions" when party feeling runs high. The more
should we welcome the notable utterance of Sir Henry Campbell-Bannerman
at Perth on June 5th, 1903:

"But I take it (the Chamberlain policy of 'Preference') as confined to
food, and it amounts to this, that the cost of the necessaries of daily
life is to be raised to the people of this country in order that the
Colonial producer may do more business, make larger profit, and the
landowner get better rents. Now the pinch of this does not fall upon the
well-to-do. It may be an inconvenience to a great number of people, but
the real pinch of it falls upon a needier class altogether, who are
sadly large among us. What is the population of the Colonies which I
have named? About thirteen millions. This is the population who will
share more or less the benefit of this new arrangement. In this country
we know, thanks to the patience and accurate scientific investigations
of Mr Rowntree and Mr Charles Booth, that there is about 30 per cent. of
our population underfed, on the verge of hunger. Thirty per cent. of 41
millions comes to something over 12 millions—almost identical as you see
with the whole population of the Colonies. So that it comes to this,
that for every man in the Colonies who is benefited, one head is shoved
under water in this country. I think I might set down that fact as
almost enough of itself to condemn any scheme, however plausible. Surely
the fact that about 30 per cent. of the population is living in the grip
of perpetual poverty is, or ought to be, a sufficient answer to the
Prime Minister's complacent suggestion that we can now afford to try
experiments which fifty years ago were not to be thought of."

These words have been widely used as a reply to the assertion that we
are a prosperous people. Their true meaning is, that while we have
acquired great wealth, and enjoy a considerable national income, that
wealth and that income are not so distributed as to give a sufficiency
of material things to all our population. As for their use as an
"argument" for Protection, we have but to turn to that land favoured of
nature, the United States of America, to find records of poverty fully
as distressing as our own.

Mr Robert Hunter, the American sociologist, thus summarises the poverty
of the United States of America: "There are probably in fairly
prosperous years no less than 10,000,000 persons in poverty; that is to
say, underfed, underclothed, and poorly housed. Of these about 4,000,000
persons are public paupers. Over 2,000,000 working men are unemployed
from four to six months in the year. About 500,000 male immigrants
arrive yearly and seek work in the very districts where unemployment is
greatest. Nearly half of the families in the country are propertyless.
Over 1,700,000 little children are forced to become wage-earners when
they should still be in school. About 5,000,000 women find it necessary
to work, and about 2,000,000 are employed in factories, mills, etc.
Probably no less than 1,000,000 workers are injured or killed each year
while doing their work, and about 10,000,000 of the persons now living
will, if the present ratio is kept up, die of the preventable disease,
tuberculosis."

We have, then, to thank the fiscal controversy for this: In the belief
that evidence of prosperity, or the reverse of prosperity, is a proof or
disproof, as the case may be, of the wisdom of a particular Customs
policy, we have been reminded at once of our riches and of our poverty.
Through the controversy over that absurd phrase the "balance of trade,"
worthy landsmen have been reminded that the United Kingdom possesses
half the world's seagoing ships, and poor clerks have learned with
astonishment that our oversea investments produce over £100,000,000 of
profits per annum. The unemployed workman, drawing from his beneficent
trade union the small allowance with which his own thrift has provided
him, and which barely keeps the wolf from his door, has learned that our
imports of food—"chiefly from foreign countries"—are worth £200,000,000
per annum. Millions—other people's millions—have become common objects
of the newspaper column, and it is probable that a great part of our
population is now acquainted with the fact that the gross income brought
under the review of the Income Tax Commissioners is about £1,000,000,000
per annum. It has also, alas, become familiar that our Poor Law
expenditure reaches £17,000,000 a year, and that, even in our best years
of trade, many of our skilled workmen are denied the means of earning
their livelihood. While demonstrating our prosperity the good Free
Trader has paused to write a cheque for a West Ham Distress Fund, or
subscribed some shillings for a children's slum party.

The object of these pages is to help the reader to form an accurate idea
of the distribution of the wealth which results from our industries and
commerce. 44,000,000 people in the United Kingdom work to produce
certain commodities, and a part of this output is exchanged for
commodities produced in other lands. We produce, we export, and we
import, and our home production increased by our imports and decreased
by our exports constitutes a great income which is divided up amongst us
in such manner that some of us are rich and some of us are poor. Let us
endeavour to make concrete our ideas on the subject of riches and
poverty, that we make quite sure what we mean when we speak of the
wealth and prosperity of the United Kingdom.




 CHAPTER II
 THE NATIONAL INCOME


In considering and estimating the national income it is necessary to
remind ourselves, in the first place, that our production, our exports
and our imports, alike consist of both goods and services. The processes
of thought and action result in the conception, production, distribution
and use of ponderable and imponderable commodities. In an advanced
community the greater part of the material and immaterial productions
which are the expressions of its various activities becomes the subject
of exchange. The many exchanges are made by reference to a common
standard, and thus we are enabled to measure, in terms of money, the
greater part of the national income. There remains a not inconsiderable
production of ponderable and imponderable things which it is difficult
or impossible to measure in terms of money, but upon which largely
depends the happiness of a people. The material produce which does not
become the subject of exchange, includes several very important items,
amongst which may be mentioned the produce of the gardens or allotments
of many agricultural labourers, and the production of clothing and the
cooking of food by the women of the middle and lower classes. The
immaterial things which do not come into the market are exceedingly
important, especially to the poor. The household work of a poor woman
with a husband and several children, if it could be measured in terms of
money, would be worth a considerable sum. The imponderable part, the
managing, the careful buying, the arranging, the cleaning, the serving,
added to the manufacturing part, the cooking and the stitching, go often
to make a sixteen-hours' working day, and who shall place a market price
upon each of the sixteen hours? In the well-to-do household we also find
the woman active for some fourteen or sixteen hours a day, but the
product of the hours is more often immaterial than in the poor man's
home. Thus the care of servants has been known to cause the expenditure
of much time and anxiety by women of large income. A rich woman who has
studied under Marchesi may exercise in private, to solace her father or
lover, a soprano worth one shilling per note in the public concert-room.
It is worth no less in the drawing-room, but in estimating the national
income we have to neglect its market value just as we must neglect that
of the poor woman's apple-pie.

With this reminder as to the production of unexchanged commodities,
which, while important, are yet but an exceedingly small part of the
product of the entire activities of our people, I proceed to an
examination of the money value of that greater part of the product which
is bought and sold.

The collection of the Income Tax makes a more or less complete
inquisition into the profits or salaries received or earned by those
whose incomes exceed £160 per annum. Below that limit income tax is not
payable, but a small amount of the income of persons with less than this
£3 per week does actually come under the review of the Commissioners.

If we take the figures of the latest period of which we have record, we
find that in the financial year 1908-9 (_i.e._ the twelve months ended
March 31st, 1909) the following particulars of gross incomes were
ascertained by the Inland Revenue Officials (fifty-third Report of the
Commissioners of Inland Revenue, Cd. 5308, p. 105):—

 GROSS AMOUNT OF INCOME BROUGHT UNDER REVIEW IN 1908-9

 Schedule A. Profits from the ownership of
    lands, houses, railways, mines, etc.            £269,900,000

 Schedule B. Profits from the occupation
    of lands (Farmers' Tax)                           17,400,000

 Schedule C. Profits from British, Indian,
    Colonial and Foreign Government
    Securities                                        47,500,000

 Schedule D. Profits from Businesses, Concerns,
    Professions, Employments, etc.,
    including certain profits from places
    abroad                                           565,600,000

 Schedule E. Salaries of Government,
    Corporation, and Public Company
    Officials                                        109,600,000
                                                  --------------
                                                  £1,010,000,000
                                                  --------------

The following table shows the growth of the aggregate during the past
fifteen years:—

 GROSS PROFITS ASSESSED TO INCOME TAX
 (_From Inland Revenue Report_)

 1893-4         £673,700,000
 1894-5          657,100,000
 1895-6          677,800,000
 1896-7          704,700,000
 1897-8          734,500,000
 1898-9          762,700,000
 1899-1900       791,700,000
 1900-1          833,300,000
 1901-2          867,000,000
 1902-3          879,600,000[1]
 1903-4          902,800,000[2]
 1904-5          912,100,000
 1905-6          925,200,000
 1906-7          943,700,000
 1907-8          980,100,000
 1908-9        1,010,000,000

It should be observed that these figures are for gross income, and some
adjustments have to be made before we can arrive at the total income of
that part of the nation which has the mingled pleasure and pain of
paying Income Tax.

From the £1,010,000,000 brought under review in 1908-9, the Inland
Revenue authorities allowed the following deductions before arriving at
taxable incomes:—

 (_a_) Exemptions in respect of incomes
       under £160 per annum                    £58,400,000

 (_b_) Abatements on incomes ranging from
       £160 per annum to £700 per annum        120,300,000

 (_c_) Life Insurance Premiums                  10,500,000

 (_d_) Charities, Hospitals, Friendly
       Societies, etc.                          11,800,000

 (_e_) Repairs to Lands and Houses              40,100,000

 (_f_) Wear and tear of Machinery and Plant     22,900,000

 (_g_) Other Allowances                         52,700,000
                                              ------------
             Total Deductions                 £316,700,000
                                              ============

So that Income Tax in 1908-9 was actually collected not upon
£1,010,000,000 but upon £693,300,000.

But we have not to make all the above deductions in arriving at the
actual income of the income tax paying class. We have only to deduct
those items which are not the real income of that class, viz.:—

 (_a_) Exemptions in respect of incomes
         under £160                        £58,400,000
 (_d_) Charities, Hospitals, etc.           11,800,000
 (_e_) Repairs to Lands and Houses          40,100,000
 (_f_) Wear and tear of Machinery           22,900,000
 (_g_) Other Allowances                     52,700,000
                                          ------------
                                          £185,900,000
                                          ============

Deducting these items we get:—

 GROSS ASSESSMENTS TO INCOME TAX
 CORRECTED[3]

 Gross Assessments 1908-9               £1,010,000,000
 Less Deductions as above                  185,900,000
                                        --------------
                                          £824,100,000
                                        ==============

This figure may be compared with the £719,500,000 given on page 11 of
"Riches and Poverty" (1905) for the fiscal year 1902-3. The increase is
no less than £104,600,000 in five years, and this increase is especially
commended to the notice of those critics who have worked so hard to
whittle away a little from my estimates of 1903-4. The onward sweep of
the figures has been magnificent; and accomplished facts now provide the
apologists of the rich with the task of explaining away another
£100,000,000 or so per annum.

To resume, the £824,100,000 arrived at above, handsome figure as it is,
is certainly not complete. There is unquestionably still a considerable
amount of evasion under Schedule D of the Income Tax. The landlords of
Schedule A cannot escape assessment because the tax is paid by occupiers
and deducted from rent, but there is a certain amount of
under-assessment. Under Schedules B, C and E evasion is, for the most
part, difficult or impossible. Under Schedule D,[4] however, a large
number of incomes are understated and many which ought to be assessed
escape altogether. It is almost as true to-day as it was in 1861 that,
in the words of Mr Lowe's Draft Report to the Income Tax Committee of
that year, "Schedule D depends on the conscience of the tax-payer who
often, it is to be feared, returns hundreds instead of thousands, and
who is certain to decide any question that he can persuade himself to
think doubtful, in his own favour." It is recorded by the Income Tax
Commissioners in their Twenty-Eighth Annual Report that when, in 1803,
taxation at source was substituted for self-assessment in the case of
all income but business profits, the effect was to make the produce of
the tax at 5 per cent. in 1803 almost equal to that of 10 per cent. in
1799, showing that in the earlier year those who assessed themselves
unaccountably overlooked one-half of their incomes. Dudley Baxter
reminds us in his classical paper on the National Income[5] that in his
Budget Speech in 1853 Mr Gladstone quoted a remarkable instance of
evasion. When Cannon Street Station was constructed, twenty-eight
persons claimed compensation for the loss of annual profits which they
estimated at £48,000. The jury, after considering their case, awarded
them £27,000. They had returned their profits to the Income Tax
Commissioners at £9,000! In recent years the formation of limited
liability companies has frequently revealed profits far in excess of
those previously stated under Schedule D. Whatever figure we allow for
such evasion must, in the nature of the case, be conjectural. In "Riches
and Poverty" (1905), p. 13, I estimated evasion and avoidance as 20 per
cent. of the declared profits. Twenty per cent. of £365,000,000 (the
profits of "Businesses, Professions, etc," assessed under Schedule D) in
1902-3 was £73,000,000. We have since had remarkable proof of the
reasonableness of this estimate. In 1907-8 the gross assessments to
Income Tax rose by £36,000,000 (see p. 11). There is little doubt that
part of the rise was due to Mr Asquith's enactment (Finance Act, 1907,
Clause 19) differentiating between earned and unearned incomes _on the
condition that earned or partly earned incomes up to £2,000 a year were
declared by their owners_. For the financial year 1907-8 does not
include the profits of the good year 1907 which (see Chap. 21) were not
assessed under our averaging system until 1908-9. It was the new
personal declarations which led to the revelation of income hitherto
escaping tax, and part of the £36,000,000 rise in assessments in 1907-8
is undoubtedly part also of the estimate of £73,000,000 escaping tax
which I made in "Riches and Poverty" (1905). For 1908-9, therefore, I
reduce my estimate of income escaping tax accordingly. I now take it as
£60,000,000 in 1908-9.

Another point for consideration is the amount of profit received by
persons in this country from places abroad. It is exceedingly difficult
to tax the whole of such profits. In 1908-9, £88,800,000, made up as
follows, was ear-marked by the Commissioners as profit received from
abroad:—

 ASSESSED PROFITS EAR-MARKED AS
 RECEIVED FROM ABROAD, 1908-9

 (1) India Government Stocks, Loans }
       and Guaranteed Railways      }    £9,000,000
 (2) Colonial or Foreign Government }
       Securities                   }    23,200,000
 (3) Colonial or Foreign Securities,
       other than Government, Coupons,
       and Oversea Railways other
       than those in (1)                 56,600,000
                                        -----------
                                        £88,800,000
                                        ===========

The total profit received or receivable yearly in this country from
oversea investments it is impossible to estimate precisely, but there is
good reason to believe that it is not less than £140,000,000. It should
not be imagined, however, that the whole of the difference between this
sum and that ear-marked by the Commissioners escapes assessment.
Undoubtedly some of it eludes taxation, but a considerable sum, it
should be remembered, is included with ordinary business profits under
Schedule D. A few illustrations will make this clear. Messrs Armstrong,
Whitworth & Co. have a shipyard in Italy the profits of which are
received in this country, but are not distinguished from the ordinary
profits of the company in the income-tax assessment. The same is true of
such a firm as Lipton Ld. which owns extensive tea plantations in
Ceylon. The profits made in Ceylon and remitted to this country are
included in and assessed with the general profits of the business. There
are a large number of firms which similarly own foreign or colonial
property or branches which are organic parts of their businesses and are
often the sources of their materials. When allowance is made for these
facts it is probable that some £115,000,000 of oversea profits
(including the nearly £90,000,000 or so actually ear-marked) are
assessed to income tax, leaving but about £25,000,000 unassessed.

Accepting these figures, we arrive at the following estimate of the
total income enjoyed by those persons who have over £3 per week:—

 INCOME OF PERSONS ENJOYING OVER £160
 PER ANNUM, 1908-9

 Gross Assessments to Income Tax Schedules
       A, B, C, D, and E                    £1,010,000,000
   _Deduct_
 Items not representing real income, etc.
       (see page 12)                           185,900,000
                                            --------------
                                              £824,100,000
   _Add_
 (_a_) For under-assessment under
       Schedule D                               60,000,000
 (_b_) Foreign profits escaping tax             25,000,000
                                              ------------
                                              £909,100,000
                                              ============

The foregoing figures relate to the fiscal year ended March 31st, 1909,
the latest period for which detailed figures are available.

It is necessary to point out again that while this fiscal year 1908-9
covered the assessment of the calendar year 1907, which was a year of
great profit-making, it did not fully assess the profits of that boom
year. Under Schedule D of the Income Tax the profits assessed in 1908-9
were the profits of the three years 1905, 1906, and 1907. That is to
say, the figures just arrived at, £909,100,000, _are an understatement
of the true aggregate incomes of those having upwards of £160 a year in
1907_. The actual income of the income tax payers in 1907 greatly
exceeded £909,000,000.

In "Riches and Poverty" (1905) my equally conservative estimate of the
income tax payers' aggregate income for 1903-4 was £830,000,000. We
therefore get the following comparison:—

 GROWTH OF AGGREGATE INCOME OF PERSONS
 ENJOYING OVER £160 A YEAR

 1903-4. Estimate of "Riches and  }
           Poverty" (1905)        }   £830,000,000
 1908-9. Estimate of this Edition }
           (1910)                 }    909,000,000
                                      ------------
                         Increase      £79,000,000
                                      ============

And this remarkable growth in five years is shown in spite of the fact
that I have allowed for £13,000,000 of income tax assessment as being
due to increased severity of collection, for I have assumed that
£13,000,000 more of existing home profits were revealed in 1908-9 than
in 1903-4.

Now let us turn to the incomes which do not exceed £160 a year, and
which, therefore, are not assessable to income tax.

First of all, we have the class of small incomes which lie between the
manual workers and the income tax payers. We cannot hope, in view of the
poverty of the information which our present Census methods place at our
disposal, to estimate this part of the national income with any degree
of confidence, and we can at best arrive at a rough approximation. I
estimate that in 1908, of our "occupied" population, about 3,100,000
were neither income tax payers on the one hand nor manual labourers on
the other hand. That is to say, they were petty tradesmen, civil
servants, clerks, shopmen, travellers, canvassers, agents, teachers,
farmers, inn-keepers, lodging-house-keepers, pensioners, and so forth,
whose profits or salaries are below £3 per week. At what rate can we
estimate their average income?

The total includes a very considerable number of young persons between
10 and 20 years of age. The teachers, some 250,000 in number, include
pupil teachers of both sexes whose remuneration begins at a few
shillings per week, and as a whole the teaching profession is wretchedly
paid. The commercial and law clerks, some 500,000 in number, include
juniors, office boys, and poorly paid girl typists. As to shopkeepers,
there is an exceedingly large number of these distributing agents whose
incomes are of the slenderest dimensions. Unfortunately we do not know
how many shops in the United Kingdom have an annual value of less than
£20, but their number must be very great, and the petty tradesmen who
keep them have to work hard for poor returns. We have also to remember
the quite considerable number of shops which are branches of great
distributive firms and managed by shopmen with small salaries. As to
shop assistants in general, their salaries are exceedingly small. I am
informed by the National Amalgamated Union of Shop Assistants,
Warehousemen and Clerks that the average male assistant "living in" gets
from £25 to £30 per annum plus "premiums" and board and lodging, while
"living out" the average is about £74. Grocery and boot salesmen in the
shops of big distributing companies, who often are not required to "live
in," get from 20s. to 30s. per week. The wages of the "managers" of
shops are sometimes as low as 25s. per week. As for the value of the
"living in," this may be illustrated by the fact that in a certain West
of London house, where "living in" is the rule, a man applied for
permission to "live out." He was told that he could do so, but that only
£5 per annum extra could be allowed him. In a return to the Board of
Trade for the purpose of statistics, the same employer would doubtless
value the same "truck" at £30 or £40 per annum. I have before me the
wages paid to the young women who work for a great multiple shop firm
with 200 shops; they range from 3s. to 11s. per week!

Passing to the class of commercial travellers and canvassers, there is
perhaps no calling in which earnings vary so greatly. While there are a
number in the income-tax class, there are thousands of men included in
the class we are now considering who live on "commission only," and
thousands more who are paid by generous employers 15s. to 25s. per week
plus a small commission. Advertisement and book canvassers are engaged
upon widely varying terms, and many of them have a very precarious
livelihood.

In "Riches and Poverty," edition 1905, I wrote: "Nearly the whole of the
farmers of the United Kingdom earn less than £160 per annum. Out of a
total profit of £17,500,000 as much as £11,000,000 is excused on the
ground that income is below £160. This £17,500,000 is the annual income
of an uncertain number of the larger farmers, probably as many as
300,000, which gives an average income of about £60 per annum! In
1902-3, 302 farmers elected to have their actual profits assessed under
Schedule D. They were assessed at £10,974, which gives an average of
only £37 per annum. These 302 farmers paid an aggregate rental of
£116,259!"

These remarks did not take sufficient account of the under-assessment of
farmers' profits under Schedule B. It would probably have been nearer
the mark to take one-half of the rental paid rather than the official
one-third as representing farmers' profits. If we did so, the profits of
300,000 farmers would come out at say £26,000,000 instead of
£17,500,000, and the average profit would run to £87 per annum. Even
this correction, however, would leave the great majority of our farmers
under the £160 income tax line.

These notes on some of the largest classes of persons which go to make
up the order of incomes immediately under consideration will serve to
show that we are dealing with working men and working women whose
earnings are exceedingly small. It should also be remembered that many
of them are subject to losses from terms of unemployment. Clerks and the
poorer travellers have little security of tenure, and at any given time
there are many out of work. Hundreds of applications are commonly
received in reply to single advertisements for clerks and travellers. To
the petty tradesman bad trade does not spell "unemployment," but it
often spells keeping a shop which does not keep its proprietor for many
months.

Taking everything into consideration, and remembering that no large
incomes are introduced to weight the average, the upper limit being as
low as £160 per annum, I do not think we can estimate the average income
of the 3,100,000 persons at more than £75 per annum, and I should put
the figure lower if I did not assume that a certain amount of interest
is drawn by some members of the group. This estimate gives £232,000,000
as the annual income of those who are not "manual" workers, but whose
incomes are not assessed to income tax because they are less than £3 per
week.

I have thus assigned to these members of the lower middle classes no
greater earning power than they possessed in 1903. I think I am well
advised in this. As will be seen later, wages have been almost
stationary of late, and there is no reason to believe that clerks,
commission men, etc., have fared better. Even as I write there comes to
me a letter from a man whom I employed when editing a newspaper some
years ago. He says (August 1910), "My present wage is 25s. per week,
with no allowance for lodging out when doing country work. It is easily
understood that this is not a sum which allows of luxuries for the
present or provision for the future." He is now a directory canvasser,
one of thousands in the employ of a large firm of publishers.

Since these pages went to the printer, a Committee of the British
Association has issued a Report (1910) on the group of incomes just
referred to which largely confirms the conclusions I presented in 1905.
The Committee arrive at an average earned income of £71 against the £75
which I consider to cover both earned and unearned incomes. They treat
of 4,000,000 people where I treat of 3,100,000, but that is because,
while I exclude manual labourers as a class, the Committee include many
manual labourers. Thus the Committee include sweeps in this intermediate
class, while I include them with the manual workers whose earnings we
shall next consider.

We now come to the largest class of the working population, the "manual
workers" commonly so called.

Including persons of both sexes and all ages, I estimate from the census
returns the number of manual workers in our population of 44,500,000 at
15,500,000. This number includes, in addition to all those engaged in
industrial, agricultural, and domestic service, soldiers, sailors,
policemen, and postmen.

In 1886 the Board of Trade conducted the only Census of Wages made in
the United Kingdom prior to 1907. (We have not yet had a report on the
later Census.) Sir Robert Giffen, who in his then capacity as Assistant
Secretary of the Board of Trade in charge of the Commercial Department,
directed the Census, describes in his General Report issued in 1893 (C.
6889) the method adopted. Schedules were sent out to employers, after
careful consideration of the circumstances of each industry, specifying
the various occupations of each trade and asking for details as to rates
of wages, the numbers employed at each rate, the hours of labour, and so
forth.

As to industrial employment generally the following trades were
investigated: Cotton, woollen, worsted, linen, jute, hemp, silk, carpet,
hosiery and lace manufacture, smallwares, flock and shoddy manufacture,
coal and iron mines, metalliferous mines, paraffin oil works, slate
mines and quarries, granite quarries and works, stone quarries, china
clay works, police, construction and care of roads, pavements and
sewers, gasworks, waterworks, pig-iron manufacture, general engineering,
iron and brass foundries, iron and steel, shipbuilding (iron and wood),
tin plate manufacture, saw mills, brass and metal wares, cooperage
works, coach and carriage building, boot and shoe making, breweries,
distilleries, brick and tile making, chemical manure manufacture, and
railway carriage and wagon building.

The details obtained related to 355,838 men, 80,253 boys, 151,263 women
and 48,772 girls, and were considered by Sir Robert Giffen to be
"representative of, perhaps, three-fourths of the manual labour classes
of the United Kingdom." He also expressed the opinion that the "broad
results shown by the census summary would not be sensibly modified by
including the great mass of other employments not comprised in that
summary."

In the following table the Board of Trade summarised the proportion of
men, women, boys and girls working at various rates of wages, in 1886,
in the industries which I have mentioned:—

 WAGES IN 1886. THE BOARD OF TRADE SUMMARY OF RATES OF WAGES (NOT ACTUAL
 EARNINGS) DERIVED FROM THE DETAILED EXAMINATION OF 38 SELECTED
 INDUSTRIAL OCCUPATIONS

                       Men.      Women.    Boys.     Girls.
                     Per Cent. Per Cent. Per Cent. Per Cent.

 Half Timers            --        --      11.9      27.2
 Under 10s. per week   0.1      26.0      49.7      62.5
 10s. to 15s.   "      2.4      50.0      32.5       8.9
 15s. to 20s.   "     21.5      18.5       5.8       1.4
 20s. to 25s.   "     33.6       5.4       0.1        --
 25s. to 30s.   "     24.2       0.1        --        --
 30s. to 35s.   "     11.6        --        --        --
 35s. to 40s.   "      4.2        --        --        --
 Above 40s.     "      2.4        --        --        --
                     -----     -----     -----     -----
     Total           100.0     100.0     100.0     100.0
                     -----     -----     -----     -----
 Average Rate of    _s._ _d._ _s._ _d._ _s._ _d._ _s._ _d._
 wages              24    9   12   11    9    2    6    5

It will be seen that the average rate of men's wages came out at 24s.
9d. per week or, say, £64 per annum in a year of constant occupation.
The weighted average rate for both sexes and all ages comes out at 17s.
6d. per week or, counting 52 weeks' work in the year, £45. 10s. per
annum.

The Board of Trade also investigated the rates of wages in other
occupations, and the following table compares the £64 of the adult males
in general industries with the rates of wages paid to adult males in (1)
railway service, (2) building, (3) mercantile marine, (4) Royal Navy,
(5) Army, (6) domestic service, (7) asylums, (8) hospitals (in 1886
unless another date is given):—

 AVERAGE RATES OF WAGES (NOT ACTUAL
 EARNINGS) FOR MEN IN 1886

                                                   Per Annum
 Average of Wage Census (38 Industrial occupations)   £64
 Railways (for 1891)                                   60
 Building Trades (for 1891)                            73
 Seamen: Mercantile Marine, including estimated    }
      value of food and berths                     }   65
 Royal Navy, including value of food, etc.             65
 Army (Non-Coms, and men). Including value         }
      of food, etc.                                }   48
 Domestic Servants (large households). Including   }
      value of food, etc.                          }   68
 Employees in Lunatic Asylums. Including value     }
      of food, etc.                                }   60
 Employees in Hospitals and Infirmaries. Including }
      value of food, etc.                          }   61
                                                      ---
                   Unweighted Average                 £62
                                                      ---

In his report already referred to, Sir Robert Giffen, after detailing
the average rates of the above table, says (p. xxxiii): "Thus in nearly
all these trades the average rates are about the same as the average
rate in the Census of Wages Summary." But the table does not include the
badly paid agricultural labourer, the largest group of all, and the
figures for seamen, etc., are, it should be observed, swollen by
estimates of the value of board and lodging.

Finally, Sir Robert Giffen arrived at the general conclusion that "the
broad results shown by the census summary would not be sensibly modified
by including the great mass of other employments not comprised in that
summary."

In January 1893 Sir Robert Giffen gave evidence before the Labour
Commission and submitted the facts I have detailed. He prepared a
general estimate of the proportion of the national income then taken by
the wage-earning classes, and his evidence on this point (questions 6909
to 6914) is summarized in the following table:—

 EARNINGS OF MANUAL LABOURERS IN 1886
 (Sir Robert Giffen's estimate for the Labour Commission)

          Number.     Annual Average   Aggregate Earnings.
                     per Wage-Earner.
 Men     7,300,000      £60  0  0         £439,000,000
 Women   2,900,000       40  0  0          118,000,000
 Boys    1,700,000       23  8  0           46,000,000
 Girls   1,260,000       23  0  0           29,000,000
        ----------      ---------         ------------
        13,200,000      £48  0  0         £633,000,000
        ----------      ---------         ------------

There can be no question that this estimate of Sir Robert Giffen's
somewhat exaggerated the actual earnings of manual labourers as a whole.
In the first place, it was too much to assume that the 24s. 9d. per week
or £64 per annum was representative of the whole of adult male labour.
Without introducing agricultural labourers (the largest group in the
country), general labourers, postmen, and other ill-paid workers, the
unweighted average of the table on page 24 is £62. If £60 per annum had
been given as the average _rate of wages_ of all the adult male workers
in 1886 it would probably have been an exaggeration. It was not given as
a rate of wages, however, but as the actual earnings of the men after
all allowance made for short time, unemployment, sickness, accidents,
strikes, lockouts, stress of weather, etc. Sir Robert Giffen appears to
have assumed that all the adult male workers of the United Kingdom were
employed on the average about 50 weeks out of 52, and were paid at the
average rate of £64 per annum!

In 1866 Leone Levi, in estimating the manual workers' earnings, assumed
that four weeks per annum were lost. Dudley Baxter in 1867 pointed out,
in criticism of Leone Levi, that if four weeks' "play" were all that
need be allowed "England would be a perfect Paradise for working
men."[6] Dudley Baxter, in view of the circumstances of his day, allowed
ten weeks for "play" in making his estimate, and there can be no
question that he was nearer the truth than Levi. At the present day the
level of employment is very much the same as it has been for the past
forty years, while sickness, accidents, and the weather are still with
us. We need not wonder, then, if Professor A. L. Bowley, who has given
the subject of wages so much attention, bases his estimates upon the
loss of six weeks' work per annum through sickness and holidays, and
makes an additional allowance for unemployment, while also assuming that
10 per cent. of the working population only get casual or irregular
work, bringing them in about half the amount shown in the Wage Census.[7]

If the estimate given to the Labour Commission had allowed for six
weeks' "play," the average earnings of men, women, boys and girls would
have come out at £40. 5s. per annum instead of £48, and the aggregate
earnings, therefore, at much less than £633,000,000. Leone Levi's
estimate for 1884, allowing for only four weeks' play in the year, was
£521,000,000. This figure is too large, but it is over £100,000,000 less
than that of Sir Robert Giffen.

I now take the Wage Census figure of 1886 as a basis and correct it for
the upward movement of wages since that date by the wage index numbers
of the Board of Trade (Cd. 4954, which slightly corrects the index
numbers of Cd. 1761, used in "Riches and Poverty," 1905 edition, p. 24),
which are based on the mean of over 150 rates:—

                           Average Wage
                         (Men, Women, and      Board of Trade
  Year.                     Children) per      Index Number
                               Week.           1900 = 100.*
                              _s._ _d._
 1886 (Wage Census figure)    17    6              82.86
 1900       "     "           21    1             100.00
 1908       "     "           21    3             101.02

* The meaning of this column is that, if the average wage of 1900 be
represented by 100, the average wage of 1886 is represented by 82·86 and
that of 1908 by 101·02.

We thus arrive at 21s. 3d. as the average weekly wage of the manual
workers in 1908. There is much reason to believe that this estimate errs
on the side of liberality. It is unfortunate that we have not a
compulsory wage census, and the method of estimation used here can
pretend to no more than approximation. It neglects the important fact
that between 1886 and 1908 the ranks of women and child workers have
swollen at the expense of adult male workers. The 15,500,000 (estimated)
manual workers of 1908 consisted as to a larger proportion of women and
children than the 13,200,000 (estimated) manual workers of 1886. I
regard the 21s. 3d., therefore, as the most liberal figure that can be
put forward as the average earnings of the men and women and child
workers of the United Kingdom in 1908.

We have now to decide what allowances should be made (1) for the great
army of casual, incompetent, and aged or ageing workers who figure in
the census returns as following definite occupations, and (2) for the
loss of time through unemployment, sickness, accidents, stress of
weather, strikes, lockouts, "bank" and other holidays, etc., in the case
of the remaining workers.

With regard to the first item, I do not think we are justified in
estimating the incompetents and casuals at less than 1,000,000 out of
the 15,500,000. For the purposes of the present estimate, I assume that
these 1,000,000 workers earn, on the average, £25 per head per annum, or
an aggregate of £25,000,000. My view is that this is a liberal estimate
of the earnings of what may be termed the camp-followers of the
industrial army.

With regard to the remaining 14,500,000, we have to form an estimate of
the amount of time lost per annum through voluntary or enforced leisure.
No certain information exists, and the widest differences of opinion
have been expressed on the subject. As I have said above, Dudley Baxter
took ten weeks; Leone Levi took four weeks; Mr A. L. Bowley takes six
weeks plus a further allowance for unemployment.

The Board of Trade, in their recent examination of fluctuations in
employment, made an analysis from the records of the Amalgamated Society
of Engineers, combined with information supplied by employers, of the
time lost in the engineering trade. They came to the conclusion that, in
an average year, perhaps 8 per cent. of working time was lost from all
causes, and expressed the opinion that in a good year the loss might
fall to 4 per cent. and in a bad year rise to 15 per cent. or more (Cd.
2337, p. 101). This would mean, for the engineering trade only, a loss
of time varying from only two weeks in the year to as much as eight
weeks or more.

In other employments the widest variations exist. There are the quite
regular employments, such as the army, the navy, the postal service, the
police service, and, for the greater part, the railway service. There
are violently fluctuating employments, such as the building trades and
the shipbuilding trades. In all alike, sickness takes its toll, and
unemployment arises from accidents, from disputes, from "drink," and
from seasonal influences and depression, while, on the other hand,
overtime occasionally goes to swell the aggregate earnings.

I make the assumption that the average working year of the 14,500,000
remaining wage-earners consists of 44 weeks. Applying the average wage
already arrived at (21s. 3d. per week), we get an average annual earning
of, say, £46. 15s., which gives us £678,000,000 as the probable
aggregate earnings of the 14,500,000 workers. Adding the £25,000,000
assumed to be earned by the remaining 1,000,000, we arrive at
£703,000,000 as the total earnings of the manual labourers in 1908.

It is probable that this calculation does not take sufficient account
either of the changes of occupations since 1886, or, as has been already
pointed out, of the changes in the respective proportions of men, women
and children employed. The average wage of the 1886 Census, taken as the
basis of the calculation, was, it is necessary to insist, exaggerated by
the omission of the most ill-paid workmen, while the returns upon which
it was based, framed as they were by employers, are only too likely in a
proportion of cases to have put the wages paid in the most favourable
light. The employers again, who filled in the forms, were only some 75
per cent. of the firms applied to by the Board of Trade, and it is a
fair inference that those who neglected to reply had no excessive pride
in the records of their wage-sheets. I submit, therefore, that as the
1886 average wage figure is a liberal estimate,[8] the figure which I
have deduced from it does not, in all probability, err on the side of
under-estimation.

Professor Bowley estimates the total paid in wages in 1901 as
£705,000,000,[9] and the Board of Trade in the Fiscal Blue Book of 1903
(Cd. 1761) say:—

"From investigations based on the Board of Trade Census of Wages (1886)
combined with the recorded changes of wages since that date and the
distribution of the working population among various industries as shown
in the census returns, the total wages bill of the United Kingdom has
been estimated at between £700,000,000 and £750,000,000, according to
the state of employment."

The estimate which I have given, therefore, differs but little from
those of Professor Bowley and the Board of Trade.[10] I prefer to use
the smaller figures on several grounds. In the first place, the
allowance for "play" is a conservative one. In the second place, I have
the gravest doubts as to the propriety of including in the estimates of
the wages of domestic servants, sailors, and others, an allowance for
the value of "lodging," as is done in the figures used. To include so
many shillings a week for the accommodation afforded by a seaman's bunk
or a general servant's fraction of an attic is to flatter "earnings" out
of all resemblance to the truth. The free cottages and other allowances
to agricultural labourers are often of a scarcely marketable character.
We may be justified in valuing an unhealthy hovel at 1s. 6d. per week,
in view of the fact that the labourer, if he had it not, would need to
pay rent elsewhere, but in too many cases the "cottage" is fit not for
inhabitation but for demolition. In the third place, no allowance is
made for the excessive rents paid by workmen in London and other large
towns. These rents are really part of the working expenses of the wage
earners, and there is as good ground for making deductions on account of
them as there is for deducting wear and tear of machinery in the case of
income-tax incomes.

We can now arrive at an approximate estimate of the National Income as a
whole in 1908-9 (say 1908).

 THE NATIONAL INCOME IN 1908

 (1) Persons with incomes which exceed
        £160 per annum                       £909,000,000
 (2) Persons with incomes below £160 per
        annum:—
     (_a_) Persons earning small salaries,
              petty tradesmen, etc.           232,000,000
     (_b_) The wage-earning classes           703,000,000
                                           --------------
                                           £1,844,000,000
                                           ==============

It will be seen that _the income tax exemption limit of £160 per annum
splits the national income into two almost equal parts_. Of a total
income amounting to £1,844,000,000 in 1908, those with over £160 per
annum took £909,000,000, while those with less than £160 per annum took
£935,000,000.

[Footnote 1: Figures examined in "Riches and Poverty" (1905), Chapter 2.]

[Footnote 2: In "Riches and Poverty" (1905), Chapter 2, I estimated this
figure at £900,600,000.]

[Footnote 3: It has been too freely assumed in calculating the national
income that the gross assessments represent actual income.]

[Footnote 4: As Schedule D is an exceedingly important gauge of national
prosperity, it may be well to remind the reader of its precise
application. It is a tax upon all income derived from trades, industries
and professions, and from all sources not specified under the other four
Schedules. Profits from businesses established in places abroad are
assessable under it. The assessments are made annually, and are
generally based upon the mean of the income received during the
preceding three years. Fuller particulars will be found in Chapter 21.]

[Footnote 5: "National Income." R. Dudley Baxter. Macmillan & Co. 1868.]

[Footnote 6: "The National Income," Dudley Baxter.]

[Footnote 7: "Economic Journal," Sept. 1904. Page 458.]

[Footnote 8: Take, for example, the boot and shoe trade. The Wage Census
for 1886 (Cd. 6889, p. xiii.) gives the average earnings in boot and
shoe factories (both sexes and all ages) as £48 per annum. In 1908, more
than twenty years after, the Board of Trade "Labour Gazette" shows, from
employers' returns, that (in a July week) 60,337 boot workers took only
£58,147 in wages, which is about 19s. per week or £49, 8s. in a year of
52 such weeks. With regard to this trade, it is clear that either the
1886 estimate was too liberal, or that earnings have been practically
stationary in the twenty years.]

[Footnote 9: "Economic Journal," September 1904.]

[Footnote 10: If, however, the reader prefers to rely upon the larger
estimates he will find that the general conclusions of this and the
following chapter remain practically unaltered.]




 CHAPTER III
 DISTRIBUTION OF THE NATIONAL INCOME


Taking the population of the United Kingdom, 1908, at 44,500,000, and
the total income at £1,844,000,000, we get an average income per head of
about £40.

Thus, if the income of the nation were equally distributed amongst its
inhabitants, a family of five persons would enjoy an income of about
£200 per annum.

But how is the £1,840,000,000 actually divided amongst our people?
Contrasts between great riches and extreme poverty are every day
presented to our eyes. Can we do anything to reduce to a definite shape
our vague conceptions of riches and poverty?

Investigation of the material at our disposal has convinced me that it
is hopeless to do very much in the way of detailed classification of
incomes. Our census methods are ridiculously inadequate, and our
inquisition into individual incomes is but partial. It is possible,
however, to depict the subject of distribution in broad outlines with
considerable accuracy.

As we have already noticed, the £160 line at which assessment to income
tax begins, divides the national income into two almost equal parts.
Those persons who have more than £160 per annum enjoy an aggregate
income of £909,000,000. Those persons who have less than £160 per annum
enjoy an aggregate income of £935,000,000.

Let us endeavour to discover how many persons have an income of £160 and
upwards.

A certain amount of confused light is thrown on the subject by the
returns of the Inland Revenue Department. Under Schedules D and E, which
relate to profits from "Businesses, Concerns, Professions, Employment,
etc.," to use the official language,[11] the commissioners give us a
record of the number of individual assessments which are made. A summary
of these is as follows:—

 INCOME TAX. SCHEDULES D AND E.
 PROFITS FROM BUSINESSES, CONCERNS, EMPLOYMENTS, ETC.

                                    Number of    Gross Income
                                   Assessments.    Assessed.
 (_a_) Persons not employees         416,661     £109,900,000
 (_b_) Firms (number of partners
         not known)                   53,663       80,500,000
 (_c_) Public Companies (number
         of shareholders unknown)     37,937      291,000,000
 (_d_) Local Authorities              11,985       24,000,000
 (_e_) Bankers, Coupon dealers,
         etc., deducting tax on
         behalf of the Revenue     not available   33,100,000
 (_f_) Employees (Schedule D)        114,074       27,100,000
 (_g_) Employees (Schedule E)        471,564      109,600,000
                                   ---------     ------------
                                   1,105,884     £675,200,000
                                   =========     ============

We have thus a record of 1,100,000 _assessments_, but these assessments
do not always correspond to individual tax-payers.

Item _a_, "Persons not employees," gives us the fact that 416,661
individuals are taxed in respect of trading or professional profits.
Item _b_ reveals the existence of 53,663 firms with an unknown number of
partners. Item _c_ covers a great many large and small shareholders.
Item _d_ covers a large number of investors who have lent money to local
bodies. Item _e_ similarly covers many persons of property deriving
interest from various securities which are taxed "at the source." In
items _f_ and _g_ each assessment refers to an individual.

Further, these 1,100,000 assessments are made under Schedules D and E
only, which cover but £675,000,000 out of a total gross assessment to
income tax of £1,010,000,000 in 1908-9. There remain to consider
Schedules A, B, and C.

A moment's reflection will show that from these three schedules, which
deal respectively with realty, farmers' profits, and government
securities, we can expect little assistance. The assessments under
Schedule A are made upon tenants, who in the majority of cases are not
the actual and ultimate tax-payers. The number of assessments is
enormous; we do not know it, but it would not help us if we did, for it
has no relation whatever to the number of property owners. Under
Schedule B, as is explained elsewhere,[12] there are few income tax
payers. Under Schedule C certain interest from home and foreign
government securities is taxed, but not by assessment on the actual
tax-payers.

To sum up, the number of assessments to income tax is not known, and, if
it were known, it would be very much greater than the number of
individual tax-payers. Two-thirds of the income tax is collected, not
directly from the persons who owe the tax, but indirectly or "at the
source." It is possible for an individual tax-payer to appear more than
once in each schedule. With delightful humour the Inland Revenue
Commissioners give a hypothetical case of a composite income of £5000
per annum, made up as follows:—

 HYPOTHETICAL COMPOSITE INCOME

 Schedule.                                             Amount.
 A   Profits from the Ownership of Lands, Houses, etc.    £500
 B      "    from the Occupation of Lands                  200
 C      "    from Government Securities                    200
 D      "    as an Author                                  100
 D      "    as a Solicitor (partner in a firm the
               total profits of which are £5000)         2,500
 D      "    from Investments in a Public Company
               (total profits of the Company,
               £55,000)                                    500
 D      "    Investment in Municipal Stock                 100
 D      "    from Investments in Foreign Bonds
               (payable by coupons cashed in the
                United Kingdom)                            100
 D      "    Salary as a Land-Agent                        500
 E      "    Salary as a Borough Auditor                   300
                                                        ------
                                                        £5,000
                                                        ======

This hypothetical gentleman, who is at once a landlord, a farmer, a
fundholder, a man of letters, a lawyer, a shareholder, an investor in
foreign bonds, a land-agent, and a borough auditor, does great credit to
the sense of humour of the Inland Revenue authorities, and may be called
an extreme case. There are, however, tens of thousands of fortunate or
unfortunate persons who are at once business men, investors, and
landlords or houselords, and it is clear that if we are to arrive at the
actual number of individuals who earn or receive incomes of £160 per
annum or upwards we must proceed by other methods.

Before leaving the table on page 33, however, the reader should take
note of the low range of incomes it reveals, so far as individuals can
be detected in the list:

                                                  Per Annum.
 (_a_) The 416,661 persons not employees have an
         average income of                           £260
 (_f_) The 114,074 employees taxed under
         Schedule D have an average income of         230
 (_g_) The 471,564 employees taxed under
         Schedule E have an average income of         230

Many of these individuals have other sources of income beside their
earnings, but the low mean income of each class remains remarkable when
that fact is taken into account. Classes _f_ and _g_ cannot possibly
deceive the Income Tax Commissioners as to their incomes, for the law
compels employers to tell the authorities exactly what their employees
earn. With an average as low as £230 it is clear that the majority of
salaries lie between the exemption limit of £160 and £200 a year. The
under payment of the middle class stands revealed.

If the reader takes note of these facts he will be less surprised by the
results of the analysis to which we will now proceed.

We now turn to what information is available upon the subject of
individual incomes. So far as the poorer classes of income tax payers
are concerned, some clear light is afforded by the Income Tax
Commissioners in a table showing the number of persons claiming
abatements. This table, which is of great importance, is given on page
37.

These abatements are claimed by certain individuals who satisfy the
Commissioners that their entire incomes, _from every source_, lie
between £160 and £700 per annum. Thus we get definite information that
in 1908-9, 779,552 individuals declared their incomes to be within these
limits.

The record of the number of abatements is worth particular attention. In
1893-4 the limit of exemption was £150. In the following year the
exemption limit was raised £10 to £160, and for the first time an
abatement was allowed upon incomes up to £500. In 1898-9 abatements were
introduced on incomes up to £700.

 INDIVIDUAL INCOMES BETWEEN £160 AND £700
 Defined by claims for abatements

 ----------+--------------------------------------------------------------+
           |                         ABATEMENTS.                          |
           +----------+---------+-----------+---------+---------+---------+
           |          | £160 on |  £100 on  | £150 on | £120 on | £70 on  |
           |  £120 on | incomes |  incomes  | incomes | incomes | incomes |
           |incomes of|exceeding| exceeding |exceeding|exceeding|exceeding|
    Year.  | £150 and |£160 but | £400 but  |£400 but |£500 but |£600 but |
           |   under  |   not   |    not    |   not   |   not   |   not   |
           |   £400.  |exceeding| exceeding |exceeding|exceeding|exceeding|
           |          |  £400.  |   £500.   |  £500.  |  £600.  |  £700.  |
 ----------+----------+---------+-----------+---------+---------+---------+
  1893-4   |  509,397 |         |           |         |         |         |
  1894-5   |}         | 436,325 |  13,010   |         |         |         |
  1895-6   |}         | 449,003 |  20,375   |         |         |         |
  1896-7   |}         | 464,017 |  23,492   |         |         |         |
  1897-8   |}         | 481,306 |  26,056   |         |         |         |
  1898-9   |}Exemption| 495,791 |}          | 31,669  | 11,115  |  3,940  |
  1899-1900|}limit and| 515,680 |}          | 38,055  | 16,861  |  6,714  |
  1900-1   |}abatement| 530,014 |}Abatements| 42,123  | 20,520  |  8,647  |
  1901-2   |}altered--| 554,727 |}extended--| 46,967  | 23,899  | 10,490  |
  1902-3   |}see next | 575,444 |}   see    | 49,610  | 26,737  | 11,982  |
  1903-4   |} column  | 603,338 |}following | 51,922  | 27,777  | 12,879  |
  1904-5   |}         | 612,548 |} columns. | 53,384  | 29,227  | 13,483  |
  1905-6   |}         | 622,437 |}          | 56,305  | 31,100  | 14,886  |
  1906-7   |}         | 628,818 |}          | 58,704  | 33,150  | 16,607  |
  1907-8   |}         | 638,482 |}          | 64,560  | 39,166  | 22,272  |
  1908-9   |}         | 648,310 |}          | 66,523  | 40,721  | 23,998  |
 ----------+----------+---------+-----------+---------+---------+---------+

 ----------+---------+----------+--------
           |         |          |
           |         |          |
           |         |  Annual  | Rate of
           |  Total  | Increase | Income
           |Abatement|in No. of |  Tax.
    Year.  |Granted. |Abatements|Pence in
           |         | Granted. | the £.
           |         |          |
           |         |          |
 ----------+---------+----------+--------
  1893-4   | 509,397 |          |   7
  1894-5   | 449,335 |          |   8
  1895-6   | 469,378 |  20,043  |   8
  1896-7   | 487,509 |  18,131  |   8
  1897-8   | 507,362 |  19,853  |   8
  1898-9   | 542,515 |  35,153  |   8
  1899-1900| 577,310 |  34,795  |   8
  1900-1   | 601,304 |  23,994  |  12
  1901-2   | 636,083 |  34,779  |  14
  1902-3   | 663,773 |  27,690  |  15
  1903-4   | 695,916 |  32,143  |  12
  1904-5   | 708,642 |  12,726  |  12
  1905-6   | 724,728 |  16,086  |  12
  1906-7   | 737,279 |  12,551  |  12
  1907-8   | 764,480 |  27,201  |9 to 12
  1908-9   | 779,552 |  15,072  |9 to 12
 ----------+---------+----------+--------

It will be seen that since 1897-8 there has been a rapid increase in the
number of abated incomes. This has been caused not by the sudden growth
of incomes of this class, but by (1) the abatements being better
understood, and (2) heavier taxation making it better worth while for
individuals to claim the abatements. With the income tax at 1s. and 1s.
3d. it became worth while to fill up the form. We have, then, to thank
the late war, and the increased taxation which followed it, for putting
at our disposal a fairly complete record of the number of individual
incomes between £160 and £700. Probably the record is still incomplete,
and we must make an allowance for the fact. It is probable also that a
certain number of persons of small income who ought to pay tax escape
assessment. Both counts, however, are certainly well covered by adding a
small percentage to the number of individual incomes revealed by the
claimed abatements. In "Riches and Poverty," edition 1905, with the
actual claims made standing at about 700,000, I suggested that 50,000
would be a fair estimate of the number not claiming abatements or who
escaped taxation. But in five years some 80,000 new claims have been
made. Over 27,000 of these were made in 1907-8; this was probably due to
the clause in the Finance Act of 1907 compelling all employers, and not
companies alone, to divulge their employees' incomes, thus bringing to
light non-assessed incomes and causing claims for abatements by their
owners. My estimate of 50,000 I should, in view of this further
information, raise to 90,000 or 100,000, and at the present time I am
inclined to think that some 40,000 incomes between £160 and £700 must
still be regarded as either escaping tax or as being not reviewed in the
abatements table. We thus arrive at, in round figures, 820,000 as a near
approximation to the number of individuals who possess between £160 and
£700 per annum.

The aggregate income of the 779,000 persons granted abatements in 1908-9
is not given in the report. We can, however, estimate it closely, and
this is done in the following table, figures being added for the 40,000
persons whom we have assumed either to neglect to claim abatements or to
escape taxation altogether:—

 INDIVIDUAL INCOMES BETWEEN £160 AND £700 (1908)

                                              Estimated
                                             Aggregates.
 648,000 Incomes between £160 and £400.
      Average assumed to be £300             £194,400,000
 67,000 Incomes between £400 and £500.
      Average assumed to be £450               30,150,000
 41,000 Incomes between £500 and £600.
      Average assumed to be £550               22,550,000
 24,000 Incomes between £600 and £700.
      Average assumed to be £650               15,600,000
 40,000 (balance of estimated total of
      820,000) Incomes of persons who
      either neglect to claim abatements or
      altogether escape taxation. Average
      assumed to be £300                       12,000,000
                                             ------------
           820,000 Incomes aggregate         £274,700,000

To proceed, we see that some 820,000 persons enjoy an estimated
aggregate income of £274,700,000 per annum. But the total income of the
income tax paying classes we have already seen to be £909,000,000. There
remains therefore, to form an estimate of the number of persons who
enjoy the balance of £634,000,000.

Our best clue to these persons, who individually possess incomes
exceeding £700 a year, is to be found in the number of rich men's houses
in the United Kingdom.

In Great Britain an Inhabited House Duty is levied upon the occupiers of
all houses and residential business premises of an annual value
exceeding £20. The duty being graduated, we obtain records of the houses
of Great Britain classified according to their rentals. The duty is not
levied in Ireland.

The Inland Revenue report gives us the following interesting record.

 GREAT BRITAIN ONLY: PRIVATE DWELLING-HOUSES OF £20 AND UPWARDS:
 1908-9

   Class of House.   Number of  Class of House.  Number of
                      Houses.                     Houses.
 £ 20 and under £25   384,583  | £ 20 and over   1,473,214
   25     "      30   256,906  |   25    "       1,088,631
   30     "      41   414,663  |   30    "         831,725
   41     "      50   104,949  |   41    "         417,062
   50     "      61   125,051  |   50    "         312,113
   61     "      80    61,498  |   61    "         187,062
   80     "     100    38,898  |   80    "         125,564
  100     "     150    44,953  |  100    "          86,666
  150     "     200    16,563  |  150    "          41,713
  200     "     300    13,649  |  200    "          25,150
  300     "     400     5,207  |  300    "          11,501
  400     "     500     2,416  |  400    "           6,294
  500     "     600     1,187  |  500    "           3,878
  600     "     700       723  |  600    "           2,691
  700     "     800       472  |  700    "           1,968
  800     "     900       323  |  800    "           1,496
  900     "    1000       176  |  900    "           1,173
 1000 and over            997  | 1000    "             997

The figures refer to Great Britain only, but the number of income tax
payers in Ireland is small, the payment of income tax in that country,
in 1908, being but £996,000 out of £31,860,000 paid by the United
Kingdom as a whole.

If there were a constant ratio between incomes and rentals, and if every
private house contained but one family, the record of houses would be a
sufficient clue to the number of income tax payers; but there is no such
correspondence, and a considerable proportion of the houses are let in
tenements.

In London persons with an income over £160 a year rarely pay a rental
less than £30. In the provinces a rental as low as £25 may sometimes
represent an income tax payer. Many £25, £30, and even £40, and more
houses in London and elsewhere are tenement dwellings. Some notorious
London slums consist of houses of about £30 annual value. In West London
6s. a week, £15, 12s. a year, commands two poor rooms.

Some residential shops, etc., not included in the above list, house
income tax payers, but usually the well-to-do shopkeeper lives away from
his shop, the upper part of which is let to poorer persons.

These considerations make it impossible to deduce the aggregate of
income tax payers from the house record, but it is a suggestive fact
that in Great Britain there were in 1908 only 1,088,631 private houses
of £25 and over. It is clear that the number of persons with incomes
exceeding £160 a year cannot much exceed that figure, even when
allowance is made for the Irish houses not included in the record.

As we have ascertained from the income tax abatement claims the
approximate number of income tax payers between £160 and £700 a year, we
are enabled to neglect the difficult relation of small rentals to
incomes, and to concentrate our attention upon a simpler and more
satisfactory problem, the number of houses likely to be in the
occupation of persons with upwards of £700 a year.

It is submitted that persons in the Metropolis possessing an income of
over £700 per annum are unlikely to occupy private dwelling-houses of an
annual value below £60. Indeed, London householders with incomes below
£700 sometimes pay higher rentals than £60. Against this fact we must,
however, place the existence of many blocks of flats of high rentals
which pay Inhabited House Duty, not per flat, but per block. I think we
may balance the one consideration against the other, and assume that the
private dwelling-houses in London exceeding £60 in annual value roughly
correspond to the number of persons with £700 per annum and upwards.

In the provinces and Scotland rentals are lower, and I think we may
safely draw the line at £50, in view of the fact that we are excluding,
as in London, all residential shops, public houses, etc.

The number of houses in Great Britain of the classes referred to is as
follows:—

 PRIVATE DWELLING-HOUSES IN GREAT BRITAIN LIKELY TO BE IN THE OCCUPATION
 OF PERSONS WITH £700 PER ANNUM AND UPWARDS (1908-9)

 Annual Value.  Metropolis.  Rest of England.  Scotland.
   £50 to  £61                    76,141        10,739
    61  "   80    18,502          37,075         5,921
    80  "  100    10,033          24,875         3,988
   100  "  150    12,593          28,411         3,949
   150  "  200     5,110          10,075         1,378
   200  "  300     5,541           7,427           681
   300  "  400     2,645           2,437           125
   400  "  500     1,408             960            48
   500  "  600       748             424            15
   600  "  700       504             210             9
   700  " 1000       746             212            13
 £1000 and over      826             145            26
                  ------         -------        ------
                  58,656         188,392        26,892
                  ======         =======        ======

If the reader has not before examined the subject he will probably be
exceedingly surprised to find that there are so few rich men's houses,
and therefore so few rich men, in Great Britain. In England and Wales
there are 247,048 houses and in Scotland only 26,892 houses likely to
contain persons with incomes exceeding £700 per annum. There are nine
times as many such houses in England as in Scotland. This corresponds
closely to the income tax assessments. The yield of the income tax in
Scotland is but one-ninth or one-tenth of the yield in England.

We have to add an estimate for Ireland. The yield of the income tax in
Ireland is very small, about one-third of the yield of Scotland. If,
then, we add 9000 houses for Ireland, we shall probably be near the
truth.

We thus get the following figures for the whole of the United Kingdom,
making our figures round:

 PRIVATE DWELLING-HOUSES IN THE UNITED KINGDOM PROBABLY CORRESPONDING
 TO INCOME TAX PAYERS WITH £700 AND UPWARDS PER ANNUM (1908-9)

                            Number.
 London                      58,700
 Rest of England and Wales  188,400
 Scotland                    27,000
 Ireland                      9,000
                            -------
           Total            283,100
                            =======

We can now arrive at an estimate of the total number of income tax
payers. It is as follows:

 INCOME TAX PAYERS OF THE UNITED KINGDOM (1908-9)

        Incomes.          Number.
 Between £160 and £700    820,000
 Exceeding £700           280,000
                        ---------
           Total        1,100,000
                        =========

I think that this estimate of 1,100,000 may be accepted with confidence
as a near approximation to the actual number of individual incomes which
exceeded £160 per annum in 1908-9.

Taking 1,100,000 as a trustworthy figure, we are in a position to show
how the population of the United Kingdom is divided by the line of
income tax exemption. If we assume that each of the 1,100,000 persons is
the head of a family of five persons, we get, by obvious
calculation, the following result:

 THE EQUATOR of BRITISH INCOMES

 +----------------------------------+
 |                                  |
 |      £909,000,000 per annum      |
 |             taken by             |
 |         5,500,000 people         |
 |having Incomes of £160 and upwards|
 |            per annum             |
 |                                  |
 +----------------------------------+
 |                                  |
 |      £935,000,000 per annum      |
 |             taken by             |
 |        39,000,000 people         |
 |    having Incomes below £160     |
 |            per annum             |
 |                                  |
 +----------------------------------+

_In 1908 the Income Tax Exemption limit of £160 per annum divided the
National Income into two almost equal parts._

 DISTRIBUTION OF THE NATIONAL INCOME AS BETWEEN THOSE WITH MORE AND
 THOSE WITH LESS THAN £160 PER ANNUM (1908-9)

                                Number.       Income.
 Persons with incomes of
   over £160 and their
   families (1,100,000 × 5)     5,500,000    £909,000,000
 Persons with incomes of less
   than £160 and their
   families (total population
   less 5,500,000)             39,000,000     935,000,000
                               ----------     -----------
                               44,500,000  £1,844,000,000
                               ==========  ==============

These striking facts are expressed in diagrammatic form on page 45.
Broadly speaking, it is shown that _one-half of the entire income of the
United Kingdom is enjoyed by about 12 per cent. of its population_.

But a still more extraordinary conclusion emerges from the facts we have
examined. Of the 1,100,000 income tax payers, 820,000 are persons with
incomes over £160 and not exceeding £700. The aggregate income of these
820,000 persons we estimated at £275,000,000 (page 39), and the estimate
is a liberal one. By subtraction from the total income of the income tax
classes (£909,000,000) we see that the 280,000 rich persons with over
£700 per annum possess an aggregate income of £634,000,000 per annum.
The facts are clearly shown in the following table and in the diagram
which forms the frontispiece of this volume:

 RICHES, COMFORT, AND POVERTY, 1908

 Distribution of the National Income as between (1) those with £700 per
 annum and upwards; (2) those with £160 to £700 per annum; and (3) those
 with not more than £160 per annum.

                                Number.       Income.
 RICHES

   Persons with Incomes of
     £700 per annum and
     upwards and their
     families, 280,000 × 5     1,400,000    £634,000,000

 COMFORT

   Persons with Incomes
     between £160 and £700
     per annum and their
     families, 820,000 × 5
                               4,100,000     275,000,000

 POVERTY

   Persons with Incomes of
     less than £160 per
     annum and their
     families                 39,100,000     935,000,000
                              ----------  --------------
                              44,500,000  £1,844,000,000
                              ==========  ==============

Thus, to the conclusion that one-half of the entire income of the nation
is enjoyed by but about 12 per cent. of its population, we must add
another even more remarkable, viz.: that _more than one-third of the
entire income of the United Kingdom is enjoyed by less than
one-thirtieth of its people_.

The broad outlines thus drawn I shall not attempt to amplify, for, as
will be gathered from the nature of the available material, such
amplification would be of little value. Nor would any useful purpose be
served by any arbitrary division of our population into "upper,"
"middle," and "working" classes. The three divisions of population at
which we have arrived, although arbitrary, have naturally arisen in the
course of our inquiry, and with some propriety we may term them
respectively the Rich Classes, the Comfortable Classes and the Poor
Classes.

The great fact emerges that the enormous annual income of the United
Kingdom is so badly distributed amongst us that, out of a population of
44,500,000, 39,000,000 are "poor" in the sense that their incomes do not
exceed £160 a year. It is no longer incredible that in a population of
44,500,000 people, enjoying an aggregate income of £1,844,000,000, there
exist "30 per cent. living in the grip of perpetual poverty." When we
realize that 39,000,000 out of our 44,500,000 are poor, measured by a
very modest standard of income, the statistics of Booth and Rowntree
cease to surprise us. In analysis, the United Kingdom is seen to contain
a great multitude of poor people, veneered with a thin layer of the
comfortable and the rich.

It will be of interest to compare the above statistics with those which
appeared in "Riches and Poverty," edition 1905. The statement then
presented was based on the Inland Revenue figures of 1903-4, and the
frontispiece bore the heading "British Incomes in 1904." For the
purposes of comparison, the 1905 edition figures may be attributed to
1903, since the fiscal year 1903-4 is as to nine months in 1903.
Similarly, the figures arrived at in the above pages may be dated 1908,
an interval of five years separating the two investigations.

The following is the comparison arrived at, after adjustment of the
earlier figures by raising the estimated number of income tax payers in
1903 from 1,000,000 to 1,050,000, for the reasons given on page 38.

 DISTRIBUTION OF BRITISH INCOMES

 ---------------------------+-----------------------+---------------------
                            |         1903          |        1908
                            |Figures of "Riches     |
                            |  and Poverty," 1905   |
                            |  edition, adjusted[13]|
                            |  by raising estimate  |
      RANGE OF INCOME.      |  of Income            |
                            |  Tax payers from      |
                            |  1,000,000 to         |
                            |  1,050,000.           |
                            +------------+----------+------------+--------
                            | Number of  |          | Number of  |
                            | Persons.   | Income.  | Persons.   | Income.
 ---------------------------+------------+----------+------------+--------
 Persons with over £700     |            | Million£ |            |Million£
   a year and their families|  1,250,000 |   570    | 1,400,000  |   634
                            |            |          |            |
 Persons with over £160,    |            |          |            |
   but not over £700, and   |            |          |            |
   their families           |  4,000,000 |   260    | 4,100,000  |   275
                            |            |          |            |
 Persons with not more      |            |          |            |
   than £160 and their      |            |          |            |
   families                 | 37,250,000 |   880    | 39,000,000 |   935
 ---------------------------+------------+----------+------------+--------
         Totals             | 42,500,000 |  1710    | 44,500,000 |  1844
 ---------------------------+------------+----------+------------+--------

The result is to show that, in the five years, the wealthy classes have
increased their share of the national dividend, both actually and
relatively. We shall later find this conclusion confirmed by a
comparison of the respective growths of taxed incomes and wage rates.

The stationariness of wages is a fact which closely demands the
attention of the nation.

[Footnote 11: For a fuller explanation of these Schedules reference
should be made to Chapter 21.]

[Footnote 12: See Chapter 21.]

[Footnote 13: The change in the proportions through the adjustment is
insignificant and negligible, as will be seen by reference to the
original estimate.]




 CHAPTER IV
 THE ESTATES OF RICH AND POOR


Our review of the extraordinary facts relating to what has been called
with grim humour the "National" income, prepares us for an examination
of the estates of rich and poor.

Legal distribution of the property of deceased persons can only be made
upon payment of certain taxes, commonly called death duties, and legally
known as the Estate, Legacy and Succession duties. The nature and extent
of these duties I shall discuss in a later chapter. At this point I am
only concerned with the facts which are brought to light in the
collection of the chief death duty, the Estate duty, as since varied, of
the great 1894 Budget[14] of the late Sir William Harcourt.

The principle of graduation was very properly applied to this duty, and
accordingly we obtain, through the reports of the Inland Revenue
Commissioners, an exceedingly valuable record, not only of the total
value of the property which is "left"—it is a suggestive term—by the
deceased, but of the classification of that property in large and small
estates.[15]

The Estate Duty is payable upon all estates which exceed £100 net (net,
that is, after the discharge of all debts due by the deceased) and the
Inland Revenue authorities undoubtedly pass under review the greater
part of the property which is thus legally taxable. There must be a
certain leakage, of course, for such heritages as household furniture,
cash in money or notes, bearer bonds, and so forth, are sometimes
divided up amongst the relatives of a departed property owner without
account to the State, and it is difficult properly to assess unquoted
securities, goodwills, trade stocks, furniture, etc. Moreover, large
sums pass _inter vivos_. How much property thus escapes official
observation we do not know, but it is probably a considerable amount.

 PROPERTY LEFT AT DEATH IN THE UNITED KINGDOM. NUMBERS AND VALUES OF
 ESTATES BROUGHT TO THE NOTICE OF THE INLAND REVENUE COMMISSIONERS IN THE
 FIVE YEARS 1904-5 TO 1908-9.

 ------------------------------------------+----------------+----------------+
                                           |                |                |
              CLASS OF ESTATE.             |    1904-5.     |    1905-6.     |
                                           |                |                |
 ------------------------------------------+-------+--------+-------+--------+
                                           |       | Value. |       | Value. |
                                           |Number.|Mill. £.|Number.|Mill. £.|
 A. _Estates not Dutiable_:                |       |        |       |        |
      Bankrupt Estates                     |  1,628|        |  1,552|        |
      Estates not exceeding £100 net       | 15,931|  0.9   | 15,462|   0.9  |
                                           +-------+--------+-------+--------+
                Total A                    | 17,559|  0.9   | 17,014|   0.9  |
                                           +-------+--------+-------+--------+
 B. _Estates Liable to Duty_:              |       |        |       |        |
      Small Estates:—                      |       |        |       |        |
        (1) Not exceeding £300 gross       | 18,505|   3.5  | 18,262|   3.5  |
        (2) Between £300 and £500 gross    |  8,846|   3.6  |  8,907|   3.6  |
      _Net Capital Values_:—               |       |        |       |        |
        Exceeding   £100 but not over £500 |  5,853|   2.5  |  5,728|   2.5  |
            "        500      "      1,000 | 10,098|   8.4  |  9,894|   8.1  |
            "      1,000      "     10,000 | 16,704|  60.4  | 16,130|  58.8  |
            "     10,000      "     25,000 |  2,295|  41.8  |  2,254|  40.4  |
            "     25,000      "     50,000 |    883|  34.6  |    931|  36.4  |
            "     50,000      "     75,000 |    288|  18.9  |    277|  19.5  |
            "     75,000      "    100,000 |    161|  15.0  |    139|  12.1  |
            "    100,000      "    150,000 |    128|  14.0  |    133|  18.2  |
            "    150,000      "    250,000 |     89|  21.6  |     91|  18.6  |
            "    250,000      "    500,000 |     44|  17.6  |     70|  23.9  |
            "    500,000      "  1,000,000 |     23|  17.2  |     21|  13.1  |
            "  1,000,000      "  2,000,000 |}      |        |       |        |
            "  2,000,000      "  3,000,000 |}     1|   5.9  |      8|  13.5  |
            "  3,000,000                   |}      |        |       |        |
                                           +-------+--------+-------+--------+
                Total B                    | 63,918| 265.1  | 62,845| 272.2  |
                                           +-------+--------+-------+--------+
      _Total Estates_                      | 81,477| 266.0  | 79,859| 273.1  |
 ------------------------------------------+-------+--------+-------+--------+

 +----------------+----------------+----------------+----------------
 |                |                |                |   Average of
 |    1906-7.     |    1907-8.     |    1908-9.     |   1904-5 to
 |                |                |                |    1908-9.
 +-------+--------+-------+--------+-------+--------+-------+--------
 |       | Value. |       | Value. |       | Value. |       | Value.
 |Number.|Mill. £.|Number.|Mill. £.|Number.|Mill. £.|Number.|Mill. £.
 |       |        |       |        |       |        |       |
 |  1,704|        |  1,663|        |  1,802|        |  1,670|
 | 16,039|   0.9  | 16,475|   0.9  | 15,875|   0.9  | 15,956|    0.9
 +-------+--------+-------+--------+-------+--------+-------+--------
 | 17,743|   0.9  | 18,138|   0.9  | 17,677|   0.9  | 17,626|    0.9
 +-------+--------+-------+--------+-------+--------+-------+--------
 |       |        |       |        |       |        |       |
 |       |        |       |        |       |        |       |
 | 18,995|   3.7  | 19,340|   3.7  | 19,481|   3.7  | 18,917|    3.6
 |  9,311|   3.7  |  9,736|   3.9  |  9,640|   3.8  |  9,288|    3.7
 |       |        |       |        |       |        |       |
 |  5,990|   2.6  |  6,374|   3.0  |  6,422|   2.9  |  6,074|    2.7
 | 10,516|   8.6  | 10,782|   9.1  | 10,729|   9.1  | 10,404|    8.6
 | 17,098|  61.6  | 17,356|  65.4  | 17,266|  64.5  | 16,910|   62.1
 |  2,473|  42.5  |  2,341|  40.3  |  2,328|  40.4  |  2,338|   41.0
 |    909|  34.9  |    908|  35.5  |    918|  34.4  |    910|   35.1
 |    314|  19.6  |    278|  19.8  |    297|  19.5  |    291|   19.4
 |    127|  11.3  |    144|  14.0  |    155|  13.9  |    145|   13.2
 |    159|  19.2  |    109|  16.4  |    136|  16.8  |    133|   16.9
 |    104|  22.4  |     90|  18.7  |     78|  17.3  |     90|   19.7
 |     58|  21.3  |     51|  20.1  |     50|  20.1  |     54|   20.6
 |     18|  12.9  |     17|  16.6  |     15|   8.3  |     19|   13.6
 |       |        | {    4|   4.6  |      6|   9.2  | }     |
 |     10|  34.1  | {    1|   2.6  |      1|   2.2  | }    7|   18.1
 |       |        | {    2|   8.6  |      2|   5.0  | }     |
 +-------+--------+-------+--------+-------+--------+-------+--------
 | 66,082| 298.5  | 67,533| 282.3  | 67,524| 270.9  | 65,580|  278.3
 +-------+--------+-------+--------+-------+--------+-------+--------
 | 83,825| 299.4  | 85,671| 283.2  | 85,201| 271.8  | 83,206|  279.2
 +-------+--------+-------+--------+-------+--------+-------+--------

Before setting out particulars of the numbers and values of the estates
revealed through the operation of the Estate Duty, it will be well to
remind the reader of the number of deaths per annum in the United
Kingdom. In the years 1899 to 1903, the figures were as follows:—

 DEATHS IN UNITED KINGDOM

 Year.        Deaths.
 1904         707,000
 1905         670,000
 1906         681,000
 1907         679,000
 1908         677,000

 Average Deaths per annum 1904-1908 = 683,000.

We see that the mean number of deaths in the five years 1904-8 was just
over 680,000 per annum.

We now inquire, as to these 680,000 persons who die in the United
Kingdom in a year, how many leave property of sufficient value to be
brought under the notice of the tax-gatherers, and what is the value of
the property left by them.

These questions are answered in considerable detail by the table on
pages 52 and 53, which shows, for each of the last five financial years
of which we have record, the numbers and values of the estates reviewed.

It will be seen that, taking the average of these five years, we get the
following summary facts:—

 Deaths per annum                                       683,000
 Sworn Estates per annum, number                         83,206
 Estates of less value than £100 net each per annum      17,626
 Estates exceeding £100 net each per annum               65,580
 Net value of Dutiable Estates per annum           £278,300,000

The question now arises, what is the average value of the tiny estates
which are not the subject of affidavits? What is the amount of property
per head left by the poor people who form the great majority of the
inhabitants of our rich country? There are the few humble sticks of
furniture, and the small sums invested in savings banks, friendly
societies, trade unions, building societies, etc., What are these worth?

The Chief Registrar of Friendly Societies, Mr Stuart Sim, in his latest
Report (No. 105 of 1909), p. 44, gives us the Summary of Registered
Provident Societies and Thrift Institutions, which appears on page 56.

The total funds, £439,000,000, represent the savings of some millions of
people, but the total number of "members," nearly 34,000,000, must not
be taken to stand for so many individuals. There is, of course, much
duplication in the membership, one individual being sometimes member of
two, three, four, or more societies or clubs. A carpenter, earning 30s.
a week, may be a member of his trade union, member of two friendly
societies, have a few pounds in the Post Office Savings Bank, and be a
depositor in a building society, thus figuring as "five members" in the
list.

The list is not complete, for it does not cover the industrial insurance
companies, which waste in costly management so large a part of the sums
paid them, and unregistered friendly societies and slate clubs.

 THRIFT INSTITUTIONS: SUMMARY OF REGISTERED PROVIDENT SOCIETIES
 AND CERTIFIED AND POST OFFICE SAVINGS BANKS AT DEC. 31st, 1907.

 --------------------------------------+--------+-----------+-----------
         NATURE OF INSTITUTION.        | No. of |  No. of   |  Funds.
                                       |Returns.| Members.  |
 --------------------------------------+--------+-----------+-----------
 Building Societies:                   |        |           |     £
   Incorporated Societies              |  1,852 |    565,047| 57,300,118
   Unincorporated Societies            |     58 |     58,000| 15,989,111
                                       +--------+-----------+-----------
                                       |  1,910 |    623,047| 73,289,229
                                       +========+===========+===========
 Friendly Societies, etc.:             |        |           |
   Ordinary Friendly Societies         |  6,563 |  3,416,869| 19,346,567
   Societies having Branches           | 20,640 |  2,710,437| 25,610,365
   Collecting Friendly Societies       |     55 |  9,010,574|  9,946,447
   Benevolent Societies                |     73 |     29,716|    337,393
   Working Men's Clubs                 |  1,036 |    272,847|    381,463
   Specially Authorised Societies      |    162 |     70,980|    532,717
   Specially Authorised Loan Societies |    618 |    141,850|    897,784
   Medical Societies                   |     96 |    313,755|     65,513
   Cattle Insurance Societies          |     60 |      4,029|      8,570
   Shop Clubs                          |      7 |     12,207|      1,349
                                       +--------+-----------+-----------
                                       | 29,310 | 15,983,264| 57,128,168
                                       +========+===========+===========
 Co-operative Societies:               |        |           |
   Industries and Trades               |  2,267 |  2,461,028| 53,788,917
   Businesses                          |    399 |    108,550|    984,680
   Land Societies                      |    146 |     18,631|  1,619,716
                                       +--------+-----------+-----------
                                       |  2,812 |  2,588,209| 56,393,313
                                       +========+===========+===========
 Trade Unions                          |    652 |  1,973,560|  6,424,176
                                       +--------+-----------+-----------
 Workmen's Compensation Schemes (1)    |     59 |     99,371|    164,560
                                       +--------+-----------+-----------
 Friends of Labour Loan Societies      |    248 |     33,576|    260,905
                                       +--------+-----------+-----------
   Total Registered Provident Societies| 34,991 | 21,301,027|193,660,351
                                       +========+===========+===========
                                       | Banks. |Depositors.| Deposits.
 Railway Savings Banks                 |     18 |     64,126| 5,865,072
 Trustee Savings Banks (including      |        |           |
   Investments in Stock)               |    222 |  1,780,214| 61,729,588
 Post Office Savings Bank (including   |        |           |
   Investments in Stock)               | 15,166 | 10,692,555|178,033,974
                                       +--------+-----------+-----------
     Total Certified and Post Office   |        |           |
       Savings Banks                   | 15,406 | 12,536,895|245,628,634
                                       +========+===========+===========
           Grand Total                 | 50,397 | 33,837,922|439,288,985
 --------------------------------------+--------+-----------+-----------

 (1) The figures given include 64,700 members, and £105,475 funds
 undistributed, at 31st December 1907, in respect of Schemes whose
 Certificates had expired or were revoked at that date.

 _Note._—Where Returns are made to a date other than 31st December the
 particulars at the nearest date available are given.

On the other hand, it would be a profound mistake to regard the sum
shown—£439,000,000—as belonging entirely to manual workers. No small
part of the funds of building societies, savings banks, etc., belong to
the middle classes, and even professional men do not disdain to purchase
houses through building societies.

Additions must be made for the tiny stocks of little shopkeepers and the
"furniture" in poor houses, but on the latter account those who know
what the furniture of the poor usually consists of will make modest
estimates of its value. Its exchange value is almost negligible, and its
value in use is that it is a factor in the sordid discomfort of the poor
home, being in that respect not unworthy of the ugly walls which enclose
it.

Altogether it is probable that we may estimate the total property of the
poor at less than £500,000,000 in 1908, and regard this sum as belonging
chiefly to a great mass of people, forming by far the greater part of
the 39,000,000 persons under the line of Income Tax exemption. Probably
about £15,000,000 of this sum passes at death per annum, and only a
small part of it, chiefly the house property, comes under review by
Somerset House.

With the facts we have reviewed we are in a position to arrive at a just
idea of the respective proportions of rich and poor estates. On page 59
will be found a table which shows the nature of those proportions. I
have taken the averages of the past five years arrived at in the tables
on pages 52-53, and have made a rough division between rich and poor by
drawing the line at the possession of property worth £1,000 net capital
value.

To give a true idea of the division of deaths in the two classes, it is
necessary to make allowance in the rich class for the deaths of the
children of the well-to-do. It may be taken that, in addition to the
20,000 adults who die every year possessed of estates worth upwards of
£1,000, 7,500 children and young persons die in well-to-do homes. I then
place in the upper part of the table the number of deaths remaining
after deduction from 683,000 of all the other figures in the table.

In arriving at the amount of property left by the poor I have assumed
that of the £15,000,000 of savings estimated as passing at death per
annum, £5,000,000 does actually come under review in the first few lines
of the table on pages 52-53. The balance, £10,000,000, I have brought
into the account as corresponding to the 592,294 deaths in the first
line of the table on p. 59.

With these explanations the table will speak for itself, and its tale is
a startling one. We see that, drawing the line between the rich and poor
arbitrarily at the possession of £1,000, of the 683,000 persons who die
in a year, 28,397 die rich or very rich, leaving £259,700,000, while
654,603 die poor or very poor, leaving between them only £29,500,000.

The figures over £10,000 are worth special attention:—

 FORTUNES OVER £10,000 EACH (NET)

 Year.   Number.     Value.
 1904-5   3,912   £186,600,000
 1905-6   3,924    195,700,000
 1906-7   4,172    218,200,000
 1907-8   3,945    197,200,000
 1908-9   3,986    187,100,000

_Year by year, with the regularity of the seasons, about four thousand
persons die leaving between them about £200,000,000 out of total estates
declared to be worth about £300,000,000._

 PROPERTY LEFT BY 683,000 PERSONS
 Average of 1904-5 to 1908-9

 _POOR AND VERY POOR_
                                  Deaths.  Property Left.
   Died with so little property
     that no affidavit was sworn
     (Property estimated at
     £10,000,000, see p. 58)      592,294   £10,000,000
   Died Bankrupt                    1,670
   Died leaving less than £100
     net                           15,956       900,000
   Died leaving between £100
     and £500 net                  34,279    10,000,000
   Died leaving between £500
     and £1,000 net                10,404     8,600,000
                                  -------   -----------
       Total Poor and Very Poor   654,603   £29,500,000

 _RICH AND VERY RICH_

   Died under age without
     property                       7,500
   Died leaving between £1,000
     net and £10,000 net           16,910    62,100,000
   Died leaving between £10,000
     net and £1,000,000 net         3,980   179,500,000
   Died millionaires                    7    18,100,000
                                  -------  ------------
       Total Rich and Very Rich    28,397  £259,700,000
                                  -------  ------------
       TOTAL RICH AND POOR        683,000  £292,500,000
                                  =======  ============

170 persons per annum die worth £150,000 each; 80 die worth over
£250,000 each; 26 die worth over £500,000 each; and 7 die worth about
£2,500,000 each.

Thus, in an average year, 26 persons die leaving between them far more
than is possessed by 654,000 poor persons who die in one year. Again, in
a single average year, the wealth left by the few rich people who die
approaches in amount the aggregate property possessed by the whole of
the living poor.

[Footnote 14: Finance Act, 1894 (57 & 58 Vict. c. 30).]

[Footnote 15: It was in the first edition of this work that attention
was first drawn to this new source of information.]




 CHAPTER V
 THE NATIONAL ACCUMULATIONS


We pass from the consideration of the property which is left at death in
a single year to the estimation of the value of the total capital stock
of the United Kingdom.

We can proceed by two different methods. We can argue from the property
left by those who die in a single year to the property possessed by the
living, or we can capitalize that part of the national income which is
derived from property. The former method was used as long ago as the
'fifties by Porter in his "Progress of the Nation." The second method
has been employed by many statisticians, notably by Sir Robert Giffen.

In the following table I have formed an estimate of the accumulated
wealth of the nation at the present time, dividing it into three
categories:—

(1) "National" property in the proper sense, i.e. property in the
possession of the Imperial Government or Local Authorities.

(2) Land and Capital Stock within the United Kingdom owned by private
individuals, and

(3) Property in foreign countries and British Possessions owned by
persons in the United Kingdom.

 ACCUMULATED WEALTH OF THE UNITED KINGDOM: 1908
 [This table should not be quoted without the context]

 (1) PUBLIC PROPERTY (IMPERIAL AND LOCAL):—

   (_a_) Imperial Property                       £550,000,000
   (_b_) Local Property                         1,370,000,000
                                               --------------
                                               £1,920,000,000
   Subtract (1) National Debt
   (£762,000,000) and (2) Local
   Loans (£600,000,000)                         1,362,000,000
                                               --------------
                                                 £558,000,000
                                               ==============

 (2) PROPERTY IN THE UNITED KINGDOM OWNED BY PRIVATE INDIVIDUALS:—

   (_c_) Agricultural Lands and the Farmhouses,
         Buildings, Fences, Roads,
         Ditches, etc., thereof. Profits
         under Schedule A of Income
         Tax (1908-9) £52,000,000
         capitalized at 20 years' purchase     £1,040,000,000

   (_d_) Houses, Business Premises, etc.,
         and their Lands. Profits under
         Schedule A of Income Tax
         (1908-9) £217,000,000 capitalized
         at 15 years' purchase                  3,255,000,000

   (_e_) Other Profits from Land under
         Schedule A of Income Tax
         (1908-9) £1,300,000 capitalized
         at 25 years' purchase                     32,000,000

   (_f_) Farmers' Capital. Estimated at
         £6 per acre for 47,000,000 acres
         under cultivation                        282,000,000

   (_g_) The National Debt (neglecting
          the small amount held abroad)           762,000,000

   (_h_) Local Debts                              600,000,000

   (_i_) Capital of Miscellaneous Trades:—

        (1) Profits of Miscellaneous
            Businesses, Professions, etc.,
            taxed under Schedule D of
            Income Tax in 1908-9 (allowing
            for profits assumed to
            escape taxation £60,000,000,
            see p. 16), and deducting
            for profits from abroad
            (£25,000,000, see p. 16), were
            £444,000,000. One-half of
            this sum (£222,000,000)
            assumed to be from capital
            and capitalized at 10 years'
            purchase                            2,220,000,000

        (2) Profits of small traders who
            are not Income Tax payers
            are in part derived from
            capital                               100,000,000

   (_j_) Railways. Profits taxed under
         Schedule D 1908-9 =
         £43,000,000 capitalized at 25
         years' purchase                        1,075,000,000

   (_k_) Mines and Quarries. Profits taxed
         under Schedule D 1908-9 =
         £18,000,000 capitalized at 5
         years' purchase                           90,000,000

   (_l_) Gasworks. Profits taxed under
         Schedule D 1908-9 = £7,800,000
         capitalized at 20 years' purchase        156,000,000

   (_m_) Ironworks. Profits taxed under
         Schedule D 1908-9 = £5,100,000
         capitalized at 5 years' purchase          25,000,000

   (_n_) Waterworks. Profits taxed under
         Schedule D 1908-9 = £6,200,000
         capitalised at 20 years' purchase        124,000,000

   (_o_) Canals. Profits taxed under
         Schedule D 1908-9 = £4,200,000
         capitalized at 20 years' purchase         84,000,000

   (_p_) Markets, Tolls, Fishings, Cemeteries,
         etc. Profits taxed under
         Schedule D 1908-9 = £1,400,000
         capitalized at 20 years' purchase         28,000,000

   (_q_) Other Interests and Profits taxed
         under Schedule D 1908-9 =
         £7,700,000 capitalized at 20
         years' purchase                          154,000,000

   (_r_) Furniture, Works of Art, etc., in
         Private Houses. Assumed to be
         one-sixth of the value of "Houses"
         in Schedule A (see item _d_)             540,000,000
                                              ---------------
                                              £10,567,000,000

 (3) PROPERTY IN PLACES ABROAD OWNED BY PERSONS IN THE UNITED KINGDOM

   (_s_) Interest from Indian, Colonial and
         Foreign Government Securities
         taxed under Schedule C 1908-9
         = £32,200,000 capitalized at
         25 years' purchase                      £805,000,000

   (_t_) Interest from Indian, Colonial and
         Foreign Securities, including
         Railways, taxed under Schedule D
         1908-9 = £56,600,000
         capitalized at 20 years' purchase      1,132,000,000

   (_u_) Other Profits from abroad derived
         from property assumed to have
         a capital value of about                 700,000,000
                                               --------------
                                               £2,637,000,000
                                               ==============
 SUMMARY

  (1) Public Property                            £558,000,000
  (2) Property in the United Kingdom
      owned by Private Individuals             10,567,000,000
  (3) Property in places abroad owned by
      persons in the United Kingdom             2,637,000,000
                                              ---------------
                                              £13,762,000,000
                                              ===============

To the explanations given in the table itself some further notes may be
added. For the greater part, the estimates are based, it will be seen,
upon Income Tax statistics. The items thus arrived at are near
approximations to the truth. The table also contains some necessarily
rough estimates of uncertain items.

The matter of public property is an exceedingly difficult one to deal
with. In item _a_ I have estimated that our warships and stores of naval
and military material, Imperial shipyards, dockyards and arsenals,
public offices, galleries, museums and their contents, government
factories and workshops and their plant, post office, telegraph and
telephone capital, etc., are worth £550,000,000 at a conservative
estimate. The capital value of all our ships, allowing for depreciation,
cannot be less than £150,000,000, and naval works and material must be
worth fully £80,000,000. Army material and military works are of less
value, but can scarcely be estimated at less than £120,000,000. The
value of the post office, telegraph and telephone businesses at only 15
years' purchase of the profits would be £60,000,000. The Suez Canal
shares are worth £28,000,000. Thus £550,000,000 as an estimate of the
total value of all Imperial property is not an excessive figure.[16]

The public property in the care of local authorities, as trustees for
the nation, is exceedingly great. It is convenient to consider common
lands in this connexion. Probably there are some 2,000,000 acres of
common lands in England and Wales—all that remains unfilched of full
many times that area.[17] If we value these commons at an average of £25
per acre—some of the commons, as in Surrey, are worth from £200 to
£2,000 an acre, valued at present market rates—we get £50,000,000.

Roads are an important item in the national valuation—they are almost
all that is left to the nation of the nation's area. There are about
22,000 miles of main roads and about 97,000 miles of minor roads. These
have value as land and value as highways, but if we value land and
construction together at an average of only £5,000 per mile we arrive at
about £600,000,000 as a conservative estimate of the value of the roads
of the United Kingdom.

There remain to consider the values of the parks and other land,
buildings (including offices, houses, schools, markets, asylums and
workhouses), bridges, sewers, lighting systems, gasworks, electric light
and power undertakings, tramways, waterworks, reservoirs, etc.

The outstanding debts of the local authorities of the United Kingdom are
now about £600,000,000. The whole of this amount has been spent upon the
objects referred to and they are worth considerably more. I submit that
it is a very conservative estimate to value local government property at
20 per cent. more than the amount of the outstanding loans or say
£720,000,000.

We thus arrive at £1,370,000,000 as a rough but reasonable estimate of
the value of the local property. Adding it to the £550,000,000 of
Imperial property we get £1,920,000,000 as a valuation of that portion
of the accumulated wealth of the United Kingdom which is in the
collective ownership of the nation.[18]

But, against the possession of these large amounts of property we have
to set the mortgages upon the public assets which are represented by the
National Debt and Local Debts. These, of course, are not directly
secured upon Imperial and Local Government property, but upon the
Imperial and local revenues. It is convenient, however, to regard them
as mortgages, and to deduct them as I have done in the table. Making
this deduction, I am able properly to include the amount of the national
debt and local debts in my estimate of the value of private property
(see items _g_ and _h_). This gives a true view of the subject. The
people of the United Kingdom collectively own relatively little
property. In the time to come this will be remedied, for local
authorities are rapidly acquiring reproductive undertakings. Until they
are paid for, however, by the discharge of the loans raised to acquire
or equip them, we do well to remember that they are mortgaged to
individuals. Therefore, in deducting the debts from the valuation of
public property and in adding them to the private property I submit that
I am presenting an accurate picture of the actual position.

To sum up this part of the subject, the people of the United Kingdom
collectively possess property worth £1,920,000,000 and are collectively
indebted to a few of their number in the sum of £1,362,000,000. Thus,
all that they may be said to own collectively is property worth the
comparatively insignificant sum of £558,000,000.

I pass to the private property which is commonly called "national"
wealth.

In item _c_ agricultural lands and the farmhouses and other buildings
thereon are valued at £1,040,000,000. In 1898 the Royal Commission on
Agriculture arrived at the value of lands by taking 18 years' purchase
of the profits of 1893. The value of agricultural land is now rising
with the appreciation in the price of food.[19]

Item _d_ "Houses," it should be clearly understood, covers not only
dwelling-houses, but factories, workshops, offices, and all other
premises save farmhouses. It also includes, as is so often overlooked,
both house value and land value. In capitalizing at 15 years' purchase,
the market value of the property is certainly not overstated. The
£3,255,000,000 so arrived at is a handsome sum and by far the most
considerable item in the list. It includes, in the value of factories
and other business premises, a considerable amount of trade capital.

It should not be forgotten that we are speaking of economic valuation,
not of intrinsic value. Houses which rank for no small part of the
£3,255,000,000 are of small intrinsic value, their economic value being
only produced by the sheer necessities of those whose needs must find a
roof. London contains great areas of filthy brick-work which are worthy
to be destroyed, but worth many millions to the houselords who draw
rents from them.

Item _f_ deals with farmers' capital. Here I have used the figure
arrived at in 1905 by R. H. Inglis Palgrave.[20] After careful
examination of the amounts of capital per acre employed in various parts
of the country, Mr Palgrave considers £6 an acre an excessive estimate,
but Major Craigie, who has given the subject much attention, is inclined
to think it too low.

Items _g_ and _h_ have been already referred to.

Item _i_ (1) is an estimate of the amount of capital employed in the
miscellaneous trades and professions taxed under Schedule D of the
Income Tax. I have assumed that one-half of the estimated profits were
derived from capital, and this half I have capitalized at 10 years'
purchase. The amount so arrived at—£2,220,000,000—may be regarded as a
reasonable estimate, not as an accurate one. In 1908, it may be pointed
out, the nominal "paid up" capital of registered joint-stock companies
amounted to £2,123,000,000.

Under _i_ (2) £100,000,000 is put down as a rough estimate of the
capital employed by small traders whose incomes are less than £160 per
annum. I think that £100,000,000 is a liberal estimate, but it should be
noted, against this opinion, that in 1885 Sir Robert Giffen's estimate
was £335,000,000. In either case the figure is sheer guesswork; there is
no proper statistical material.

Items _j_ to _q_ need little comment. I point out, however, that the
profits of mines, quarries and ironworks are capitalized at only 4
years' purchase by some authorities in view of their exhaustible
character.

Item r relates to furniture, works of art and other movable property. I
have estimated this to amount to one-sixth of the item "Houses" (_d_).
It is right to point out, however, that this estimate is very much at
variance with former ones. Sir Robert Giffen in 1885 took one-half of
the value of "Houses," and Mulhall and other statisticians have commonly
used this estimate. But is it reasonable? I think not. In the first
place the item "Houses" covers a great number of business premises the
contents of which are valuable but are already estimated for in item
_i_. The item also covers the value of all the land connected with the
premises. Deducting for land and for business premises, could we, even
as to the balance, assert that the average private dwelling contains
furniture and other effects worth 50 per cent. of the cost of the
structures? Enquiry has shown me that such an estimate would be only
warrantable in the case of rich houses. But rich houses, as we have
seen, are comparatively few, and "comfortable" houses not many. Coming
to the great bulk of the small dwelling houses of the United Kingdom the
furniture and effects are so poor that their value, unfortunately, as
compared even with that of the mean houses which shelter them, is small,
and in many cases negligible.

In taking one-sixth instead of one-half of item _d_ in arriving at item
_r_ therefore, I feel that I am making the most liberal possible
estimate. To make the figure about £1,600,000,000, as we should do by
taking the traditional one-half of the value of "Houses," would, I
submit, be very wide of the mark.

The total value thus estimated of the property in the United Kingdom
owned by individuals affords a striking contrast with that owned by the
State. It amounts to £10,567,000,000.

We have now to consider the third category: "Property in places abroad
owned by persons in the United Kingdom." The items speak for themselves
and are capitalized at very reasonable rates. We get the remarkable fact
that certain persons in this country own about £2,600,000,000 of
property in places abroad.

The grand total of the whole estimate is £13,762,000,000—£300 per head
of the population, or say £1,500 per family of five persons.

[Footnote 16: There is also, of course, the value of the trained
personnel of both army and navy, which could not be taken at less than
£250 per soldier and £400 per sailor, but I confine this estimate to the
value of "property" commonly so called.]

[Footnote 17: There are no commons in Ireland and Scotland.]

[Footnote 18: In 1885 Sir Robert Giffen estimated Government and local
property at £500,000,000, but I do not know his reasons for naming that
figure.]

[Footnote 19: Lord Eversley seems to think that 25 years' purchase meets
the conditions of 1905. See discussion in the Royal Statistical
Society's Journal for March 1905.]

[Footnote 20: "Estimates of Agricultural Losses." Paper read to the
Royal Statistical Society in March 1905.]




 CHAPTER VI
 THE MONOPOLY OF CAPITAL


In view of the facts as to rich and poor estates which we examined in
Chapter 4, it is obvious that to state that the accumulated wealth of
the United Kingdom probably amounts to £300 per head of the population,
or £1,500 per family of five persons, is to mask in averages a great
inequality of distribution.

Reverting to the Death Duty records, it is possible, by means of them,
to give a true idea of the manner of distribution amongst our people of
the greater part of the nearly £14,000,000,000 of capital.

I again direct attention to the tables on pages 52 and 53. Year after
year, with extraordinary constancy, a certain amount of money passes in
each class of estate. So small are the variations in relation to the
magnitude of the totals that it is hardly necessary to average the five
years in working at the figures.

If about 65,000 persons die every year leaving about £279,000,000, what
is the ratio to these figures of the numbers and property of the living?

The question thus raised is an exceedingly interesting one. Porter in
his "Progress of the Nation" seems to have assumed a ratio of 45 to 1,
but I do not think that the true figure can be so high as this.

The British Crown, since Queen Anne, has passed at the following dates:

 Anne,         1702
 George I.,    1714
 George II.,   1727
 George III.,  1760
 George IV.,   1820
 William IV.,  1830
 Victoria,     1837
 Edward VII.,  1901
 George V.,    1910

Thus, in 208 years, the Crown has passed eight times, or, on the
average, once in about 26 years.

I have investigated the dates at which a considerable number of
well-known estates have passed at death during two centuries and have
found the most remarkable variations in different families. The Earldom
of Suffolk has passed at average intervals of 16.7 years between 1731
and 1898. The Earldom of Coventry has passed at intervals of 22 years
between 1712 and 1843. These are intervals which are well under the
average, while above the mean are cases quite as remarkable. The Earldom
of Essex, between 1709 and 1892, has passed only four times, giving an
average of 45.7 years. The Earldom of Bathurst, again, between 1775 and
1892, passed only five times, giving an average of 43.4 years.

Taking the mean of a large number of actual cases, I get an average of
29.2 years and I have decided to take 30 as a round figure which cannot
be far from the truth. Assuming, then, that there are thirty living
property owners for every dead one in the final column of the table on
page 53, I have constructed the table entitled "The Division of
Property: An Argument from the Dead to the Living," which appears on
pages 74 and 75. The figures in columns 1 and 2, taken from the table in
Chapter 4, are multiplied by 30 to form the figures in columns 3 and 4.
The results are exceedingly interesting.

 THE DIVISION OF PROPERTY: AN ARGUMENT FROM THE DEAD TO THE LIVING

 +---------------------------+---------------------+
 |                           |      THE DEAD.      |
 |                           +---------------------+
 |                           |Averages of the Death|
 |                           |Duty Records in the  |
 |CLASSES OF ESTATE.         |five years 1904-5    |
 |                           |to 1908-9.           |
 |                           +---------+-----------+
 |                           |   (1)   |    (2)    |
 |                           |PERSONS. | PROPERTY. |
 +---------------------------+---------+-----------+
 |                           |         |     £     |
 |Less than £100 net         |  15,956 |    900,000|
 |Less than £300 gross       |  18,917 |  3,600,000|
 |£300 to £500 gross         |   9,288 |  3,700,000|
 |£100 to £500 net           |   6,074 |  2,700,000|
 |                           +---------+-----------+
 |Total Estates not over £500|  50,235 | 10,900,000|
 |                           +---------+-----------+
 |£500 to £1,000 net         |  10,404 |  8,600,000|
 |£1,000 to £10,000 net      |  16,910 | 62,100,000|
 |£10,000 to £25,000 net     |   2,338 | 41,000,000|
 |£25,000 to £50,000 net     |     910 | 35,100,000|
 |£50,000 to £75,000 net     |     291 | 19,400,000|
 |£75,000 to £100,000 net    |     145 | 13,200,000|
 |£100,000 to £150,000 net   |     133 | 16,900,000|
 |£150,000 to £250,000 net   |      90 | 19,700,000|
 |£250,000 to £500,000 net   |      54 | 20,600,000|
 |£500,000 to £1,000,000 net |      19 | 13,600,000|
 |    Over £1,000,000 net    |       7 | 18,100,000|
 |                           +---------+-----------+
 |  Total Estates over £500  |  31,301 |268,300,000|
 |                           +---------+-----------+
 |           Grand Total     |  81,536 |279,200,000|
 +---------------------------+---------+-----------+

 +---------------------------+-------------------------------------+---------+
 |                           |             THE LIVING.             |         |
 |                           +-------------------------------------+         |
 |                           |Figures of columns 1 and 2 multiplied| AVERAGE |
 |                           |by 30 upon the assumption that each  |VALUE OF |
 |CLASSES OF ESTATE.         |dead property owner in column 1      | ESTATES |
 |                           |corresponds to 30 living ones.       |PER HEAD.|
 |                           +-----------------+-------------------+         |
 |                           |       (3)       |        (4)        |         |
 |                           |     PERSONS.    |     PROPERTY.     |         |
 +---------------------------+-----------------+-------------------+---------+
 |                           |                 |         £         |    £    |
 |Less than £100 net         |      478,680    |      27,000,000   |       56|
 |Less than £300 gross       |      567,510    |     108,000,000   |      190|
 |£300 to £500 gross         |      278,640    |     111,000,000   |      398|
 |£100 to £500 net           |      182,220    |      81,000,000   |      444|
 |                           +-----------------+-------------------+---------+
 |Total Estates not over £500|    1,507,050    |     327,000,000   |      216|
 |                           +-----------------+-------------------+---------+
 |£500 to £1,000 net         |      312,120    |     258,000,000   |      826|
 |£1,000 to £10,000 net      |      507,300    |   1,863,000,000   |    3,672|
 |£10,000 to £25,000 net     |       70,140    |   1,230,000,000   |   17,536|
 |£25,000 to £50,000 net     |       27,300    |   1,053,000,000   |   38,571|
 |£50,000 to £75,000 net     |        8,730    |     582,000,000   |   66,600|
 |£75,000 to £100,000 net    |        4,350    |     396,000,000   |   91,034|
 |£100,000 to £150,000 net   |        3,990    |     507,000,000   |  127,067|
 |£150,000 to £250,000 net   |        2,700    |     591,000,000   |  218,800|
 |£250,000 to £500,000 net   |        1,620    |     618,000,000   |  381,481|
 |£500,000 to £1,000,000 net |          570    |     408,000,000   |  715,789|
 |    Over £1,000,000 net    |          210    |     543,000,000   |2,585,714|
 |                           +-----------------+-------------------+---------+
 |  Total Estates over £500  |      939,030    |   8,049,000,000   |    8,571|
 |                           +-----------------+-------------------+---------+
 |           Grand Total     |    2,446,080    |   8,376,000,000   |    3,424|
 +---------------------------+-----------------+-------------------+---------+

In the first place, the total property comes out at £8,376,000,000 which
is about £5,400,000,000 less than the estimate of private property
arrived at in Chapter 5. This is not surprising. There can be no
question that a considerable amount of property evades the Death Duties.
On page 78 will be found details, taken from the Reports of the Inland
Revenue Commissioners, of the various descriptions of property which
passed in the year 1908-9. Take the item "Household Goods, Apparel,
etc." It amounts to but £6,000,000. Now, in Chapter 5, as the reader
will remember, I formed an estimate of £550,000,000 as the value of such
effects, this estimate being £400,000,000 lower than that made by Sir
Robert Giffen twenty years ago. The £6,000,000 is officially described
as relating to "household goods, pictures, china, linen, apparel, etc."
Multiplied by 30 it gives but £180,000,000, which is certainly
£300,000,000 less than it should be. It will be seen that "Book Debts,
Stock, Goodwill, etc.," figure for only £17,000,000 in 1908-9, pointing
to under-estimation. Similar undervaluation probably obtains in regard
to other items of property, while bonds to bearer frequently escape
taxation. Of investments in places overseas a very great part
undoubtedly escapes death duty.

Another and most important point is that a considerable amount of
property eludes the Death Duties through gifts by the living. The
following figures are significant:—

 COMPARISON OF (1) INCOME TAX ASSESSMENTS AND (2) ESTATE ASSESSMENTS

            Gross Assessments  Net Estates
                   to          Reviewed for
               Income Tax.     Death Duties.
                Million £        Million £
  1895-6          677.8            213.2
  1896-7          704.7            215.8
  1897-8          734.5            247.3
  1898-9          762.7            250.6
 1899-1900        791.7            292.8
  1900-1          833.3            264.5
  1901-2          867.0            288.9
  1902-3          879.6            270.5
  1903-4          902.8            264.1
  1904-5          912.1            265.1
  1905-6          925.2            272.2
  1906-7          943.7            298.5
  1907-8          980.1            282.3
  1908-9         1010.0            270.9

It will be observed that there is a remarkable lack of correlation
between the income tax and the death duty assessments. The former have
grown most satisfactorily. The latter grew in the first few years of the
operation of the Harcourt revised Death Duties and then became, for
practical purposes, stationary. There can be no doubt that the
explanation is to be found in the increase of gifts made _inter vivos_
to avoid the payment of death duty, and that the estates reviewed in
1908-9 should have been nearer £400,000,000 than £300,000,000.

Parliament has tried to meet this avoidance by enacting (Finance Act of
1909, which was passed into law in 1910 after rejection by the Peers in
1909) that gifts _inter vivos_ shall not be exempted from death duty
unless made more than three years prior to the death of the giver.

The apparent discrepancy between the £8,376,000,000 arrived at on page
75 and the £13,700,000,000 arrived at on page 65 is therefore not an
inaccuracy, but an accurate consequence of the facts referred to.

As it stands, then, the table on pages 74-75 represents the greater
part, but not the whole, of the property of the persons to whom it
relates. Nevertheless, it gives us as accurate an idea of the manner of
distribution as though it dealt with the whole.

CLASSIFICATION ACCORDING TO (1) SIZE OF ESTATE AND (2) DESCRIPTION OF
PROPERTY, OF THE GROSS VALUE OF THE ESTATES WHICH PASSED AT DEATH
IN THE FISCAL YEAR 1908-9

---------------------------+-----------+----------+-----------+-----------
                           |  Stocks,  |          |  Money    |   Trade
                           |  Funds,   | Cash in  |  lent on  |  Assets,
     Size of Estates.      |Shares, and|the House |Mortgages, |_i.e._ Book
                           |other like |  and in  |  Bonds,   |  Debts,
                           |Securities.|  Bank.   |Bills, etc.|  Stock,
                           |           |          |           | Goodwill,
                           |           |          |           |   etc.
---------------------------+-----------+----------+-----------+-----------
                           |     £     |    £     |     £     |     £
Not exceeding £300 gross   |    239,910| 1,263,509|    119,186|    222,528
Between £300 and £500 gross|    392,345|   974,686|    211,362|    262,508
£100 to £500               |    265,873|   354,133|    110,053|    664,130
£500 to £1000              |  1,586,521| 1,633,265|    760,018|    863,702
£1000 to £10,000           | 21,247,265| 6,169,300|  7,281,737|  4,296,571
£10,000 to £25,000         | 18,767,290| 2,345,310|  4,112,023|  2,184,906
£25,000 to £50,000         | 17,675,813| 1,454,151|  3,111,506|  1,704,057
£50,000 to £75,000         | 10,562,035|   726,051|  1,561,811|  1,334,990
£75,000 to £100,000        |  7,534,683|   572,995|  1,354,405|    852,908
£100,000 to £150,000       | 10,175,403|   567,701|  1,479,966|    668,643
£150,000 to £250,000       |  9,738,895|   317,672|    888,356|    736,528
£250,000 to £500,000       | 11,377,749|   860,505|  1,648,587|  1,244,988
£500,000 to £1,000,000     |  3,370,659|    36,126|    280,636|  1,177,432
Over £1,000,000            |  6,318,402|   616,113|     82,533|  1,059,061
---------------------------+-----------+----------+-----------+-----------
        Total              |119,252,843|17,891,517| 23,002,179| 17,272,952
---------------------------+-----------+----------+-----------+-----------

---------------------------+----------+----------+------------+----------
                           |          |          |            |
                           |          |Household |            |  House
     Size of Estates.      | Policies |  Goods,  |Agricultural| Property
                           |    of    | Apparel  |   Land.    |   and
                           |Insurance.|   etc.   |            | Business
                           |          |          |            |Premises.
                           |          |          |            |
---------------------------+----------+----------+------------+----------
                           |    £     |    £     |     £      |    £
Not exceeding £300 gross   |   562,756|   277,353|    100,014 |   598,220
Between £300 and £500 gross|   353,865|   210,848|     94,088 |   967,152
£100 to £500               |   507,869|   239,037|    329,362 | 2,862,200
£500 to £1000              |   844,829|   404,730|    588,750 | 4,120,809
£1000 to £10,000           | 3,553,234| 1,673,603|  4,102,764 |18,168,513
£10,000 to £25,000         | 1,400,980|   849,525|  2,432,372 | 6,516,563
£25,000 to £50,000         | 1,067,993|   633,560|  2,465,454 | 4,322,623
£50,000 to £75,000         |   314,705|   360,607|  1,407,645 | 2,091,525
£75,000 to £100,000        |   337,012|   208,217|  1,741,005 | 1,161,460
£100,000 to £150,000       |   490,791|   364,077|  1,373,393 | 1,635,301
£150,000 to £250,000       |   535,038|   336,487|  1,542,264 | 1,454,949
£250,000 to £500,000       |   279,200|   448,789|  1,611,265 | 1,222,858
£500,000 to £1,000,000     |   179,368|-[A]39,952|  1,649,580 |   614,244
Over £1,000,000            |   282,723|   225,708|  1,253,498 |   307,871
---------------------------+----------+----------+------------+----------
        Total              |10,710,363| 6,192,589| 20,691,454 |46,044,288
---------------------------+----------+----------+------------+----------

[A: Capital transferred in the year to other classes exceeded that
brought into these classes.]

---------------------------+---------+----------+-----------
                           |         |          |
                           | Ground  |          |   Total
     Size of Estates.      |  Rents  |  Other   |   Gross
                           |   and   |Property. |  Capital
                           | similar |          |  Values.
                           |Burdens. |          |
                           |         |          |
---------------------------+---------+----------+-----------
                           |    £    |    £     |     £
Not exceeding £300 gross   |    1,505|   388,068|  3,773,049
Between £300 and £500 gross|    5,811|   397,431|  3,870,096
£100 to £500               |   13,008|   517,903|  5,863,568
£500 to £1000              |   43,922| 1,226,606| 12,073,152
£1000 to £10,000           |  571,404| 7,811,769| 74,876,160
£10,000 to £25,000         |  790,506| 4,802,567| 44,202,042
£25,000 to £50,000         |  724,520| 4,199,814| 37,359,491
£50,000 to £75,000         |  371,867| 2,061,497| 20,792,733
£75,000 to £100,000        |  271,003| 1,225,183| 15,258,871
£100,000 to £150,000       |  354,061| 1,485,937| 18,595,273
£150,000 to £250,000       |  561,046| 2,479,257| 18,590,492
£250,000 to £500,000       |  411,398| 2,257,972| 21,363,311
£500,000 to £1,000,000     |  105,066|   992,010|  8,365,169
Over £1,000,000            |  188,350| 6,571,469| 16,905,728
---------------------------+---------+----------+-----------
        Total              |4,413,467|36,471,483|301,889,135
---------------------------+---------+----------+-----------

The table is full of striking contrasts. I have divided it into two
parts, the lower of which consists almost entirely of the income tax
paying classes. We should expect those with incomes exceeding £3 per
week for the most part to be the property owners of the nation. It will
be seen that the number of persons with £500 of property and upwards
indicated by this table is 939,000. This number may be compared with our
estimate of income tax payers, which was 1,100,000.

Of the 939,030 persons with £8,049,000,000, as many as 312,120 own
between them but about £258,000,000, leaving 626,910 persons with
£7,791,000,000.

Of the 626,910 persons with £7,791,000,000, as many as 507,300 have
between them £1,863,000,000, leaving 119,610 persons with
£5,928,000,000.

And it is amongst the big estates that we must assuredly look for the
bulk of the avoidance of Death Duties, which is clearly indicated by the
table on pp. 76-77. Thus the closer we get to the facts the more amazing
the monopoly of capital appears. It is literally true to say that a mere
handful of people owns the nation. _It is probably true that a group of
about 120,000 people who with their families form about one-seventieth
part of the population, owns about two-thirds of the entire accumulated
wealth of the United Kingdom._

It is an inevitable consequence of the monopoly of capital by a few
people that the distribution of the national income is as pictured in
the frontispiece of this volume. If we were quite unable to investigate
incomes, we should know without investigation that the facts as to
capital must have as a corollary a grossly uneven distribution of
income. If, again, we had merely the known facts as to incomes before
us, and death duty statistics were not available, we should be able to
deduce from them just such a monopoly of wealth as is examined in this
chapter.

As to the insignificant fraction of the national wealth owned by the
working and lower middle classes, it is mockery to term it the "capital
of the working classes," as is done not infrequently. It corresponds,
for the most part, to the squirrel's store of nuts. It stands chiefly
for sick pay, unemployment benefits, funeral moneys, bits of jerry-built
houses, and so forth. It is rarely industrial capital used for the
benefit of the savers.

Those who have so little property cannot bargain fairly for the sale of
their services with those who own the national undertaking. A small
group of private owners exercises the effective government of the nation
through the possession of the means of production, which are the means
of life. As for the Government at Westminster, it is impotent because,
like the mass of the people, it owns little or no property. It cannot
even control the chief source of the national wealth—coal, or the prime
factor in trade—railways. The investments of the State, like the
investments of the masses, are a negligible quantity. And those rule who
own.




CHAPTER VII

THE AREA OF THE UNITED KINGDOM


Let us now consider the area of the United Kingdom. I use the word area
with intention, for it is its area which differentiates land from all
other commodities. Man can make soil by disintegrating rock. He can
entirely strip the soil from a given superficies. He can change a fen
into a farm. He can rob land of its fertility by careless cultivation.
He can rear floors above land or sink shafts below it. Upon the base
afforded by a small piece of land he can manufacture enough cloth to
clothe a multitude. There is one thing, however, which he cannot do. He
cannot change the geographical position of land. The element of area, of
extension, is inherent and immobile, unchangeable and indestructible.[21]

It follows that the manner of the control of land is an exceedingly
important matter to a community. The immobile area is the base of all
human activities. Upon it we needs must live, and the manner of our
distribution upon it largely determines our happiness.

In the United Kingdom, as we have already seen, the people collectively
own but little property, and of the entire area of the country, the
control of which so largely determines their relations with each other,
but the roads, rivers, and a few insignificant commons and parks are
public property. The whole area measures 77,000,000 acres and nearly
77,000,000 acres are private property.

As we might expect from the facts we have already examined, the greater
part of the area is in a comparatively small number of hands. There are
a large number of landowners, but great landowners are few.

As in many other parts of these enquiries, we are faced with a plentiful
lack of precise information as to the ownership of the soil. The more
important the subject, the less trouble we take, as a people, to keep
record of it. In 1910 it is impossible for any man to say precisely how
many persons own British land. No Bluebook on the subject has been
published for thirty-five years. The last return of landowners, known as
the "New Domesday Book," was made in 1873, and is forgotten by the
present generation, although it created much interest and controversy
upon its publication.

The contents of the New Domesday Book were carefully corrected and
analysed by Mr John Bateman.[22] For England and Wales alone his summary
of the figures, revised as to the great estates down to 1883, is as
follows:—

 OWNERSHIP OF LAND IN ENGLAND AND WALES

 Number of Owners.    Class of Owner.      Acres.

          400       Peers and Peeresses   5,729,979
        1,288       Great Landowners      8,497,699
        2,529       Squires[23]           4,319,271
        9,585       Greater Yeomen[23]    4,782,627
       24,412       Lesser Yeomen[23]     4,144,272
      217,049       Small Proprietors     3,931,806
      703,289       Cottagers               151,148
       14,459       Public Bodies         1,443,548
                    Waste                 1,524,624
      -------                            ----------
      973,011                            34,524,974
      -------                            ----------

While the number of owners came out at nearly 1,000,000, it will be seen
that the ownership of the greater number is a very small thing indeed.
For practical purposes, about 38,000 persons owned by far the greater
part of England and Wales. The analysis shows:

  38,214 people owned 27,473,848 acres:
         average 719 acres each.
 934,797 people owned 5,526,502 acres:
         average 6 acres each.

Again of the 934,797 small owners:

 703,289 people owned 151,148 acres:
         average less than 1 rood.

As to the United Kingdom, Mr Bateman's analysis showed:

 UNITED KINGDOM LAND OWNERSHIP: 1883

                           Acres.
 Total Area              77,000,000
 Owned by 2,500 persons  40,426,000

It has been quaintly observed in mitigation of these facts, and with a
view to reconciling the British people to the humiliation and economic
servitude involved in these facts, that some part of the 2,500 persons'
40,000,000 acres consists of mountain and waste land. As a matter of
fact, this plea is a further condemnation of the position, for very
little indeed of our small British area ought to be "waste." British
landowners are responsible to the nation for their wanton neglect of
afforestation. Let the "waste" land of the rich be handed over to the
nation if it is declared to be valueless to its few owners.

Since 1883 the number of owners has doubtless increased, but not
largely, for even those people who own little strips of land bearing
houses chiefly do so on leasehold tenure, being in effect employed in
the engaging process of nursing ground rents for a future generation of
the few who own. It may be that in the United Kingdom at the present
moment there are about 1,250,000 freeholders, but the substantial
ownership of British land remains as it is faithfully pictured in the
above figures.

As need hardly be added, these facts about land ownership are a most
striking confirmation of the conclusions arrived at in these pages as to
the monopoly of capital.

As we are land animals, we are compelled, such of us as cannot command
the capital necessary to buy a base to live upon or work upon, to come
to terms with the individuals who are in possession of the British area.
The payment which is made for permission to use land is commonly called
rent, and the total amount of the rent paid for the use of the
77,000,000 acres is a considerable sum. We can form a very fair estimate
of it from the Income Tax returns already examined.

First, as to the landlords' revenue from agricultural land. This we
obtain from Schedule A of the Income Tax. The income assessed in 1908-9
was £52,000,000 gross, but as we have already noted, part of this was
not real income. Between the cost of repairs (for which the
Commissioners allowed £6,360,000), adjustments on appeal, etc., the net
income from agricultural lands taxed in 1907-8 was about £44,000,000.
But this is the rent, not of the land alone, but of the farms as going
concerns, with all their buildings, fences, roads, ditches, etc. The
actual rent of the land alone may perhaps be put at £35,000,000.

Secondly, we come to the rents of all lands bearing houses, factories,
business premises, etc. The gross income assessed under Schedule A of
the Income Tax in 1908-9 was £217,000,000, of which £49,000,000 was for
the Metropolis alone. From this figure considerable deductions have to
be made to arrive at net income. The Commissioners allowed for repairs
£33,700,000, for Charities, etc. £7,400,000, for empty property
£8,000,000, for over-assessments, etc. £3,900,000. Thus the real income
from houses and the land upon which they stand, accruing to private
landlords is reduced to £164,000,000. Of this £164,000,000 how much is
rent from land alone?

In London about one-third of the gross assessment is land rent. In the
Provinces the proportion is smaller; probably less than one-fourth. As
to the former figure, the L.C.C. surveyor, after careful examination of
the subject in detail, a few years ago estimated the land values of the
Metropolis at £15,000,000, which was just over one-third the gross
assessment of land and buildings together. I take, then, the
Metropolitan land rents at £16,000,000 and those of the rest of the
United Kingdom at one-fourth of the gross assessment (£164,000,000), or
£41,000,000. Thus we arrive at £57,000,000 for the whole of the United
Kingdom. To this we have to add £1,000,000 of miscellaneous sporting
rents, tithes, etc.

But Schedule A does not exhaust the profits derived from the ownership
of land. Under Schedule D are assessed Railways, Mines, Quarries,
Ironworks, etc., which are undertakings attached to land, and in the
profits of which land rents form a part. The most important case is that
of mines. In 1893 the Royal Commission on Mining Royalties carefully
calculated all mining royalties, dead rents, etc., received by
freeholders in 1889 at less than £5,000,000.[24] This sum has now
probably increased to about £7,000,000, including mines and quarries of
all descriptions. The rental value of the land employed in Railways,
Canals, etc., can hardly be taken as more than £6,000,000 per annum.

Collecting the figures we have estimated, we get:

 ESTIMATE OF LAND RENTS OF THE UNITED KINGDOM

 From Farm Lands                           £35,000,000
 From Lands bearing Dwelling-Houses,
   Factories, Business Premises, etc.       57,000,000
 From Sporting Rents, etc.                   1,000,000
 From Mines, Quarries, etc.                  7,000,000
 From Other Property                         6,000,000
                                       ---------------
                                      [25]£106,000,000
                                       ===============

Thus, in round figures, we get £106,000,000 as an estimate of the
tribute which is paid to private owners for permission to use the area
of the United Kingdom. As we have seen, 2,500 persons own one-half the
whole area, while 38,200 persons own three-fourths of the area of
England and Wales, so that the greater part of this income of
£106,000,000 goes into few hands.

In view of the fact that the total income of the United Kingdom has been
estimated at £1,840,000,000, it is at first surprising that the amount
of this land rent is not larger than £106,000,000, and it is of interest
to ask why it is, in view of the monopolization of so much of the whole
area by so few people, that the land rents are not greater than they
are.

The first explanation is the influence of free imports and cheap
transport in putting at our disposal the harvests of the entire world.
Cheap food for our people has spelt "loss" to the landowner. The
landowners possess just as much land as before, neither more nor less,
but as the produce which it yields is lower in price, they have been
able to exact, for permission to produce the kindly fruits of the earth,
a smaller rent. As our wealth has grown in the last generation the
tribute paid to the owners of agricultural lands has grown less. Now
that food is again appreciating in price the land tribute will on this
account rise again.

But, while the rent paid for farm lands has fallen since the seventies,
the rent paid for urban sites has increased, and, of course, a further
portion of the whole area has passed from the first category into the
second. The country-side has been increasingly deserted, and our big
towns have grown,[26] both by their own natural increase, and by a
continual influx from the villages and small towns.

How is it, then, that the landlords have not been able to exact a
greater rent than about £57,000,000 for the use of urban sites? In the
first place, while this sum may seem small in proportion to the total
income of our people, it is very large in relation to the exceedingly
small area for the use of which it is exacted. Almost the entire area of
the United Kingdom is sparsely populated. It is an empty country dotted
with small crowded spots called towns. When we reflect, then, that the
land rent of the great empty country is £35,000,000, while the land rent
of the crowded towns is £57,000,000, we see the latter item in its true
light, as enormous in relation to the insignificant area for permission
to use which it is paid.

In this connexion it is important to observe that an exceedingly large
manufacturing business can be carried on upon a small piece of the
earth's surface, measuring 50 feet by 100 feet, or only an eighth part
of an acre. The whole of the manufacturing plant of the United Kingdom
stands upon a base which cannot possibly amount to more than a
negligible fraction of the whole area of the country. Thus, while the
industrial has to bid high for the use of land, he needs, as a rule, but
a very small piece for his purposes. The area needed for a tennis court
is often sufficient for the base of a business in which 100 or 200 hands
are employed and which draws a huge profit from their labour.

Or take the subject of housing. All the urban sites of the United
Kingdom together occupy a negligible part of its area. If our 9,000,000
houses occupied half an acre each, as unfortunately they do not, they
would account for but 4,500,000 acres out of our 77,000,000 acres.

But apart from the fact that the size of the area which yields urban
land rents is exceedingly small, local rates are a perpetual charge upon
land rents. The point is that, as the renter of fixed property is rated
according to his rental, the size of the rental he is able to pay is in
part determined by the amount of the rates. The higher the rates, the
less rent he can afford, and therefore the less can the landowner obtain
for the use of his land.

For the reason just stated, it is often argued that the landowner
actually pays local rates.[27] The fact that he is unable to exact as
much rent as though no rates existed is said to be equivalent to an
actual payment by the landowner of the difference between the rent which
he receives and the rent which he might receive. This economic doctrine
is worth examination.

In the first place it is not only the rates which the occupier takes
into consideration when he decides that he can afford to rent a certain
property. He considers "rates and taxes." The Inhabited House Duty is
taken into consideration fully as much as the poor rate. If it did not
exist the tenant could afford to pay a higher rent.

Let us carry this a little further. What is the Inhabited House Duty? It
is an Income Tax roughly proportioned to the size of a man's income by
the size of the house which he inhabits. But there is another Income
Tax, the Income Tax commonly so-called, levied at so much in the £ on
incomes over £160 per annum. Is the Income Tax taken into consideration
by a family man looking out for a house? Not directly, perhaps, in the
same way that he adds the "rates and taxes" to the rent before deciding
that he can afford a certain eligible residence, but indirectly there
can be no question whatever that the Income Tax has great influence in
deciding a man's rental. Indeed, the raising of the Income Tax from 6d.
to 1s. may directly cause a man to leave a £60 house for a £50 house. We
see, then, that if the landowner pays the local rates, he most certainly
pays the Inhabited House Duty, and further that if he pays the form of
Income Tax called the House Duty, it is at least arguable that he pays
the Income Tax proper.

But that is not all. There is another determinant of the rent which a
man can afford, and that is the price of gas. In and around London the
variation in price is considerable, and the careful householder does not
forget the fact when deciding whether to live North, South, East, or
West. South of the Thames gas is cheaper than in the North. According to
the doctrine under examination, therefore, the landowners North of the
Thames must at least "pay" the difference between the two rates.

Again, on the same lines it might be argued that, as a rise in the price
of building materials checks building and therefore makes a landowner
ready to accept a lower rent for his land, the landowner actually pays
the increased cost of building when materials rise.

And so we might proceed from one logical step to another until we
arrived at the comfortable conclusion that, if the sole expense of a
householder were his rent, he could pay his whole income as rent, and
that, therefore, the real "loss" of the landowners is the difference
between the entire income of the nation and the land rents which they
now actually receive.

The whole truth of the matter is: For long years rates have been levied
upon the occupiers of fixed property. Contracts as to the use or sale of
land and the property affixed thereto have been made between man and man
with full knowledge of the existence of rates. While, therefore, it is
perfectly true that, but for the existence of local levies, the owners
of the soil would be receiving a higher tribute than is actually the
case, it is straining the meaning of language to say that they pay the
rates, or that the rates are an actual burden upon them. In so far as
present-day landowners have inherited their land from men who were given
it by a worthless Sovereign or in any other way came by it without
proper consideration, to talk of the burden of rates upon real property
can scarcely excite sympathy. In so far as present-day landowners
acquired their property for proper consideration or inherited it from
those who so acquired it, the rates were taken into account when the
price was paid, and no burden can therefore truly be said to exist. If
to-day A gives £1000 for a piece of land he does so with full knowledge
of local rates, and the seller gets less for his land because of his
knowledge. Therefore, when A, in his turn, leases his land and a house
built upon it to another person, he cannot allege that he bears the
burden of the rates. Yet it remains true that, if the burden did not
exist, the land would yield A a higher rent. In a word the rates have
become a rent-charge upon the property.

To sum up the conclusions of this chapter, we have seen that while the
total income of the nation is £1,840,000,000, the landowners take
£106,000,000 as land rent, and that this amount would be much greater
but for (1) the untaxed admission of competitive foodstuffs, (2) the
very small area occupied by the towns, and (3) the levying of local
taxation upon fixed property.

[Footnote 21: _Cf._ Marshall, "The fundamental attribute of land is its
extension."—"Principles of Economics," Book I, p. 221.]

[Footnote 22: "Great Landowners." John Bateman (Harrison).]

[Footnote 23: These classifications are purely arbitrary.]

[Footnote 24: See C 6980, page 79.]

[Footnote 25: It has been constantly stated that the land rents of the
United Kingdom amount to £250,000,000. Such an estimate is unwarranted.]

[Footnote 26: It is only in the large towns that land rents have risen.
Many towns of less than 20,000 in population are decreasing in size and
their rents consequently falling. In the ten years ended 1901 no less
than 187 towns of from 2,000 to 50,000 inhabitants declined in
population.]

[Footnote 27: The point is of so much importance that it may be well to
quote some expressions of opinion on the subject.

"In practice there is little doubt that the majority of intending
tenants, both in town and country, do take the precaution of enquiring
what rates or taxes they will have to pay, and vary their estimates
accordingly. In their case, then, it is the landlord, and not the
tenant, who bears the burden of the rates." "Land Nationalisation" (p.
86), by Harold Cox. (Methuen & Co.).

"We have assumed with most economists, that in the end, on the average,
the rates, however levied, fall upon the owner (inasmuch as they compel
him to lower the rent which he demands for his property)." "Towards a
Social Policy" (p. 49), by a Committee of Liberals. "The Speaker"
Publishing Co. Ld.]




CHAPTER VIII

THOSE WHO WORK AND THOSE WHO WAIT


We have seen that, although the sum of the land rents taken by the
owners of the British area is actually very great, it is small as
compared with the total of the national income. We have also seen that
there is a simple explanation of this. We have become a manufacturing
and a town-dwelling people, and the area occupied by our factories and
towns is very small. The chief demand for land is confined to the
outskirts of such towns as are increasing in size. The landlords of the
big towns have their pockets increasingly filled with unearned
increment, while the landlords of the empty country are reminded in the
most practical possible way of that inherent quality of immobile area to
which we have referred as the distinguishing characteristic of land.
When we speak of a town as growing rapidly we refer to the growth in
relation to the area of the town, not in relation to the area of the
country. I reiterate this point because, when it is once realised, we
see our way as a community to an exceedingly simple solution of many
important problems. We speak of the enormous size of London. As a matter
of fact, the whole area administered by the London County Council is but
75,000 acres. Again, "Greater London" contains but 443,000 acres, and
yet is the dwelling-place of 7,000,000 people, or far more than the
entire population of the 2,420,000,000 acres of the Dominion of Canada.

We shall return to the foregoing considerations hereafter.

As a result of the small amount of land required as a base for the
establishment of industrial plant, or for the warehouse or stores of a
distributive business, it is usually but a small part of the total
product of an industrial or commercial organisation which is taken by
the owner of its site. That this is usually true is obvious from the
fact that of a total annual income of £1,840,000,000 the owners of area
are able to exact but £106,000,000. Of this £106,000,000 again, as was
pointed out in the last chapter, £35,000,000 is exacted from farmers who
make the meagre profit of from £17,000,000 to £26,000,000 per annum over
and above their rentals. Out of the teeming populations of the towns,
with all their manufacturing and commercial activities, the owners of
area are able to draw but about £57,000,000.

Now let us revert to the extraordinary figures which are the basis of
the frontispiece to this volume.

We have shown that, of a total income of £1,840,000,000, as much as
£634,000,000 is taken by a small group of persons numbering 280,000, or
with their families 1,400,000. The great landowners are obviously
amongst these 280,000 persons, and the greater part of British land
rents are therefore included in their income. But, if the whole of it be
included, there still remains £528,000,000 of income not derived from
land rents, and taken by a very small number of persons.

The explanation of this fact is to be found in the monopoly of capital
which we examined in Chapter 6. In so few hands is the greater part of
the accumulated capital of the country concentrated that, in spite of
the fall in the rate of interest, the lion's share of the national
income is secured by a few. Each "dose" of capital may produce a smaller
return than of old, but there are more "doses" of capital in the
possession of the few capitalists, and these, in relation to the whole
population, add but very slowly to their numbers, so slowly that we get
the extraordinary congestion of capital revealed by the Death Duty
returns and pictured in the table in pages 74 and 75.

Thus the monopoly of capital is a more far-reaching thing than the
monopoly of land, and it secures for a number of people almost as
limited as the great land-owning class, a gross profit compared with
which the sum of British land rents is insignificant.

It is of interest to show, from a number of concrete examples, how the
joint product of mental and manual labour comes to be shared up between
those who work and those who wait.[28]

The following particulars are extracted from recent balance-sheets of
ten well-known industrial joint-stock companies, each of which is
representative of hundreds of others. I shall distinguish the concerns
by a letter only, for I am not criticizing individuals, but seeking to
illustrate the causes which produce inequalities of wealth.

Company A owns a well-known proprietary article. The balance-sheet
examined is dated 1904. Its issued capital is £1,000,000, and there are
no Debentures. A Profit and Loss a/c shows that the year's sales
amounted to £411,000. The total expenditure incurred in manufacturing
the year's production was only £218,000. There was therefore a balance
of profit amounting to £193,000. That is to say, after paying all
outgoings, including wages, salaries, rent, advertising, and so forth,
produce which cost £218,000 to manufacture was sold for nearly twice as
much. A dividend of 20 per cent. was paid for the year, and £30,000
carried to reserve. What, then, did those get who worked to produce the
goods which were sold for £411,000? Obviously, a part only of the
£218,000, probably not more than £100,000. If it be taken as £100,000,
we see that those who worked to make the products of the Company
(including the brain work of managers, foremen, etc.) obtained only
£100,000, while the shareholders of the Company took £192,000. A great
slice of the increment went into the pockets of individuals who
certainly had not earned it.

Company B is a restaurant company and the balance-sheet is for 1903. It
does not publish a Profit and Loss a/c. The issued capital is £189,000,
but a great deal of this is "water," for bonus shares have been issued
year after year. In the year under review the profits amounted to
£76,000, or over 40 per cent. of the amount of the watered capital. We
do not know what the Company pays in wages, but I doubt if it reaches
£30,000 per annum, or one-half the amount of the year's profits. The
employees are chiefly young girls who are paid a few pence per hour.
This case is an exceedingly instructive one to the student of "unearned
increment," because the restaurants are many in number and situated on
most valuable sites. After paying the ground landlord's unearned
increment, the sleeping partners in this concern gain, as they sleep, a
hundredfold more unearned increment than the ground landlords.

Company C sells an article of food. The balance-sheet is dated 1903. Its
issued capital is £2,000,000, and there are £500,000 of 4½ per cent.
debentures. Much of the capital is represented by goodwill. The net
profit for the year, after paying Directors' fees, amounted to £139,000.
In spite of the enormous capital, the sleeping "ordinary" partners get 7
per cent. Again we do not know the wages paid, but it is hardly likely
to be as much as the net profit of £139,000. If the employees get that
sum, which is doubtful, the sleeping partners gain as much as all the
workers who make and sell the products of the Company and manage and
direct it.

Company D is an engineering firm. The balance-sheet is dated 1904. The
issued capital is £3,500,000 and there are £1,500,000 of 4 per cent.
debentures. The net profits for the year were £636,000, which sufficed,
after paying debenture interest, preference dividend, directors' fees,
etc., to give the ordinary shareholders 15 per cent. It is not probable
that the wages paid in a year are greater than the £636,000 of net
profit, but if they amount to £1,000,000, which is unlikely, the workers
of the Company gain little more than the shareholders.

Company E is a restaurant company. Date of balance-sheet 1903. The
issued capital is £325,000 and in addition there are £100,000 of
debentures. The profits for the year amounted to £52,000. After paying
debenture interest, and preference dividend, the ordinary shareholders
got 16 per cent. The amount of wages paid is not known, but it is
probably under £20,000. To take this liberal estimate, the workers get
£20,000; the sleeping partners £52,000.

Company F is an engineering concern; the balance-sheet is for 1903. The
issued capital is £5,000,000 and there are debentures for £2,250,000.
The net profits for the year amounted to £556,000. After paying
debenture interest and preference dividend, 10 per cent. was paid to the
ordinary shareholders. Again it is impossible to state with accuracy the
amount of wages paid, but it is improbable that they exceed the amount
of the net profit. 5,000 men at £80 per annum would come to £400,000.

Company G is engaged in manufacturing cotton. Its capital is £10,000,000
and there are debentures for over £1,000,000. The net profit (the
balance-sheet is for 1903) amounted to £2,684,000, which is a return of
25 per cent. on the entire capital. I do not know the wages bill, but if
the company employed 5,000 people at £100 a year each, and 10,000 more
at £50 a year each the total wages would be £1,000,000. Such employment
would still leave the sleeping partners with nearly three times as much
increment as the workpeople!

Company H is a restaurant company, which fortunately gives us a profit
and loss account. The balance-sheet is for 1904. The issued capital is
£570,000 and in addition there are £300,000 of 4 per cent. debentures.
The profit and loss account shows the following figures:

 Gross Profit on Trading                               £474,000
 Salaries, wages, _rents_, rates, repairs, horsekeep,
       maintenance and other expenses                   327,000
                                                       --------
                            Profit                     £147,000
                                                       ========

Here we have the statement that included in the £327,000 of total
expenses is a certain sum which was paid in salaries and wages. What was
it? We do not know, but the company had 90 restaurants at each of which
about 10 persons were engaged. That means 900 employees. If they were
paid £40 a year each (as a matter of fact they were paid less than that)
the wages would amount to £36,000. If, in addition, at headquarters,
etc., 100 more people were employed at £100 each, that would mean
another £10,000 a year or a total wages bill of £46,000. The net profits
were £147,000. Therefore the investors got at least four times as much
as those who worked to make the profits! As for the landlord's share, a
glance at the figures shows that it must have been very small in
proportion to that taken by the sleeping partners. Yet again the
business is done upon some of the most valuable sites in the whole
country. The business, indeed, is only valuable because of the sites,
yet the capitalist and not the landlord takes the lion's share of the
unearned increment.

Company I is a manufacturing firm in an important trade. The
balance-sheet is for 1903 and the directors complain of "_depression of
trade_." The issued capital is £500,000 and there are debentures for
£300,000. The net profit made was £70,000 which, after paying debenture
interest, sufficed to provide 10 per cent. for the shareholders. If the
company "finds work" for 1,000 men at an average of £70 per man, the
profits, even in depression, are more than is paid to the workmen who
make the profits.

Company J works a great monopoly service under licence from the
State.[29] The issued capital amounts to £5,500,000 and in addition
there is Debenture Stock amounting to £3,570,000. In 1904 the income
amounted to over £2,019,000 and the outlay, including rents, wages,
materials, management, etc., to £1,155,000, leaving a net profit of
£864,000. Of this the State took £186,000 for royalties, leaving a
balance of £678,000 for the share and debenture holders. Thus the
sleeping partners took far more than the entire earnings of managers,
clerks, operators, and workmen. The number of individuals employed by
this concern in 1904 was 30,000. As illustration of a fact already
referred to, viz. that a great business needs but a small base, it may
be added that the year's rents (building _plus_ land rents), taxes and
insurance came to only £77,000. Thus, while the landlords of most
valuable sites took something much less than £77,000, the capitalists
took £864,000 out of the business done upon the sites.

I have thus described the earning and distribution of a very
considerable amount of income by 10 large industrial joint-stock
companies. It should be observed that the profits made were won in a
period of trade depression and falling wages, when short time and
unemployment slew their thousands.

The consideration of such companies is exceedingly instructive for
another reason. In them the functions of capital and of business ability
are usually divorced. Their shares are, as to a great part, held by mere
sleeping partners, while the business ability is supplied by managers or
managing directors who, while they may have a certain proprietary
interest in the company, rarely own more than a small part of the
capital. In the cases quoted, after payment for both labour and skill in
management, great and disproportionate sums remain over to reward those
who "wait."

The companies quoted cannot be regarded as exceptional cases. The reader
has but to glance from day to day at the reports of company meetings
published in the daily newspapers to note the steady manufacture of
dividends by industrial and other joint-stock concerns. In 1908 the
number of joint-stock companies registered in the United Kingdom and
believed to be trading was 45,000 and the paid-up capital
£2,100,000,000. In 1908-9, the corresponding financial year, 37,937
"public companies" were assessed to income tax and declared their
profits at £291,000,000. From this £291,000,000 we have to make certain
deductions before we arrive at the profits of ordinary joint-stock
companies, for the total includes railway companies and some banks,
waterworks, etc., not registered with the Registrar of Joint-stock
Companies. Allowing £65,000,000 on this score we have £226,000,000 left
as the profit made by joint-stock companies having a nominal capital of
£2,100,000,000. Many of these companies have debenture capital but, on
the other hand, it is probable that, of the £2,100,000,000, fully
one-third is "water"—exaggerated goodwills, promoters' profit,
underwriters' commissions, bonus shares and the rest of it. Anyone who
is interested in this point should examine the yearly return of
companies registered which now shows not only the amount of capital
"considered as paid up" but the actual amount subscribed in cash and the
payments for underwriting. In a recent return I find such items as this:

 Capital considered as paid up              £76,683
 Minimum Subscription required                   £7
 Amount allotted before beginning business  £16,729

and this:

 Capital considered as paid up              £25,000
 Minimum Subscription required               £8,000
 Commission for underwriting           25 per cent.
 Amount allotted before commencing business  £8,010

That is how a great part of the £2,100,000,000 of registered joint-stock
"_paid up_" capital is made.

Setting dummy capital against debentures, we see that, after payment of
wages to the workmen and foremen, after the payment of salaries to
clerks and officials, after the reward of business ability by the
payment of managers or managing directors, after the payment of
royalties to patentees where such were payable, after the payment of all
rents exacted by the owners of area, there remained a profit of
£226,000,000, being over 10 per cent. on the total paid-up capital,
watered and unwatered, of all the joint-stock companies registered in
the United Kingdom.

We have also to remember that a large amount of unearned increment
accrues to many of the sleeping partners who draw the £226,000,000
through the appreciation of their securities on the stock markets. Thus
the £1 shares of Company H referred to above were quoted in July 1905 at
£6 each, which means that either the present or past holders of the
shares gained not only handsome interest, but saw their capital
increased sixfold without any exertion upon their part. This creation of
a market in the profits of usury has terribly unfortunate results for
the employees of joint-stock companies. To the original shareholders who
sold at a huge premium the 30 per cent. dividend was 30 per cent. To the
new shareholder who pays the price which has arisen from the usurious
profits, the 30 per cent. dividend is only 4 per cent. or 5 per cent. He
goes to the shareholders' meeting clamouring for his 5 per cent., and
eager to resist any suggestion that the wages of those who make his
profits should be increased. The very success of the company thus
becomes an argument not for the increase of wage but for a reduction of
expenses. The managing director knows that he has got to face a body of
shareholders who, for the most part, rate a high dividend as a low one.
This point was illustrated in my own experience recently in a very
striking way. Writing in the "Daily News" I commented upon the small
wages paid by a well-known company paying a dividend of 30 per cent. per
annum. This roused the indignation of a shareholder in the company who
wrote me a letter the chief point of which ran as follow:

 "Most of the shareholders have paid £6 or £7 per share, and so get a
 return of not more than 5 per cent."

So one set of taskmasters passes out of the game with its tremendous
gains, and is succeeded by another set. To the latter the poor
workpeople are not churning out 30 per cent. but a mere 5 per cent. When
the new shareholders enter their premises they see easy work done by
overpaid people who make dividends of only 5 per cent. If, at a
shareholders' meeting (it has happened at company meetings) a
shareholder pleads for higher wages for the employees, he is howled
down. They are earning only 5 per cent!

Another illustration is to be found in railway stocks, many of which
have (1) been deliberately watered, and (2) risen in price on the
market, so that, while railway men are badly paid, the present holders
of the stocks are apparently making small profits. Many railway
companies have enlarged their ordinary capital by the delightfully
simple process of multiplying by two. £100 of original stock has been
changed into £100 of "preferred" and £100 of "deferred." This has not
been done behind the scenes, but boldly and with the permission of our
rich men's parliament. As a consequence it is made to appear that the
net receipts of railways are only about 3½ per cent. of their "paid-up"
capitals. But the nominal capitals have not been "paid-up"; and even in
so far as the original capital is concerned much of it is unreal. Thus
the magnitude of the injustice which they suffer is hidden from railway
servants. They risk their lives for the public every day and what do
they get for it? In 1908, the 27 leading railway companies paid in wages
only £30,000,000, or only 25s. per employee per week! These 27 companies
own nearly all the railway lines, employ nearly all the railway servants
and make nearly all the profits assessed by the Inland Revenue
Commissioners. And what do these profits amount to? As I have shown in
Chapter 5, they amount to £43,000,000 per annum, or far more than is
paid in wages in one of the most dangerous and most useful of all
occupations.

It is instructive to note how the joint-stock company promoter
calculates the wages factor in forming his plans. I recently had sent to
me the prospectus of a gas company, formed to take over and enlarge an
existing concern. It began by picturing the fat dividend "earned" by
other gas companies, thus:—

The profitable nature of the Gas Companies, and the favour in which
their Shares are held by Investors, is shown by the following
particulars, which are obtained from the Stock Exchange Official List,
Stock Exchange Year Book, and other Official sources:

The Croydon Gas Company pay 14 per cent., and the £100 Ordinary Stock is
quoted at £320.

The Wakefield Gas Company pay 11½ per cent., and the £25 Ordinary Shares
are quoted at £63.

The Brentford Gas Company pay 12 per cent., and the £100 Consolidated
Stock is quoted at £250.

The Staines and Egham District Gas Company pay 13 per cent., and the £25
Ordinary Shares are quoted at £60.

While the Eastbourne Gas Company's A and C Stock pay dividends of 15 per
cent. respectively, and the £10 Shares are now standing at 165 per cent.
premium.

What all men who live by work and not by dividends should note is, how
such beautiful results are arrived at. Inquiry will show that common
"gas" is extracted from certain suitable varieties of coal by the hard
labour of individuals employed in the handling of the inventions of the
dead. It is hard work and exhausting work. If the shareholders, who only
stand and wait, receive such princely dividends, what is the share of
those who make the gas?

The company prospectus referred to is good enough to reveal the nature
of the division of the spoils. Its own statement is as follows:—

Taking the consumption of Gas at only 30,000,000 cubic feet per annum,
and after allowing for the total cost of Coals, Labour, etc., and
crediting the sales for Coke and Residuals, Rates, and Taxes, Materials,
etc., the income of the Company should be as follows:

 By sale of 30,000,000 feet of Gas at 5s. 10d. per 1,000
     cubic feet (present price being 6s. 10d.)             £8,750 0 0

 " sale of Coke, Tar, Breeze, and Residuals, including
     Meter Rentals                                          1,813 0 0
                                                          -----------
                                                          £10,563 0 0

 To purchases:

 " 3,000 Tons of Coal at 17s. 6d. per
    ton                                     £2,650 0 0

 " Purification, 2d. per 1,000 feet            250 0 0

 " Repairs and Renewals to Works
    and Machinery, 4d. per 1,000
    feet of Gas made                           500 0 0

 " Repairs, Services to Mains, Lamp
    Columns, and Meters, 2d. per
    1,000 feet of Gas made                     250 0 0

 " Directors' Remuneration, Secretary
    and Manager's Salary, Wages
    at works, Rates and Taxes, etc.,
    and Miscellaneous Expenses               1,353 0 0
                                             ---------
                                                             5,003 0 0
                                                            ----------
                                  Net Profit                £5,560 0 0

 To pay 6 per cent. on 15,000
    Preference shares at 6 per cent           £900 0 0

 To pay 12 per cent. on 15,000 Ordinary
    shares at 12 per cent.                   1,800 0 0
                                             ---------       2,700 0 0
                                                             ---------
 Leaving a surplus, available for further dividends on
    the Ordinary Shares and for Reserve Fund                £2,860 0 0
                                                            ----------

The company expects to sell its gas and by-products for £10,563. It
further expects that its entire outlay in producing the £10,563 worth of
gas, etc., will be only £5,003, leaving a net profit of £5,560! Now let
us look for the estimated _remuneration of labour_.

Here are the lines:—

 To directors' remuneration, secretary and manager's
    salary, wages at works, rates and taxes, etc.,
    and miscellaneous expenses                           £1,353

 And the repair and renewal items, which include
    some wages                                              750
                                                         ------
                                            Total        £2,103
                                                         ======

So that £2,103 per annum covers, not only wages at works, salaries,
directors' fees, but repairs, rates and taxes, and miscellaneous
expenses, which must include postages, stationery, etc. It is obvious,
therefore, that the total reward of all bodily and mental labour, all
furnace-feeding and more or less scientific management, all work
whatsoever connected with the gas-making and repairs is calculated by
the promoters to cost something less than £2,103. Therefore, it is
actually promised to investors, in the light of day, that they can take
out of the product of the company's labour profits amounting to £5,560,
while all the workers, including managers, are to take only about
£1,500. And nothing is more certain than that, in the present condition
of what we prettily call the "labour market," thousands of men, with
thousands of women and children dependent upon them, would clamour to
have the chance to take a share of the £1,500 while working to make
£5,560 for the investors. Nor is it that we are merely examining the
extravagant promises of a prospectus. There is nothing impossible in
this scheme; the company has a good thing, and it is bound to make fine
profits. I have given above a few specimens of gas dividends. Here are
some more:

                                   Nominal
                                    Value                    Price
   Name of Company.               of Shares   Dividend.    of Shares
                                   or Stock.                 (1905).
 The British Gas Light Co., Ltd.     £20       10  p.c.       £41
 The Ipswich Gas L. Co. (A Stk.)      10       13½ p.c.        28
 Eastbourne Gas Co. (C Stock)         10       15  p.c.        28
 Harrogate Gas Co. (A Stock)         100       17  p.c.       340
 Aldershot Gas and Water Co.          10       11½ p.c.        23
 Portsea Is. Gas Lgt. Co. (B Shs.)    50       13  p.c.       127
 European Gas Co., Ltd.               10       11  p.c.        23
 Bournemouth Gas and Water Co.        10       14  p.c.        30
 Watford Gas and Coke Co.            100       13½ p.c.       276

In each of these cases the remuneration of labour is much less than the
remuneration of those who "wait."

Thus the records of public companies place at our disposal a very fair
picture of distribution as it is. We cease to wonder at the terrible
error in the distribution of the nation's income. It is brought home to
us that a few individuals, through a monopoly of capital, have a great
economic advantage over the multitude of their fellows. That it is
impossible to argue that the error of distribution accords, even
roughly, with the intrinsic value of the various orders of services, is
sufficiently shown in the case of these companies, for their gross
profit is usually subject to deduction for the reward of brain-power
before assessment by the Income Tax Commissioners. We see that it is not
any form of ability, either in design or in organization (which is but
design) or in manual effort which secures the largest rewards in
industry. It is capital, as capital, which takes the lion's share of the
product of the mental and manual labour exercised upon the small area of
land which serves for the basis of our industries.[30] The landlord's
share, although actually great, is relatively small. In agriculture the
conditions are different. It is the landlord, as landlord, who takes the
lion's share of the product of the cultivated acres of the United
Kingdom.

[Footnote 28: I use this phrase with intention. Interest, once defined
as the reward of "abstinence," is now usually explained by the
economists of the schools to be the reward of "waiting." "Abstinence"
has been laughed out of court.]

[Footnote 29: The State has now agreed to buy out this undertaking.]

[Footnote 30: In view of the fact that the Single Tax doctrines of Henry
George are still sedulously propagated in this country it is of interest
to quote here the following passage from one of Mr George's latest
works:

"_We have no fear of capital, regarding it as the natural handmaiden of
labour; we look on interest itself as natural and just; we would set no
limit to accumulation, nor impose on the rich any burden that is not
equally placed on the poor; we see no evil in competition, but deem
unrestricted competition to be as necessary to the health of the
industrial and social organisms as the free circulation of the blood is
to the health of the bodily organism—to be the agency whereby the
fullest co-operation is to be secured. We would simply take for the
community what belongs to the community, the value that attaches to land
by the growth of the community; leave sacredly to the individual all
that belongs to the individual; and, treating necessary monopolies as
functions of the State, abolish all restrictions and prohibitions
save those required for public health, safety, morals, and
convenience._"—From "The Condition of Labour" by Henry George. Published
by Swan, Sonnenschein, 1891. Pages 91 and 92.

This gospel of unrestricted competition (in the same volume Henry George
chided Pope Leo XIII. for counselling the State to restrict the
employment of women and children) is actually preached to the poor as a
solution of the problem of poverty.]




 CHAPTER IX
 PROFITS, BAD TRADE AND UNEMPLOYMENT


If we look at the amounts of profit assessed under the income tax during
the last fifteen years we are struck with the steady growth of the
figures:—

GROSS PROFITS ASSESSED TO INCOME TAX

 1893-4       £673,700,000
 1894-5        657,100,000
 1895-6        677,800,000
 1896-7        704,700,000
 1897-8        734,500,000
 1898-9        762,700,000
 1899-1900     791,700,000
 1900-1        833,300,000
 1901-2        867,000,000
 1902-3        879,600,000
 1903-4        902,800,000
 1904-5        912,100,000
 1905-6        925,200,000
 1906-7        943,700,000
 1907-8        980,100,000
 1908-9      1,010,000,000

These figures have been widely quoted, and with reason, as indicative of
rapidly growing prosperity. We see that the gross assessment to income
tax has actually grown by over £336,000,000 since 1894. We could have no
better proof of the growth of the national product which is divided up
amongst us.

There is but one set-back in the table. It occurred in the year 1894,
when the total gross assessment fell by £16,600,000, and the assessment
under Schedule D (Trades and Professions) fell by £16,000,000. This
fall, of course, was only an apparent one caused by an alteration in the
limit of exemption. Since that date there has been remarkable growth.
Since "Riches and Poverty" first appeared (1905) the growth has
proceeded very rapidly indeed.

It is of interest to inquire into the movement of wages and employment
during these years of remarkable prosperity. Did wages rise and was
employment constant?

In "Riches and Poverty," edition 1905, pp. 99 _et seq._, I wrote:

"Let us take some typical trades, and examine the rates of wages paid in
these years of rapidly increasing profits.

"The figures about to be quoted are those collected by the Labour
Department of the Board of Trade.

"London carpenters in 1894 were paid 9½d. per hour. In 1897 the rate
rose to 10d. and in 1903 to 10½d. In Birmingham in 1894 the rate was 9d.
and in 1903 9½d. In Belfast the rise between 1894 and 1903 was from 7¾d.
to 8½d.

"Bricklayers' labourers in London were paid 6½d. per hour in 1894 and
7d. in 1903. In Manchester the rate remained constant at 6d. per hour.
In Birmingham there was a rise from 6d. to 6½d. Masons' labourers in
Glasgow have been paid since 1894 a constant rate of 5½d.

"Turning to coal-hewers we get some considerable changes, which are best
shown in tabular form:—

 NOMINAL DAILY EARNINGS OF COAL HEWERS
 1894-1903

     ||               |          |   Sth. Staffs. |
     ||Northumberland.|  Durham. |    and East    |   West
     ||               |          | Worcestershire.| Scotland.
     ||  _s._  _d._   |_s._  _d._|   _s._  _d._   |_s._  _d._
 1894||   5     9     | 5     5  |    4     8     | 6     0
 1897||   5     0     | 4    11  |    4     4     | 4     6
 1900||   6     0     | 5    10  |    4     8     | 6     3
 1901||   7     9     | 7     5  |    5     0     | 8     0
 1903||   6     0     | 5    10  |    5     0     | 5     9

"In the ten years there has been a considerable variation, but the high
rates of 1901 were brief in duration. Coal-hewers' wages have now gone
back almost to the level of 1894.

"Engine fitters in London earned 38s. in 1894 and 39s. in 1903. In
Birmingham and Manchester the rates rose from 34s. in 1894 to 36s. in
1903. In Newcastle there was a greater rise in the same period, from
31s. 6d. to 36s.

"Ironfounders in London obtained 38s. in 1894, 40s. to 42s. in 1900 and
40s. in 1903. In Manchester the rates were much the same. In Birmingham
36s. was paid in 1894 and 38s. in 1903.

"Compositors in London were paid 38s. in 1894 and 39s. in 1903. In
Manchester the rate remained constant at 35s. In Glasgow the rate
remained constant at 34s.

"Agricultural labourers in the Eastern Counties obtained 11s. 1d. per
week in 1894 and a gradual increase to 13s. 1d. in 1903. In the North
near coal there was a rise from 17s. 5d. to 18s. 4d. In the Midlands
13s. 5d. was paid in 1894 and 14s. 6d. in 1903.

"Textile wages are best expressed by an index number. Taking the rate of
1903 as 100 the rate paid in 1894 was nearly 95 per cent. of that of
1903. This increase refers to cotton spinners and weavers and linen and
jute operatives taken together.

"A mere recital of the foregoing facts is sufficient to show that the
rise in wages in 1894-1903 was at a much lower rate than the growth of
profits in the same period."

Revising this work for 1910, I regret to say that the changes in the
above-quoted rates have been so few that it is not worth while to
rewrite what I set down five years ago. Wage rates have been almost
stationary in the interim, and the changes that have been made in the
above figures are too insignificant to be worth recording.

The matter is best dealt with by setting out the Board of Trade wages
index numbers. In the important table on page 112 I have contrasted the
representative wage index numbers prepared by the Board of Trade with
index numbers representing the gross assessments to income tax. In a
similar table in "Riches and Poverty," 1905 edition, I did not take into
consideration the growth of the number of income tax payers. In the
present calculation I have assumed a growth of income tax payers of
10,000 a year throughout the period, which must be very near the truth.

It will be seen that, representing the profits of 1900 by 100 and
calculating the profits of other years as percentages of 100, the total
profits index number rises from 86.8 in 1893 to 112.5 in 1908.

The wages are treated in the same way, the rates of the years before and
after 1900 being expressed as percentages of the rates of that year. It
will be found that the index number expressing the unweighted average of
the building, coal-mining, engineering and textile trades, and
agriculture rose from 90.1 in 1893 to 101.0 in 1908.

It is a striking contrast:—


 PROFITS AND WAGES CONTRASTED
 (From Table on page 112).

            Profits.              Wages.
       Per cent. of those   Per cent. of those
            of 1900.             of 1900.
 1893         86.8                 90.1
 1900        100.0                100.0
 1908        112.5                101.0

It should be remembered that the income tax assessments are largely made
upon the average of the profits of the three years preceding the year of
assessment (see Chapter 21), and that the income tax has been better
collected in recent years, but even when allowance is made for this the
figures remain remarkable.

The table does much less than justice to the growth of profits, for this
reason. As will be seen by the table on page 37, the growth of income
tax payers has been chiefly in the region of small salaries, which (see
p. 36) average about £200 a year. The addition of 10,000 income payers
at £200 a year adds but £2,000,000 to a year's aggregate assessment. But
the addition of 10,000 £200 income tax payers in a year, little as it
adds to the aggregate, waters down the average income tax income (col.
C, p. 112), and so lowers the Profits Index Number. If one could
separate the small salary earners from the table, _profits would show a
much more decided growth_, considerable as is the rise in the index
number as modified by the small fry.

On the other hand, the Wage Index Number deals with certain
trades—mining, textile, engineering, building, agriculture—which have
certainly gained more in wage rates in the period than a great mass of
labour outside the groups named. Therefore, while the Profits Index
Number minimizes the growth of profits, the Wage Index Number
exaggerates the growth of wages as a whole. On the latter point, see
Chapter 2.

 TAXED PROFITS AND WAGES CONTRASTED

 The Wage Index Numbers are those of the Board of Trade (Cd. 4954). The
 Profit Index Numbers are based upon the Inland Revenue Assessments. The
 Financial Year 1893-4 is taken to correspond with the Calendar Year
 1893.

 _Note._—The wages and profits of 1900 are represented by 100. The wages
 and profits of the other years are expressed as percentages of those of
 1900.

 ---------+-----------------------------------------------------+-----------
          |                          PROFITS.                   |  WAGES.
          +---------------+-------------+-----------+-----------+-----------
          |        A      |       B     |     C     |     D     |     E
   YEAR.  |     Gross     |  Probable   |  Average  | Index No. |
          |  Assessments  |  Number of  |   Gross   |    of     |   Wages
          |      to       | Income Tax  | Income of | Incomes.  | Index No.
          |  Income Tax.  |   Payers.   |Tax Payers.|1900 = 100.|1900 = 100.
 ---------+---------------+-------------+-----------+-----------+-----------
          |        £      |   NUMBER.   |     £     | PER CENT. | PER CENT.
   1893   |   674,000,000 |   950,000   |    709    |   86.8    |   90.1
   1894   |   657,000,000 |   960,000   |    684    |   83.8    |   89.5
   1895   |   678,000,000 |   970,000   |    698    |   85.5    |   89.1
   1896   |   705,000,000 |   980,000   |    719    |   88.1    |   89.9
   1897   |   734,000,000 |   990,000   |    741    |   90.8    |   90.8
   1898   |   763,000,000 | 1,000,000   |    763    |   93.5    |   93.2
   1899   |   792,000,000 | 1,010,000   |    784    |   96.0    |   95.4
   1900   |   833,000,000 | 1,020,000   |    816    |  100.0    |  100.0
   1901   |   867,000,000 | 1,030,000   |    841    |  103.0    |   99.0
   1902   |   880,000,000 | 1,040,000   |    846    |  103.6    |   97.8
   1903   |   903,000,000 | 1,050,000   |    860    |  105.3    |   97.2
   1904   |   912,000,000 | 1,060,000   |    860    |  105.3    |   96.7
   1905   |   925,000,000 | 1,070,000   |    864    |  105.8    |   97.0
   1906   |   944,000,000 | 1,080,000   |    874    |  107.1    |   98.3
   1907   |   980,000,000 | 1,090,000   |    899    |  110.1    |  101.7
   1908   | 1,010,000,000 | 1,100,000   |    918    |  112.5    |  101.0
 ---------+---------------+-------------+-----------+-----------+-----------
  Increase|      49.8     |     15.7    |    29.5   |   29.5    |   12.0
 1893-1908|    Per Cent.  |   Per Cent. |  Per Cent.| Per Cent. | Per Cent.
          +---------------+-------------+-----------+-----------+-----------
  Increase|      21.2     |     7.8     |    12.5   |   12.5    |   1.0
 1900-1908|    Per Cent.  |   Per Cent. |  Per Cent.| Per Cent. | Per Cent.
 ---------+---------------+-------------+-----------+-----------+-----------

[Illustration: PROFITS AND WAGES, 1893-1908
(see Table on p. 112)]

Thus in recent years the proportion of the national income taken by
labour made no gain upon the proportion taken by capital. On the
contrary, labour took a diminished share of the increased product.

Since the Boer War labour has barely retained the increase which it
obtained between 1894 and 1900.

The seriousness of the position is increased by the great rise in the
cost of living, as the following figures testify:

 WAGES AND COST OF LIVING

                                       Board of Trade
                     Board of Trade    Index Number
                     Wages Index No.  Retail Price of
                                      Food in London.

 1895                     89.1            93.0
 1900                    100.0           100.0
 1908                    101.0           109.0
                         -----           -----
 Increase per cent.       13.3            17.2
                          ====            ====

Thus, real wages have actually fallen since 1895.

Again, as has been already remarked, the Board of Trade Wages Index
Number deals with trades which on the whole have gained more than wages
generally. Railway wages have been stationary for years, even while the
cost of living has been going up. On the German and Swiss national lines
the men have been granted higher wages in compensation for increased
costs; here our railway companies abuse their monopolistic position to
the uttermost in regard to wages as in regard to the public welfare.

In addition to reduced rates of wages in slump years, the working
classes are made to bear the brunt of depression through (1) "short
time" or partial unemployment, and (2) dismissal.

 UNEMPLOYMENT.—TABLE SHOWING, FOR THE END OF EACH MONTH IN 1900-1910,
 THE NUMBER OF MEMBERS OUT-OF-WORK IN THE TRADE UNIONS WHICH PAY
 "UNEMPLOYMENT BENEFIT." THESE FIGURES DO NOT INCLUDE MEMBERS RECEIVING
 STRIKE OR SICK PAY

 ---------+-----------+------+-----++---------+-----------+------+-----
   Date.  |Membership.|Number| Per ||  Date.  |Membership.|Number| Per
          |           |out of|Cent.||         |           |out of|Cent.
          |           |Work. |     ||         |           |Work. |
 ---------+-----------+------+-----++---------+-----------+------+-----
   1900.  |           |      |     ||  1902.  |           |      |
 January  |  521,833  |14,252| 2.7 ||July     |  550,169  |21,859| 4.0
 February |  524,872  |15,114| 2.9 ||August   |  551,565  |24,549| 4.5
 March    |  524,199  |11,821| 2.3 ||September|  553,870  |27,522| 5.0
 April    |  525,865  |13,075| 2.5 ||October  |  548,442  |27,270| 5.0
 May      |  531,608  |12,645| 2.4 ||November |  549,197  |26,454| 4.8
 June     |  533,119  |13,992| 2.6 ||December |  552,415  |30,302| 5.5
 July     |  533,499  |14,566| 2.7 ||  1903.  |           |      |
 August   |  534,331  |15,971| 3.0 ||January  |  547,671  |27,685| 5.1
 September|  536,242  |19,520| 3.6 ||February |  549,843  |26,471| 4.8
 October  |  535,668  |17,750| 3.3 ||March    |  559,129  |24,096| 4.3
 November |  539,175  |17,515| 3.2 ||April    |  554,901  |22,665| 4.1
 December |  540,102  |21,496| 4.0 ||May      |  554,524  |22,102| 4.0
   1901.  |           |      |     ||June     |  556,695  |24,804| 4.5
 January  |  545,539  |21,682| 4.9 ||July     |  555,743  |27,394| 4.9
 February |  543,487  |21,159| 3.6 ||August   |  561,946  |30,751| 5.5
 March    |  544,688  |19,618| 3.8 ||September|  558,508  |32,179| 5.8
 April    |  547,197  |21,018| 3.6 ||October  |  555,105  |32,358| 5.8
 May      |  544,460  |19,487| 3.4 ||November |  562,954  |33,614| 6.0
 June     |  541,651  |18,605| 3.4 ||December |  559,897  |37,501| 6.7
 July     |  539,422  |18,164| 3.9 ||  1904.  |           |      |
 August   |  543,971  |21,025| 3.7 ||January  |  561,226  |36,767| 6.6
 September|  542,917  |20,180| 3.7 ||February |  563,824  |34,388| 6.1
 October  |  544,827  |19,995| 3.8 ||March    |  567,232  |33,950| 6.0
 November |  545,832  |20,614| 3.6 ||April    |  561,611  |33,706| 6.0
 December |  554,018  |25,703| 4.6 ||May      |  571,384  |36,002| 6.3
   1902.  |           |      |     ||June     |  573,373  |34,066| 5.9
 January  |  553,218  |24,470| 4.4 ||July     |  568,272  |34,494| 6.1
 February |  561,708  |24,072| 4.3 ||August   |  575,061  |37,006| 6.4
 March    |  551,270  |20,241| 3.7 ||September|  575,575  |39,005| 6.8
 April    |  550,958  |21,349| 3.9 ||October  |  576,642  |39,396| 6.8
 May      |  549,023  |21,926| 4.0 ||November |  577,268  |40,244| 7.0
 June     |  544,893  |22,832| 4.2 ||December |  573,726  |43,435| 7.6

 UNEMPLOYMENT—_continued_

 ---------+-----------+------+-----++---------+-----------+------+-----
   Date.  |Membership.|Number| Per ||  Date.  |Membership.|Number| Per
          |           |out of|Cent.||         |           |out of|Cent.
          |           |Work. |     ||         |           |      |Work.
 ---------+-----------+------+-----++---------+-----------+------+-----
   1905.  |           |      |     ||  1908.  |           |      |
 January  |  578,910  |39,315| 6.8 ||January  |  649,789  |40,580| 6.2
 February |  578,708  |35,778| 6.2 ||February |  639,073  |40,900| 6.4
 March    |  578,684  |32,558| 5.6 ||March    |  639,716  |43,853| 6.9
 April    |  575,968  |32,348| 5.6 ||April    |  638,237  |48,035| 7.5
 May      |  575,512  |29,487| 5.1 ||May      |  627,613  |49,515| 7.9
 June     |  576,346  |29,995| 5.2 ||June     |  653,327  |53,766| 8.2
 July     |  576,472  |29,845| 5.2 ||July     |  646,511  |53,163| 8.2
 August   |  578,444  |31,046| 5.4 ||August   |  648,585  |57,912| 8.9
 September|  578,542  |30,696| 5.3 ||September|  593,444  |55,793| 9.4
 October  |  584,288  |29,560| 5.0 ||October  |  591,053  |56,200| 9.5
 November |  586,040  |27,769| 4.7 ||November |  644,770  |58,349| 9.1
 December |  581,630  |28,734| 4.9 ||December |  679,060  |61,619| 9.1
   1906.  |           |      |     ||  1909.  |           |      |
 January  |  588,121  |27,614| 4.7 ||January  |  688,588  |59,786| 8.7
 February |  586,956  |26,064| 4.4 ||February |  696,688  |58,670| 8.4
 March    |  585,376  |22,465| 3.8 ||March    |  700,654  |57,450| 8.2
 April    |  582,201  |21,037| 3.6 ||April    |  700,867  |57,250| 8.2
 May      |  590,919  |21,080| 3.6 ||May      |  699,779  |55,473| 7.9
 June     |  593,830  |21,785| 3.7 ||June     |  698,284  |55,331| 7.9
 July     |  595,637  |21,464| 3.6 ||July     |  693,848  |54,877| 7.9
 August   |  596,010  |22,528| 3.8 ||August   |  697,268  |53,918| 7.7
 September|  598,611  |22,826| 3.8 ||September|  695,720  |51,749| 7.4
 October  |  600,122  |26,313| 4.4 ||October  |  694,930  |49,664| 7.1
 November |  604,370  |27,446| 4.5 ||November |  696,415  |45,569| 6.5
 December |  597,198  |29,212| 4.9 ||December |  692,153  |45,963| 6.6
   1907.  |           |      |     ||  1910.  |           |      |
 January  |  617,911  |25,990| 4.2 ||January  |  694,456  |47,259| 6.8
 February |  618,574  |23,932| 3.9 ||February |  701,252  |40,121| 5.7
 March    |  618,230  |22,058| 3.6 ||March    |  701,766  |36,543| 5.2
 April    |  619,591  |20,310| 3.3 ||April    |  699,932  |30,475| 4.4
 May      |  624,993  |21,081| 3.4 ||May      |  703,439  |29,787| 4.2
 June     |  622,584  |22,189| 3.6 ||June     |  702,522  |25,866| 3.7
 July     |  631,158  |23,291| 3.7 ||July     |  698,888  |26,664| 3.8
 August   |  632,068  |25,458| 4.0 ||         |           |      |
 September|  631,241  |28,914| 4.6 ||         |           |      |
 October  |  638,788  |30,079| 4.7 ||         |           |      |
 November |  639,678  |32,010| 5.0 ||         |           |      |
 December |  644,298  |39,343| 6.1 ||         |           |      |

As to the amount of short time worked between 1900 and 1910, we have no
adequate information, but as to unemployment the evidences have forced
themselves upon public attention in every part of the country.

How ruthlessly the workman is made to bear the chief burden of bad trade
and how, even in the best years, there is always a surplus of unemployed
labour, can be clearly shown.

There are about 2,000,000 men and women Trade Unionists in the United
Kingdom, belonging to some 1,300 Trade Unions, and forming but about
one-seventh of the manual workers of the United Kingdom. Some of these
Unions pay "unemployed benefits," and are therefore enabled to record
accurately how many of their members are out-of-work. The membership of
these particular Unions is about 650,000. The Board of Trade collects
from them, monthly, details of the members out-of-work and these details
are published in the official "Labour Gazette." From that publication I
have compiled the table on pages 116-117, which shows faithfully, so far
as about half a million of our workmen are concerned, how capital deals
with labour. It covers the years since 1900, and continues the record
printed on pp. 106-107 of "Riches and Poverty," edition 1905.

The period examined covers a complete trade cycle, with its fat years
and lean years. I think the reader cannot fail to be struck with the
extraordinary variations in the state of employment shown in the table.
Even in the best year of the period, 1900, and in March, the best month
of that year, 11,821 members were receiving out-of-work pay out of a
total of 524,199, and before a month had passed 1,200 more men had been
discharged. By January, 1901, the number of unemployed exceeded 21,000,
or 4.0 per cent. By the end of 1901 the employers had rid themselves of
26,000 men out of 554,000. Throughout 1902 the number receiving
out-of-work pay was round about 25,000 at the end of each month, the
figure rising to 30,000 in December. By the end of 1903 another 7,000
were discharged, and in December 1904 the total rose to over 43,000 out
of 574,000, or 7.6 per cent. In 1905 there was improvement, continuing
in 1906-7. At the end of 1907, however, 39,000 out of 664,000 were out
of work, and a year later 62,000 out of 679,000, or 9 per cent., were
unemployed. 1909 saw recovery, which has happily continued until now
(August 1910). At the end of July 1910 the unemployment rate had fallen
to 3.8 per cent.

These facts relate, not to casual labourers, but to the flower of our
skilled workmen—to a class of men who are least likely to suffer (1)
because they are the most needed instruments of capital, and (2) because
they are organized and best able to resist injustice. If we were able to
set out the facts relating to all manual labourers we should probably
get a picture even more distressing. It is at any rate unlikely that,
amongst manual labourers as a whole, employment is better than in the
chief Trade Unions.

In December 1904, the Hackney Town Council conducted a census of the
unemployed of Hackney. It was carried out in a very sensible way. At a
cost of about £150 every house in the borough was canvassed between
December 12th, 1904, and January 31st, 1905, and particulars obtained
from every person over 16 years of age found to be unemployed. The
results were:—

                  Population
                   (1901).    Houses.  Unemployed.

 North   Hackney    45,110     9,152        465
 Central    "       69,368     9,837      1,090
 South      "      104,794    14,751      2,963
                   -------    ------      -----
     Totals        219,272    33,740      4,518
                   =======    ======      =====

South Hackney, which contains the poor Homerton Ward, of course gave the
worst results. The unemployed in South Hackney actually numbered 3 per
cent. of its whole population, men, women, and children! Taking the
borough as a whole, including well-to-do Stamford Hill, the unemployed
rate came out at nearly 7 per cent. of the "employable" population of
all classes. 530 cases of "pawning and selling home" were discovered.
Thus, for all classes of workers in Hackney, the unemployment rate was
almost precisely the same as the rate in the Trade Unions paying
unemployment benefit. It is also worthy of note that, out of a total
number of 4,315 males unemployed, as many as 1,477 were "labourers," and
1,167 of these "general labourers." These facts, impressive as they are,
amount to an understatement of the case, however. Many of the
unemployed, from feelings of delicacy, failed to record their condition
for fear of public attention being directed to them personally. Mr
Councillor Fairchild of Hackney told me that he knew of forty cases of
unemployment not returned in the census. This goes to show that we are
justified in taking the unemployed Trade Union rate as really
representative of the whole body of labour. While, on the one hand, it
excludes postmen, railway servants, policemen, and others who have quite
regular work, it does not include the great mass of "labourers" and
other casual workers whose state of employment must always be worse than
that of the men belonging to the benefit-paying Trade Unions.

It is well to point out, for the facts are little known, the enormous
sums expended by the chief Trade Unions in out-of-work pay. For recent
years the figures have been:—

 EXPENDITURE ON UNEMPLOYED BENEFIT BY CERTAIN TRADE UNIONS HAVING A
 TOTAL MEMBERSHIP OF ABOUT 650,000

 Year.  Expenditure.

 1898     £234,000
 1899      185,000
 1900      261,000
 1901      325,000
 1902      429,000
 1903      516,000
 1904      655,000
 1905      523,000
 1906      424,000
 1907      466,000

Thus, even in the best recent years, 1899 and 1900, these Unions had to
pay out £185,000 and £261,000 respectively to sustain members
out-of-work. Modern industry works with a constant margin of unemployed
labour, a margin which ever tends to depress wages and to place the
employed at a disadvantage in bargaining for the sale of their services.

The sums above named are part, of course, of the alleged working class
"capital" referred to on page 56, and often advanced as proof of the
_riches of the poor_. In plain fact they are abstracted from poor wages
in order to keep the home together when those poor wages fail altogether
in seasons of unemployment. To term them "capital," or to flaunt them as
"wealth," shows a curious perversity of ideas.

While we do not know how many workers are unemployed at any given time,
it is probable that, as the whole body numbers about 15,000,000, and
60,000 are sometimes unemployed out of a group of 650,000 of these, the
total may reach 500,000 or 600,000 or more in bad years.

Yet, when we obtain particulars of the profits of capital in "bad years
of trade," we see little diminution in the handsome sums confessed to
the Commissioners of Inland Revenue, and we understand how profits are
sustained at the expense of the suffering and partial degradation of a
great body of British citizens larger in number than the entire
landowning and capitalist classes. I shall be surprised if it does not
occur to some of those who read these lines that in view of the
extraordinary profits shown in the totals on page 112 the wholesale
dismissal of workmen at the first symptom of slackening trade is a
disgrace to our civilization.

As I have remarked earlier in these pages, unemployment is by no means
confined to the manual labour classes. All the humbler units of
commercial life are subject to treatment which is little better than
that accorded the "workman." As I write there are thousands, if not tens
of thousands, of clerks, writers, warehousemen, shop assistants,
travellers, canvassers, agents, and others out of work and undergoing
terrible sufferings in the endeavour to keep afloat. Cases are frequent
in which advertisements offering berths of small account are hungrily
applied for by hundreds of applicants. It is a sad reflection that for
the vast majority of our people there is no such thing as security of
tenure of employment. The profits assessed to income tax, the income,
that is, of about one-ninth of our population, continue to rise by leaps
and bounds, but the state of employment remains very much as it was.
After a careful examination of the employment records of forty years the
Board of Trade gave their verdict in 1904 (Cd. 2337, p. 84), that "the
average level of employment during the past four years has been almost
exactly the same as the average of the preceding forty years."

But, as our population to-day is very much greater than in 1860, the
same "average level of employment" means that there are far more
unemployed workmen in England to-day than was the case forty years ago.
The proportion of out-of-works is neither larger nor smaller, but the
magnitude of the problem is greater because there are more of us.

No attempt is yet made by our inadequate Census to obtain particulars of
the number of unemployed. The Census Bill of 1910 led to a wrangle as to
whether a religious census should be taken, but there was not even a
wrangle as to whether the golden opportunity should be seized to
ascertain the number of unemployed. So the Census of 1911 will come and
go. Before the Census of 1921 is taken many proposals will be made for
dealing with unemployment, but no one will know the size of the problem
to be dealt with.

There is, of course, no remedy for unemployment under present economic
conditions. All that can be done by the State, consistently with the
private ownership of land and industrial capital, is to _remedy the
distress arising from unemployment_, and as I write (1910) the
Government are contemplating a scheme for unemployment insurance, based
on contributions by men and masters, with aid from taxation. Such a
scheme should be strongly supported, but there should be clarity of
ideas as to what is effected by insurance. Unemployment insurance no
more cures unemployment than life insurance cures death. All that is
done by it is to _relieve the distress caused by the unemployment_. It
is a great and worthy object, but the unemployed workman drawing his
out-of-work pay, _is still unemployed_.

The Labour Party has propounded a "Right-to-Work" Bill, but this again,
on examination, suggests work _or maintenance_, its promoters seeing
clearly that economic work cannot be made to order by a State which is
as poor in property as the workmen themselves. The Right-to-Work Bill is
thus no more a _remedy for unemployment_ than an insurance scheme is
such a remedy.

Nor can the State, by pursuing its few public works chiefly in bad
seasons, level unemployment as between good years and bad, or as between
good seasons and bad. The troughs of the waves of depression are too
great to be filled by such means, and they deceive themselves who think
that they can rule those waves by the manipulation of Government
contracts.

The Labour Exchange is a useful machine for organizing labour to meet
the vicissitudes of individualistic industry. It has been described as
equivalent to the _organization of industry_, but that is a misnomer.
The organization of industry can only begin with the organization of the
means of production. If we organize production we necessarily organize
labour. If we enrol unemployed workmen, and move them about as pawns to
suit the uneconomic conditions of unorganized capital units ("Come and
tell us if you want a man;" "Come and tell us if you want a job") we may
save the workman some trouble and loss of self-respect in finding new
jobs, and render more tolerable his periods of idleness, but most surely
we neither organize industry nor increase the volume of employment.




 CHAPTER X
 PART OF THEIR WAGES


In considering the earnings, as distinguished from the rates of wages,
of the manual labour classes, we have found it necessary to make an
allowance for time lost through sickness and accidents. Let us now
examine the available records of the industrial accidents and diseases
of occupations which are part of the wages of the working classes, and
at the price of which the comforts of the well-to-do are purchased.

As to persons employed in factories and workshops, we have the reports
made to the inspectors under the Factory and Workshop Act of 1901. By
Section 19 of the Act it is provided that where there occurs an accident
which either

(_a_) Causes loss of life to a person employed in a factory or workshop;
or

(_b_) Causes to a person employed in a factory or workshop such bodily
injury as to prevent him on any one of the three working days next after
the occurrence of the accident from being employed for five hours on his
ordinary work, written notice shall forthwith be sent to the factory
inspector for the district.

If the accident arises from special causes defined as machinery moved by
power, boiler explosions, escape of gas or steam, or use of hot liquid
or molten metal, the casualty has to be reported to a Certifying Surgeon
as well as to the Inspector.

It is also provided that if any notice required by Section 19 as to an
accident in a factory or workshop is not sent to the local inspector,
the occupier of the factory or workshop shall be liable to a fine not
exceeding £5.

Thus, under the Factory and Workshop Act, an accident is not always a
reportable accident. One worker may meet with a trivial accident which,
though he is able to continue work, prevents him from doing his ordinary
work for, say, the next six hours only after the accident. This would be
a reportable accident. A second worker may meet with an accident which,
though it does not prevent him from continuing his ordinary work for
five hours on "any one of the three working days next after the
occurrence of the accident," may afterwards develop into a permanent
partial disablement, so that for weeks, or even months, he may be unable
to do any work. This accident would not be "reportable" under the
Factory Act.

But there is a more important reason why the official records of
accidents are incomplete. It lies in the fact that the administration of
the Factory and Workshop Act by the Home Office is lax, and the staff of
men and women inspectors ridiculously inadequate. The number of
factories and workshops under inspection in 1908 was as follows:


 FACTORIES, WORKSHOPS, ETC., UNDER INSPECTION, 1908

 Class of Works.  Number of Works.
   Factories          110,691
   Workshops          149,398
                      -------
                      260,089
                      =======

The staff of inspectors and assistant inspectors in 1908 was stated
officially to be of an authorized strength of 200. This is an
improvement upon the 152 recorded in "Riches and Poverty," edition 1905,
p. 115, but it cannot be termed adequate. If we imagine the 260,000
registered workplaces divided equally amongst the staff we see that each
inspector has to deal, on the average, with 1,300 workplaces. If, then,
each registered workplace were inspected only once in each year, each
inspector would need to inspect 32 factories or workshops per week. As
this is a physical impossibility, it is clear that each registered
workplace is not called upon even once in each year.

Whether an employer does or does not report a reportable accident
largely depends upon the vigilance of the local inspector, and as it is
physically impossible for a few inspectors to be vigilant in regard to
many employers there can be no question that an exceedingly large number
of accidents go unreported. No reflection is made here upon the
inspectors themselves; it is simply pointed out that, however devoted
they may be, they cannot properly carry out the work which needs to be
done.

The Factory Report for 1908 (Cd. 4664) enables us to make the following
comparison with the 1903 figures given in "Riches and Poverty" (1905
edition).

 CASUALTIES IN FACTORIES AND WORKSHOPS, 1903-8

         Fatal     Non-Fatal
       Accidents.  Accidents.
 1903    1,047       92,600
 1908    1,042      121,112

The fatal accidents have remained stationary; the non-fatal accidents
have curiously increased. The explanation is largely that the additional
staff of inspectors has led to better reporting of accidents. Probably
many still go unreported.

However, merely to take the list of "reported" accidents as it stands,
we get the gruesome total of 1,042 persons killed and 121,000 wounded in
factories and workshops in a single year.

A considerable number of the non-fatal accidents are of a serious
character, as may be judged from the following details showing the cases
reported to certifying surgeons as arising from the "special causes"
already referred to:

 FACTORIES AND WORKSHOPS: ACCIDENTS REPORTED TO CERTIFYING SURGEONS, 1908

      Degree of Injury.       Number.

 Fatal                         1,042
 Loss of hand or arm             126
 Loss of part of hand          3,303
 Loss of part of leg or foot      78
 Fractures                     1,680
 Loss of sight                    44
 Injuries to head or face      5,109
 Burns and scalds              5,617
 Other injuries               24,902
                              ------
                              41,901
                              ======

The number of reports to the Certifying Surgeons in 1903 was 30,509
("Riches and Poverty," edition 1905, p. 117).

Having formed an idea, if an inadequate one, of the deaths, mutilations
and injuries which occur in our factories and workshops in a single
year, let us pass to the question of diseases of occupations. The
particulars on page 129 are taken from the Factory Reports.

 DISEASES OF OCCUPATIONS IN FACTORIES AND WORKSHOPS
 (Cases reported under the Factory and Workshop Act)

 --------------------------------------------------+-----------+-----------
                                                   |  CASES.   |  DEATHS.
                                                   +-----------+-----------
                                                   |Year ended |Year ended
 Disease and Industry.                             | December. | December.
                                                   +-----+-----+-----+-----
                                                   |1908.|1903.|1908.|1903.
 --------------------------------------------------+-----+-----+-----+-----
 LEAD POISONING—                                   |     |     |     |
   Smelting of Metals                              |  70 |  37 |   2 |   2
   Brass Works                                     |   6 |  15 |     |
   Sheet Lead and Lead Piping                      |  14 |  11 |     |
   Plumbing and Soldering                          |  27 |  26 |     |
   Printing                                        |  30 |  13 |   2 |   2
   File Cutting                                    |   9 |  24 |   2 |   2
   Tinning and Enamelling of Iron Hollow-ware      |  10 |  14 |   0 |
   White Lead Works                                |  79 | 109 |   3 |   2
   Red and Yellow Lead Works                       |  12 |   6 |   0 |
   China and Earthenware                           | 117 |  97 |  12 |   3
   Litho-transfer Works                            |   2 |   3 |   0 |
   Glass Cutting and Polishing                     |   3 |   4 |   1 |
   Enamelling of Iron Plates                       |   7 |   4 |   0 |
   Electrical Accumulator Works                    |  25 |  28 |   1 |
   Paint and Colour Works                          |  25 |  39 |   0 |   1
   Coach Making                                    |  70 |  74 |   3 |   5
   Shipbuilding                                    |  15 |  24 |     |   1
   Paint used in other Industries                  |  47 |  46 |   1 |   1
   Other Industries                                |  78 |  40 |   5 |
                                                   +-----+-----+-----+-----
             Total Lead Poisoning                  | 646 | 614 |  32 |  19
                                                   +-----+-----+-----+-----
 MERCURIAL POISONING                               |  10 |   8 |     |
                                                   +-----+-----+-----+-----
 PHOSPHORUS POISONING                              |   1 |     |     |
                                                   +-----+-----+-----+-----
 ARSENIC POISONING                                 |  23 |   5 |   1 |
                                                   +-----+-----+-----+-----
 ANTHRAX                                           |  47 |  47 |   7 |  11
                                                   +-----+-----+-----+-----
 TOTAL FACTORIES AND WORKSHOPS                     | 727 | 674 |  40 |  30
                                                   +-----+-----+-----+-----
 LEAD POISONING AMONGST HOUSE PAINTERS AND PLUMBERS| 239 | 201 |  44 |  39
                                                   +-----+-----+-----+-----
             Grand Total                           | 966 | 875 |  84 |  69

The greater part of the table, it will be seen, refers to factories and
workshops, but a line is added to show the cases of lead poisoning
amongst house painters.

Thus, in 1908, 84 workpeople, and in 1903, 69 workpeople, succumbed to
poisoning or anthrax, while about 966 non-fatal cases were reported in
the later year. Hundreds more, of course, go unreported, but the figures
as they stand, representing only part of the terrible truth, make one
shudder.

Most of the lead poisoning cases under china and earthenware refer to
women and young girls, and it should be noted that the figures for 1903
are very much better than those of previous years. Prior to 1899 one in
every fifteen of the persons employed in lead processes was reported as
suffering from plumbism! Stringent new rules were made in 1898, a
monthly medical examination being provided for, and in 1899 the reported
cases fell from 457 to 249. Now they have fallen, as our table shows, to
about 100 per annum. That is bad enough, for only some 6,000 pottery
workers are employed in the lead processes. The improvement, however,
shows how much can be done to protect the factory worker. Pity it is
that such steps were not taken before the people of the Potteries were
stunted by their deadly employment.

The horrible disease, anthrax, is responsible for about ten deaths per
annum, and as its bacillus lurks in wool, hair, hides and skins imported
from many countries for many industries, a large number of workers, from
warehousemen to woolcombers, regularly run the risk of contagion.

Turning to mining, the public is reminded at intervals, by a large scale
disaster, of the work of the coal-miner. Momentarily, we think of the
perilous nature of the industry upon which our wealth is built, and then
the tide of events sweeps on—and we forget.

Who remembers the last Rhondda holocaust? Was it in 1904 or in 1906? How
many men perished? What was the cause? Few could answer these questions.
Perhaps the 1910 disaster at Whitehaven will be more easily remembered
because of its picturesque horror; because the sea washes over the
miners' tomb; because reluctant hands were compelled to build a wall
between the dead and the living. But these things are but the scenery of
tragedy. It is the deaths that matter, and Whitehaven, awful as it is,
accounts for but about one-ninth or one-tenth of the deaths in or about
coal-mines of which the year 1910 will take toll.[31]

There will be the usual inquiry in the matter of this disaster, and I
assume that the gravest consideration will be given to the
circumstances. It appears to have been forgotten that on November 26th,
1907, five men were killed and seven injured at this same Whitehaven
Colliery under circumstances which involved breaches of the Coal-Mines
Regulation Act, and that on that occasion nearly 200 miners were
imperilled. The cause was careless shot-firing, the same cause which
destroyed 120 miners in the Rhondda in 1905—and in his official report
Mr R. A. S. Redmayne said:—

"Had the flame reached the haulage road, the loss of life would have
been very great, as probably all the morning shift, amounting to 180
persons ... would have lost their lives."

Thus there was very grave and recent warning as to the need for care in
this fiery mine underneath the sea.

That in passing. My immediate purpose is to point out that such
disasters as that of 1905 or 1910, destroying over 100 lives at a single
blow, barely disturb the average loss of life in coal-mines, so great is
the yearly loss.

 DEATHS FROM ACCIDENTS AND EXPLOSIONS IN COAL-MINES, 1851-1908

 1851 to 1900       54,322
     1901            1,131
     1902            1,053
     1903            1,097
     1904            1,049
     1905              945
     1906            1,040
     1907            1,136
     1908            1,116
                    ------
 Total, 58 years    62,889
                    ------
 Average per annum   1,083
                    ------

Loss of life in getting coal is not a spasmodic thing for occasional
tears; it is a day by day matter. The public at large is stricken with
horror by such a disaster as Whitehaven. Miners' widows are made every
day by trifling accidents of which the public never hears. It is bad
that 133 men have been buried and burned off the coast of Cumberland in
1910; it is worse that from 1,000 to 1,500 men will have perished in our
coal-mines between January 1 and December 31, 1910.

And what of the maimings? Under the Mines Acts, notification of
accidents in mines and quarries is also compulsory. Three classes of
accidents are distinguished under the Acts: (1) Fatal accidents; (2)
injuries from special causes, viz. explosions of gas, accidents in the
use of explosives, and boiler explosions; (3) other injuries not of a
"serious" character, no definition being given of serious personal
injury. When death occurs from a case already reported as an injury, a
further notification is required.

In 1908, the casualties in British mines and quarries were as follows:

 MINES AND QUARRIES, 1908

                                                Injured.
                                          (Cases of Disablement
                                 Killed.  for more than 7 days).

 Coal and Metalliferous Mines—
   1. Underground Accidents:
     (_a_) Explosions               128             139
     (_b_) Falls of ground          603          52,579
     (_c_) Shaft accidents           90           1,010
     (_d_) Miscellaneous            373          78,489
   2. Surface accidents             151          11,041
                                  -----         -------
                                  1,345         143,258
 Quarries                            92           4,809
                                  -----         -------
                                  1,347         148,067
                                  =====         =======

(The above table gives fuller particulars than that on page 120 of
"Riches and Poverty," edition 1905; the latter gave particulars of
"serious" accidents only.)

One miner in about 600 is killed, and one miner in six is more or less
seriously injured in the course of a year. The incapacity of the injured
included in these figures and proportions ranges from one week to
life-long disablement.

In the slate quarries of North Wales, one man in every three is injured
in the course of a year. The wages paid are very low.

Returning now to the figures of the table on p. 132, it will be observed
that the deaths in recent years are almost precisely the same in number
as the average of the fifty-eight years examined. That, of course,
points to great improvement, because the number of miners at work and
the quantity of coal got has rapidly increased in the period. With
regard to explosions alone, the saving of life under the Coal-Mines Acts
has been very great. In his valuable paper on the effect of British
labour laws upon industrial occupations, read to the Royal Statistical
Society in 1905, Mr Leonard Ward, H.M. Inspector of Factories told us:

"The total number of deaths from explosions which occurred during the
five years 1856-60 was 1,286, and if the number of persons employed and
the death-rate from that cause had remained constant, the total deaths
for fifty years would be 12,860; allowing for increase in numbers
employed, the total deaths during that period would probably have
exceeded 25,000, instead of which the actual total is about 15,000 less
than that, hence it would seem that by the prevention of explosions
alone, no less than 15,000 lives have been saved during the last fifty
years by the operation of the statutes which regulate the hygienic
conditions of employment in coal-mines."

That is to say, legislative insistence on ventilation of coal-mines
saved some 15,000 lives in fifty years.

This fact should, in the first place, give pause to those who have no
faith in legislation, and in the second place it should give
encouragement to those who believe that further great improvements can
be effected. The law prevented 15,000 deaths in fifty years; it
permitted 10,000 to occur. It is impossible to read such an official
report as that upon the Whitehaven explosion of 1907 without being
impressed by the great carelessness which still obtains in dangerous
mining operations. The last great Rhondda accident occurred through
wanton carelessness. I do not know the cause of the Whitehaven disaster,
but, speaking of fiery mines generally, it does appear that there is a
strong case for the total prohibition of shot-firing. One may hedge
round this labour-saving process with what restrictions one will; if it
is done under any conditions serious accident or disaster must come
sooner or later. Can there be any justification for labour saving of
such character?

That is to speak of but one factor in the production of mining
accidents. Other considerations, and serious ones, arise in connexion
with such a case as that of Whitehaven where workings extend for miles
under the sea and where yet there is no attempt made to provide egress
to an emergency shaft. The men went down at Whitehaven and out to their
work under the sea. They had either to return the way they came or to
return not at all. It may be that the provision of a return passage to
an emergency shaft would have burdened the undertaking with such a
capital expenditure as to prevent the economic working of the mine. If
that is so, a nation which owes its industrial greatness to coal should
consider whether it is desirable to work this under-sea coal or not, for
it would appear obvious that a mine as fiery as the 1907 inquiry proved
the Whitehaven colliery to be, must sooner or later be the scene of
serious disaster under the given conditions. To pass to another point, a
large proportion of mining accidents occur in the shafts. It would be
interesting to know the ages of many of the cages and of much of the
winding machinery which are employed in our coal-mines. From reading
official reports on mining accidents I have come to the uncomfortable
conclusion that far too many of the appliances are fit for the scrap
heap.

In the figures relating to mining casualties, many young children are
included. In the ten years 1895 to 1904, 414 children between the ages
of 12 and 16 years were reported as killed underground, under the heads
"haulage," "machinery" and "sundries."[32]

It is quite unknown to the general public how many women, girls and boys
are employed in and about mines. The figures of the 1901 Census show
that in the coal-mines of England and Wales only, 134,422 boys and 1,458
girls under 20 years of age are employed. Of the boys as many as 31,587
are between the ages of 10 and 15 years! I dwell upon these facts
because I once had brought home to my mind in a very striking way the
necessity of making them known. Speaking to an audience at the National
Liberal Club, I mentioned incidentally that a very large number of
children were employed in our mines. To my astonishment, I was loudly
interrupted by a certain Liberal candidate for Parliamentary honours,
who openly scoffed at the idea that children were so employed, while the
audience clearly did not know which of us was in error.

With railway accidents the public is more familiar, although it is
questionable whether many people realize that, in an average week, 10
railway servants are killed and 250 are wounded.

By a Board of Trade order, made under the Regulation of Railways Act of
1871, accidents on railways are compulsorily reported. Fatal accidents
must be notified to the Board of Trade within 24 hours after the
occurrence of the accident. Non-fatal accidents must be reported
whenever they prevent the injured servant on any one of the three days
following the accident from working for five hours. The "special causes"
distinguished in the cases of Factories and Mines are not referred to.

Legislation has done a little to protect the railway worker. While the
number of railway employees has increased considerably in the last 20
years—from 350,000 to 579,000—the number of accidents has remained about
the same. Nevertheless, the death roll is still heavy and the number of
wounded very great. In 1903 there were 497 killed and 14,356 injured. In
1908 there were 432 killed and 24,181 injured. Of course the risk varies
considerably as between one kind of railway employment and another.
Railway mechanics have an accident death-rate of 1 in 4,524 and an
injury rate of 1 in 147. Shunters, on the other hand, are killed at the
rate of 1 in 264 per annum, while 1 in every 17 is injured! Goods
guards, who are not brought into contact with the public as are their
more fortunate and safer colleagues the passenger guards, suffer almost
as badly as shunters—1 in 374 being killed and 1 in 18 injured per
annum. Facts such as these show how great is still the risk of railway
work and what a debt we are under to those who do it. As to the manner
of repayment of the debt it may be again remarked that, in 1908, the 27
leading railway companies, employing something like 90 per cent. of the
railway employees of the country, paid an average wage of only 25s. per
week. There are probably 100,000 railway employees who receive less than
20s. per week.

In the case of merchant seamen we have only the records of accidents
resulting in death. Every illness or injury has to be recorded in the
ship's log, but only death statistics are compiled. The fatalities from
shipwreck and accident vary considerably in number from year to year,
but appear to be falling.

It remains only to record the accidents in engineering works covered by
the Notice of Accidents Act of 1894. This Act provides for the
notification of accidents in the construction of railways and in the
construction, working or repair of tramways, canals, bridges, tunnels,
or other works authorized by any local or personal Act of Parliament.
Also it covers the use of any traction engine or other machine worked by
steam in the open air. Under this Act there have been reported, in
recent years, about 60 deaths and 1,200 injuries per annum.

Collecting the figures we have reviewed, we are able to construct the
table below, which shows, for all occupations, the number of persons
reported as having been either killed or wounded in 1908.

 REPORTED CASES OF INDUSTRIAL ACCIDENT AND DISEASE, 1908
 Number of Workpeople who suffered Death or Injury.

                                            |Killed, or| Injured, or
                                            |Died from |Suffered from
                                            | Disease. |  Disease.
                                            +----------+-------------
 Accidents in Factories and Workshops, etc. |  1,042   |   121,112
 Accidents in Mines and Quarries            |  1,437   |   148,067
 Accidents on Railways                      |    432   |    24,181
 Accidents on Ships, etc.:                  |          |
   Merchant Vessels                         |    999   |     3,781
   Fishing Vessels                          |    212   |       392
 Accidents in Engineering Works (under      |          |
   Notice of Accidents Act)                 |     32   |     1,228
 Diseases of Occupations                    |     84   |       966
                                            +----------+-------------
                 Totals                     |  4,238   |   299,727
                                            +----------+-------------

It should be distinctly understood that these figures refer to reported
cases only and that they are far from complete. In the case of factories
and workshops it is probable that the greater number of the serious
accidents are reported, but thousands of minor cases escape record. The
railway figures have been much more complete since 1896, in which year
the number of accidents recorded jumped from 7,480 to 14,110 owing to a
more stringent regulation as to reporting made by the Board of Trade.
The figures as to accidents on ships and in engineering works are very
incomplete.

Cases of industrial disease form the smallest part of the table, but if
the whole truth could be expressed in statistics, the result would be
appalling. All that we have reported under this head are cases of
metallic poisoning and of anthrax. Terrible as these are, they affect so
few people as to be of far less consequence to the nation than the high
death-rate of Lancashire cotton operatives or Belfast linen workers.
Phthisis does not appear in official statistics as a "disease of
occupation," but thousands of textile workers die of phthisis resulting
from work done in a humid atmosphere. Physical degeneracy is not an
"accident," for it progresses with our knowledge and deliberate consent,
but how much graver is the deterioration of the jute workers of Dundee
than the figures relating to railway accidents. In 1899, Mr H. J.
Wilson, H.M. Factory Inspector for Dundee, measured and weighed 169 boys
and girls with a view to discovering the amount of degeneracy as
compared with the recognized normal. Here is the melancholy result:

 PHYSICAL DETERIORATION IN DUNDEE[33]

 ------------+---------------+---------------
             |    Height.    |    Weight.
             +-------+-------+-------+-------
 Age.        |Dundee.|Normal.|Dundee.|Normal.
 ------------+-------+-------+-------+-------
 11 to 12—   |Inches.|Inches.| Lbs.  | Lbs.
    Boys     | 50.0  | 53.5  | 62.8  | 72.0
    Girls    | 51.5  | 53.0  | 63.0  | 68.1
             |       |       |       |
 14 to 15—   |       |       |       |
    Boys     | 54.0  | 59.0  | 70.5  | 92.0
    Girls    | 55.7  | 59.7  | 77.5  | 96.1
 ------------+-------+-------+-------+-------

Speaking of the deaths from phthisis and diseases of the lungs in
Belfast, Dr Whitaker, Medical Officer of Health for that city, says in
his report for 1902: "Of the 2,911 deaths reported from these causes,
1,779 were attributed to diseases of the respiratory organs and 1,132 to
phthisis. It is therefore evident that these diseases caused upwards of
one-third of the mortality in our midst. This is not to be wondered at
when we remember the nature of the occupations in which so many of our
people are engaged and the unhealthy surroundings which environ
them."[34]

The truth is that many thousands of the deaths which occur in the United
Kingdom every year are really caused by "diseases of occupations," and
that to the thousands of deaths must be added hundreds of thousands of
cases of direct injury to health arising from work in unhealthy and
insufficiently controlled factories and workshops.

Death, injury and disease have thus been administered to our industrial
population for several generations. To-day, conditions are better than
of old, but they are still so bad that to speak of improvement is to
indict the past as black indeed. Against the fact that industrial
hygiene has improved, must be set the grave consideration that it is in
part an enfeebled people which is now provided with a slightly better
environment. We have effectually degraded no small proportion of the
race; the present measures of industrial control are not strong enough
to restore it.

[Footnote 31: Since these pages went to press, another large scale
disaster at Bolton has killed over 300 miners.]

[Footnote 32: See Mr Fenwick's Return "Mines (Fatal Accidents)," No.
140. 1905.]

[Footnote 33: Annual Report on Factories and Workshops, 1900, page 336.]

[Footnote 34: This and many other cognate facts were quoted by Mr
Leonard Ward in his paper on Industrial Occupations read to the Royal
Statistical Society on May 16th, 1905.]




 CHAPTER XI
 CONSEQUENCES


The consequences of the error of distribution now demand our attention.

The congestion of so much of the entire income and accumulated wealth of
the United Kingdom in a few hands has a most profound influence upon the
national development. It means that the great mass of the people—the
nation itself—can progress only in such fashion as is dictated by the
enterprise or caprice of a fraction of the population. The possessors of
wealth exercise the real government of the country and the nominal
government at Westminster but timidly modifies the rule of the rich.
When we say that about one million people command one-third of the
entire income of the nation we mean, broadly, that one million people
have under their control the lives of one-third of the population or of
15,000,000 people. When we say that about five million people command
one-half of the entire income of the country we mean, broadly, that five
million people control the lives of one-half of the population, or of
22,000,000 people. Expenditure is a call for material or immaterial
commodities, and a demand for commodities is a demand for labour. That
call rules the continuous series of employments which form the main
activities and which mould the lives and character of our people. If the
call be for worthy things, our people are directed into noble
occupations. If the call be for unworthy things, labour is misdirected
and degraded.

The self-degradation of a limited number of unduly rich persons would be
a little thing from a national point of view if its effects could be
confined to the rich themselves. Unfortunately, those effects are not a
stagnant pool which we may avoid, but a stream which flows through and
pollutes the lives of the majority of our people. A working man may
resist the temptation to ape the vices which are bred of idleness, but
the highest standard of morality cannot save him from degrading his
manhood in the service of waste. Without his knowledge the product of
his toil may be bartered for the toy of a moment, and the skill of his
hands pass to the foreigner in exchange for the means of wanton luxury.
The rare steam coal of South Wales, got in blood and tears in a fiery
mine, may be exported to France in exchange for a racing automobile. It
would matter little that a limited number of drones inhabited the hive
if they had no command of the work of the community. It matters
everything when these drones, by their expenditure, can each command
thousands of workers to attend their idleness.

There are certain well-defined servants of the rich wholly devoted to
their pleasure, such as menial servants, grooms, stablemen, gardeners,
makers of expensive articles of food, clothing, furniture, etc., hotel
servants, many of the inhabitants of the rich quarters of towns and of
fashionable pleasure resorts, many tradespeople and their shop
assistants, and other workers. Again, there are certain well-defined
servants of the poor, such as petty tradespeople, general storekeepers,
the workmen and officials engaged in institutes, charities, free
libraries, municipal tramways and other services, public gardens, and so
forth. There is often, however, no clear distinction between those who
serve the few rich and those who serve the many poor. Every trade,
however useful nominally, has to give of its best to be poured into the
cup of luxury and spilt in wanton extravagance. Our 1,300,000 builders,
our 1,400,000 metal workers, engineers and shipwrights, our 1,300,000
textile workers, our 1,300,000 clothiers, and all the other persons
engaged in our "useful" industries, furnish their large quota of
products for the rich and their small quota of products for the poor.
The edict of the rich man goes forth and industry hastens to obey it.
Bricks from Berkshire which are sadly needed for the building of decent
cottages for agricultural labourers are taken into Surrey to form part
of one of the vulgar and pretentious red-brick villas which mock every
canon of architecture and make hideous the most beautiful portions of
that Garden of England. Good fir from Sweden, imported in exchange for
the toil of Lancashire or the sweat of Cleveland, roofs in the tenth,
fifteenth or twentieth bedroom of the man who has more rooms than
children, and more menial servants than guests, while the Census shows
us that in England and Wales there existed, in 1901, 3,286,526 tenements
of fewer than five rooms, of which 251,667 had but one room, 658,203 but
two rooms, 779,992 but three rooms and 1,596,664 but four rooms. The
mechanic, the electrical worker, the girl at the loom, all appear to be
usefully employed in contributing to the well-being of the nation. As a
matter of fact, the lion's share of the wealth they create goes to add
to the income of a few, while the remainder is distributed amongst a
number so great as to constitute nearly the whole of the population. If
we consider the case of the cotton industry alone, it appears, on the
surface, that 582,000 workers (172,000 men and 410,000 women and
children) are most usefully employed in the production of articles of
the first necessity. They do work, each year, upon some 16,000,000 cwts.
of raw cotton which they manufacture into about £120,000,000 worth of
cotton goods. But trace the history of these goods. Are they consumed by
the countrymen of the people who make them? Alas! no. Of the yearly
output of £120,000,000, as much as £100,000,000 is exported to foreign
countries and British Possessions, chiefly to foreign countries. Only
£20,000,000 worth of the magnificent output of our cotton workers is
retained by our 44,000,000 people. In addition there is a consumption of
a few million pounds worth of imported cotton goods. Can it be true that
our population need to renew their household and personal stock of
cotton fabrics to the extent of a value of but 10s. per head per annum?
Of course it is not true. From cotton is manufactured, for the person,
dresses or blouses of muslin, lawn, cambric, prints, mercerized stuff,
etc., shirts and underclothing in great variety for both sexes,
handkerchiefs, lace, hosiery, etc., and for the household, cotton sheets
and other bed furnishings, curtains of lace, cretonne and muslin,
towels, dusters, and a host of other things. Yet so poor are the mass of
our people that 10s. per head per annum furnishes them with all the
cotton goods which they can afford to buy for both their persons and
their households. Great is their need and small are the means available
for its satisfaction. If it were not so, our cotton trade would need
many thousands more bales of raw cotton per annum, first to supply a
quite ordinary home demand and second to export to the foreigner to
obtain in exchange the satisfaction of other ordinary needs.

In the following table I have estimated a demand for cotton goods by a
household of five persons. The prices are wholesale and relate to the
_materials_ only. It should be distinctly understood that nothing is
included for retail profit or for the manufacture of the materials into
garments. I have estimated for all the cotton goods used on the person
or in the household, not forgetting the cotton linings commonly used in
woollen clothing.

 CALL (AT WHOLESALE PRICES) BY A HOUSEHOLD OF 5 PERSONS, FOR COTTON
 MATERIALS

 For the Person:
     (1) The Man         £0 16 0
     (2) The Woman        1  9 0
     (3) Three Children   1  2 1
 For the Household        1 10 6
                         -------
                         £4 17 7
                         =======

In framing this estimate I have imagined an exceedingly modest standard
of comfort, one such as few readers of these lines would probably care
to adopt, and the prices, as I have said, refer to the wholesale cost of
the material only. Yet, modest as it is, the estimate works out at
nearly 20s. per head. Given such a modest demand, our cotton trade would
need to produce about £45,000,000 worth of cotton goods per annum for
home consumption alone. As we have seen, it finds a call for only
£20,000,000 worth, a great part of which, of course, is absorbed by the
"rich" and "comfortable" classes.

It is a deeply significant fact that a nation of 44,500,000 people,
producing by its manifold activities a total income of £40 per head per
annum, should be able to afford to retain of its total output of cotton
fabrics but 10s. per head per annum.

Let us turn to our woollen and worsted industries. Here we have in an
average year an output worth some £65,000,000 of which £23,000,000 is
exported, leaving £42,000,000 for home consumption. In addition there is
a considerable importation (£12,000,000) of woollen and worsted goods,
chiefly woollen goods, of a character which we do not ourselves produce,
from France. Thus we have a total home consumption worth £54,000,000 per
annum. This amounts to about 25s. per head per annum, a sum which, in
view of our climatic conditions, is, if anything, less satisfactory than
that for cotton consumption. Again let us picture our working-class
household of five persons and inquire what might be its most modest
imaginable expenditure upon articles made of wool:—

 CALL (AT WHOLESALE PRICES) BY A HOUSEHOLD OF 5 PERSONS, FOR WOOLLEN AND
 WORSTED GOODS. MATERIALS ONLY

 For the Person:

 (1) The Man         £3   7  10
 (2) The Woman        2   9   9
 (3) Three Children   3   0   0
 For the Household    3   0   0
                     ----------
                    £11  17   7
                    ===========

In working out this estimate in detail, I have again postulated a low
standard of comfort. Thus the man is assumed to have but one new woollen
suit and one new pair of trousers per annum, and an overcoat once in two
years. It is also assumed that the children are partly provided for by
adaptation of their parents' discarded garments. Even so, the estimate
works out at 47s. per head. At this rate there would be a call for about
£105,000,000 of woollen and worsted goods by the 44,500,000 people of
the United Kingdom. As a matter of fact, the call is for only
£54,000,000 worth, or about 25s. per head on the average. But who is the
Average Man? He is a creature of the statistician. The real truth is, of
course, that quite a small number of people consume a very great part of
our total present annual call for £54,000,000 worth of woollen and
worsted goods. The masses of the people spend a sum which is a small
fraction of the average expenditure of 25s. per head.

Again, let us consider the boot and shoe industry. Here I have no
reliable estimate as to the value of production, but we know that
employment in the trade is sometimes exceedingly bad, and that in
Leicester, Northampton and elsewhere the greatest distress exists from
time to time because the boot manufacturers have _overtaken demand_.
What does this mean? There are some 7,000,000 houses in England and
Wales not assessed to the Inhabited House Duty because they are under
£20 in annual value. It is safe to say that each of the inhabitants of
each of these 7,000,000 houses would gladly purchase three pairs of
boots and shoes if they had the means to do so, and would then not be
overburdened with footwear. That means that a need exists at this moment
for 7,000,000 × 5.2 (the average number of persons per house in this
country) × 3 = 109,000,000 pairs. That great demand, obviously, could be
renewed, did means allow, within 12 months.[35]

Yet, in November 1904, the Mayor of Leicester (Mr S. Hilton, of Messrs
S. Hilton & Sons, boot factors) dealing with the question of want of
employment in the boot industry said:

"I think the present great need of Leicester is a new industry. We
cannot expect, at any rate for some considerable time, that much more
employment will be derived from the boot and shoe trade, at least, not
sufficient for a growing population. The rapidity with which boots and
shoes are turned out, owing to the improved machinery and modern
methods, will supply all the demands for some time to come, and the man
who may be the means of introducing some additional industry in this
town, which will not only prove remunerative to the employer, but
provide work for the many men and youths who are in need of it, will be
a benefactor to the town."

With improving methods and machinery, there must, sooner or later,
arrive, in every industry, a time when output overtakes visible demand,
and when that time arrives, as it is alleged to have done in Leicester,
great suffering is caused to many hard-working people. Their trade slips
from them, and the matter of re-adjustment, the establishment of new
industries, the transition to other employments, entails severe
distress. But who can truly say that the boot trade has yet reached, in
this country, the maximum of possible output? Certain it is that there
are many who need new footwear and cannot afford it, even while
Leicester men look vainly for employment. The real truth would appear to
be that Leicester is suffering from the under-consumption of those who,
if they had the means, would buy boots. I have shown that 100,000,000
pairs at least could be readily absorbed in Great Britain. Yet men are
unemployed at Leicester and the Mayor calls for a new industry!

The fact is, of course, that while 7,000,000 or more poor householders
lack the means to buy boots, some tens of thousands of unduly rich
households are squandering those means and in effect commanding men to
leave the boot trade to take up industries which shall serve their
pleasures.

In relation to the trades which supply the materials of clothing the
census returns give evidence that our industries are not developing
healthily. It should be remembered, however, that it is impossible to
measure the growth of luxury by the census returns, although it makes a
certain impression in them. The labour of tens of thousands who follow
nominally useful occupations is actually devoted to waste. This may be
illustrated by two typical cases which recently were brought to the
notice of the public. On February 8th, 1905, in the King's Bench
Division, a millionaire, well-known in financial circles (his name
matters not, for I take the case not to reproach an individual but
because it is a typical one) sued a West-End firm of contractors and
caterers for damages. It appears that in July 1903 he gave a dinner
party with a concert and supper, and engaged the defendant firm to erect
behind his residence in Grosvenor Square a temporary supper-room for the
occasion. He gave instructions that "no expense was to be spared." The
electric light was installed in the temporary structure, and from this
or another cause, a fire occurred, and the temporary structure perished
a few hours before its time. Out of this arose the claim for damages,
which failed, the jury awarding the contractors their counter-claim for
the work done.

It is not the merits of the action to which I direct the reader's
attention. What would the mere statistics tell us of the men who were
engaged in erecting the temporary supper-room "regardless of expense"?
We should find them described as following quite useful occupations:

 Building Contractors.
 Electrical Engineers.
 Plumbers.
 Carpenters.
 Painters.
 Upholsterers.
 Carmen.
 Labourers, etc.

As a matter of fact the skill and labour of these honourable callings
were turned to sheer waste at the command of the millionaire financier.
With the same expenditure of time and effort, and with the same
consumption of material, those men might have decently housed one or two
families for life. Had they been free to choose between the housing of a
poor family and the carrying out of a rich man's caprice, can we doubt
which work they would have chosen? But they were not free to choose, and
inquiry would probably show that they are constantly employed to do
similar work in rich men's houses. Their lives are wasted to the nation
at large, and devoted to the fancies of a few. In return, they are
handed wage-money which is too often unearned by those who pay the
bills. Thus A the financier commands B to waste his precious skill, and
at the same time commands certain other persons, C and D, to devote part
of their labour to sustaining B while he wastes his time and does
nothing for them in return.

Let me give another pertinent illustration:

In July, 1904, a great deal of attention was aroused by a case in which
a West-End dressmaker was fined for working her girls at illegal hours.
Her excuse was that she was compelled to get finished at very short
notice a frock to be worn at Ascot by a certain rich lady. Considerable
comment was aroused by the case, especially in view of the fact that a
play with a purpose in which a similar incident was introduced was being
played at the time in a London theatre.[36] I was particularly struck
with the fact that the fashionable customer who caused the trouble was
chiefly censured for her dilatoriness and want of consideration in
ordering her frock at the last moment. But the gravamen of the offence
lay not in ordering the frock late but in ordering it at all. The chief
point is not one within the scope of the consolidated Factory and
Workshop Act of 1901, but a much greater one, which goes deep down into
the roots of the problem of want and poverty in the richest country in
the world. For the special Ascot frock, the garment costing anything
from 10 to 50 guineas, made to be worn once and then cast aside, is a
perfect illustration of the misdirection of life and waste of labour
which is caused by the error in the distribution of the national income.
For every special Ascot frock worn by one woman, whether that frock be
made in legal or illegal hours, a number of other women go
insufficiently clad.

Such illustrations might be multiplied indefinitely. At the great Albert
Hall Charity Bazaar held in 1904 a titled lady present wore a
magnificent dress which had been completed literally at the eleventh
hour of the previous evening by a number of young women whose economic
condition is such that only the best of health and the best of fortune
can save them from becoming the objects of "charity" in the time to
come. As in the case of the temporary supper-room, these girls, to judge
by the census of occupations, would appear as following useful
occupations. From the point of view of the national welfare, they had
better be paid wages for digging holes and filling them up again.

While the rich consume the means of living of the poor we need not be
surprised if useful trades languish. A rich person can but consume a
limited quantity of useful commodities. After that consumption, having
still a great superfluity, he seeks other diversions, and the orders go
forth which swell the ranks of the wrongfully employed.

At the other end of the scale, what is the possible expenditure upon
goods by the poor? The answer which has been given to this question by
the researches of Mr Charles Booth in London and of Mr Seebohm Rowntree
in York is seen to be one which can only be regarded as inevitable in
view of the figures we have examined. Mr Booth concluded that 30.7 per
cent., or nearly one-third of the population of London were probably
living in "poverty." Mr Rowntree found that in York, a typical
provincial city, in a year of good trade, 7,230 persons, representing
15½ per cent. of the working classes, or 10 per cent. of the entire
population of York, were living below a primary poverty line drawn at an
income of 21s. 8d. per week for a family of five persons paying only 4s.
per week for rent. Mr Rowntree also found 13,072 persons living in York
under conditions which were but little above the primary line, making a
total of 20,302 persons, or 28 per cent. of the population of York,
living in want.

Mr Rowntree's primary poverty line of 21s. 8d. per week was arrived at
thus.[37] He considered necessary expenditure under the three heads: (1)
Food, (2) Rent, (3) Clothes, fuel and other necessaries. To begin with
food, he framed a dietary which contained no butcher's meat or butter,
and allowed such a luxury as tea but once a week. The only meat was
bacon and very little of that. It was a dietary "more stringent than
would be given to any able-bodied pauper in any workhouse in England or
Wales." Taking the lowest co-operative store prices, he found that this
dietary would cost 3s. each for the adults and 2s. 3d. each for the
children per week. Thus the cost of food alone would be 12s. 9d. per
week. Allowing for rent and rates 4s., we arrive at 16s. 9d. per week.
To this Mr Rowntree added for clothing, fuel, and all other necessaries
4s. 11d. per week, making, in all, the 21s. 8d. referred to. Here is the
estimate in detail:-

 MR ROWNTREE'S PRIMARY POVERTY LINE

                                                        _s._  _d._
 Expenditure on Food                                     12    9
 Rent and Rates                                           4    0
 Clothing, including Boots                                2    3
 Fuel                                                     1   10
 Lighting, washing materials, furniture, crockery, etc.   0   10
                                                         -------
                                                         21    8
                                                         =======

It will be seen that nothing is allowed for drink, or tobacco, or
newspapers, or postage stamps, or any relaxation whatever. Yet 15 per
cent. of the working people of York were found to be living _below_ a
primary poverty line conceived on such a scale as this. For boots,
clothing, underclothing, hats, furniture, glass, crockery, utensils,
curtains, washing materials, and gas or oil, only 3s. 1d. per week or £8
per annum (32s. per head per annum). Need we wonder, then, if Lancashire
is only called upon by 44,000,000 British people for £20,000,000 worth
of cotton goods?

The Board of Trade recently gave us (Cd. 2337) some useful studies of
workmen's budgets which show that even Mr Rowntree's 3s. 1d. per week
for goods is a larger sum than is expended by most workmen's families
with about 21s. per week. The Board of Trade examined 1,944 workmen's
budgets with the following results:—

 AVERAGE EXPENDITURE ON FOOD BY URBAN WORKMEN'S FAMILIES IN 1904

                                  Average               Average     Balance of
                        Number     no. of    Average  expenditure     income
                          of      children   weekly       on          after
                       Families.  living at  income.     food.     expenditure
                                    home.                             on food.

                                            _s.  d._    _s.  d._     _s.  d._
 Under 25s.               261       3.1      21  4½      14  4¾       6  11¾
 Between 25s. and 30s.    289       3.3      26 11¾      17 10¼       9   1½
 Between 30s. and 35s.    416       3.2      31 11¼      20  9¼      11   2
 Between 35s. and 40s.    382       3.4      36  6¼      22  3½      14   2¾
 Above 40s.               596       4.4      52  0½      29  8       22   4½

As the Board of Trade point out "It is not to be supposed that the
returns received represent in their exact proportions the different
grades of working-class incomes in the towns of the United Kingdom. The
higher range of family incomes is unduly represented in the returns,
partly owing to the fact that the more intelligent operatives have
supplied returns more readily and more accurately than those belonging
to the unskilled labouring classes."

It is of interest to note that the 261 budgets under 25s. per week
averaged 21s. 4½d. per week, which closely corresponds to Mr Rowntree's
primary poverty line. The expenditure on food is seen to be 14s. 4¾d. or
1s. 6¾d. more than was allowed by Mr Rowntree. Thus only 6s. 11¾d. per
week is left for all other expenditures, including rent, fuel, light,
clothes and furniture. If we take the class above, between 25s. and
30s., we see that only 9s. 1½d. is left after payment for food. Even in
the class earning from 30s. to 35s. the food bill leaves but 11s. 2d.
per week for rent and all other requirements.

If we pass from the town to the country and inquire into the condition
of the agricultural labourer we find an even smaller command of comfort.
At the census of 1901 the number of agricultural labourers, shepherds,
etc., was 956,000. What of cottons or woollens or boots or furniture can
these command? The late Mr Arthur Wilson Fox in the invaluable Report
(Cd. 2376) on the wages of agricultural labourers, which was such a
labour of love to him, shows that their total earnings including the
value of all "truck" vary from 14s. 6d. per week in Oxfordshire to 22s.
in Durham, the average being 18s. 3d. for the whole of England. In Wales
the average is 17s. 3d.; in Scotland 19s. 3d. and in Ireland only 10s.
11d. The expenditure on clothing in England varies between £6 and £10 by
a family of six persons; in Ireland, of course, it is much less.

The simple truth is that the total demand for clothes and underclothes,
hats, boots, furniture, china, glass, ironmongery, domestic utensils and
other comforts by about 20,000,000 of people out of our population of
44,500,000 is exceedingly small. The greater part of slender incomes is
absorbed by the cost of food and drink, and after provision is made for
rent, fuel and lighting, the balance amounts to a few odd shillings. We
need not wonder, then, that our textile industries have to meet such a
modest home demand, or that the Mayor of Leicester cries out for a new
industry to employ "surplus labour."

Let us consider the position of bootmakers as customers for the textile
trades. The Census figures of 1901 for the boot trade were as follows
(England and Wales; 22,000 dealers included):

 PERSONS EMPLOYED IN BOOT AND SHOE TRADE, 1901, ENGLAND AND WALES

 Men (over 20)                             165,589
 Women (over 20)                            31,734
 Boys and youths                            32,715
 Girls                                      21,105
                                           -------
 Total                                     251,143
                                           =======

The average earnings of these workers are actually less than £1 per
week. The Board of Trade publish monthly the earnings of a
representative number of them, derived from particulars furnished by
employers. The "Labour Gazette" for August 1910 showed that in July
1910, 60,337 boot workers took £58,147 in a week, or about 19s. per
week. After paying for rent and food, how little is left to provide
custom for the makers of cottons or woollens. And equally, when textile
workers draw meagre wages, how little is left, after the gratification
of primal needs, to provide custom for the maker of boots.

Thus the error in the distribution of income connotes an error in the
distribution of our population amongst useful and useless, noble and
ignoble, industries. Too few of our population are engaged in the
manufacture of houses, boots, textiles, and furnishings. Too many of our
population are engaged either in the direct production of luxuries or in
the production of useful articles to be exchanged for foreign luxuries.
The great masses of our people are under-served; a small proportion of
our people are over-served. There is enough labour put forth to give
material happiness and comfort to all, but so much of the labour runs to
waste that only one-ninth of our population can be said fully to possess
the means of comfort.

Considerations such as these make us understand how futile it is to
boast of the aggregate trade, internal or external, of a nation, or to
term that wealth "national" which is the possession of a few.

[Footnote 35: Some notes of mine on this subject in the "Daily News"
brought me the following letter from the provinces:

"You very rightly, I think, referred on Monday and Tuesday to the
subject of boots. Here is my own experience. I am a railway man, in
constant work at 30s. per week. I am the happy, or otherwise, father of
six healthy children. Last year I bought twenty pairs of boots. This
year, up to date, I have bought ten pairs, costing £2, and yet at the
present time my wife and five of the children have only one pair each. I
have two pairs, both of which let in the water; but I see no prospect at
present of getting new ones. I ought to say, of course, that my wife is
a thoroughly domesticated woman, and I am one of the most temperate of
men. So much so, that if all I spend in luxuries was saved it would not
buy a pair of boots once a year. But this is the point I want to
mention. During 1903 my wages were 25s. 6d. per week, and I then had the
six children. My next-door neighbour was a bootmaker and repairer. He
fell out of work, and was out for months. During that time, of course,
my children's boots needed repairing as at other times. I had not the
money to pay for them being repaired, so had to do what repairing I
could myself. One day I found out that I was repairing boots on one side
of the wall, and my neighbour on the other side out of work, and longing
to do the work I was compelled to do myself. I shall never forget the
feelings that passed through my mind as I thought of the circumstances;
and so it came home to me again when I read your reference to the boot
trade, and I decided I would forward this to you. Most surely, as you
say, if the 30,000,000 could and would buy those 50,000,000 pairs of
boots you mention, there need not be any slackness in the boot trade;
but, as you say again, if your reference to the question is the means of
making people think seriously about it, much good will be done."

Thus between my correspondent who sorely needed boots, and his neighbour
the bootmaker there stood a wall—and our commercial system.]

[Footnote 36: "Warp and Woof," by Mrs Alfred Lyttelton.]

[Footnote 37: "Poverty," a Study of Town Life, by B. Seebohm Rowntree
(Macmillan).]




 CHAPTER XII
 THE WASTE OF CAPITAL


It has been observed by Professor Marshall that "perhaps £100,000,000
annually are spent even by the working classes, and £400,000,000 by the
rest of the population of England in ways that do little or nothing
towards making life nobler or truly happier."[38] In view of the fact
that the "working classes" are the bulk of the nation, and the "rest of
the population" a relative handful, this estimate points to a little
waste by the many, and much waste by the few. The fact is, of course,
that if the working classes, after prolonged study of dietetics and
hygiene, spent their incomes in the most economical way possible, and
refrained entirely from alcoholic liquor and tobacco, they would still
be unable, save in exceptional cases, to command the means of a noble
and truly happy life. As for the "rest of the population," if we
consider the 5,000,000 persons who enjoy an income of £909,000,000 per
annum, we see very clearly that their superfluity is so great that they
could easily add to the fixed capital of the nation at the rate of
£500,000,000 per annum, and still have left incomes sufficient, if
wisely expended, to command a very considerable degree of comfort. As
things are, an enormous amount of wealth is wasted every year upon
current expenditure of an ignoble character, even while every city and
every industry needs the application of more capital.

Nothing is more striking in the estimate of capital which we formed in
Chapter 5 than the small proportions of the total when considered in
relation to the extent of the national income. For the total, it should
be remembered, includes the value of the land of the United Kingdom.
Subtracting it, we see that the wealth which has been added to the land
is worth not more than about £8,000,000,000, whereas the national income
amounts to £1,840,000,000. Thus, in the United Kingdom we have
accumulated stock, apart from the market price of the land, only to the
extent of about four years' income.

The facts which correspond to these figures are that, in every county
and in every township, there are more ugly and uncomfortable houses than
beautiful and convenient ones, more inefficient plants than
well-equipped businesses, more badly clothed than well-clothed people,
more evidences of poverty than of wealth. On every hand we see the need
of capital, but while its application is so sorely needed, the few rich
who command so much of the national income pour it out in wanton
extravagance. The growth of luxury has been accompanied by an increasing
want of enterprise in industry and commerce. Even in London the most
fruitful opportunities lie neglected. The port is inefficient; the
Thames highway has been neglected; north and south Londoners remain
strangers because of lack of transit facilities; street traffic is
archaic; the important railway termini are dirty, inconvenient and
unconnected. All these and many less important things cry aloud for the
application of capital. In London and in every other town there is a
housing problem, and the housing problem is a problem of capital. If the
income of the last 20 years had been patriotically expended there would
be no housing problem to-day, and the fixed capital of the country would
be very much greater than it is.

Another significant fact is the very considerable investment of British
capital abroad, probably amounting, as we have seen, to about
£2,600,000,000. These investments are often spoken of as "our foreign
investments." There is a grim irony in the phrase. For what in essence
are these investments? They left our shores, originally, in the form of
exported manufactures, the product of British labour. We had no gold to
lend, but some amongst us could command and lend the fruit of our work.
These exported products were sent away from our shores by a mere handful
of rich persons who saw in foreign or Colonial loans or enterprises the
opportunity of gaining a higher rate of interest than at home. Year by
year there is returned to those who made the investments, or to their
successors in title, a tribute of foreign and Colonial commodities which
goes to swell our imports. In 1908 this yearly tribute of imports, for
which no present exports have to be exchanged, amounts to about
£130,000,000 or £140,000,000. Whether the nation as a whole gains by
this tribute depends entirely upon the wisdom and patriotism of those
who receive it. If we could ensure its wise use as capital for the
promotion of the general welfare, then the United Kingdom would gain
materially by the lien which a few of its people possess upon foreign
and Colonial activities. But we have no guarantee as to the manner of
its use, and too often it but serves to bring to this country
commodities which in no way make life "nobler or truly happier." I do
not mean that articles of luxury are necessarily imported in payment of
the interest on "our" oversea investments, but certain it is that the
limited class which owns them are the chief consumers of luxuries. It
should never be forgotten that, as has already been pointed out in these
pages, the most ordinary raw material may become a vehicle of luxury,
and the commonest forms of labour its servants. Certain imports, _e.g._
motor cars or Steinway grand pianos, can be ear-marked as luxuries, but
potatoes from Jersey wasted in a long dinner or Douglas pine from Canada
built into a racing pavilion are "luxuries" more to be deplored than the
importation of Valenciennes lace or Sèvres porcelain by persons of
refinement.

It may be well to remark, in passing, that to place a heavy customs duty
upon imported luxuries would in no way benefit the nation at large. It
would merely stimulate the production of luxuries in the United Kingdom,
and so increase the already considerable number of persons engaged in
the trades of luxury.

That we have incidentally gained by acting as a world money-lender is
indisputable. The case of Argentina is a familiar one. British exports
have been largely lent to that country for the construction of railways.
Those railways have cheapened Argentine transport, and so placed at our
disposal cheap bread and meat. But this benefit has been incidental and,
moreover, shared by the world at large. Against such incidental gains we
have to place the criminal neglect of our own country. While capital has
gone overseas in a never-ending stream, the people whose united
activities produced the commodities embodied in that capital have
remained poor for lack of the proper investment of capital at home.
Large sections of the British people have unconsciously worked for the
benefit of the foreigner and of the British Colonist, never realizing
that their own country sorely needed all the capital that their labour
could create.[39]

We cannot even lay the flattering unction to our souls that the British
capital which has been sent abroad has gone entirely to build foreign or
Colonial railways, or to develop other useful industries, nor, in so far
as it has been usefully employed, can we claim much credit for the fact.
The sole motive which has influenced the individuals who have thus
disposed of the products of British labour has been individual gain.
That gain they have sought without regard to any consideration of
patriotism. Foreign nations have had our capital indifferently for war
or for peace, for building railways or for constructing warships. A
generation ago we wickedly poured our capital into Turkey. A generation
ago were born hundreds of thousands of British children who, for lack of
the full employment of British capital on British soil, are to-day
creatures of the abyss.

The flow of capital to places abroad continues to this hour. If South
Africa is booming, the possessors of capital hasten to gather dividends
on soil thousands of miles away, and with the interest received in this
country, direct British labour to noble or ignoble ends, as may seem
good in their eyes. If a foreign war is proceeding, they hasten to lend
the belligerents as many millions as may be required at anything from
five to eight per cent., and with the interest they give righteous or
unrighteous "work" to other British sons of freedom. If a South African
mine or a Japanese war loan offers apparent opportunities of quicker
profits than putting fresh capital into British ironworks, or founding a
new British industry, it is the end of South Africa or Japan which is
served. Three per cent. gained at home, of course, is not so desirable
as ten per cent. gained abroad. If, therefore, a housing scheme at home
promises to yield but three per cent., while the employment of coolies
in South Africa promises ten per cent., South Africa and the coolies are
"developed"[40] and the housing scheme collapses. This is by no means a
rhetorical flourish; it is the statement of a case not more extreme than
hundreds which occur every year.

If I have dwelt upon our oversea investments (I use the possessive
pronoun for the sake of simplicity of expression) it is because they
illustrate in a very forcible way the misuse of British capital. But the
neglect of British interests which they illustrate is small indeed when
compared with the waste of income upon the pursuit of pleasure and the
foundation of worthless industries at home. If the whole of our oversea
investments had been made since 1860, the average amount so invested
would be not more than £50,000,000 per annum. That consideration enables
us to view the matter in its due perspective. The foreigner and the
Colonist have gained through the profit-hunting of the few possessors of
British wealth, but only to the extent indicated. The oversea
investments, with all the taint of national shame which attaches to many
of them, sink into insignificance when we consider the wanton waste of
labour which has occurred at home. Since 1860 probably as much as
£6,000,000,000 of income which should have passed into reproductive
capital has been thrown away in forms of expenditure which have been to
the degradation of the community. Had that £6,000,000,000 been employed
in the promotion of cheap transport, in the attachment of agricultural
workers to the soil, in the acquisition of land by municipalities, in
the provision of healthy homes for the people, the problems which
confront us to-day would be of a different order, and it would not be
possible for the dire poverty of one-third of our people to be basely
used as a weapon of political warfare.

And while so much of the labour which might have added to the nobility
and happiness of the British people has been wasted by direction of a
small fraction of their number, no small part of our employed capital is
but the tool of mischief. For just as individual capital goes abroad to
seek its usury without regard to principle or patriotism, so at home it
engages in the most profitable enterprise known to its limited
intelligence, without regard to morality or the national welfare. It is
often more profitable to appeal to what is worst in human nature than to
seek to supply it with things healthy and honourable. "Is there money in
it?" is the only touchstone which individual capital applies to
enterprise.

Obviously there must be reciprocation between the demand for luxurious
articles and the capital employed in their production. The misdirection
of labour which we examined in the last chapter connotes a considerable
misdirection of capital. Thus the effects of luxurious expenditure are
two-fold. There is dissipation of income in the payment for luxurious
immaterial commodities which call for no fixed capital, and again there
is the expenditure of income upon luxurious material commodities which
call capital to their creation. In either case the result is waste. The
menial servant is an illustration of the first process. He is divorced
from production and his work lost to the nation at large. The commodity
which he sells is obsequious hand-service, degrading alike to himself
and the person he serves. The purchase of a motor-car is a striking
example of the second process. To produce it a considerable plant is
required and capital flows to a business profitable because its
customers are rich persons who view low priced articles with suspicion.

A striking illustration of a combination of the two processes is
afforded by a fashionable hotel and restaurant. Here we have a large
amount of capital sunk in an enormous building which is sustained
entirely by the expenditure of the wealthy. A host of menial servants
are employed, whose lives are a denial of manhood and womanhood. In
addition there are nominally useful occupations associated with the
conduct of the business. It calls for the manufacture of food, of
utensils, and of furniture, and a large number of tradesmen and their
nominally useful assistants are regularly employed in connexion with its
supplies. A hotel of 700 bedrooms directs the services of an army of
people, most of whom would appear in the Census as following useful
occupations. The whole concern is for the most part an organization for
the waste of capital and labour, and its manifold activities are called
into existence by the orders of a very limited number of unduly rich
people who desire that hand-service shall be at their command at a
moment's notice wherever they may be.

Even more extraordinary is the organization of entire districts in the
service of wealth and luxury. Nothing can be more pitiable than the
spectacle which is presented by a neighbourhood the inhabitants of which
are economically dependent upon the patronage of a limited number of
well-to-do residents. The local tradesmen, the local builders, the local
carters, the local nurserymen, the local physician, the local
boat-builders, the entire local organization, with its little capital
and much labour, is under the economic over-lordship of a few persons
whose patronage sustains the entire machinery. Little that is useful is
produced in the district; but by a process which none of its inhabitants
could explain there are imported into it commodities from all parts of
the country. Parasites upon parasites, they scramble for the expenditure
of the well-to-do, and often contrive to make fat livings out of them.
Thus, through the initial evil, the underpayment of labour at one end of
the scale, there is created at the other end a class of luxury providers
who have no conception of their true position in our social system, or
of their uselessness to the community at large.

There remains to consider the tremendous waste of capital which arises
from (1) unnecessary competition and (2) weak or bogus company
promotion.

In the game of competition frequent attempts are made to establish
superfluous businesses in many branches of trade. While industry remains
unorganized such waste of capital must continue, for lacking an estimate
of the quantity of commodities required in any particular department,
the limits of consumption can only be found by fruitless attempts to
discover an unsatisfied demand. This blind application of capital, not
to service, but in the hope of gain, accounts for the waste of large
quantities of labour.

Turning to company promotion, it is certain that hundreds of millions of
capital have been wasted in the last twenty years through the dangling
of fancy baits before the possessors of unearned increment. The company
promoter obtains from Somerset House the names and addresses of
shareholders in such concerns as those referred to in Chapter 8, and so
is enabled to send to persons who have already tasted the joys of
"waiting" a prospectus promising them even larger slices of unearned
increment than they already receive. So other millions derived from
labour pass into channels of waste.

The waste and misdirection of capital is a far-reaching matter. Lacking
capital, which simply means lacking tools, labour cannot be economically
exerted, whether in agriculture, in manufacturing, or in distribution.
For the use of tools we leave the great mass of our population dependent
upon a comparative handful of rich persons. That dependence amounts to
an economic serfdom which places the direction of the lives and labours
of the people in the hands of the few. The unduly large share of the
national dividend possessed by the rich produces in them grave faults of
character and purpose which make them indifferent administrators of the
capital without which labour is powerless. The unduly small share of the
national dividend possessed by the poor is the source of a stream of
moral and physical evils which, mingling with the waters of death which
descend from the high levels of luxury, produces effects whose causation
is only obscure as long as we neglect the study of the Error of
Distribution.

[Footnote 38: "Principles of Economics," Vol. i., p. 786.]

[Footnote 39: The same is true of France. Our neighbours across the
Channel have fully £1,500,000,000 invested in places outside the
country.]

[Footnote 40: At Johannesburg on April 15th, 1905, Mr Lionel Phillips is
reported to have said: "The Chinese were housed, fed and looked after
better than the working population of England." It may well be.]




 BOOK II
 TOWARDS ORGANIZATION




 CHAPTER XIII
 THE GOLDEN KEY


The misdirection of labour and the waste of income can be checked if we
would have it so. It is in our power, as a nation, to employ the wealth
of the community for national ends and to increase abundantly the
fertility of labour. It is true that we want "more trade," and it is
also true that we need better use of the results of the trade that we
have. The problem of poverty is neither obscure nor insoluble; its cause
is clear from the extraordinary series of facts we have examined; its
solution becomes equally clear when we realize what ample means of
remedy we have at our command. We perceive that the chief ramifications
of the social problem are but varying effects springing from one cause,
the waste of labour. We realize that Poverty, in a nation of 44,000,000
persons possessing an aggregate exchange income of about £1,840,000,000,
need be with us only as long as we care to tolerate it. Each social or
political problem takes on a new aspect when we consider it, as we
should consider it, in relation to the income of the nation and its
distribution.

Unfortunately, the facts of the case have been studied by few people,
and, in so far as they have been published at all, it has been in pages
inaccessible to the public. Of our 44,000,000 people, it is doubtful if
as many as a hundred have studied the subject matter at first hand. Even
in relation to taxation, the question of distribution is rarely
discussed. It is but necessary to listen to a debate on the income tax
in the House of Commons to perceive that on the subject of "ability" the
vaguest conceptions exist. Our most ardent reformers discuss their plans
without reference to the economic framework of the society which they
propose to reform. As a result, we get a vast amount of misdirected
effort, a dreary outpouring of vague and empty rhetoric, a pitiful
misconception on the part of the public as to the true condition of
their finances, industries and commerce, and a succession of timorous
proposals for reform ludicrous in relation to the nature and magnitude
of the problems with which they seek to deal.

In the following pages an attempt is made to correlate the facts as to
the Error of Distribution with many of the problems of government. From
the standpoint that we are a people with a great income, with a clear
idea as to the ill-distribution of that income and the manner in which,
through the joint operations of luxury and poverty, a nation may be
devitalized even while its income is growing, let us consider the means
of amelioration.




 CHAPTER XIV
 THE NATION'S CHILDREN


Let us begin at the beginning with what should be the chief care of the
reformer—the child.

Every year in the United Kingdom there are some 700,000 deaths and some
1,200,000 births. The social structure which we seek to improve thus
offers us a double hope. However degraded, however enfeebled, however
criminal many of the units of the present generation may be, they must
pass away. Unit after unit is cancelled; unit after unit is replaced.
The child, save in a small percentage of cases, is given to us an
unsullied page, upon which we may write what we will.

If the reader would realize fully the truth which I have just expressed,
let him ponder the following utterance by Professor D. J. Cunningham
when under examination by the recent Inter-Departmental Committee on
Physical Deterioration. After referring to the manner in which changes
in the condition of life affect the growth of an individual class, and
more especially how poverty with its squalor, its bad feeding, and its
attendant ignorance as to the proper nurture of the child, lowers the
physical standard of the poor, he went on to say:

"In spite of the marked variations which are seen in the physique of the
different classes of people of Great Britain, anthropologists believe,
with good reason, that there is a mean physical standard which is the
inheritance of the people as a whole, and that no matter how far certain
sections of the people may deviate from this by deterioration (produced
by the causes referred to) the tendency of the race as a whole will
always be to maintain the inherited mean. In other words, those inferior
bodily characters which are the result of poverty (and not vice such as
syphilis and alcoholism) and which are therefore acquired during the
lifetime of the individual, are not transmissible from one generation to
another."

I break the quotation to accentuate the conclusion:

"Therefore, to restore the classes in which this inferiority exists to
the mean standard of national physique, all that is required is to
improve the standard of living, and in one or two generations the ground
that has been lost will be recovered."

According to Dr Alfred Eichholz, H.M. Inspector of Schools, fully 90 per
cent. of the children born in poor neighbourhoods are healthy. Dr Edward
Malins, President of the Obstetrical Society, gives it as his opinion
that 80 to 85 per cent. of children are born physically healthy,
whatever the condition of the mother antecedently.[41] The weight of
new-born children, he thinks, is, speaking generally, not below the
average—there is a constant reversion to the race standard.

It is probable that these statements of Dr Eichholz and Dr Malins
require some modification. Other evidence goes to show that it is far
from true that the majority of children born in poor neighbourhoods are
healthy. Thus Dr Henry Ashby, of Manchester, a leading authority on the
diseases of children, said in a letter to the "Lancet" on October 1st,
1904:—

"My own experience in the out-patient room entirely confirms the opinion
that the nutrition of the mother has a very important bearing on the
nutrition of the fœtus and that the statement that the percentage of
unhealthy births among the poor is small is not justified by facts. We
constantly see fully developed infants a day or two old brought by
midwives or neighbours exceedingly badly nourished, blue and feeble, and
who are clearly ill fitted, as the event indeed proves, to withstand the
conditions of an external existence. There must be numbers of such born
in this city that perish within a few weeks of their birth, and who fail
to thrive for even a day. There is no question of syphilis; they are the
children of poor mothers who have lived lives of hard wear and tear
during pregnancy, are themselves badly nourished and weakly, and have
felt the pinch of poverty, though often perhaps poverty of the secondary
sort. I have a strong conviction also that the infants of the poorer and
weaker mothers, even though they are born fairly well nourished, are
difficult to rear, and easily waste even when under fairly favourable
conditions in a home or hospital."

Evidence to the same effect was given to the Physical Deterioration
Committee, but unfortunately ignored in their report. It seems to a
layman a common-sense view that if, in the period when a woman has to
eat to "feed two," she is badly nourished, and exposed to undue fatigue,
the child must suffer. Nevertheless, the striking phrase of Dr Malins,
"Nature intends all to have a fair start," may be fully accepted, and
Professor Cunningham's words of hope require no modification. What we
have to remember is that pre-natal as well as post-natal conditions must
be improved if we wish to rehabilitate our stock. If we have not a
renewed opportunity with each birth, at least we have it, save in quite
exceptional cases, in the person of each pregnant woman. The weight of
evidence goes to show that the influence of heredity upon disease has in
the past been greatly exaggerated. The chief causes of deaths from
debility, atrophy and premature birth are to be found in the evil
environment and malnutrition of the mother during pregnancy. The unborn
child fights hard for its life, but in a number of cases, sufficiently
large seriously to affect the total population, it is born unfit. It
either succumbs rapidly or lingers on to be a curse to itself and its
kind.

These all-important facts once realized, an avenue of hope stretches out
before us. 1,200,000 new births every year; 1,200,000 new units added to
the national stock, and the possibility of ensuring that nearly the
whole of them shall be born healthy. Here is Nature ever endeavouring to
reform the race—ever offering us opportunity. Combine with knowledge of
this opportunity knowledge of the means to take advantage of it. Combine
with the determination to secure reform the application of national
wealth to truly national ends and all things become possible.

Under what circumstances are the children of the new generation now
born? It follows from our examination of incomes that a large proportion
of our new births are of mothers who exist in conditions of extreme
poverty. Fully one-fourth to one-third of the 1,200,000 are born to want
and squalor. In England and Wales, at the census of 1901, of a
population of 32,527,843, there were 12,983,109 persons belonging to
families living in four rooms or less. In one room each lived families
forming 507,763 people. In two rooms each lived families forming
2,158,644 people. In three rooms each lived families forming 3,186,640
people. In four rooms each lived families forming 7,130,062 people.

If the one-third of very poor could be gifted with all the virtues, if
drink were abolished and every penny spent upon scientific principles,
we have seen that they would still be unable to command a healthy
existence. One-third of our hope of the future is thus mortgaged.
One-third of the new-born go to feed the ranks of misery and to form,
such of them as do not perish in infancy, the raw material of the social
problems of those who are to follow us.

In England and Wales, in 1908, 940,000 children were born. In the same
year 113,000 infants died under one year of age, or 120 per 1000 births.
The conditions which exist in some of our towns can be gathered from the
following figures:—

 INFANT MORTALITY
 (Rates per 1000 births in 1908)

 Towns with High Rates.  |  Towns with Low Rates.
  Stalybridge     206    |  Reigate           80
  Farnworth       209    |  Tunbridge Wells   83
  Aberdare        198    |  Hornsey           75
  Rhondda         182    |  Guildford         71
  Burnley         194    |  Winchester        88
  Batley          186    |  Watford           88
  Longton         199    |  Ilford            98
  Tunstall        198    |  Salisbury         95

The towns with low rates cannot be said to possess ideal conditions, but
merely to take them as a standard we see how considerable is the wastage
of life which goes on in Lancashire and Yorkshire and Staffordshire and
South Wales. In some of the poorer wards of our great towns one in three
of the children born perish within twelve months. That is the case in
some parts of Birmingham, where the Medical Officer of Health recently
stated that "a reduction of 50 per cent. in the rate of infant mortality
in Birmingham would mean the saving of 1500 lives per annum."

But death is only one of the symptoms we have to consider in this
connexion, and death itself were preferable to the survival of a large
proportion of the children of neighbourhoods where the rate of infantile
mortality reaches one in every three or four births. Death is the
extreme case. Those who do not die in infancy have physical degeneracy
as their portion, and, in a world where virility and energy were never
more needed by the labourer if he is to bargain successfully for a
decent livelihood, enter the fierce lists of modern industry with
enfeebled bodies. Docile units thus flood the casual labour market, or,
totally unfitted for labour, swell the ranks of the "residuum."

A woman ought not to work for the last three months of her pregnancy or
during the three months after her child is born. Further, if the child
is to be fed as Nature intended it should not be weaned until about the
seventh or eighth month of its life.

What cognizance does the law now take of these simple physiological
facts? The Factory Act is not aware that pregnancy precedes childbirth.
It recognizes, however, that children are born, and provides that the
occupier of a factory or laundry shall not allow a woman to be employed
"within four weeks after she has given birth to a child." Thus a feeble
attempt is made to protect the working mother for a month after
childbirth, but no law whatever protects the child. It is legal for the
mother to go back to the factory on the twenty-ninth day and leave the
child to take its pitiful chance.

The "four week" provision is largely a dead letter. How is an employer
to "know," when a woman applies to him for work, that she bore a child a
fortnight before her application? And who shall blame the woman for
seeking work, when she must work or starve? Miss A. M. Anderson,
Principal Lady Inspector of Factories, gives the following three cases
found in a single town in one week's inquiry:—[42]

A. B., aged 24, unmarried, jute worker, had to leave work, being unfit,
seven weeks before confinement. Became destitute, and found work with
new employer, saying nothing about the baby. Earns 9s. 8d. per week.

C. D., aged 34, married, jute spinner; the child illegitimate. Went back
to work three weeks after childbirth. The new employer knew nothing of
the confinement.

F. F., aged 32, married, jute spinner. Went back to work in 15 days—to a
new employer. Earns 11s. to 12s. per week. Father out of work and
disappeared one week after the birth. The woman's mother "takes care" of
the new baby and two other children, the eldest of whom earns 8s. a week
in a jute mill. Thus 19s. or so per week supports two adults and three
children. They all live in a single room which is very dirty.

In spite of an overwhelming mass of evidence as to the devastating
effect of the employment in factories and workshops of pregnant women
and mothers, the Physical Deterioration Committee's recommendations on
the subject were exceedingly timid. They appear to have been impressed
with the terrible consequences of the employment of women "from
girlhood, all through married life and through child-bearing"; they
realized that "the decreasing physical capacity of the child-bearing
woman brings her at last some relief at the hands of the manager of the
mill and she is sent away, often to take up the equally unsuitable
occupation of charwoman or house scrubber." But, after setting out pages
of good reason for action, the Committee, in effect, came to the
conclusion that little or nothing could be done, because they were
reminded of "the enormous practical difficulties that would accompany
any sort of legal prohibition." Even as to extension of the period after
confinement during which employment is forbidden, a point as to which,
as in many other matters, we are falling behind Western civilization as
a whole, the Committee did not advocate the enactment of a longer period
than four weeks. They pinned their faith to a medical certificate as to
fitness, and production of proof that reasonable care is made for the
child in a municipal crèche or otherwise. They also strongly urged the
application of "voluntary assistance" in the shape of maternity funds.

Thus lastly they came to the crux of the matter, the subject of "ways
and means." The cause of the Committee's timidity is only too plain. It
is impossible to make a recommendation of any value which does not
entail expense. What is the use of talking of "medical certificates,"
unless we can ensure that, when the medico has certified unfitness, the
poor mother shall have the means of refraining from work? Of what use to
talk of "reasonable care" of the infant, unless the means of reasonable
care be provided, and what form of care other than that of the mother is
"reasonable"?

The whole aspect of the question is changed when we consider the extent
of our national resources. Miss Anderson, in the invaluable memorandum
on the subject which she supplied to the Committee, said: "It ought not
to be impossible to link together in one great national provident and
protective association all the isolated, half-informed societies and
agencies at work in aid of maternity and for the saving of infant life.
More than that, I believe, with Miss Squire (Lady Factory Inspector),
that all over the country, but particularly in the great centres in the
Midlands and the North, it needs only an organizing mind and purpose to
bring such a national movement into being."

The Committee did not take up the idea of a "national movement." They
preferred to urge that "voluntary assistance" should devote itself to
the formation of maternity funds. But a problem of so much gravity
demands national effort, and the use of the national purse. Out of the
labour of the poor is drained the rents, profits and dividends which
make the gross assessment to income tax in 1908-9 as much as
£1,010,000,000. Of this sum, how much is needed to deal with the problem
of the poor mother?

We have to consider not alone the woman who works in the factory, but
also the woman who works in the home. A large proportion of the latter
are necessitous and ignorant, lacking both the means to feed themselves
and their children properly, and the training to apply the means if they
had them. The case is one in which education and supply must go hand in
hand, and both education and supply should be provided for nationally.

In the school the teaching of personal and domestic hygiene to scholars
of both sexes should begin at an early age. In the case of girls, infant
hygiene should be added in the higher standards. Girls should not leave
school or continuation classes until they have been seriously trained in
domestic duties. At present we herd them in classes of 60 or 80, and
leave a teacher, herself often ignorant of the chief duties of
womanhood, to impart to them a smattering of matters of secondary
importance. Able to write badly, to cipher inaccurately, and to read a
novelette, the girl goes forth from the school "educated," and more
ignorant of essential things than the untutored savage.

If we would have these children technically trained in domestic economy
and hygiene, acquainted with the dietetic value of simple foods, and
sent out into the world fit to take their places in the national
economy, we must make up our minds to increase our expenditure upon
education. We must have more teachers and better trained teachers.

But, if we put our hands earnestly to this work tomorrow, many years
would elapse before we could rear a new generation of mothers. What of
the mothers who now lack education—of the vast number of girls who are
now passing from school into the world they are so unfit to play a part
in? Work upon the right lines has already been commenced at Preston, St
Pancras, and other places. Let me outline the admirable scheme of Dr J.
F. J. Sykes, the Medical Officer of Health for St Pancras.

St Pancras is a poor and crowded London Borough in which, as in many
other such neighbourhoods, infants are dying at a younger and younger
age from increased immaturity at birth, from diminished capacity to
resist disease and from increased rearing "by hand." It is but necessary
to take one walk through its mean streets to see that St Pancras is
breeding a degenerate race. The Borough Council has awakened to the
terrible evil which increasingly threatens them. They have a most
capable medical officer and they have appointed women inspectors to act
under his authority. These women inspectors perform the important
function of following up the weekly official returns of births. There
are about 130 births a week in St Pancras, and all of them cannot be
visited by the present small staff, but an endeavour is made to visit
every necessitous case. To all the mothers, whether visited or not, a
card or leaflet of useful information is sent by post. Dr Sykes does not
teach the mothers how to wean or artificially feed their children, but
to suckle their babies and to avoid weaning them before their first
teeth appear. To the many indigent mothers the women inspectors give
advice as to regimen and diet and, where artificial feeding is
absolutely necessary, how best to proceed. Endeavour is also made to
reach and advise pregnant women. Throughout, the chief aim is to reduce
hand-feeding to the smallest possible proportions.

In cases of poverty requiring temporary assistance, the women inspectors
give cards of introduction to the Charity Organization Society, or to
the Poor Law Guardians. Where health is deranged or there is a desire or
necessity to wean, introduction to a doctor or a hospital is arranged
for. Where the husband is out of work the case is notified to the Labour
Bureau. In every case the hygienic, sanitary and domestic circumstances
of the mother and infant are carefully inquired into and reported upon.

This practical work, now in operation in St Pancras, and with variations
in some other places, is what is wanted everywhere if we are to rescue
the poor children of the new generation. The appointment of sufficient
Women Health Inspectors by local authorities must be made compulsory. In
"Riches and Poverty," edition 1905, I wrote: "The Health Inspectors must
of course be directed by a capable Medical Officer enjoying a permanent
appointment. It is most important that Medical Officers of Health
everywhere should have the same security of tenure which they have in
London. At present they hold office as a rule at the goodwill of the
local authority." Mr Burns's Housing Bill of 1909 has secured this
important reform. In future every county will have its independent
Medical Officer, unafraid of local influence.

Closely allied to the work of the Health Inspector is that of the
medical man, and here is raised a point of the utmost importance. Above
all, if we are in earnest about this matter of breed, the public medical
service should be greatly enlarged as part of the machinery of a
Ministry of Health, and the sale of soothing syrups and other "patent"
medicines absolutely prohibited.[43] The Medical Officers of Health
should be able to marshal a liberal service of trained medical skill in
defence of the national well-being. Also at their command should be an
ample supply of Health Visitors and trained and certificated nurses. The
creatures, nearly always ignorant and frequently unclean, who now
"assist" poor women in their time of trouble, are responsible for part
of the infant mortality which swells our death returns. I shall never
forget some of the "monthly nurses" I have met in the homes of the poor.
One ancient dame I found swilling stout. She leered at me out of a beery
eye and explained that she liked stout "because it made her feel as
though she could sing." Needless to say, she strongly recommended the
same joyful fluid to her patients.

The excellent Notification of Births Act of Lord Robert Cecil (1907)
should be adopted (or its adoption enforced—the Local Government Board
has power to enforce adoption) universally, in order that Health
Visitors may do their work effectually.

Given a properly organized public medical service we could begin at the
beginning, with the unborn child. The pregnant woman could obtain, free
of charge and as a matter of course, advice upon her diet and conduct.
Through such a service, it would be a simple matter to administer a
Public Maternity Fund. It is probable that, of the 1,200,000 births per
annum, as many as 300,000 are in necessitous families. We cannot afford
to allow 300,000 children to be starved before and after birth every
year.

The nation must set its face against the employment of married women in
factories or workshops, and gradually extend the period of legal
prohibition. There is only one proper sphere of work for the married
woman and that is her own home. In the case of factory workers the
employer must be made to furnish a maternity fund if he wishes to employ
married women. Thus penalized he will probably prefer not to employ
them—to the very great advantage of the labour market and the nation.
There are several model factories in the United Kingdom where the female
workers are dismissed upon marriage. This is found to prevent the girls
falling victims to loafers who desire to play three days a week. The
Jewish community amongst us, the very aliens who are despised by the
race they are supplanting in the East End of London, set us an example
which we should do well to imitate. The Jewish children are much
healthier and stronger than their Gentile neighbours because they are
better mothered. Jewish women find their true avocation at home. The
Jew, however poor, does not live on his wife's earnings, and it would be
counted shame for a Jewess to work during pregnancy or after childbirth.

But what of the poor woman in her home? We can safely confer upon our
medical officers and women inspectors power to report upon and advise
the assistance of necessitous cases, before and after childbirth. The
mother and child must be fed. Nature must be allowed to fulfil her
desire to give the new unit of population a fair start in life. The cost
would be surprisingly small. If 300,000 cases were assisted to the
extent of £10 each it would entail an expenditure of only £3,000,000 per
annum. With £10 per case a great deal could be done.

By assistance to the extent of £10 each I do not necessarily mean a
money payment. Often the assistance which is most wanted is personal
help. The poor Jewish women of East London have the aid of that
excellent institution the Sick Room Helps Society, which is practically
a charitable institution, the poor mothers contributing less than
one-third of the expenditure. The "Sick Room Helps" provided by this
Society are thus described by Miss Bella Löwy:

 "They had to take the place of the house-mother when, through
 confinement or sickness, she was laid low, and when, were it not for
 their ministrations, the children and husband, and the home (sometimes
 consisting of one room only) would be absolutely uncared for. The Helps
 were only sent in where there was no woman or girl old enough and able
 to do the work. The Sick Room Helps, for the time being, took the place
 of the housemother, washed the baby, got the children ready and sent
 them to school, cooked the food, tidied and cleaned up the home, saw
 that any accumulation of washing was done. In fact, she attended to the
 hundred and one little things which required to be seen to even in the
 most modest home, and they could readily understand how much more
 cleanliness and order became indispensable when the family had to live,
 eat and sleep in one room only. The advent of the Sick Room Helps also
 ensured for the mother peace of mind, as well as of body, at a time
 when she sorely needed both, and if she knew that her husband and
 children were well-cared for and well looked after she was assisted on
 the road to health and strength, and was, thereby, enabled to take up
 afresh the routine of her numerous daily duties. Formerly the poor
 mothers used to grudge themselves even a few days of enforced idleness,
 and, by premature activity in getting up and about, they but too often
 sowed the seeds of illness and sickness, and brought untold troubles on
 themselves and their families. Notwithstanding that these facts were
 well-known and were perfectly obvious to every thinking person, the
 opposition to what was erroneously termed a new form of pauperization
 had been very great. But an institution which not only benefited the
 recipients by nursing them when it was imperatively necessary, but, at
 the same time, gave employment to deserving women, enabling them to
 support themselves, and, perhaps, their family, could not be accused of
 encouraging pauperism in any way."

Mrs Alice Model, the honorary secretary, tells me that the Jewish Board
of Guardians applies a sum annually for the relief of destitute women in
childbed, which is handed to this Society and applicants for relief are
referred to it. If a case is found suitable, a nurse is sent in twice
daily and milk and other suitable nourishment provided. Excellent
results are obtained and many lives saved. Work on such lines might
easily be carried on given a sufficient staff of Women Health Inspectors
and an expenditure such as I have mentioned to provide nurses and
nourishment.

In this connexion a municipal milk service, which will be discussed in
these pages hereafter, would be of the first importance, and it would be
found a simple matter to supply pregnant women and nursing mothers with
an ample quantity of pure milk. Such a supply might be made universal
and be specially supplemented in necessitous cases. In any case, the
mother has a special claim upon the community and that claim should be
recognized. The birth of a child is a special tax upon the family in
which it occurs, a tax which is deliberately avoided by many people. Yet
the unit not only belongs to its family; it is an integral part of the
nation, and entitled to the care of a country which desires strong and
healthy citizens.

Such provisions should be accompanied by drastic punishment of parents
who neglect their duties. Upon report of the Health Officer, the
prosecution and punishment of offenders against the nation's children
would swiftly follow. We must make the man who neglects his child, which
is also the nation's child, feel that he is the greatest criminal of
them all.

It is impossible to leave the subject of the birth of the new generation
without reference to the necessity for the segregation of the unfit. It
must be made no longer possible for the habitual drunkard, the vagrant,
the criminal, the mentally defective, to reproduce their terrible kind.
The subject is so rarely brought before the public that few people
realize the nature and extent of the danger. _Fully two per cent. of our
existing elementary school children will never be fit to direct their
own lives._ The State has but one duty in the matter and that is to
protect society from the breeding of the unfit, while protecting the
unfit from themselves. The child of the habitual drunkard is often
feeble-minded. The child of the feeble-minded is frequently an idiot.
Need we wonder, while the State has no control of the feeble-minded,
that our lunatic asylums are ever growing too small for their pitiable
populations. Our criminal and workhouse records are full of testimony as
to the terrible results of the unchecked propagation of the insane by
the mentally weak. A few years ago, at Daventry, a couple were charged
with neglecting their ten-year-old son. It was stated that the child was
in the habit of smoking a pipe and drinking beer, supplied by the
father. A doctor stated that the boy was a perfect savage. He was
undersized and threatened to be an idiot or a criminal. The boy was sent
to the workhouse while the mother and father, described as "mentally
weak," were sentenced to one day's imprisonment and are now free to
bring forth _sui generis_. Another recently reported case which I noted
was that of a partly paralyzed old man who applied for out-relief to the
Oulton Guardians. He has had thirty children and the youngest, a girl,
is described as "practically an imbecile." From her, doubtless, and from
others of the brood, the terrible strain will proceed. Mr Amos W.
Butler, speaking at the American Association for the Advancement of
Science, gave particulars of the descendants of a feeble-minded woman.
She was the mother of two daughters, who were free to marry because,
like their parent, they were not actually insane. One of them, Rachel,
has married twice, and borne eleven children, three of whom are dead.
One of the survivors is a criminal and the others are degenerates. The
other daughter, Kate, has four children, all feeble-minded, two of them
illegitimate. One of them became the wife of a feeble-minded paralytic
and has had five awful children. The direct descendants of the woman
first mentioned number twenty-nine, and in ten years twelve of them have
spent an aggregate of twenty-two years in asylums and orphans' homes.

These details may be nauseating, but of what use to shirk them? It is
only when we realize that such propagation is going on unchecked that we
see our duty clear in the matter. We then also see that segregation of
the unfit would not increase our burdens, but decrease them.

Segregation recognized as a painful duty, it would no longer be
necessary to make any reservation when speaking of the hope that lies in
the child. Our 1,200,000 new births per annum would soon regenerate the
race. _During the next twenty years about 25,000,000 children will be
born in the United Kingdom._

[Footnote 41: See evidence before the Physical Deterioration Committee.]

[Footnote 42: Cd. 2175, p. 117.]

[Footnote 43: In this connexion it should be observed that there are
28,000 surgeons, physicians and medical practitioners in the United
Kingdom. The number (one to about 300 families) is probably larger than
the nation needs, but even to organize the whole of them as public
servants, and to make the medical service entirely free, would cost only
about £10,000,000 per annum, allowing for salaries ranging from £250 to
£1,000.]




 CHAPTER XV
 THE SCHOOL


In a commonwealth a man would need a healthy mind in a healthy body to
be true to himself, and to every man. In an unorganized community, in
which each man must needs struggle with his fellow for the right to
live, and in which to be unselfish is to be weak, and to be weak is to
go to the wall, a man needs a healthy mind in a healthy body in order to
set up himself and those dear to him in a fortress impregnable, with
ramparts against competitors, secret stores against time of siege, and
insurance policies against the horrors that threaten weak women and
young children whose champion has departed.

As things are now, we have then, not merely to train the boy to be a man
for manhood's sake, but to fit him to fight what has been pleasantly
called "the battle of life." He must be not only strong but artful, not
only intelligent but cunning, not only brave but aggressive, not only
fit to work but fit to bargain, not only an artist but a shopkeeper.

Knowing what we do of the hardness of the competitive system, how unfair
we are to these children whom we affect to "educate." We dose them with
a little book-learning and pass them on to seek employers. Nothing has
been taught them by way of preparation for the real education upon which
they are about to enter. They are wholly ignorant of the nature of the
machine of which they are about to become an insignificant part. They
plunge into the hard work which henceforth is to be their portion and
little that has been taught them is of value in connexion with it. The
boy is compelled to play a game for wages without knowledge of the
rules. Business presents itself to him as an impenetrable mystery, the
secrets of which are known but to a few. He becomes a producer of things
which in some way, he knows not how, are sold and bought and come to
yield him a certain or uncertain wage. He does not see, nor, if he saw,
would he understand, the balance sheet which sums up the processes which
yield him a part only of his production. He is not competent to measure
the extent of the injustice which he suffers. It is a game played
between a few who know and many who do not know.

From the beginning of the child's life, the Error of Distribution plays
its part. The opportunity offered the child varies directly with the
income of its parent. The frontispiece of this volume measures not
income alone; it measures also the degree of opportunity which is
offered to the children respectively of the rich, the comfortable and
the poor. Since the bulk of the people are poor, the greater number of
the nation's children are handicapped at the start. Individually they
are deprived of their birthright. Collectively the community is deprived
of the proper value of their strength, their intelligence, their genius.

The last point is rarely discussed. Intellect and genius are the
possessions of no single class. Year by year we kill off units of our
population who might live to work good for their kind. Year by year we
brutalize men who, given opportunity, might enrich our literature or
ennoble our art. Year by year we waste the greater part of the gifts of
our people. Here and there some rare combination of muscle and brain
rises superior to circumstance and lives to command the class which
would have repressed him. These exceptional cases serve to remind us of
the ability which is lost. We know only of the soldiers who live to be
commanders. Probably greater generals than Napoleon have perished as
privates in their first battle. That is unavoidable, for in battle some
must die. But in the arts of peace the sacrifice of potential commanders
need not go on. Given equality of opportunity, the marshal's baton in
each private's knapsack, and the nation need not waste one of its great
men.

If we are in earnest in this matter of the problem of poverty, we must
hasten to equalize opportunity, and having begun with the unborn child,
continue our work in the school. We must seek to make the school a
preparation for life and endeavour to build up, out of the new
generation, citizens who understand, and who, understanding, will see to
it that they remain not poor.

In the first place, we have to attend to the child's body. Through the
school we can see that the child is properly clothed and properly fed.
Through the school we can teach the child to understand its physical
nature and to respect it. In a certain class of trumpery novel, the
"tubbing" Englishman is distinguished from the unclean foreigner. The
simple fact is that the Englishmen who "tub" are quite exceptional
specimens of their kind. Few of the 9,000,000 houses of the United
Kingdom are provided with tubbing apparatus, and even the London County
Council has lately built "model" cottages which contain no bath. We must
change all that. The Germans are setting us the example of introducing
shower baths into their public elementary schools, and all the children
are bathed once a week. They soon get to enjoy it, and it is rarely that
a child objects. Mr George Andrew, in his valuable report to the
Scottish Education Department on the schools of Berlin and
Charlottenburg,[44] says that in the poorer localities this weekly bath
system is found to have an educational effect upon the parents. The
mothers, influenced by the knowledge that their children's underclothing
will be scrutinized, supply them with clean things. Thus even that least
amenable of subjects, the parent, may be reached through the child.

In "Riches and Poverty" edition 1905, I wrote:—

"In the matter of school hygiene and the physical training of children,
the introduction of the medico into the school is all-important. At
present, proper hygienic inspection of our schools does not exist.
Medical officers should be appointed both to see that school buildings
are absolutely healthy and to care for the personal health of the
pupils. Upon entering the school, the child should undergo a preliminary
examination and from thence onward remain under the care of the school
doctor. The preliminary examination would decide the question of fitness
for normal instruction; defective children would be drafted into special
classes."

In 1907 the Education (Administrative Provisions) Act made it the "duty"
of local education authorities "to provide for the medical inspection of
children immediately before, or at the time of, or as soon as possible
after, their admission to a public elementary school" and the "power" of
such authorities to make arrangements "for attending to the health and
physical condition of the children." It is earnestly to be hoped that
this "power" will be exercised; at present many authorities are blind to
it. The reader may judge from a single example the importance of using
the schools as a means of physical control and training. Dr Ralph H.
Crowley, the Medical Superintendent of the Bradford Education Authority,
conducted an inquiry into the physical condition of the school children
of Bradford in 1907. The results make painful reading.

Let us begin with the "general condition" of the Bradford children. The
examination as to cleanliness was made by observations of the head,
ears, and neck, and by rolling up the sleeves of the children. The
following approximate figures were arrived at:

 CONDITION AS TO CLEANLINESS

                 Number.  Per Cent.

 Clean           10,000     22.2
 Somewhat dirty  22,000     49.0
 Dirty           11,500     25.5
 Very dirty       1,500      3.3

I think we must agree with Dr Crowley that these figures "show a
deplorable state of things." What is to be said of "home life" and
"education," which between them fail to teach a child to be clean?

Here are some saddening details as to the condition of the heads of
girls:

 CONDITION OF GIRLS' HEADS

               No. of Girls.  Per Cent.

 Clean             7,000         30
 Nits present      8,500         35
 Lice present      8,500         35

And these figures, we are told, exclude many children sent home because
their heads had "broken out" through the presence of lice.

As to clothing, here are the figures:

 CONDITION OF CLOTHING

                  No. of Children.  Per Cent.

 Good                  10,000          22
 Average               19,000          42
 Bad or very bad       16,000          36

As for boots, the results are worth the consideration of British
bootmakers. As many as 6,500 children had foot-gear so bad that in many
cases "it was difficult to see how what were meant for boots managed to
keep on the feet."

Condition as to nutrition was judged broadly, irrespective of cause. Dr
Crowley divided the schools into three classes—better class schools,
poor schools, poorest. I take the case of the poorest schools:

 C. SCHOOLS—POOREST

        Nutrition.              Infants.      Upper School.
                             No.  Per Cent.   No.  Per Cent.

 Good or sufficiently good   51     30.7      105    24.4
 Below normal                58     34.9      183    42.6
 Poor or very poor           57     34.4      142    33.0

Taking the three groups of schools together, we find that 1,019 children
out of nearly 2,000 were "below normal" in point of nutrition. More than
one-half, that is, were suffering from chronic semi-starvation. Of the
1,019, as many as 344 were described as "poor or very poor."

Very instructively Dr Crowley measured nutrition against mental
capacity, and showed clearly how often unhealthy minds are the product
of unhealthy bodies. Of children of exceptional intelligence, 62.7 per
cent. were of good nutrition. Of dull children only 24.9 per cent. were
of good nutrition.

Dr Crowley concluded his significant report with these words:

"No increased facilities for higher education or technical instruction
can in any way take the place of attention to the physical side of our
children. The future of our nation will depend, not on the ability of
the few, but on the fitness of the many, and this fitness must be
secured at all cost. It is for us as a nation a matter of life and
death."

To proceed, anthropometric statistics should be carefully compiled, and
a sickness register kept, so that the nation may judge of the progress
made in restoring its stature. The teeth would have special attention
and the school dentist would work hand in hand with the school doctor.
Children need few dosings, but in special cases cod liver oil or a
suitable tonic could be administered, as is done in Belgium.

In cases of defective nourishment the child must be fed, whatever the
character of the parent. No fears as to the loosening of parental
responsibility need stand in the way in this essential matter, for
drastic punishment of neglectful parents should go hand in hand with our
care of the child. Nothing, in my opinion, is so likely to encourage the
feeling of parental responsibility, and to shame careless mothers, as
the knowledge that at the school the child is regarded as a valuable
commodity. In this connexion it would be well for the Board of Education
to insist upon periodical reports, not less frequently than every three
months, to parents upon their children. A carefully written report upon
the progress of the scholar in all departments would be calculated to
stimulate the better feelings of the parent.

The greatest timidity was shown by the Physical Deterioration Committee
in dealing with the important subject of underfed children. The report
runs:

"By a differentiation of function on these terms—the School Authority to
supply and organize the machinery, the benevolent to furnish the
material—a working adjustment between the privileges of charity and the
obligations of the community might be reached. In some districts it
still may be the case that such an arrangement would prove inadequate,
the extent or the concentration of poverty might be too great for the
resources of local charity, and in these, subject to the consent of the
Board of Education, it might be expedient to permit the application of
municipal aid on a larger scale."

It is the State that must furnish the "material," not as a matter of
charity, but from motives of the purest common sense. The timidity of
the Committee is the more remarkable when the evidence presented to them
is examined. Dr Eichholz made a special investigation into the
conditions of the Johanna Street Board School, Lambeth, as a type of
school in a very bad district, and he considers that 90 per cent. of the
children are unable, by reason of their physical condition, to attend to
their lessons in a proper way. His estimate of the underfed children in
the elementary schools of London is 122,000, or 16 per cent. of the
whole.[45]

Those alone who have had to do with voluntary free breakfast schemes can
have any idea of the terrible hunger of the children who attend them.
The hugging of the mug of cocoa, the ravenous swallowing—it cannot be
called eating—of the slices of bread, make one shudder to think that,
but for such isolated voluntary effort, the poor children would in an
hour or so be entering a school at which their attendance is compulsory
to—study! And for one helped by voluntary effort how many go hungry to
their tasks, utterly unable, through physical weakness, to do their
work!

Those who have grasped the importance of the utterance of Dr D. J.
Cunningham, quoted in the last chapter, will heartily agree with Sir
Shirley Murphy, L.C.C. Medical Officer of Health, that "the child has
got to be fed." The chief deterrent to many is fear that parents will be
demoralized by free meals at the schools. It must be realized by those
who entertain this fear that the parents are often already thoroughly
demoralized, and that their demoralization in the great majority of
cases has resulted from the conditions imposed upon them from their
birth by our social system. They are what they are because of
circumstances over which their control was nominal. _The reader, or
myself, if transplanted to Lambeth at a few months old, and nurtured as
they were nurtured, would at this moment be what they are._ "There, but
for the Grace of God, goes myself," is the reflection which every man
should make when he contemplates the waste products of the civilization
of which he himself is a favoured part. That truth realized by any man,
it is never again possible for him, if he has more than the average
share of the nation's income, to grudge a part of the amount by which
his income exceeds the average to raise to a higher level the children
of those whose lives have been a crying injustice from their cradles—of
those who have, with all their faults, done more than their share of the
hard labour of the world.

In 1906 the Education (Provision of Meals) Act enacted that a local
education authority "may take such steps as they think fit for the
provision of meals for children in attendance at any public elementary
school in their area" to the extent of a halfpenny rate and no more. So,
with extreme timidity, the legislative machine advances.

Games, physical drill, gardening and swimming, should be taught to every
child, under proper medical control. I assume the existence of
playgrounds in some ample shape—each school having its indoor and
outdoor places of recreation and its school garden. A great object is to
keep the child from the street. For the same reason, the school grounds
should be open on summer evenings and during all vacations. It is a
simple matter to make the vacations a time of real holiday for every
child—filled with lively interest and healthful sport. With the physical
exercises and teaching of games and, indeed, with all other departments
of school life should be associated what Rousseau considered to be the
chief moral principle that a child should learn—to do harm to no one.
That carries with it the teaching of "manners" in their best sense. Nor
should graces of person be neglected. The boy should not be allowed to
slouch about with his hands in his pockets. If he does, he is only too
likely to slouch into casual labour hereafter.

Clean, neatly clad, healthy, well-nourished, upright, self-respecting
and therefore respectful of others, feeling its strength in every limb,
well-mannered, capable of lucid expression—is it beyond our powers to
make the average child all this? Not if these things are as well worth
consideration as the resistance of an armour-plate, the trajectory of a
rifle-bullet, or the virtues of a smokeless powder. Not if the proper
study of mankind is man.

Having made provision for the body, we may now turn to the mind. I have
referred to the child's power of expression, and I think that the
average elementary scholar's incapacity to think clearly or to express
its ideas with lucidity show how much we have missed the way in our
educational methods. We have forgotten that to "educate" is literally to
"lead out." The two guiding principles or characteristics of the German
school curriculum as described by Mr George Andrew are: (1) The
principle of "_Anschauung_" (observation, intuition, concrete), and (2)
The development of oral expression.

"Anschauung" literally means "looking at" and as an educational
principle it means observation of the concrete as paving the way to the
abstract. The child begins school with the supply of words and
conceptions which it has gained from infancy in its own house. These
have to be corrected and completed; the child's concepts are enriched by
fresh observations and by gradual steps it is advanced from the familiar
to the strange, from the known to the unknown. In the youngest classes
the instruction in reading, writing, arithmetic, drawing, nature study,
is all in varying degrees based on "Anschauung," and later the same
principle of observation is to be traced in the teaching of such
subjects as geometry, geography, and history, where models, pictures,
maps, and plans are continually resorted to in order to deepen and
vivify the ideas gained from the printed page. Mr Andrew thus contrasts
infant teaching in Scotland with that in Berlin:

 "In Scotland, infant classes generally begin with the alphabet and the
 elementary reading-book, the object-lesson being something of an
 "extra," in which much useful and stodgy information is often imparted
 to the youthful mind—not always on subjects within its range of actual
 experience—and then retracted under an incessant fire of jerky
 interrogatories.

 "The Berlin child begins in a different way. With him the "observation
 lesson" is the starting-point. It is maintained that the child in his
 natural intercourse at home with his parents, brothers and sisters, and
 playmates, has equipped himself with a certain rudimentary supply of
 words and ideas, which concern themselves mainly with objects that have
 fallen within his own range of vision. He has learned to speak in a
 language, the purity or corruptness of which will largely depend on his
 environment. It is on these two lines, his rudimentary knowledge of
 simple objects and his power of simple speech, that his first school
 instruction proceeds, individual words and their constituent _sounds_
 with (the corresponding letter names) being reached by a gradual
 analytical process. In the "observation lesson" such objects as are in
 the schoolroom, or again, the child's body and limbs, his food, his
 clothes, his home, his street, etc., anything, in fact, which he can
 see, or has seen, are made use of. But even in this early "observation
 lesson" one cannot fail to note how the foundations are laid for
 developing oral expression—for teaching the child _Sprachfertigkeit_.
 Just as the child comes to school with his rudimentary ideas, and has
 these gradually corrected and extended by "observation," so also in
 this lesson the power of speech he brings with him is taken up and
 developed from the beginning. He is asked to describe what is placed
 before his eyes; he is made—and this is naturally the first
 difficulty—to speak in a distinctly loud tone of voice; and he is made
 to answer in a sentence or sentences. For example, the teacher's watch
 was taken as the subject of an "observation lesson" in a class of
 pupils newly come to school. One heard such little sentences as "This
 is a watch"; "from the watch hangs a chain"; "on the face of the watch
 are figures," etc. Every now and then some child is made to
 recapitulate the whole account, e.g. to repeat the above three
 sentences—a process to which great importance is attached."

Thus from the beginning the child is taught to observe and to express
lucidly what it has observed, and this excellent principle—this real
"education"—is followed throughout its school life. As a result the
children become self-reliant in utterance, able to think clearly and to
express their ideas orally or in writing in logical order and
appropriate language. Thus, whatever the influence of the home the child
gains a proper use of its mother-tongue. In our own country the
vocabulary of the home remains the vocabulary of the child, and I know
of nothing more painful than to listen to the talk of our "educated"
elementary school children in poor neighbourhoods.

There is no subject in the curriculum to which the principles of
observation and development of expression are not applied with success.
Thus, arithmetic is not taught by rule-of-thumb, as is too often the
case in our schools, but from the beginning the child is led to "count
with understanding." The child does not merely learn a series of
mechanical rules. He understands the process he employs and can give a
lucid account of his knowledge. It is perhaps hardly necessary to add
that he studies the metric system, and becomes familiar with the
arithmetic of business operations.

Our elementary school curriculum must be made to include the study of
the sciences as a matter of course and not as special subjects.
Unfortunately, public opinion is still lamentably absent on this point.
An ex-Prime Minister is not ashamed to state publicly that he is
ignorant of science, and the majority of those who have received what is
known as a "liberal" education could not intelligently explain the
ringing of an electric bell or the action of their own hearts. This
deplorable neglect of science is sadly handicapping us as a nation in
every department, and it is a notable fact that the majority of recent
scientific discoveries have been made in other lands. In "Riches and
Poverty," 1905, I mentioned the following as especially notable: X-Rays,
Germany; Radium, France; Synthetic indigo, Germany; Artificial Silk,
France and Germany; Incandescent gas light, Germany; Wireless
telegraphy, Italy. Since then the English Channel has been crossed by a
flying machine—from the French side. I notice that Mr Andrew, in the
report already referred to, while acknowledging that science was
generally treated excellently in the German schools, obtained a "vague
impression that rather much was attempted." Is that vague impression to
be wondered at, in view of the pitiable condition of science teaching in
the United Kingdom?

As a matter of fact, nothing is more fascinating to the average child
than the science-lesson. The child is instinctively a scientist; its
mind is ever searching for the reason of things, and the average British
parent is every day through his ignorance of science compelled to evade
the simple but very reasonable inquiries of his offspring. It should be
our object at the school to encourage the child's wonderings, and to do
what we can to cherish the wise habit of wondering. The savage at least
wonders when he sees a locomotive. The average "educated" citizen has
long ceased to wonder either about the science that moves his train or
the science that lights his house.

It is easy to understand how well the two guiding principles of German
teaching fit the study of science, or of nature-knowledge, to use the
terminology of the Charlottenburg curriculum. The material aim of the
course is to give the pupil knowledge of nature in a form suited to his
grasp, including, be it observed, the laws of health. Then there is the
formal aim—to train the pupil's powers of observation, and to develop
his powers of thinking, and to awaken his sympathy with plant and animal
life and admiration for the beauty of Nature. At Charlottenburg Natural
History is taught under the three sub-divisions A. Botany, B. Zoology,
and C. Anthropology. Under the third is taught animal physiology, the
laws of health, and first aid in cases of accident. In connexion with
Botany, school excursions for the study of plant life are organized. I
can imagine no more useful discipline for a town dweller. In the domain
of physical science, the pupils are led on to the knowledge of Nature's
laws and to the causes of common things. Particular attention is paid,
Mr Andrew tells us, to such phenomena or principles as are of importance
in domestic, industrial and commercial life—those of domestic life
applying to the girls, the latter two to the boys. Light, heat,
magnetism, electricity, mechanics, sound, chemistry and mineralogy are
taken. Experiment is largely employed, and the apparatus used is
adequate and admirable, in this respect being a striking contrast to the
mean outfit which is usually considered good enough in the United
Kingdom. The reflection is forced upon one that, in the region of
foreign competition, with which this work is not concerned, they will be
formidable antagonists, these scientific German children, in the time to
come.

In connexion with the teaching of hygiene in schools we can do much to
encourage abstinence from intoxicating liquors. If in the study of
physiology the harmful effects of alcohol upon the kidneys and other
organs is made clear to the children, a very wholesome fear of "drink"
will be bred in them.

The little we are doing in the way of teaching domestic economy and
cooking to girls needs much strengthening. These subjects should be
compulsory in the highest classes of all girls' schools. There is
perhaps no other country in which poor women are so ignorant of cooking
as in the United Kingdom. There is no simple national dish which every
one knows how to make, and it is rarely that poor Englishwomen can make
a decent soup or have any idea of the proper cooking of vegetables.

As a preliminary to the abolition of child labour under the age of 16,
the introduction of the principle of compulsion in connexion with
continuation classes is badly needed. The children are now set free at
the most dangerous period of their lives, and nothing but good could
arise from compelling their attendance at classes which, in the case of
girls, should deal with infant and domestic hygiene, cookery, and
dressmaking, and in the case of boys with science, technics and
languages.

In 1908 I introduced into the House of Commons a measure to establish
compulsory day continuation schools in England and Wales. The Bill was
prefaced with a memorandum which pointed out:

"According to the census of 1901 there were in England and Wales about
4,600,000 persons of both sexes between the ages of 14 and 21 years.
According to the reports of the Board of Education the number of pupils
aged 15 to 21 years attending day and evening continuation schools of
all sorts is only about 387,000."

The Bill itself was as follows:

 1. This Act may be cited as the Continuation Schools Act, 1909.

 2. The earliest age at which a child shall be entitled to any exemption
 from obligatory school attendance shall be fourteen years, and the
 Education Acts, 1870 to 1902, are hereby repealed in so far as they
 permit the partial or total exemption from school attendance of
 children under fourteen years of age.

 3. Every child whose age exceeds fourteen but does not exceed seventeen
 years shall be deemed to be a continuation scholar, and is hereinafter
 so termed in this Act.

 4. Every education authority shall establish classes (hereinafter
 termed a continuation school) for the continued education and technical
 training, without fees, of all continuation scholars in its district
 who do not attend approved day secondary or day technical schools.

 5. The continuation school shall be carried on at hours which do not
 terminate later than six o'clock p.m., and every continuation scholar
 shall attend the continuation school for a period of not less than six
 hours per week.

 6. Sufficient school places, and sufficient teachers, scientific and
 technical apparatus, material, tools, or plant, et cetera, shall be
 provided to enable every continuation scholar controlled by the
 education authority to be instructed in industry or agriculture, or in
 domestic economy, in the English language and literature, in the
 principles of hygiene, and in the duties and obligations of
 citizenship, and the scheme and curriculum of each continuation school
 shall be subject to the approval of the Board of Education.

 7. For the purposes of the administration of this Act, the education
 authority may co-opt any number of local employers not exceeding six.

 8. Every employer shall permit every continuation scholar in his employ
 time in which to attend the continuation school, and, failing to permit
 such attendance, shall be liable on summary conviction to a penalty not
 exceeding _two pounds_ for every day upon which his employee therefore
 fails to make his due attendance at the continuation school.

 9. Every parent or responsible guardian of a continuation scholar who
 fails to attend a continuation school shall be liable on summary
 conviction to a penalty not exceeding _ten shillings_ for every day
 upon which the continuation scholar fails to attend the continuation
 school, unless the non-attendance is due to the fault of the scholar's
 employer, or to illness, accident, or other unavoidable cause.

 10. It shall be the duty of the education authority to prosecute the
 parent or responsible guardian or the employer of any continuation
 scholar who is absent from the continuation or other approved school
 save through illness, accident, or other unavoidable cause:

 Provided that no continuation scholar shall be required to attend a
 continuation school held beyond two miles, measured along the nearest
 road, from the residence of the continuation scholar.

 11. _The cost of carrying out the provisions of this Act shall be paid
 out of moneys provided by Parliament._

So much is said about the example of Germany that it may serve as a
stimulus to those who think the above provisions too drastic to observe
that my Bill was based upon the scheme which is in actual operation at
Munich and which may soon be in operation for all German children.

It is by the adoption of such rational methods in our schools that we
may give opportunity to the new generation. If they exhibit ability they
can advance to, and benefit by, a secondary education which shall fit
them to perform the highest service for the State. If their abilities
are of a meaner order, we shall at least send them out into the world
well-equipped mentally and physically for their life's work and keep a
guiding hand upon them after their school days are ended.

With such an education the individual unit of industry would have
strength and understanding to contend for a better wage and be fitted to
do better work. He would also take thought as to the constitution of the
society of which he forms a part, and employ intelligently the franchise
which in the past he has so frequently used to his own undoing. In an
individualistic society such a unit would be better fitted to hold his
own. In the wise collectivism towards which we are steering, he would be
fitted to do his whole duty to his fellows and himself.

The relevance of education to the main theme of this book demands little
comment. It is obvious that, if we are to provide a proper physical and
mental training for our people we must spend more money. Better schools,
better playgrounds, better apparatus, more and better trained teachers,
classes not exceeding 30 pupils per class, the introduction of the
school doctor and school dentist, the provision of meals, the compulsory
continuation schools—all these things are needed and all these things
are costly. It is only want of reflection upon the enormous resources at
the disposal of the State which makes so many people timid in
educational reform. Take the matter of school doctors, for instance. On
page 64 of the Report of the Physical Deterioration Committee will be
found:

"Dr Eichholz thought it (the medical inspection of school children) was
the greatest need in school organization."

Therefore, you would say, Dr Eichholz and the Committee would urge that
the "greatest need" be properly supplied. Alas! the report goes on:

"On the ground of expense he would confine a general examination to the
poorest schools, and considered that in London the work could be done by
ten young men at £250 each."

The Committee, speaking for themselves, say:

"The Committee believe that, with teachers properly trained in the
various branches of hygiene, the system could be so far based on their
observation and record, that no large and expensive medical staff would
be necessary...."

Always the idea appears to be uppermost that this is a poor, a very
poor, country, which cannot afford to do the things which it would wish
to do. That teachers "properly trained in the various branches of
hygiene," which certainly do not cover the diagnosis of disease, should
be considered competent to decide which children should or should not
undergo medical examination amounts to an expression of opinion that we
cannot afford to provide the schools with their "greatest need."

I refer the timid to the fact that the gross assessments to Income Tax
in 1908-9 were over £1,000,000,000. The practical point is this. Of the
£1,000,000,000, can we spare a few millions for the purposes mentioned
in this chapter?

[Footnote 44: Cd. 2120.]

[Footnote 45: It is of interest to observe that Mr Robert Hunter
estimates that 70,000 of the school children of New York arrive at
school either breakfastless or underfed. This estimate accounts for 13
per cent. of the school children of the city.]




 CHAPTER XVI
 THE HOME


It is an amusing statistical fact that at the census of 1901 our
"overcrowded" England had but 558 persons to the square mile, or one
person to 1.15 acres, or one family to about 6 acres. If in 1901 the
population of England and Wales had been distributed evenly over the
area there would have been a distance of 240 feet between each person.
In 1871 a similar distribution would have removed each person from his
neighbour by 288 feet. Thus England is little more "crowded" to-day than
it was a generation ago. It is useful to remind ourselves by these
statistical exercises that the country is indeed nearly empty, and the
towns very full. In the 75,000 acres of the administrative county of
London were crowded, at the census of 1901, 4,536,541 people, a number
as great as the entire population of Australia, almost as great as the
entire population of the Dominion of Canada, and more than one-tenth of
the entire population of the United Kingdom. In London and 75 other
great towns in England and Wales are crowded about 15,000,000 persons or
about one-half of the entire population of the country. As London and
the great towns grow, the countryside is increasingly depopulated, and
not the countryside alone. Many small towns are decreasing in size. Thus
an increasing population is ever huddling closer together in a
diminishing number of centres.

The greater number of our new births, then, are in crowded districts.
The figures of Book I. tell us, also that the greater number are in
urban houses of a rental under £20 per annum. The rental values of the
houses of Great Britain in 1907-8 were as follows:

 HOUSES OF GREAT BRITAIN, 1907-8

 The figures do not include Ireland, but they include all residential
 shops, lodging-houses, hotels, farm-houses, etc., in Great Britain.

 Under £20 (Exempt from House Duty),    6,875,000
 £20 and over (Charged to House Duty).  1,912,000
                                        ---------
                                        8,787,000
                                        =========

Of the 8,787,000 houses fully 7,000,000 are obviously the homes of the
very poor, as we should expect if the statements made in the earlier
parts of this book are true. In various districts the accommodation
which can be bought for £20 a year varies greatly, as has been already
pointed out. £20 per annum may command a decent home in some parts of
the provinces or Scotland, or a filthy tenement in East London or
Manchester. Broadly speaking, the majority of the houses under £20 are
fit for demolition. They rank in our estimate of capital (Chapter 5) for
a great deal of money; they command an enormous amount of rent, but, I
repeat, they are chiefly fit for destruction. In a minority of cases
they are indecent or insanitary; in a majority of cases they are either
old or ugly or uncomfortable. Rarely are they fit habitations for a
self-respecting people. The same is true of many of the houses up to £40
and even £50 per annum in London and other crowded centres. Many £40
dwellings in London are crowded tenement houses, each of several reeking
floors.

What overcrowding means to the lives of those who suffer it may be
illustrated by the table prepared by Sir Shirley Murphy, which compares
the sanitary areas of Hampstead and Southwark in respect of expectation
of life. I have added the fourth column to give prominence to the
accusing fact that _the poor are robbed not of means alone but of life
itself_:

 EXPECTATION OF LIFE IN HAMPSTEAD AND SOUTHWARK, MALES ONLY,
 IN 1897-1900

                                  Expectation of life in Southwark
                                       less than that in
   Age.   Hampstead.  Southwark.         Hampstead by
   ---       ---         ---                 ---
  Years.    Years.      Years.              Years.
 At birth    50.8        36.5                14.3
    5        57.4        48.7                 8.7
   10        53.3        45.0                 8.3
   15        48.7        40.6                 8.1
   20        44.2        36.4                 7.8
   25        39.8        32.4                 7.4
   30        35.5        28.6                 6.9
   35        31.3        25.0                 6.3
   40        27.5        21.9                 5.6
   45        23.8        18.9                 4.9
   50        20.3        16.2                 4.1
   55        17.0        13.6                 3.4
   60        14.1        11.3                 2.8
   65        11.5         9.1                 2.4
   70         9.2         7.0                 2.2
   75         7.1         5.2                 1.9

In Hampstead only 6.3 per cent. of the population live more than two in
a room in tenements of less than five rooms, and only 11.1 per cent. of
the population live in tenements of one or two rooms. In Southwark, on
the other hand, 22.3 per cent. of the population are in the first
category, and 31.6 per cent. in the second category. The table enables
the reader to measure the years which are stolen from the lives of the
inhabitants of Southwark. The area of Hampstead is 2,248 acres and the
population 68,416. The area of Southwark is 544 acres and the population
89,800. We should never forget that there are two sorts of crowding, one
of which is measured by room or tenement, the other by area.

The Census definition of "overcrowding" by room or tenement is a very
modest one. It applies to tenements containing more than two occupants
per room, bedrooms and sitting-rooms included. Accepting this definition
there were 392,414 overcrowded tenements in England and Wales at the
Census of 1901, which were the homes of 2,667,506 people, or 8.2 per
cent. of the total population.

That is bad enough, but if we take a more reasonable definition of
"overcrowding" and apply the term to all tenements (by tenement is meant
a separate occupation, whether a house or part of a house) of three
rooms or less we find that in 1901, in England and Wales, as many as
5,853,047 or 18 per cent, of the entire population occupied tenements of
either one, two or three rooms. A further 7,130,062 persons or 21.9 per
cent. of the population of England and Wales were housed in 4-roomed
tenements. The complete tenement figures are as follows:

 TENEMENTS (SEPARATE OCCUPATIONS, WHETHER HOUSES OR PARTS OF HOUSES)
 IN ENGLAND AND WALES. 1901

 -------------+-----------+-------------+-----------+----------
              |           |             | Percentage|
              |           |             |  of Total |
   Number of  | Number of | Occupants of| Population|  Average
     Rooms    | Tenements.|  Tenements. |  in each  | Occupants
 in Tenements.|           |             |  group of | per Room.
              |           |             | Tenements.|
 -------------+-----------+-------------+-----------+----------
   1 Room.    |   251,667 |     507,763 |     1.6   |   2.02
   2 Rooms.   |   658,203 |   2,158,644 |     6.6   |   1.64
   3 Rooms.   |   779,992 |   3,186,640 |     9.8   |   1.36
   4 Rooms.   | 1,596,664 |   7,130,062 |    21.9   |   1.12
   5 or more  |           |             |           |
     Rooms.   | 3,750,342 |  19,544,734 |    60.1   |
              +-----------+-------------+-----------+----------
              | 7,036,868 |  32,527,843 |   100.0   |
 -------------+-----------+-------------+-----------+----------

It will be seen that, even in the 4-roomed tenements, there was an
average of 1.12 persons per room (room meaning every apartment in the
tenements, including sitting-rooms, attics, box-rooms, kitchens or
sculleries), and when we remember the small cubical content of many of
these "rooms" we see that as many as 12,983,109 persons, or 39.9 per
cent. of the population of England and Wales were certainly crowded, if
not "overcrowded."

In Scotland, at the Census of 1901, 969,318 families occupied 3,022,077
rooms, giving an average of only 3 rooms per family. Into the 3,022,077
rooms of all sorts were crowded 4,472,000 people.

While overcrowding, measured by room, slightly decreased between 1891
and 1901, overcrowding on area considerably increased. In the ten years
a considerable number of model dwellings—models, that is, of everything
that dwellings should not be—were erected, and much ground in London and
elsewhere which should have been left open, was covered with buildings
of every conceivable degree of ugliness.

As for existing houses, thirty years after the passing of the Public
Health Act of 1875, and fifteen years after the passing of the Housing
of the Working Classes Act of 1890, a considerable proportion are
actually insanitary, and only a minority conform to the most modest
standard of convenience and comfort. In the North of England and in the
Midlands there remain tens of thousands of houses built back-to-back, so
that there is no passage of air through them.

The Manchester Citizens' Association recently published, from the pen of
its secretary, Mr T. R. Marr, a little book,[46] which shows, by a
coloured map, that slum property, including many back-to-back and
"converted" back-to-back houses, form a great ring round the offices and
factories of Central Manchester. Its lessons are enforced by a series of
photographs of slum property. Here is a picture of a Salford court, upon
which face the living rooms of eleven houses. Standing out in the court,
as a public exhibition, are three rotten places of convenience, only one
of them usable. Here, again, is a photograph taken in St Michaels'
Ward—taken, let us hope, in the absence of St Michael. A group of four
closets open on the street, and beside them, surrounded by a group of
slum children curiously watching the photographer, is a tap which is the
sole water supply of 22 houses. A third picture, also taken in St
Michaels' Ward, shows a stone-paved court of eleven houses. There is one
tap, an open ash-box, and several closets the doors of which are torn
from their hinges.

In Liverpool, according to a paper read before the Royal Sanitary
Institute in April 1905 by Mr Fletcher T. Turton, the Liverpool Deputy
Surveyor, there were still 8,600 back-to-back houses standing, the
death-rate in their area being about 60 per 1,000! Further erection of
such houses is forbidden by Mr Burns's Housing Act of 1909, but there
are tens of thousands already in existence.

In Leeds there are many of these back-to-back houses, without
ventilation, or yard, or private sanitary arrangements, let at rentals
varying from 3s. 6d. to 7s. 6d. per week. As many as three and four
houses join at one closet. The closets are frequently in yards, forty
yards from the house. In wet weather, rather than carry the waste water
from the bedrooms the length of the street, women may often be seen
pouring it down the street gully. On Sundays, when the inhabitants are
all at home, the difficulty as to sanitary accommodation is intensely
aggravated.

In Sheffield, in the Potteries, and many other places, these abominable
back-to-back houses are to be found. Few workers' houses in the
Potteries have more than two bedrooms. The back-to-back houses in
Sheffield number 15,000, and sometimes as many as eight or ten persons
are to be found in their three little rooms. If we take only 7 persons
to the house there are 105,000 Sheffield people living in these dens.

If there are not back-to-back houses or cellar dwellings in London,
there are many squalid areas which contain greater aggregations of the
poorest of the poor than can be found in any other part of the country.
In Marylebone, Southwark, St Pancras, Holborn, Bethnal Green,
Shoreditch, Stepney, and Finsbury upwards of 30 per cent. of the
inhabitants live in tenements of one or two rooms. In Finsbury the
proportion reaches 45 per cent.; in Shoreditch and St Pancras 37 per
cent. In Lambeth, Westminster, Paddington, Chelsea, Kensington,
Islington and Bermondsey 20 per cent. and upwards of the population live
in tenements of one or two rooms. Only, indeed, in Lewisham, Wandsworth,
Stoke Newington, Hampstead, Woolwich, Greenwich, Deptford, Camberwell,
Hackney and Fulham, do less than 15 per cent. of the inhabitants occupy
tenements of one or two rooms. Not even the school children of Ancoats
or Deansgate, Manchester, exhibit the degree of physical deterioration
of those of Lambeth or West Ham.

It cannot be too strongly insisted that in connexion with the problem of
housing the people there is not merely the question of "overcrowding" or
of "crowding," whether in rooms or on area, to be considered. Not only
death and disease but ugliness and inconvenience have to be fought. The
speculative builder is covering suburban areas with mile after mile of
amorphous dwellings. Acre after acre of smiling meadow is disfigured.
Street after street of buildings of unredeemed ugliness reach out into
the beautiful country which lies so near to the 75,000 acres of London.
Trees are felled; every particle of verdure is scraped away. The town
advances, and before its grim threatenings Beauty flies. The lane
becomes the street; the hedge is replaced by cast-iron palings; beyond
the hedge there arises the row of "bay windows with venetian blinds"
which figure in the advertisements. Pass to the rear and you will find
the 16 or 18 feet frontage which the builder thought beautiful balanced
by a "back addition" which even the builder knew to be ugly. Facing the
back-additions, across two "gardens" together not so long as a cricket
pitch, another row of rear elevations, and so on, row after row. Such is
the vision with which we stimulate the fancy of the more fortunate of
the children of the people. We teach them drawing on the latest
principles—free-arm—in the school. We give them infinite ugliness as
their environment outside the school. We have still to learn that while
the dwellings and surroundings of the people are unlovely we cannot hope
for a gifted race. We have yet to understand that education begins when
the child opens its eyes and ears to the sights and sounds of the home
and its surroundings. It is not alone that the people lack monetary
income. To the ill-distribution of wealth is added the ill-distribution
of the means of a beautiful life. The majority of our people are denied
the vision of beauty, and even those who receive fair wages perish
morally for lack of that vision.

From the centre to the circumference there passes all the evil thinking
and evil doing which the unnatural conditions of the centre have created
in the minds of men. The workman who leaves the centre for the new
suburb of Walthamstow is not surprised to find there the ugliness which
he left behind him. He does not expect to find Beauty—that is a
commodity confined to pictures. He does not wonder that man could be so
blind as to create a sore on the borders of one of the most beautiful
spots which this earth has to show. He owns his cottage with a smile,
oblivious of the might-have-been, and rarely if ever wonders why in a
country containing nearly 80,000,000 acres his considerable rental can
command so small a share of the surface of his native land.

And surely it is for lack of vision that our efforts in connexion with
the housing problem are so misdirected. The rulers of our towns instead
of directing their attention to the outskirts have practically confined
themselves to tinkering at the centre. Blocks, palatial in size and
unholy in principle, have been erected and ironically dubbed "model
dwellings." It is true that in all big towns there are a certain number
of workmen who must live near their work, but there is usually a far
larger number who have no such tie. And the model dwellings referred to
usually succeed in housing not the class which must live near their work
but the class who could well go out beyond the suburbs. Thus the effect
of tinkering in the centre is often but to set free for the poorest of
the poor the tenements deserted by the better class who pass to the new
dwellings. That is good in its way, but how much better it would have
been to relieve the centre by emptying out its streets into the places
beyond. To buy up slums in the centre and create model dwellings is to
play into the hands of the landlords—to increase the value of the
unbought slums. To empty out the centre of its movable population is to
leave a better selection of homes for those who must remain, and to
leave the slum landlord to mourn a fall in the value of his "property."

A great deal is often said about unoccupied sites in towns and their
suburbs and it has even been suggested that efforts should be used to
force them into the market and compel building upon them. Here again is
exhibited a most lamentable lack of vision. In so far as town sites are
unbuilt upon let them remain so, and if their owners are waiting for a
rise in value let us take measures to make that waiting prolonged.

In a widely circulated leaflet on the land question I read: "If we pass
through the outskirts of any of our great centres of population, we see
pieces of land left practically derelict, with perhaps an old horse
grazing there disconsolately, or a few hens investigating a rubbish
heap. A little farther on we see houses being built and roads being laid
out. We know that still more houses are badly wanted, and we wonder why
the land between is not being utilized."

Here we have a reformer ardently desirous of filling up an open urban
space which, if he were wise, he would use his best endeavour to keep
open for ever. Seeing houses being built and roads being laid out "a
little farther on"—what kind of houses and what sort of roads, I
wonder?—he is anxious to turn out the disconsolate horse and pile up
more houses in the intervening space. It apparently does not occur to
him that yet "a little farther on" there is land enough for the housing
of an army, and that a horse, however disconsolate, is at the worst a
prettier object than a speculative builder's "villa."

Two things are necessary if the housing problem is to be grappled with
seriously and not resigned to private profit timorously modified by
municipal tinkering. The first is the control of land, and the second
ready access to capital. As has been truly said, the housing question is
a land question; as has been too rarely remembered, it is even more a
capital question.

There is only one effective way in which the community can control land
and that is to become its landlord. It is also true that there is only
one effective way in which the community can keep in its own hands the
"unearned increment" arising from the enhanced value of land created by
the presence and work of the community, and again that effective way is
for the community to own the land. There is no necessity, however, for
the town to play into the hands of suburban landlords by purchasing dear
land. It can evade attempts to corner land required by the community by
going out and beyond that land if it is held for a rise. Indeed it is
better to leave a zone between its present circumference and the site of
its new housing area. Even in London, it is a simple matter to reach
land cheap enough for successful housing operations. It is of the utmost
importance that all municipalities should without further delay secure
considerable areas of the agricultural lands which surround their
townships.[47] By doing this well in advance of their building
operations they can insure that, as they themselves raise the value of
the land by developing it and establishing means of transit, the whole
of that value will remain in their hands. Moreover, if the owners of the
intermediate land thus see their market failing they will gladly place a
reasonable price upon their holdings. In this connexion it is probable
that the taxation of land upon its selling value may prove to be of
assistance. The man who controls a part of the area of his country and
who will neither use it himself nor allow others to use it should in any
case be taxed. I attach more importance, however, to the simple and
effective policy of widening the radius of operations until cheap land
is reached.

It cannot be too clearly understood that simply to tax land on its
selling value is of itself no solution either of the land question or
the housing question. If land is priced by its owner at £1,000 per acre
and he is holding it to obtain that figure, we should not necessarily
bring it into the market by taxing it on its selling value. The price
asked obviously includes all the rise in value expected by the present
owner in the near future; that is why the price is held out for. If the
land be taxed upon the capital value the owner, unless very strong
financially, would probably have to sell. To do so, he would reduce the
price and the land would be taken up by a second owner. The expected
rise in value would thus be discounted, and the second owner having
obtained the land at a lower rate, would be able to hold the land for
the rise in spite of the tax payable. Thus the tax would not necessarily
bring the land into use. Nor, if it did, would it necessarily be devoted
to a desirable use. Owner B is not necessarily more moral or public
spirited than owner A. Owner A held up the land, but owner B, having
bought it, may put it to such base uses that we could wish it had been
held up a little longer. Above all, therefore, we must have public
control of area.

As the owner of its own sites, the township can be the arbiter of its
own developments. This has been clearly recognized in Germany, where,
under the encouragement and stimulation of the State governments,
municipalities are acquiring land beyond their existing borders.
Considerable areas are owned by many German towns. Stettin has 12,500
acres; Mannheim has 5,000 acres; Breslau has 12,000 acres; Frankfort has
11,000 acres.

Large as our population is, it is really remarkable to note how little
area would be required to rehouse the people of the towns. Taking the
number of families in the United Kingdom at 9,000,000, only 1,800,000
acres, or less than one-fortieth part of the area of the country, would
be required to house five families to the acre. This simple calculation
helps us to realize the point referred to in a former page—how tiny an
area now contains nearly the whole of our 44,500,000 people.

Having wisely purchased land upon its borders, the municipality must
take thought as to the distribution of the population upon its new
territory. Plans must be made of the new roads, streets, open spaces,
and transit facilities long before they are actually required, so that
each step in development may be taken deliberately and that no new
difficulties may be built up to be the despair of the future. The
well-governed city should study its present and future area as the
artist regards his prepared sheet of canvas. Within its borders what
varying effects may be produced! With the loving care that the old
Italians bestowed upon the preparation of their panels, the municipality
should plan the ground upon which the life of the city is to move. It is
a picture the arrangement of which means life or death to the citizens;
it may easily be made to glow with health and beauty.

Mr Burns's important Housing Act of 1909 has made it possible for local
authorities to plan out the future extensions of towns; it will be
interesting to see whether there is sufficient imagination in our local
rulers to make the provision fructify.

In one of the most valuable contributions to this subject which have
been published in recent years,[48] Mr T. C. Horsfall describes the
thought and trouble which is given to the planning of the extension of
municipalities by German Town Councils. Thus Stuttgart, in 1901, when
preparing for a large extension of the town borders (its present
population is about 182,000), obtained the advice of skilled architects,
engineers, medical authorities, and _artists_. The politico-economic
aspect of the matter was also carefully considered. The opinions, plans,
and suggestions were then published in a volume to enable all the people
of Stuttgart to study the proposals for extension.

Mannheim, again, which is chiefly a manufacturing town, prepared in 1901
building plans which provide for the requirements of industry and
housing, while always remembering the claims of Beauty. I quote the
following from Mr Horsfall: "The description of the building plan for
Mannheim, prepared by Professor Baumeister, which is published in
Numbers 69, 70, and 71 of the 'Centralblatt der Bauverwaltung,' shows
that the new part of the town will be provided with a remarkably
complete system of narrow railways for passenger traffic, and with an
equally complete system of railway lines of the ordinary width leading
from goods-stations in all directions, for goods traffic, which will
enable every manufactory to load goods on to trucks on its own premises.
Carriage, therefore, will be exceptionally cheap in the town. Yet the
Town Council, who are thinking so much of economical working, recognize
that even their poorest fellow-citizens are men and women, whose bodies
and minds need wholesome recreation and an abundant supply of fresh air,
of light, and of the influence of flowers and trees. The building plan,
therefore, provides for the creation of avenue streets of widths varying
from 24 to 43 yards; and Professor Baumeister adds: 'Of course care has
been taken to provide open spaces, decorative shrubberies, parks and
sites for public buildings.' The width of ordinary streets varies from
8⅓ to 21⅓ yards."

The German building plans provide in what districts factories may be
erected and determine (1) how much of building sites may be covered by
houses, and (2) the height of all buildings. Thus, even in cases where
the municipality does not own its own sites, it can in some measure
control the greed of the houselord. It cannot too strongly be insisted
upon, however, that absolute sovereignty of the manner of distribution
of the people upon area can only be obtained by acquisition of the land.

The practicability of going out and beyond the township and emptying
into the open country the crowded and enfeebled inhabitants of the
cities has been amply demonstrated in the United Kingdom. An
object-lesson of the most practical character is afforded by the
beautiful garden city of Bournville, which the beneficence and wisdom of
Mr George Cadbury have raised four miles from the gloomy city of
Birmingham.

Most people have heard of Bournville, but few are aware that it is not
merely a village erected for the accommodation of Mr Cadbury's
employees, but a working model of what may be done to solve the housing
problem of great cities. The village of Bournville now no longer belongs
to Mr Cadbury, for he has bestowed it upon the nation, the gift being
worth not less than £200,000. In December 1900, the estate was handed
over to the Bournville Village Trust, which is under the final control
of the Charity Commissioners. In the Deed by which the property was made
over to the Trustees the founder has thus set forth its objects: "The
founder is desirous of alleviating the evils which arise from the
insanitary and insufficient accommodation supplied to large numbers of
the working classes and of securing to workers in factories some of the
advantages of outdoor village life, with opportunities for the natural
and healthful occupation of cultivating the soil.... The object is
declared to be the amelioration of the condition of the working-class
and labouring population in and around Birmingham, and elsewhere in
Great Britain, by the provision of improved dwellings, with gardens and
open spaces to be enjoyed therewith."

The objects thus outlined have been carried out by the provision of
beautiful homes set in gardens which are at once a source of revenue and
of healthful recreation to their possessors.

Less than one-half of the breadwinners of Bournville are employed by Mr
Cadbury himself. The village is not a private preserve, as is so often
imagined, in which patronized cottagers live a bounty-fed existence, but
a free independent and public-spirited community which rules itself in
matters of detail through a Tenants' Committee or Council. A census of
the inhabitants made in December 1901 gave the following results:—

_Proportion of Bournville Householders working in_

                                                   Per Cent.
 Bournville                                          41.2
 Birmingham                                          40.2
 King's Norton and Selly Oak (manufacturing
   villages within a mile of Bournville)             18.6
                                                    -----
                                                    100.0
                                                    =====

 _Occupations of Bournville Householders_

                                                   Per Cent.
 Factory workers                                     50.7
 Clerks and Travellers                               13.3
 Mechanics, Carpenters, Bricklayers and others       36.0
                                                    -----
                                                    100.0
                                                    =====

Having this working population of people paying rentals between 5s. 6d.
including rates and 12s. 6d. excluding rates, the rate of infantile
mortality in Bournville in 1903 was only 65 per 1,000 against 331 in the
district of Birmingham known as St Mary's.

The architectural beauty of Bournville has not been secured by
extravagant expenditure, but by tastefully treating good and simple
materials with due regard to utility. Mr W. A. Harvey, the architect,
says: "The idea of a cottage home that I have always endeavoured to keep
in view is one in which beauty is based on utility." There is nothing
tortured, nothing deliberately and queerly "quaint," no plastering of
ornament. The houses look comfortable because they are comfortable. The
windows are pretty because they are simple casements, the best possible
sort of window.

A type of house which particularly pleased me had the following
accommodation:

 Ground floor:

  Living room, 17 feet by 16 feet with ingle-nook and bay window.

  Scullery, 13 feet by 11 feet 3 inches, with bath sunk in floor.

  Larder, 5 feet by 4 feet 6 inches. Coal cellar, watercloset, tool shed
  and small paved yard. Verandah in front.

 First floor:

  Bedroom No. 1, 17 feet by 13 feet 6 inches.

  Bedroom No. 2, 13 feet by 8 feet.

  Attic Bedroom, 10 feet by 8 feet 7 inches.

  Linen cupboard.

The total cost, including fencing, laying out garden, etc., was £280.
The house, it will be seen, has no "parlour," but one large living room
measuring 17 feet by 16 feet without the ingle-nook and large square bay
window. It is an exceedingly attractive and comfortable room, and the
sensible idea is appreciated by many of the tenants. The tastes of
others are met by the ordinary arrangement of a separate kitchen and
parlour.

The picturesque and comfortable houses have a charming setting. They are
set back from the road and grouped in such manner as to give each house
the best use of the sun—an important matter often neglected in the
planning of even expensive houses, and absolutely ignored by the
speculative builder. It follows that there are no monotonous roads in
Bournville; natural grouping arises from attention to aspect. Each
cottage has one-eighth to one tenth of an acre of garden. The gardens
are laid out when the houses are built, so that the tenant has not to
begin by breaking up uncultivated land. Lines of fruit trees are
planted, and these, besides yielding a good supply of fruit, form a
pleasant screen between the gardens. As a rule, the tenants take a keen
interest in their gardens, and cultivate them with great success. In
addition to the cottage gardens there are about 100 allotments, which
are eagerly sought after by the inhabitants of the neighbouring
manufacturing villages. There are two gardening classes for young men.
Two professional gardeners with a staff are in charge of the gardening
department, and are always ready to give whatever information and advice
may be required, but each tenant is responsible for the cultivation of
his own garden. It is a notable fact that the gardens are found to
yield, on the average, 1s. 11d. each per week. Gardening is lovingly
fostered by the Village Council already referred to. The members of this
Council, whose services are rendered voluntarily, are elected by ballot,
and the annual elections and by-elections evoke considerable interest.
Through this body arrangements are made for the co-operative purchase of
plants, shrubs, and bulbs in great numbers; gardening tools such as
mowers, rollers or shears, bought for the purpose, are let on hire; a
loan library of gardening books has been formed; also a gardening
association with periodical inspections of gardens; while lectures are
arranged for the winter, and excursions for the summer. Further, the
Council has established and managed with conspicuous success flower
shows and an annual fête for the children. The bath-house and children's
playground are also under its control.

The roads are 42 feet wide, and are all planted with trees. Out of the
100 acres laid out for building 14 acres have been reserved as open
spaces, including parks, green, and children's playgrounds. It is part
of the plan that in no part of the little community should children be
far removed from a proper playground.

I have already referred to the rate of infantile mortality in
Bournville. It may be added that the death-rate for 1904, as certified
by the local Medical Officer of Health, was 6.9 per 1,000. The rate for
Birmingham for the same year was 19.3. In his report for 1900 the
Medical Officer of Health referred to Bournville as follows:—"I have in
my previous reports made mention of the model buildings on the estate
which has been laid out by Mr George Cadbury. I cannot refrain from
again mentioning how much I admire the system he has adopted. The object
of the dwellings has been to give plenty of light and air with a good
deal of air space to each house with sufficient land adjoining, and so
insure a 'breathing lung' for the inhabitants of these houses. The
houses are moreover built on modern principles, and no pains have been
spared to make them as dry and free from insanitary conditions as
possible. In addition, open spaces have been laid out so that at all
times there can never be any danger of increasing the density of the
population over the area on which the buildings have been erected. I
cannot speak too highly of these dwellings, and I can only hope that we
may be able to keep all dwellings as far as possible up to this
standard."

To pass to the all-important financial side of the matter, the balance
sheet for 1909 gives the following results:

 BOURNVILLE VILLAGE TRUST INCOME AND EXPENDITURE,
 YEAR ENDED DECEMBER 31ST, 1909

        Income.                  Expenditure.
 Total rents   £9,249  Salaries                 £1,313
 Other incomes  1,042  Office expenses             164
                       Rates, taxes, etc.          754
                       Maintenance, repairs
                         and renewals            1,531
                       Legal expenses               73
                       Miscellaneous               143
                       Maintenance of roads
                         and open spaces           244
                       Depreciation on fencing,
                         etc.                      229
              -------                           ------
              £10,291                           £4,451
              =======                           ======

  Balance excess of Income over Expenditure, £5,840.

The whole of this surplus profit is devoted to building new houses and
to buying and developing more land, so that Bournville automatically
increases in size year by year. At the present time it is growing at the
rate of about 50 houses, or say, 250 persons, per annum, and the rate of
increase will, of course, be progressive.

In considering the above figures it must be remembered that the
Bournville Trust in 1900 had the whole estate handed over to it by Mr
Cadbury as an absolute gift. No capital charges had therefore to be met.
I am informed by Mr L. P. Appleton, the building manager, however, that,
with regard to the houses erected by the Trust itself, they all show a
net return of 4 per cent. on the capital, after providing for ground
rent, rates and taxes, repairs, management and all out-goings.[49]

The respective parts played by land and capital in such a scheme should
be carefully noted. If a municipality acquired land at £100 per acre,
and laid out roads and sewers at a cost of £400 per acre, and erected
upon each acre ten houses costing £280 each, the total outlay per acre
would be £3,300, and per house £330. How little a considerable variation
in the cost of land affects the result will be realized from the
following table:

              |              |Cost of Roads,|              |
 Cost of Land | Cost of Land |Sewers, etc., |   Cost of    |Total cost of
   per Acre.  |per House. 10 |  per House   |   building   |  each House
              | to the Acre. |  (£400 per   |    House.    | and its Land.
              |              |    Acre).    |              |
      £       |      £       |      £       |      £       |      £
      50      |       5      |      40      |     280      |     325
     100      |      10      |      40      |     280      |     330
     200      |      20      |      40      |     280      |     340
     300      |      30      |      40      |     280      |     350

It is not commonly realized by many of those who write on the housing
question that building land is a manufactured article, and that when raw
land is secured housing is as far off as ever unless capital can be
secured to develop it. It would rarely be necessary for a municipality
to pay more than £200 per acre, but whether it paid £20 or £200 the cost
of making roads, sewers, etc., and of erecting the houses would remain
the same. To house all our people on the scale of ten families to the
acre as at Bournville would absorb only 900,000 acres of land, which
could be acquired for quite a moderate sum of money at a small remove
from crowded centres, but the cost of manufacturing the land and of
manufacturing the houses would be great.

Given the provision of healthy houses by a municipality, would they be
appreciated by those for whom they were intended? Here the experience of
Bournville is conclusive. The village has never a house untenanted and
the new houses are eagerly sought after long before they are completed.
There is a constant stream of applications, and this in spite of the
fact that Birmingham is distant four miles. Many of the men cycle to and
from their work in the big city. They do not come to Bournville for
charity rents. They have to pay about the same rentals as in Birmingham.
The difference lies in the substitution of a healthy and lovely home for
a gloomy and uncomfortable tenement.

There is nothing in the Bournville scheme which cannot be effectively
carried out by any municipality. Under the housing acts local
authorities possess the power to acquire land for present or future
building operations, the power to raise loans, and the power to build.
The explanation of their sluggishness in putting the acts into effect is
to be found in the fact we have already noted, viz. that the housing
question is chiefly a capital question. This was slightly recognized by
the Housing of the Working Classes Act of 1903 which extended the period
allowed by the 1890 Act for the repayment of loans from 60 years to 80
years.

The vital importance of good housing makes it necessary to do something
to put capital cheaply at the disposal of local authorities for the
purpose. The housing question is a national one, and demands the use of
national capital. Again we touch the matter of ways and means and again
we see the advantage of considering social problems in relation to the
income and accumulated wealth of the country. Year by year, as we have
seen, an enormous amount of capital is wasted. British workmen, denied
proper housing, are paid something less than the value of their product,
while the margin is largely wasted in luxury at home or even sent out of
the country to establish water works in Argentina, supply the sinews of
war to Japan, or employ Chinese Coolies in South African mines. The time
has come when the nation must consider the nature of its resources, and
study its own development. We must see to it that the demand for houses,
the primary demand of a civilized man, is answered, not by the
speculative builder, but by the nation itself.

The proposal here made is a simple one. It is that National Housing
Loans should be raised and the proceeds placed in the hands of a
permanent Housing Board or Commission which should be empowered to
guide, assist and if necessary stimulate local authorities to rehouse
their poor. The Housing Board should have power to lend money to local
authorities, for the execution of approved schemes, for a period of 100
years at a nominal rate of interest, say 1½ or 2 per cent., the loss to
be made up out of the proceeds of Imperial taxation. To deal effectively
with the question, a yearly loan of at least £20,000,000 would be needed
for some years. Borrowing this at 3 per cent. and lending it out at 2
per cent. would create a charge of only £200,000 for each £20,000,000.
If then we authorized an annual issue of £20,000,000 for ten years—in
all £200,000,000, the total annual charge through loss of interest would
be but £2,000,000. Such a loan, about two-thirds of the cost of the late
South African war, would not only rehouse one-tenth of our people, but
place local authorities in possession of assets yielding a fine
revenue,[50] which on the Bournville plan, could be used for the
progressive extension of housing schemes. With access to capital for
housing at 2 per cent., and 100 years in which to repay it, local
authorities would be eager to claim their share of the national housing
provision. The loan would only be granted on the approval of plans for
the extension of the town boundaries, for transit facilities, and of
plans of the houses, gardens and recreation grounds for which the loan
was desired.

Failing action by the local authority, the Housing Board would make a
compulsory housing scheme[51] upon representation by the persons lacking
accommodation.

A drastic housing policy is needed as much in rural as in urban
districts. Want of housing accommodation is helping to thin our country
population, and the Housing Acts have been simply ignored in the past by
Rural Sanitary Authorities. On this head the Housing Bill of 1909 makes
salutary provisions giving county councils power to act in default of
rural district councils, and also giving power to the Local Government
Board to order schemes to be carried out within a reasonable time.

We have to do something more for the agricultural labourer than house
him, however, and here we touch another question intimately bound up
with national development—the land in its primary aspect as the basis of
agriculture and the source of food and material. This brings us to the
consideration of the empty country.

[Footnote 46: "Housing Conditions in Manchester" (Manchester University
Press price 1s.).]

[Footnote 47: This point should be read in connexion with the more
drastic proposal made in the next chapter.]

[Footnote 48: "The Example of Germany," by T. C. Horsfall. Published by
the Manchester University Press.]

[Footnote 49: Near York Mr Joseph Rowntree has successfully carried out
a housing scheme upon Bournville lines, and provided at the modest
rental of 4s. 6d. a week (the rates are an additional 8d. per week)
houses within the reach of unskilled workmen. The cottages are thus
described:

On the ground floor is a large living room (12 ft. 6 in. by 20 ft. 6
in.) with a bay window and plenty of cupboard accommodation, a small
pantry, and a scullery fitted with a copper, bath, and sink. The copper
is fitted with a patent exhaust to carry the steam direct into the
flues, thus preventing the discomfort which often arises in small houses
on washing day. The bath is fitted with a drop-down lid, forming a table
when the bath is not in use. Upstairs there are three bedrooms, each
fitted with a fireplace, and there is a large wardrobe on the landing.
The walls are plastered internally with adamant cement, which dries very
quickly, and assumes a smooth hard surface, and is thus more sanitary
than the ordinary plaster. All the rooms are fitted with picture
mouldings. Gas is supplied throughout the house, and city water is laid
on.

The gardens are not so large as at Bournville and the houses of cheaper
construction. The rental named, 4s. 6d. a week, is found to yield a
clear profit of 4 per cent., which is devoted, in happy emulation of the
Bournville scheme, to the extension of the little community.]

[Footnote 50: On this point the experience of Richmond, Surrey, is of
great value. In the "Housing Handbook" Alderman W. Thompson shows what
great financial advantages Richmond will reap from its cottage building,
although this was carried out on land costing £700 an acre. The houses,
built in 1894 and 1900, cost from £162 to £276 each and let from 6s. to
8s. per week. Altogether there are 132 houses containing 650 rooms and
132 sculleries, on six acres of ground costing £4,250 for site; £1,857
for roads and sewers; £505 for sundries, and £31,200 for building, being
a total cost of £37,812 and an average inclusive cost of £58 per room.
The income gives a gross profit which provides interest at 3¼ per cent.
on capital outlay, a sinking fund contribution of £486 per annum, and a
net profit of £38 per annum. Thus a large number of people have been
well housed at a profit to Richmond. At the end of 42 years from 1897
Richmond will have paid off the entire loan through the operation of the
sinking fund and be in possession of a property worth £35,000 and
producing a net income of over £1,600 a year. It is found that the
tenants take a great pride in their dwellings, and that their social
habits have greatly improved.]

[Footnote 51: The Grand Duchy of Hesse compels municipalities to borrow
money whether they like it or not. Hesse has determined that her people
shall be properly housed—a most wise and patriotic determination. The
Duchy therefore lays it down that the first duty of a municipality is to
buy land that its borders may extend in a proper and healthful manner.
Further, under the law of 1902, Town Councils which decline to build
houses for the people can be compelled to accept a loan from the bank
and to lend the money so obtained to a building society which is willing
to do the work.]




CHAPTER XVII

THE EMPTY COUNTRY


Although it is a well-known fact that the increase of population of the
United Kingdom is practically an addition to the urban population, it
may be well to preface consideration of the land question in its
relation to the national wealth and income by reminding the reader of
the precise facts of the case.

If we have regard only to the technical "Urban" and "Rural" Districts,
we get the following figures:

 ENGLAND AND WALES: POPULATION OF URBAN AND RURAL DISTRICTS RESPECTIVELY

                  Urban           Rural
 Census of      Districts.      Districts.
   1891         21,745,286       7,257,239
   1901         25,058,355       7,469,448

Thus the urban population increased by 15.2 per cent., while the rural
population increased by 2.9 per cent.

Many of the so-called "Urban" Districts, however, are quite rural in
character, being often small towns dependent as business centres upon
the agricultural areas in which they are situated. In 1901 there were
215 Urban Districts with populations below 3,000; 211 with populations
between 3,000 and 5,000; and 260 with populations between 5,000 and
10,000.[52]

Having regard to these considerations the following figures are arrived
at:

 (1) Classing with the Rural Districts all those Urban Districts which
 had in 1901 populations below 10,000 we get:

              Urban            Rural
           Population.      Population.
 1891       18,964,882       10,037,643
 1901       21,959,998       10,567,845

This gives an urban increase of 15.8 per cent. and a rural increase of
5.3 per cent.

 (2) Classing with the Rural Districts those Urban Districts which had
 in 1901 populations below 5,000 we get:

              Urban            Rural
           Population.      Population.
 1891       20,576,448        8,426,077
 1901       23,803,714        8,724,129

This gives an urban increase of 15.7 per cent. and a rural increase of
3.5 per cent.

Combining the three tests, we see that the truth broadly stated is that
the rural population is almost stationary while the urban population is
rapidly increasing. The rural population is thus a diminishing
proportion of the whole.

In 23 rural counties in England and Wales actual depopulation occurred
between 1891 and 1901, ranging from a decrease of 7.5 per cent. in
Montgomeryshire to a decrease of 1.9 per cent. in Cornwall.

The Census Commissioners make an interesting test of depopulation of
rural areas by taking the 112 Registration Districts which are entirely
rural, and which had in 1901 an aggregate population of 1,330,319. Their
population at each census back to 1801 has been approximately as follows:

 POPULATION OF 112 RURAL REGISTRATION DISTRICTS, 1801-1901

                                       Increase + or
 Census Year.      Population.         Decrease - in
                                    preceding decennium.

    1801             932,364               ...
    1811             997,494             +  6.99
    1821           1,139,137             + 14.20
    1831           1,216,872             +  6.82
    1841           1,288,410             +  5.88
    1851           1,324,528             +  2.80
    1861           1,321,870             -  0.20
    1871           1,321,377             -  0.04
    1881           1,313,570             -  0.59
    1891           1,304,827             -  0.67
    1901           1,330,319             +  1.95

The great advance in 1811-1821 was presumably due to the cessation of
the long war. In 1851-1891 actual depopulation occurred, but in
1891-1901 there was a gain of 1.95 per cent. Of the 112 districts,
however, 73 showed actual decrease in 1891-1901, the total increase
being entirely due to an advance in a few of the districts containing
mines. It is clear that in the last 50 years there has been actual
depopulation of strictly rural areas.

This becomes still plainer when we examine the facts given in the table
on page 237 as to the natural growth of the rural areas.

 THE MIGRATION FROM THE COUNTRY

 -----------------+-------------------+-----------+-----------+----------
                  |    Population.    | Increase  | Excess of |   Loss
                  +---------+---------+    of     |Births over|    by
                  |  1891.  |  1901.  |Population.|  Deaths.  |Migration.
 -----------------+---------+---------+-----------+-----------+----------
 112 Registration |         |         |           |           |
 Districts        |         |         |           |           |
 entirely Rural   |1,304,827|1,330,319|  24,492   |  150,437  | 124,945
                  |         |         |           |           |
 222 Registration |         |         |           |           |
 Districts which  |         |         |           |           |
 contain urban    |         |         |           |           |
 districts with   |         |         |           |           |
 populations under|         |         |           |           |
 10,000           |4,176,219|4,215,326|  39,107   |  414,816  | 375,709
                  +---------+---------+-----------+-----------+----------
   Total of 334   |         |         |           |           |
     Registration |         |         |           |           |
     Districts    |5,481,046|5,545,645|  64,599   |  565,253  | 500,654
 -----------------+---------+---------+-----------+-----------+----------

It will be seen that in a rural population of nearly 5½ millions, the
natural increase by excess of births over deaths was, in 1891-1901,
565,253, but in the same time 500,654 persons left these districts
either for urban England or for places abroad, so that the total
increase in population was only 64,599.

Turning to the number of persons employed in agricultural operations of
all kinds, the table on page 239 shows the decline which has occurred.

This extension of the table given in "Riches and Poverty," Edition 1905,
p. 223, modifies it somewhat. The reduction of agricultural labourers is
not so great as the crude totals suggest. It is the women and boys who
have chiefly disappeared from British agriculture, and it should be
observed that 248,500 wives and daughters disappeared in 1871 as
compared with 1861 merely by reason of the fact that they were
enumerated at the earlier date but not at the later one. According to
Lord Eversley's careful analysis ("Statistical Society's Journal,"
1907), the actual decline of male agricultural employment (men and boys)
in Great Britain was from 1,657,000 in 1861 to 1,236,000 in 1901, or, in
England and Wales alone, from 1,449,000 in 1861 to 1,079,000 in 1901.
This is a serious decline, but not as great as is commonly supposed.

Nothing is commoner than the belief that the trend to the towns is only
to be observed in the United Kingdom. As a matter of fact it is confined
to no country and is, indeed, a world-wide phenomenon. Between 1851 and
1906 the urban population of France increased from 25.5 per cent. to
42.1 per cent. of the whole. Between 1871 and 1905 the urban population
of Germany increased from 36.1 per cent. to 57.4 per cent. of the whole.
In both cases the population classed as "urban" is that contained in
towns with at least 2,000 inhabitants.

 ENGLAND AND WALES: PERSONS EMPLOYED IN AGRICULTURE, 1851-1901

+------+---------------------------+-----------------------+
|      |          ADULTS           |     YOUNG PERSONS     |
|Census|    (Aged 20 and over).    |      (under 20).      |
| of-- +---------+-------+---------+-------+-------+-------+
|      |  Men.   |Women. | Total.  | Boys. |Girls. |Total. |
+------+---------+-------+---------+-------+-------+-------+
| 1851 |1,141,000|336,000|1,477,000|328,000|100,000|428,000|
| 1861 |1,119,000|301,000|1,420,000|323,000| 60,000|383,000|
| 1871 |  972,000|122,000|1,094,000|277,000| 52,000|329,000|
| 1881 |  884,000| 50,000|  934,000|254,000| 11,000|265,000|
| 1891 |  816,000| 40,000|  856,000|237,000|  6,000|243,000|
| 1901 |  750,000| 43,000|  793,000|186,000|  9,000|195,000|
+------+---------+-------+---------+-------+-------+-------+

+------+----------------------------+
|      |      TOTAL, ALL AGES.      |
|Census|                            |
| of-- +---------+--------+---------+
|      | Males.  |Females.| Total.  |
+------+---------+--------+---------+
| 1851 |1,468,000| 436,000|1,905,000|
| 1861 |1,442,000| 361,000|1,803,000|
| 1871 |1,249,000| 175,000|1,424,000|
| 1881 |1,139,000|  61,000|1,200,000|
| 1891 |1,054,000|  46,000|1,099,000|
| 1901 |  936,000|  52,000|  988,000|
+------+---------+--------+---------+

I remind the reader of these facts because it is necessary to
distinguish between what is true and what is untrue in the arguments
used in support of the cry "Back to the Land." As a general rule the
stationariness of the rural population is attributed to cheap imports,
or to land tenure, or to want of housing accommodation, or to the
attractions of town life, or to the higher wages offered in industrial
pursuits. All these things are causes of migration to the towns, but one
of the most potent causes is rarely considered. It is the application of
machinery and improved methods to agriculture. To produce a given
quantity of food, far less labour is required than of old. Therefore,
even in a country like France, which is almost independent of imported
food, it is obvious that there must be a trend townwards as the labour
displaced from agriculture seeks other employment.

Thus, in considering land in its agricultural aspect _we must not regard
it as containing an unlimited field of employment_. Agricultural methods
will continue to improve, and the day will undoubtedly come when one
man's work applied in agriculture will literally feed a multitude.

But, having made that reservation, let us look at the French and German
figures in another aspect. We see that in France, although the urban
population has increased, it is still much less than one-half of the
whole. In Germany, again, the town population in 1910 is about 60 per
cent. of the whole. In our own country, if we counted as urban
population the inhabitants of all towns containing 2,000 and upwards, we
should find it amount to over 80 per cent. of the whole. While,
therefore, not losing sight of the reservation already made, it is clear
that, in the United Kingdom, causes other than the application of
machinery to agriculture have operated to produce urban congestion.

There was a time when no European country was so rich as England in men
who cultivated their own land. To-day there is no country in the world
in which cultivation and security of tenure are so widely divorced.
Whatever the trend to the towns in other countries may be, there is no
other country in which such a marked diminution in agricultural
employment has occurred as in the United Kingdom. The land which bred
the bowmen of Agincourt and the Ironsides of Cromwell now sends forth
the men of whom Sir Ian Hamilton wrote to Mr Horsfall "I will not give
you, a Manchester man, offence, if I say that their physique was hardly
equal to the fine standard of their determination and courage.... It is
the fault of some one that these brave and stubborn lads were not at
least an inch or two taller and bigger round the chest, and altogether
of a more robust and powerful build."

Looking at the industry of our people as a whole, the main fact which
stands out is want of security of employment. Nearly the whole of our
industrial workers are earners of weekly wages, and of our sparse
agricultural population but a small proportion are owners. Compare the
position of France. There, fully one-half the population are attached to
the soil by virtue of ownership and secure in the mother-earth which
nourishes them. They may be poor, many of these peasant proprietors, but
at least they are not constantly on the verge of hunger; at least they
have the glorious privilege of independence.

Our empty country-side is universally admitted to be a great national
danger. It is not alone that we are so much dependent upon imported
food; it is that the imported food is for the consumption of a race
degenerating in the unwholesome environment of town life. Everywhere the
cry of "Back to the Land" is raised, but, as though to mock that cry, it
is only answered by well-to-do weekenders, attendance upon whom, in
faked-up cottages from which labourers have been ousted, has become one
of our many degrading trades of luxury.

We must be under no illusions. We must not believe that mature and
debilitated town-dwellers can be planted out in rows to gain a living by
entire devotion to agriculture. We can hope for but little from farm
colonies for the unemployed. Our chief hope, here as elsewhere, is in
the children. We must seek to attach our present rural population to the
soil under such conditions that their children may see hope where now
there is none.

How shall we secure allotments and small holdings for the agricultural
labourer? Parliament in 1906-1909 has given much attention to rural
problems, and the Small Holdings Act of 1908, setting up Commissions
with power to make schemes for small holdings if County Councils neglect
to do so, extending to eighty years the period for which money may be
borrowed for the purposes of the Act, and giving powers for the
compulsory acquisition of suitable land, is now in operation. The Report
for 1908 shows that County Councils in England and Wales acquired 11,346
acres for small holdings and 304 acres for allotments.

We may venture to hope for better results than this, but is it asking
too much of the nation, at this juncture, to broaden its conceptions?
Why should we not, having regard to the extraordinary facts as to our
national wealth and income, having regard to the admitted dangers of our
present position, having regard to the best disposition and welfare of
our 44,500,000 people upon their island home of 77,000,000 acres,—why,
having regard to these things, should we not determine to secure
absolute control of area, and, having secured it, to order the first
essential of healthful life, proper distribution upon area?

As has been already pointed out in these pages, the 77,000,000 acres of
the United Kingdom, outside the tiny spots called towns which occupy an
almost negligible fraction of the whole, _produce a gross rental of
only_ £52,000,000. This is the sum at which the whole of the land of the
United Kingdom, save that small part which is attached to houses, was
assessed to Income Tax in 1908-9. It represents the rentals of
agricultural lands as they stand with all their farm-houses and other
buildings, roads, ditches, fences, etc. In 1898 the Royal Commission on
Agriculture valued this land at only eighteen years' purchase. Twenty
times £52,000,000 is only £1,040,000,000 or about one-half of one year's
income of the country. This, it will be remembered, was the valuation of
land which we adopted in Chapter 5.

The question I submit for consideration is this: Is it worth our while
to buy up our own birthright at the price of one-half of a single year's
income?

The question should be answered with due regard to all the
considerations as to agriculture, housing and the distribution of
population and industries which have been advanced in these pages. The
problem of the town is before us, and not alone the question of the
tilling of the soil. It should also be answered with due regard to the
question of food importation and the probabilities as to the continuance
of cheap supplies.

In 1875-6 the gross assessments of agricultural lands—an area very
little larger than at present, for, as has been shown, the largest town
occupies a relatively insignificant area—amounted to £67,000,000 or
£15,000,000 more than at the present time. If we had bought in 1875,
then, and rents had remained the same, we should have lost capital, but
would the value of the land have remained the same? In thirty years we
could have created a considerable yeomanry,—men holding land from the
State not in fee simple, but nevertheless in absolute security of
tenure. They could have paid us rentals at which small holdings would be
eagerly competed for, yet rentals larger than are at present derived by
the little sovereigns of the British country-side from their tenants.
Further, we should have stemmed the current of humanity which for thirty
years has flowed to the towns, and done something, in the phrase of
Ruskin, to "get as much territory as the nation has, well filled with
respectable persons."

My point as to the value that is and the value that might be is
illustrated by Sir Robert Edgcumbe's experiment with Rew Farm, in the
parish of Winterbourne St Martin, in Dorsetshire. Sir Robert bought this
farm of 343 acres for £5,050, made a road through it, and sold it in
small holdings at prices ranging from £7 to £20 per acre. The land was
eagerly taken up and the experiment has been a great success. When Sir
Robert bought the land in 1888 the outgoing tenant was in financial
straits—he could not make Rew Farm pay. It was rented at £240 per annum
and its net rateable value was £215. It is improbable that a new tenant
would have paid more than £200. Yet, under small cultivation, the
rateable value of Rew Farm rose from the £215 of 1888 to £346 in 1902, a
rise of 60 per cent. In the same period, the rateable value of the
parish of Winterbourne St Martin as a whole fell from £2,807 to £2,073.

Apart from the question of small holdings, nothing is more probable than
a rise in the value of British agricultural land to a point far beyond
any yet attained. Already, within the last few years, a revolution has
taken place in our wheat supplies—a revolution which has gone unnoticed
by the British public, so long accustomed to its miraculous cheap loaf
in the baker's shop that the miracle has become, as is the fate of all
miracles, a commonplace and unregarded thing. The table on p. 245 shows
the nature of the change which has occurred:

 UNITED KINGDOM IMPORTS OF WHEAT AND FLOUR IN EQUIVALENT WEIGHT OF GRAIN
 In Millions of Cwts.

------------------+-----+-----+-----+-----+-----+-----+
                  |1895.|1896.|1897.|1898.|1899.|1900.|
------------------+-----+-----+-----+-----+-----+-----+
Russia            | 23.0| 17.2| 15.1|  6.4|  2.5|  4.5|
Roumania          |  2.0|  5.4|  1.2|  0.2|     |  0.7|
U.S.A.            | 45.3| 52.8| 54.1| 62.0| 60.2| 57.4|
Argentina         | 11.4|  5.0|  0.9|  4.0| 11.5| 18.7|
Canada            |  5.1|  6.3|  6.9|  7.7|  8.7|  8.0|
India             |  8.8|  2.1|  0.6|  9.5|  8.2|     |
Australia         |  3.6|     |     |  0.2|  3.0|  2.9|
------------------+-----+-----+-----+-----+-----+-----+
Total of above and|     |     |     |     |     |     |
  other countries |107.2| 99.6| 88.7| 94.4| 98.5| 98.6|
------------------+-----+-----+-----+-----+-----+-----+

------------------+-----+-----+-----+-----+-----+-----
                  |1901.|1902.|1903.|1904.|1905.|1908.
------------------+-----+-----+-----+-----+-----+-----
Russia            |  2.6|  6.6| 17.3| 23.7| 24.8|  4.6
Roumania          |  0.5|  2.4|  3.1|  1.5|  2.1|  1.8
U.S.A.            | 66.8| 65.0| 46.7| 18.5| 14.5| 40.7
Argentina         |  8.3|  4.5| 14.2| 21.8| 24.1| 31.8
Canada            |  8.6| 12.2| 14.5|  9.0|  8.4| 16.8
India             |  3.3|  8.8| 17.1| 25.5| 22.9|  2.9
Australia         |  6.2|  4.2|     | 11.4| 11.5|  5.8
------------------+-----+-----+-----+-----+-----+-----
Total of above and|     |     |     |     |     |
  other countries |101.0|107.9|116.7|118.2|114.2|109.1
------------------+-----+-----+-----+-----+-----+-----

In 1902 America sent us 65,000,000 cwts. of wheat. In 1903 this great
supply fell sharply and in 1904-5 it was reduced to less than 20,000,000
cwts. In 1908 there was recovery, but this was but temporary. Sooner or
later the United States supply will wholly cease. By 1925 the United
States will have some 110,000,000 to 120,000,000 people to feed.

In "Riches and Poverty," 1905 edition, I wrote:—

"The United States failing, we still secured our imported wheat supplies
in 1904 and 1905, but at an increased price. Canada failed, but those
uncertain suppliers, India and Australia, came to the rescue. Argentina
sent us more than ever before and Russia also came into the export
market. But the facts as to America remind us that none of these
suppliers can be relied upon indefinitely, and some of them are
notoriously uncertain. Canada has done badly in 1904 and there will
always be difficulties of climate to consider. Moreover, the United
States will in future come into the market as a buyer and compete with
us for the exports of North-West Canada and Argentina. The sum is that
we cannot for the future depend upon dirt cheap wheat raised by scratch
farming on virgin soil, and that, as a consequence, the price of wheat
will rise. As with wheat, so, sooner or later, with many other foods.
When it comes to putting more labour and manure, and less luck, into
farming in new lands, then conditions will be equalized, prices of
produce will rise, and the price of British land will rise also."

It is now (1910) only necessary to add that the price of wheat has moved
thus:

 THE RISE IN WHEAT

                           British    Foreign   Indian and
                           Wheat.     Wheat.    Colonial.
                          _s._ _d._  _s._ _d._  _s._ _d._
 1894 (lowest on record)   22   10    22   10    23    6
 1904                      28    4    30    5    29    7
 1905                      29    8    31    2    30    8
 1906                      28    3    30    1    30    3
 1907                      30    7    32    4    33   10
 1908                      32    0    36    0    36    1
 1909                      36   11    39    2    40    3

Merely as a commercial speculation, then, it would be well worth our
while to invest £1,000,000,000 in buying up the United Kingdom. The land
is now probably at bed-rock price, and we should come in, as the slang
phrase goes, on the ground floor. The really dear land, that of the
towns, we could pass by. We want to get our industries and our people
out of the towns and with control of area we could do it. The State, as
landlord from John o'Groats to Land's End, could afford to dispense with
the acquisition of the tiny areas upon which the majority of our people
are now crowded. Land nationalization, viewed in this way, presents no
insuperable financial difficulties. On the contrary, it would put us in
possession, at an absurdly low price, of the opportunity to recreate our
social structure and the means to dispense with all taxation in the time
to come. Under wise management the national acreage could soon be made
to yield a revenue from farms, allotments, market gardens, houses,
factories, forests, etc., of something over three pounds per acre on the
average, for it would house the greater part of our people and produce a
larger part of our food by intensive cultivation. If we wisely use our
resources, our 77,000,000 can be made to produce, under methods of
intensive cultivation and co-operation already in practice, if not
enough food to feed our population, certainly a larger proportion of our
supplies than at present.

Also worth consideration is the important matter of afforestation. There
are now but some 3,000,000 acres of woods and plantations in this
country, and many of these are badly managed, for forestry is almost an
unknown art in the United Kingdom. Landowners do not understand it;
their agents do not understand it. Yet its possibilities are enormous
and might be realized within twenty to thirty years of the simple
financial operation which I have suggested. There need be no acre of the
77,000,000 not useful or not beautiful. Millions of acres of land now
termed waste may be clothed in verdure to yield a steady and certain
income and make us largely independent of imported timber. There is no
greater authority on this subject than Dr Schlich, and he gives it as
his opinion, confirmed by thorough investigation of British and foreign
conditions,[53] that five or six million acres could be brought under
wood, thus producing the bulk of the timber we require. Every acre
afforested would require about £2 worth of labour. After planting, each
acre would need only about five days' labour a year, but that means
30,000,000 days of work. The timber grown and cut, there would be the
transport, lumbering, and allied industries calling for labour. Dr
Schlich estimates that 500,000 men, or say 2,500,000 people, would find
employment through the afforestation of say six million acres, and the
estimate is based upon solid foundations.

It may be asked, why do the present owners of "waste" land miss such an
opportunity? The answer has several parts. Landowners are for the most
part (1) ignorant of the subject, (2) unprovided with capital, (3)
unwilling to wait. A business which does not begin to yield income for
some 15 years is not for the average private landowner. But the people,
who have waited so long for the right to tread their own soil, can wait
these fifteen years and other fifteen if need be.

Given the overlordship of area, the establishment of a permanent Land
and Housing Commission, the nationalization of the means of transport,
the establishment of well endowed schools of agriculture and forestry,
and a generation of well-born children, what possibilities open out
before us!

Is this conception too large for a race which talks of Empire? In the
United States there is a private trust which was organized by a single
individual with a capital of 1,000,000,000 dollars—a trust which owns
territory, mines, railways, steamships and mills, and supports 1,000,000
people. Business transactions are growing greater, and must greater
grow, for the world cannot afford to peddle with its resources. The
future is with the men who realize that it is not more difficult to
think in millions than in thousands. Within the last few years we have
spent on a war with a small people £250,000,000 in the name of Empire.
£250,000,000 is the price of one-fourth of the entire area of the Mother
Country. It is high time for a little Imperial thinking in the home
market.

[Footnote 52: These facts are summarized from the Census Reports.]

[Footnote 53: See his excellent "Forestry in the United Kingdom."]




 CHAPTER XVIII
 ORGANIZATION


It has already been remarked in these pages that quite inadequate
numbers of persons are engaged in the production of many useful
articles. This would be true even if all the individuals enumerated as
producers in the census returns were fully employed upon existing plant
and under their existing managers. As a matter of fact, they are not
fully employed. Unemployment or short time always exists in greater or
less degree. Between inadequate numbers and inadequate employment of
those numbers the quantity of _ponderable commodities_ produced in the
United Kingdom is so small, as we have seen, that only a small fraction
of our people are well housed or well clothed. A great multitude craves
for satisfaction of elementary needs, while a host of shopkeepers wait
hungrily for customers who cannot buy.

In the nineteenth century enormous strides were made in the invention of
machinery and labour-saving appliances and methods, and now, at the
opening of the twentieth century, we possess means more than ample for
the satisfaction of all. If invention now came to a standstill, we
could, with such science as we now command, produce, or obtain by
exchange for our production, far more food, houses, clothes, furniture
and other commodities than we actually need, and this while our
population enjoyed ample leisure in which to develop their higher
faculties.

What, then, is at fault? Not only do the majority of our men work
arduously, but an immense army of women and young children are also
engaged in production and distribution. Of the population of England and
Wales between the ages of 20 and 55 only 179,946 males and 823,135
unmarried females figured in the Census of 1901 as "without specific
occupations." What is the explanation, then, of an insufficient and
ill-distributed production? The answer can be given in a few words. It
is want of organization which leads to such poor results from so much
hard labour. _A poor stream of ponderable commodities filters through
thousands of unnecessary channels, and becomes the subject of many
strange services, each of which claims and gets some sort of reward. By
the enumeration of each of these services the total income which we
examined at the beginning of this book is made up. The Error of
Distribution of the national income connotes a wasteful and inadequate
production._

Waste in actual production is still exceedingly great. In only a
minority of cases are factories equipped with the best plant and
appliances. Model factories, in which the most economical production is
attained, are still exceptional. There are tens of thousands of small
employers who lack the capital properly to equip their establishments,
and who perforce waste labour.

That is to speak of production as a whole, without reference to the
nature of the goods produced, but when we come to analyse the product,
waste is everywhere apparent. Labour, to be economically employed,
should produce only genuine articles, capable of application for a
considerable period to the purpose which they are designed to serve. As
we know only too well, a very great part of our manufacturing output is
of articles which make-believe, and it is only a small fraction of
production in any branch of industry which is the best of its kind. Our
competitive system is largely an endeavour to make profits out of the
sale of trashy articles, the production of which wastes alike the labour
engaged in making them and the labour for which they are exchanged. It
is difficult to say which is more pitiable, the waste of labour upon
rubbish designed for the consumption of the poor, or the waste of labour
upon luxuries designed for the consumption of the rich.

Upon the waste connected with the trades and services of luxury I have
already dwelt at some length. Here it is only necessary to remind the
reader that it is of two kinds. There is the multiplication of servants
and attendants upon rich men and their houses and animals,[54] and there
is the employment of nominally useful workmen in the manufacture and
repair of the instruments of luxury.

Turning to the marketing and distribution of commodities we have many
forms of waste of labour to study. Each manufacturer in a trade, selling
his goods in competition with others, sends out his agent or agents to
assert, not always truly, that his wares are the best and the cheapest,
and to secure orders for them. Thus a large number of able-bodied men
are divorced from production and made a quite unnecessary factor in
distribution. At the Census of 1901, 64,322 commercial travellers were
enumerated in England and Wales, as against 44,055 in 1891! These men
are usually of an exceedingly capable type, whose work, better directed,
might be of great service in useful production.

Each factory, however small, must have its separate clerical staff, and
to thousands of men wasted as travellers we have to add tens of
thousands wasted as clerks. In the United Kingdom, in 1901, there were
439,972 commercial or business clerks, as against 300,615 in 1891.

The commodities produced by the wasteful competitive factories are
often, too often, dealt with by wholesale middlemen, agents, brokers,
factors, merchants, who, with their staffs of clerks and warehousemen
account for an uncertain but considerable number of the working
community. Our imports of food, which in an organized community could so
easily be handled by a single staff at each port, are scrambled for by a
great host of merchants, factors and commission agents.

A most conspicuous waste in distribution is in advertising, one of the
most unnecessary of all trades. In the game of competition, those often
win, not who supply the best goods, but who say that they supply the
best goods. As a result there has sprung up an enormous industry with
many branches which is engaged in pushing the sale of a few good and
many worthless articles. It "employs" thousands of male and female
clerks and canvassers, and directly and indirectly lays many nominally
useful trades under contribution. Printers, authors and journalists,
enamellers, carpenters, bill-stickers, paper-makers and others are
engaged to furnish the materials of the advertisements. Altogether it is
probable that some 80,000 people find a "living" in connexion with
advertising, when they should be doing useful work. Some part of the
stream of useful commodities is directed to them, and in return they
give nothing. Individually, they may be honest, industrious people,
doing the work they are employed to do to the best of their ability.
From a national point of view they are wasting their time. It may be
added that when they are pushing the sale of "patent" medicines,
whiskies and complexion creams they are doing something worse than waste
time.

Chiefly arising out of our commercial system of distribution and the
crimes and misdemeanours which it creates, the various branches of the
legal profession absorb a considerable number of able-bodied men who
contribute nothing to the wealth of the nation but who are rewarded by a
large share of the national income. At the Census of 1901 as many as
27,184 barristers and solicitors and 42,339 law clerks were
recorded.[55] These 69,523 individuals with their dependents, probably
numbering nearly 300,000 in all, help to attenuate the thin stream of
ponderable commodities which flow from the places where people labour to
useful ends.

We pass to the work of the hundreds of thousands of retail shopkeepers
and their servants, and here again we find a vast amount of wasted
labour. In each trade in each district there are a quite unnecessary
number of tradesmen hunting for profits. It is not uncommon to find
half-a-dozen butchers' men calling for orders upon the householders of a
single street.

It is sometimes represented to shopkeepers that any movement towards
collectivism threatens their livelihood. Shopkeepers will do well to
remember that it is unrestrained individualism which is their worst
enemy. In almost every branch of retail distribution the multiple shop
principle is eliminating the independent shopkeeper and substituting
badly paid shop "managers." Apologists of individualism boast of the
economy which is thus being achieved. Thus M. Leroy Beaulieu in his
"Collectivism" (which is an attack on collectivism) writes, "The
tendency of civilization, where freedom exists, appears to be towards a
reduction in the number of persons who live entirely by commerce, owing
to the gradual substitution of large for small industries that is now in
progress. Would it be possible for collectivism to act more rapidly or
efficiently?" M. Leroy Beaulieu forgets that the crushing of the small
shopkeeper by private monopolists accentuates the error of distribution,
while collectivism economizes labour for the general good.

What I have written does not apply, of course, to all fields of labour.
It has long been recognized that certain services can only be
effectually and efficiently performed under one management. Railways,
tramways, water-service, lighting, and so forth have come to be looked
upon as "natural monopolies." Even Mr Henry George, who thought that
"Socialism tended towards Atheism" and who considered that "limitation
of working hours and of the labour of women and children" could only be
enforced by methods which "multiply officials, interfere with personal
liberty, tend to corruption and are liable to abuse,"[56] admitted the
existence of "necessary monopolies" which might be treated as functions
of the State. Indeed, it is apparent to the most unthinking that between
two points A and B there can only be one best route for a railway, and
that, therefore, railway service between points A and B should be a
monopoly. Similarly it would be an obvious absurdity to construct two
sewers in one road, competing with each other for the removal of refuse,
or for two or more gas managements to run mains in the same streets. In
these and many other cases it is clearly recognized that economy of
labour is consistent with monopoly alone, and the only question that
remains to decide is whether the necessary monopoly should be in public
or private hands. I do not purpose here to discuss that question, for at
this date it is scarcely an open one. An overwhelming weight of opinion
has decided that public ownership must go with monopoly, wherever
monopoly is shown to be necessary.

It is not so generally recognized that proper economy of labour and a
proper distribution of the products of labour can only be secured by:

(1) The conversion of all common services into monopolies, and

(2) The ownership of those monopolies by the public.

Nevertheless, the waste arising from hundreds or thousands of
unnecessary centres of production and distribution is becoming better
understood, and in the United Kingdom, as in America and Germany, big
fish are increasingly eager to swallow the little fish. Combination in
the field of production is no less common than the unification of
control of stores and shops in the field of ultimate distribution.
Organization is in the air, and organization, commenced by individuals
for individual gain, can only end in the erection of monopolies, which,
for its own safety and health, the public, sooner or later, will find
itself compelled to control.

In the foregoing pages we have considered the proper use of area and the
healthy housing of the people as questions urgently calling for
collective action. The colonization of British land by the revival of
agriculture and the redistribution of industries is ultimately bound up
with the development of Transport and Power Distribution. The former is
now a problem of private monopoly which we have allowed to arise. The
latter will become one if we do not at once realize the possibilities of
power distribution and determine that they are of so far-reaching a
character as to demand public ownership from the beginning.

If we are successfully to take our industries and people out of
congested centres and spread them out over a considerable area we need
cheap and rapid transport and cheap and easily handled power. The
transport and power transmission of the future will be electrical. It is
upon record that in the early days of the steamship a Royal Commission
"sat upon" the then vexed question of "Steam versus Sails," and
unanimously decided that sails were the only practical wear for the
Royal Navy. One is reminded of this fact when one contemplates the slow
progress made by electric traction in this country, and the marked
reluctance to experiment on the part of those types of private and
injurious monopolists—our great railway companies. After much thought
and with the assistance of a pushful American citizen our London
"Underground" is, as I write, electrified, many years after electric
traction was known in Darkest Africa, but so far as the greater part of
our transport system is concerned we are at a standstill. The field of
experiment is resigned to the Americans and the Germans.

The production and distribution of light, heat and power simply mean the
production and distribution of energy in the form we call electricity,
and since transport is simply motion we see that the future of lighting,
heating, transport and power is the future of electricity.

In the matter of transport there is perhaps something to be said for the
statesmen who, without the slightest conception of the possibilities of
steam power, allowed our railways and canals to be made sources of
profit for private speculators. They erred in ignorance of the magnitude
and importance of the subject. There will be no such excuse if we allow
the production and distribution of electrical power to become the sport
of private monopolists. If there is blindness in this matter it will be
wilful blindness. For each district there can be but one power supply
consistently with economy, and so much hangs upon the wise distribution
of power that it is most important the public should be made to realize
the nature of the interests which are at stake.

The adoption of the mysterious word "Electricity" is a most unfortunate
thing. If the public understood that electricity is Energy and that it
is transmutable at will into Power or Light or Heat, they would better
realize the possibilities of the future in town and country, and all
that the proper organization and control of Energy means to them. They
would at once resolve that the power of government must not be divorced
from the Power which will run in the electrical mains of the future, and
by the aid of which we can transform the face of our land.

Let me drop the word Electricity and use the simple term Energy. Energy
will be produced at a central power station and distributed over a
considerable area. The energy mains will carry the means of lighting,
the means of motion (transport), the means of heating, the means of
manufacturing in large, the means of manufacturing in small, the means
of cooking, the means of cleaning, to every person in that area. Energy
will be at the disposal of every factory, of every workshop,—and of
every private house. No building will be without its motors, large or
small. Smoke and all the waste and dirt of smoke will disappear.

I am not speaking of a remote future, but of possibilities which can
forthwith be realized. How important it is, then, that this Energy
supply, which is already entering and will increasingly enter into our
everyday lives, should be publicly owned from the first. Given private
ownership, the monopolists of Energy will run their mains where most
profit is quickly to be garnered instead of seeking, as we should seek,
first profits in the thinning out of towns and the restoration of the
health of our people. If we part with the control of power, it is Power
indeed which we part with. We should part, also, it is important to add,
with a magnificent source of public revenue, which will amount, in the
time to come, to much more than the revenue of our railways. It is only
by securing the distribution of such profits by public ownership that we
can make any impression upon the melancholy facts treated in the first
part of this volume.

As I have already said, it is commonly recognized that such a function
as a tramway or water supply must of necessity be a monopoly, public or
private, if its working is to be economical. It is not difficult to show
that the control of the production and distribution of all articles of
common use must be unified if labour is not to be wasted. Just as one
water main and one alone is needed for the service of a row of houses,
so, to use a familiar illustration, one vehicle and one alone is needed
to supply the same row of houses with milk. If a number of milk-sellers
are competing for the custom of one small neighbourhood, as is usually
the case, a quite considerable number of able-bodied men, boys and
animals are engaged in unnecessarily traversing the same streets, one
after the other, to do the work which could be performed with much more
ease, certainty and expedition by a fraction of their number. Each of
the small tradesmen has to keep a set of accounts demanding his own
attention or that of his wife or clerk. Each milk dealer, again, has his
separate supply of milk from the railway station, sent by some farmer at
a distance. Each of these doses of milk is the subject of a separate
transaction, wasting labour at both ends of the journey and in transit.
From first to last, the process is clumsy and tedious, wasting labour at
every stage. The waste is precisely of the same nature as would occur if
several water companies supplied a certain street with water and had
their mains running side by side. There would be just as much absurdity,
and no more, in serving my road by four water-mains as in serving it by
the four milk chariots which now pay it such frequent visits.

And to pursue this useful illustration a little further there is another
analogy between a water supply and a milk supply which should not be
forgotten. The importance of pure milk is not less than the importance
of pure water. The milk supply of towns is derived from a thousand
tainted sources, the precise nature of which is unknown both to the
consumers and to the milk dealers. I fear we should drink less milk if
we could see the handling of it—the literal handling of it—from the
start. I have a lively recollection of the last milking operation I
witnessed. Suffice it to say that I agreed, afterwards, that the butter
made on the farm looked to be very fine butter, and that I was entirely
satisfied with an ocular demonstration of its many virtues. As is
pointed out by Dr G. F. McCleary, the Battersea Medical Officer of
Health,[57] "if large towns want clean milk they must not look to
outside authorities to get it for them." The ordinary milk farmer is a
conservative creature who does not appreciate the "faddist" with his
demands for a clean milker and a clean cow. A dirty person draws milk
from a dirty animal into a dirty receptacle, and tons of manure come to
London with the morning milk. Dr Leslie Mackenzie, Medical Officer of
the Local Government Board for Scotland,[58] thus describes the process:

"To watch the milking of cows is to watch a process of unscientific
inoculation of a pure (or almost pure) medium with unknown quantities of
unspecified germs.... Whoever knows the meaning of aseptic surgery must
feel his blood run cold when he watches, even in imagination, the
thousand chances of germ inoculation. From cow to cow the milker goes,
taking with her (or him) the stale epithelium of the last cow, the
particles of dirt caught from the floor, the hairs, the dust, and the
germs that adhere to them.... Everywhere, throughout the whole process
of milking, the perishable, superbly nutrient liquid receives its
repeated sowings of germinal and non-germinal dirt. In an hour or two
its population of triumphant lives is a thing imagination boggles at.
And this in good dairies! What must it be where cows are never groomed,
where hands are only accidentally washed, where heads are only
occasionally cleaned, where spittings (tobacco or other) are not
infrequent, where the milker may be a chance-comer from some filthy
slum—where, in a word, the various dirts of the civilized human, are at
every hand reinforced by the inevitable dirts of the domesticated cow?
Are these exaggerations? They are not. I could name many admirable byres
where these conditions are, in a greater or less degree, normal."

There is but one way to obtain clean and pure milk and at the same time
to secure economy of labour in its production and distribution coupled
with adequate remuneration of the labour so economized, and that is the
way of public ownership. The municipality should conduct the entire
operation of milk supply. By so doing it would prolong the lives of its
citizens, save the lives of many infants, and add to its revenue.

A public milk supply, even in relation to the food of adults, is an
urgent need. When considered in relation to infantile mortality the
question is seen to be a vital one. All medical officers of health are
at one on the point. We must have municipal milk depots if the children
are to be saved, and if we supply milk for children and nursing mothers
we may as well enlarge our basis of operations and make the milk
service, like the water service, a complete municipal monopoly.

Thus organized, another great service would be lifted out of the sphere
of bargaining and chicanery and adulteration. In another industry the
waste of labour would cease. In another trade men would work with intent
to serve, and cease to hunt profits at the cost of their bodies and
souls.

The case for the municipalization of the milk supply is a very forcible
one, but it is not more so than that for the public ownership of other
common services. The point as to waste of labour in production or
distribution largely affects them all. The dangers of adulteration and
dirt touch not milk alone, but the manufacture and distribution of every
commodity. Commercialism has undermined honesty. Sham, shoddy and
make-believe—these are erected in the form of houses, sewn up in the
form of suits, packed in tins to mock children as food, made the sole
occupation of millions of quite honest people. If honesty of production
is to be regained, the great services must pass, one by one, under
public control, and as each passes another opportunity for the amassing
of private fortunes will pass away and another factor in the Error of
Distribution will be cancelled. The best services at low charges for the
public will be accompanied by ample but not excessive remuneration of
management, a proper reward and short hours for the privates of
industry, and the accumulation of just so much profit in the public
treasury as may be deemed necessary to provide for new capital,
contingencies, or for public non-revenue services. Thus, and thus alone,
can we raise the status of the mass of the people and prevent the
congestion of wealth in a few hands. There can be no proper diffusion of
wealth until we have ended the system by which good and bad employers
use the lives of the multitude for their profit and pleasure, now
working them arduously in exchange for a payment which is an unfair
remuneration of the service, and anon refusing them even the opportunity
to do hard labour.

The remarkable success of municipal trading, so far, may be measured by
the bitterness of the attacks which have been made upon it by private
capitalists. The recent complaints of the railway companies as to the
competition of municipal tramways entirely dispose of the theory that
private enterprise alone can ensure economical management and an
efficient production. It is argued that public bodies cannot obtain
faithful service from their employees, and that businesses managed by
them are bound to fail because the men in command do not understand the
interests they seek to control or the methods of industry. Capital, it
is represented, is bound to be wasted, and the tax-payer certain to
suffer in pocket as part proprietor of an unsuccessful business, even as
he suffers also as a consumer of his own poor product. In reply it is
only necessary to point out that there is nothing which can be urged
against a trading municipality which cannot also be urged against a
limited liability company. In the latter case, as in the former, the
shareholders know nothing of the details of the business they own. In
each there is a governing body which in its turn usually knows little of
the technicalities of the business undertaken. Thus the chairman of a
well-known steel company is a solicitor. The boards of directors of the
majority of our leading limited companies are composed of men who are
strangers to the businesses they "direct." In practice management
devolves upon the Managing Director, who is usually a man well versed in
his trade or profession. We see, therefore, that a limited liability
company, after all, is in precisely the same position as a municipality.
The private monopolists are compelled to find a practical man to manage
their business and make profits for them. That is precisely what the
municipality does. As a matter of fact, some of the cleverest men in the
United Kingdom are serving municipalities as advising and managing
engineers, instead of hiring themselves out to some board of directors.

What do railway directors, for example, know of railway management? Do
they travel on their own line, note its deficiencies, and repair them?
Do they take a practical hand in its affairs? No. The practical
management is in the hands of certain paid servants, goods managers,
general managers, locomotive superintendents, and so forth. Is it
seriously argued that an individual engineer, as locomotive
superintendent of a private railway company, is more efficient than he
would be in the service of say the London County Council? If so, how
does it come about that the railway companies are losing trade while the
L.C.C. trams are crowded? If so, how is it that to travel on the South
Eastern Railway is a martyrdom, while to travel on a L.C.C. tram is a
pleasure?

It will be seen on reflection that the only difference between the
company and the municipality is this. In the case of the company the
qualification of the directors is merely the owning of stock or shares
in the undertaking, and the perfunctory votes of a few shareholders. In
the case of the municipality the "director" has to secure the suffrages
of a great body of his fellow-citizens. As for nepotism, it is far more
common in private trade than in public life in this country. In nearly
every private business some inefficient son or cousin or nephew is
"provided for," to the loss of the undertaking. Competitive industry is
full of square men carefully planted in round holes by their friends and
relatives.[59] In the municipal service there are fewer wasters than are
to be found connected with great limited liability companies. As for
waste of capital, it is common in private business, and its loss is as
real to the community, from an economic point of view, as the loss of
capital by a municipality. As for negligence and theft, these are common
in all kinds of business undertakings, but as a general rule audit and
control are stricter in municipal trading than in the case of private
companies. As for cheerful service, the reader has but to compare the
servants of municipal tramways with those of any private omnibus
company. My own experience is that it is the municipal servant who is
the more civil and obliging. Perhaps it is because the municipality
gives him better wages, shorter hours, and a decent coat. As for the
product of the machine, the London County Council gives the public
longer rides for the same fares while paying its men better. Thus the
share of the product which once went to swell private fortunes is
distributed, and by so much the Error of Distribution is reduced.

What we have lost through the private ownership of our railways may be
gauged by the experience of Belgium. The Belgian State Railways sell
tickets which enable one to travel continuously, if desired, for the
time specified thereon, within the limits of the country. For instance a
five-day ticket will cost 16s. 6d. second class, or 9s. 6d. third class.
During the life of one of these tickets it serves as a pass, and it is
only necessary to show it upon request. The total length of the railways
is nearly 3,000 miles. All that is required to obtain the circular
tickets is to present at the office an unmounted photograph of small
size, which is attached to the ticket as a means of identification. When
the ticket is purchased an extra 4s. is demanded for the safe return of
the ticket after its term of usefulness expires. On the morning after
the expiration of the ticket it can be delivered at any ticket office
along the line, and the 4s. extra will be returned. This system enables
one to travel at a minimum expense. One would like to know why, if
private trading produces the best results, that travel is cheap in
Belgium and dear in England. Why cannot a Briton, favoured as he is with
all the alleged virtues of private enterprise in railway management,
obtain a circular ticket to travel in the United Kingdom? The benefits
of the Belgian railways are conspicuous in the matter of the housing
question. Cheap workmen's tickets are issued at rates so low that men
are enabled to live at considerable distances from their work. How low
the fares are may be gathered from the following figures:

 WORKMEN'S TICKETS ON BELGIAN STATE RAILWAYS

                 For one Journey daily
 Distance.            to and fro.
                   Six Days' Ticket.
  Miles.              _s._  _d._
     3                 0     9¼
     6                 1     0
    12                 1     2½
    24                 1     7¼
    31                 1     9¾
    62                 2     6¼

Thus the daily return fare for 31 miles is less than 3¾d.!

The special workmen's tariff has existed in Belgium since 1870, and was
at first simply introduced to give Belgian manufacturers the command of
plenty of cheap labour. But the Minister builded bigger than he knew,
for the cheap fares have caused a profound revolution in the position of
Belgian workmen. In 1870, 14,223 tickets were issued; in 1890,
1,188,415; in 1901, 4,412,723! As a result it is estimated that 100,000
industrial workers, out of a total number of 900,000, although employed
in the towns, continue to live in the country, own a patch of ground,
and, with the higher wages of the town, enjoy the inestimable advantages
of country life.

It is only through the nationalization of our railways that we can
secure (1) for the travelling public the speed, safety and comfort which
science has taught us how to command, (2) for the railway servants
safety and a just share of the product of their labour, and (3) for the
goods service rapid and economical transport. It is nothing less than
national shame that our railway men receive an average wage of only 25s.
per week. It is nothing less than national folly that our lives are
placed at the mercy of underpaid and overworked signalmen.

A striking illustration of national treatment as compared with the
existing private exploitation of our national wealth is to be found in
the coal trade. Upon coal is built the wealth and commerce of the United
Kingdom. To it we owe our pre-eminence in manufactures and our
world-wide shipping and commerce. Without it the United Kingdom would
quickly sink to the position of a third-rate power. It might be assumed
_a priori_, therefore, that the production and use of coal would be
regarded by the British Government as a matter of national concern. As a
matter of incredible fact, so little do we regard coal production that
we even allow our rare supplies of naval coal to remain in private hands
and to be sold freely to foreigners. The tradition of "liberty" could
surely no further go.

From first to last private coal production and private coal distribution
are wasteful of life, material, and labour. Of our output of 260,000,000
tons of coal less than 10,000,000 tons are mined by machinery! In
nine-tenths of our coal-mines coal-cutting machines are unknown! Thus a
vast amount of unnecessary hand labour is used in a degrading and
dangerous occupation. From a national point of view it is undesirable
that a single unnecessary man should descend the mines. Under private
exploitation coal-mining employment reads thus (I quote from the Census
of Production Report, 1907):

 UNITED KINGDOM COAL-MINES, 1907

 ------------+------------------------+------------------------+-------
             |          MALES.        |         FEMALES.       | Total
             +--------+-------+-------+--------+-------+-------+ both
             |Under 16|Over 16|Total. |Under 16|Over 16|Total. | sexes.
             | years. | years.|       | years. | years.|       |
 ------------+--------+-------+-------+--------+-------+-------+-------
 Below Ground| 43,862 |625,773|669,635|        |       |       |669,635
 Above Ground| 15,623 |135,985|151,608|   643  | 4,681 | 5,324 |156,932
 ------------+--------+-------+-------+--------+-------+-------+-------
   Total     | 59,485 |761,758|821,243|   643  |  4,681| 5,324 |826,567
 ------------+--------+-------+-------+--------+-------+ ------+-------

With coal-mining organized with due regard to national welfare, there
would be no boys, fewer men, and more machines in the depths of our
mines, while the employment of girls and women even in surface work
would be unthinkable. It is true that private capital may not now, as it
did in the 'forties, employ young girls and boys under ten in its "dens
of darkness." But it deliberately sacrifices hundreds of lives every
year by using inefficient plant and by the use of explosives, and still
we permit boys to go down the pits. In the holocaust in the Rhondda in
1905 many children perished. Not infrequently three generations of a
single family may be found working in the same colliery. Few people out
of the industry know that 44,000 boys work in our coal-pits.

With our collieries in our own hands we should not only keep boys out of
the mines, but use every possible mechanical appliance to reduce the
number of men required to get the coal. We should seek for new
appliances to displace labour from such an unhealthy and dangerous
calling. To the same end we should seek to prevent the waste of coal in
every direction. Shot-firing would of course go, and after undercutting
the coal by electrical or hydraulic machinery we should bring it down by
hydraulic pressure.

Having secured an economical production, in which we should no longer
commit the crime of killing a thousand miners every year, we should
distribute the coal cheaply to our local authorities, who would act as
distributing agents. The army of coal merchants and their clerks and the
thousand and one artful dodges of the retail coal trade would disappear,
and the public would secure their coal economically.

What is the alternative to public ownership of common services? The
alternative is the rule of the "combine" or "trust," for it cannot be
too clearly realized that the organization of production and
distribution must proceed. But organization by private hands,—the
combination of industrial units into great trusts economizing
management, production and distribution,—cannot safely be tolerated. It
means the wielding of the chief power in the State by monopolists who
will use their power for private ends. The era of private competition is
closing. On every hand capital is combining with capital in restraint of
competition. Such combinations threaten the public welfare in several
directions. They can make it practically impossible for new capital to
enter an industry. They can, while economizing labour, keep the profits
arising from economy in their own hands, and build up gigantic fortunes
while increasing unemployment. They can offer such opposition to trades
unionism as to wield untrammelled power over their employees. They can
accentuate that Error of Distribution which it should be our chief
purpose to modify and remove.

Finally, the organization of services under public control is the only
remedy for unemployment, for unemployment is but a phase of poverty.
Underpaid or not paid at all, wrongfully employed or unemployed,
overworked or underworked, these conditions are the inevitable
accompaniment of a state of society in which individuals make bargains
with individuals with a view not to service but to profit. To the
individual the unemployed workman is a pitiable object—that is all. To
the nation the unemployed workman is something more than pitiable; he is
a dead loss. Unless physically or mentally unfit, and therefore entitled
to gratuitous service, he should be employed in the scheme of the
nation's work. The community needs the service of all its members; there
is none superfluous, none. While yet one uncomfortable house rears its
head, while yet one person goes ill-clad, while yet one rod of area
remains unused, there is work to do, but to utilize the work of every
man economically and wisely in the performance of necessary work is only
possible through organization. We may delude ourselves how we will with
palliatives; we shall find no remedy for unemployment short of the
control by the community of the _essential_ work of the community. While
we leave the direction of labour in the hands of a few rich men there
will ever be a surplus of labour left for our hapless "government" to
deal with wastefully. While the community resigns its right to decide
its own destinies by submitting to the rule of the rich, there will
remain the problem of poverty of which unemployment is not the worst
part.

Let it be clearly understood that, as things are, there is only one real
form of government that matters, and that is the rule of the employed by
the employer. The real arbiters of our destinies are not the King's
Ministers, but the few men who have power of life and death over their
fellows through the giving or withholding of employment. The majesty of
the law decides what a man shall _not_ do. The majesty of the employer
decides what a man shall do. The time has come when we must govern
ourselves, not negatively by way of restraint, but positively by way of
action. It is time that we determined where our roads should run and in
what fashion and in what employments we should engage ourselves. It is
time that we took stock of the lives and the homes of our people and
resolved to abolish their poverty by organizing their labour.

[Footnote 54: It it a melancholy fact that those employed in the service
of waste are often better paid than those engaged in useful production.
In a recent action brought by a cloak-room attendant at a fashionable
restaurant it came to light that in two cloak-rooms each of four
attendants drew as his share of the "tips" over £3 per week.]

[Footnote 55: I hope that no manual workman who reads these lines will
deduce from what I have written that, as things are now, his labour is
necessarily more useful than that of the clerk, the lawyer or the
shopkeeper. For every unnecessary distributing agent referred to above
several producing agents could be named whose work is useless or harmful
in the national economy. This I endeavoured to make clear in Chapter
11.]

[Footnote 56: "Condition of Labour," page 90.]

[Footnote 57: "Infantile Mortality," by Dr G. F. McCleary.]

[Footnote 58: "The Hygienics of Milk," "Edinburgh Medical Journal,"
1898.]

[Footnote 59: In a speech delivered to the students of the Crystal
Palace Company's School of Practical Engineering in 1905 the following
advice was given. I quote from the newspaper report: "Students should
cultivate the art of making friends through life. Wherever they were
they should try to make good friends, for such friends were always
useful when one wanted to obtain employment. Half the battle was won in
applying for a situation if the applicant had a friend on the board."

Excellent! "Be artful, sweet youth, and let who will be clever."]




 CHAPTER XIX
 THE AGED POOR


In "Riches and Poverty," edition 1905, I passed at this point to the
consideration of the cruellest phase of Poverty, the poverty of the
aged. Since 1905 Mr Asquith has given us an Old Age Pension Act, and it
is happily unnecessary to repeat in full the pleas which were advanced
in these pages in 1905. It is well, however, again to record the known
facts with regard to poverty in old age.

If we did not know our country, and had never encountered its poor in
the flesh, in what condition could we expect to find the aged labourer
in view of the terrible extent of the Error of Distribution? It is not
alone that the majority of our people have the slenderest incomes. To
narrow wages is in most cases added uncertainty of employment, the
greatest enemy of thrift, while the period during which the average
workman draws the full rate of wages recognized in his trade has ever
been short, and tends with the increased strenuousness of modern
industry to grow shorter.

There are about 2,100,000 persons aged 65 and upwards, in the United
Kingdom, but these are not divided between rich and poor in the
proportions shown in the frontispiece. We have to remember that the poor
are slain by their poverty. In the "comfortable" and "rich" classes the
span of life is much greater than in the case of the poor. It is
impossible to say precisely how the 2,100,000 persons are divided in
point of income, but probably, some 1,750,000 of them belong to the
classes whose incomes are below the income tax exemption limit. As to a
considerable proportion of them we have the clearest evidence of
grinding poverty.

In 1890 Mr Thomas Burt, M.P., moved for a parliamentary return showing
the number of paupers of 60 years of age and upwards, distinguishing
indoor from outdoor relief. It appears from this return that the total
number of paupers over 60 years of age in receipt of relief on August
1st, 1890 (excluding lunatics in asylums, vagrants and persons who were
only in receipt of relief constructively by reason of relief being given
to wives or children), was 286,867.

The number of those persons who were in receipt of indoor relief, the
number in receipt of outdoor relief, and their ages as stated, are given
in the table on the following page.

The notable fact which emerges is that of 286,867 paupers over 60, as
many as 245,687 were over 65. Old age as a cause of pauperism is
strikingly illustrated by a comparison of the two numbers. It is clear
that death at 64 would mercifully have saved over two hundred thousand
poor old men and women from the stigma of pauperism.

According to the census returns, in 1891, the following year, there were
1,372,974 persons (606,960 males and 766,014 females) at and over the
age of 65. On August 1st, 1890, the date of Mr Burt's return, therefore,
there were 245,687 persons out of about 1,372,000 persons 65 years old
and upwards or say 1 in 5½ in receipt of poor relief.

But Mr Burt's return related to the paupers relieved on one day only.
What ratio does the number of aged paupers relieved in one day bear to
the total number relieved in the course of the year?

 PAUPERS OVER 60 YEARS OF AGE (ENGLAND AND WALES ONLY)
 ON AUGUST 1ST, 1890

 ----------------+----------------------+------------------------+
                 |          Indoor.     |         Outdoor.       |
    Ages.        +------+--------+------+-------+--------+-------+
                 |Males.|Females.|Total.| Males.|Females.| Total.|
 ----------------+------+--------+------+-------+--------+-------+
 65 to 70        | 9,468|  6,339 |15,807|10,567 | 35,866 | 46,433|
 70 to 75        | 9,953|  6,856 |16,809|17,633 | 43,266 | 60,899|
 75 to 80        | 7,086|  5,298 |12,384|16,474 | 32,021 | 48,495|
 80 and over     | 4,949|  4,803 | 9,752|12,456 | 22,652 | 35,108|
                 +------+--------+------+-------+--------+-------+
   Total over 65 |31,456| 23,296 |54,752|57,130 |133,805 |190,935|
 60 to 65        | 8,018|  5,354 |13,372| 5,959 | 21,849 | 27,808|
                 +------+--------+------+-------+--------+-------+
   Total over 60 |39,474| 28,650 |68,124|63,089 |155,654 |218,743|
 ----------------+------+--------+------+-------+--------+-------+

 ----------------+------------------------
                 |     Total Paupers.
    Ages.        +-------+--------+-------
                 | Males.|Females.| Total.
 ----------------+-------+--------+-------
 65 to 70        | 20,035| 42,205 | 62,240
 70 to 75        | 27,586| 50,122 | 77,708
 75 to 80        | 23,560| 37,319 | 60,879
 80 and over     | 17,405| 27,455 | 44,860
                 +-------+--------+-------
   Total over 65 | 88,588|157,101 |245,687
 60 to 65        | 13,977| 27,203 | 41,180
                 +-------+--------+-------
   Total over 60 |102,563|184,304 |286,867
 ----------------+-------+--------+-------

This question is answered by a further parliamentary return, asked for
in 1892 by Mr (afterwards Lord) Ritchie. This return shows for England
and Wales the number of persons of each sex aged 65 years and upwards,
and the number between 16 and 65, also the number of children under 16
years of age, in receipt of relief (_a_) on January 1st, 1892, and (_b_)
during the twelve months ended Lady Day 1892. As in Mr Burt's return,
vagrants and lunatics are not included. The return differs from Mr
Burt's, however, in distinguishing those persons in receipt of medical
relief only.

This return of Mr Ritchie's showed that while 700,746 paupers of all
ages were in receipt of relief on January 1st, 1892, the number relieved
during the year ended Lady Day 1892 was more than twice as great, viz.
1,573,074.[60]

Mr Ritchie's return relates to all paupers, whereas that of Mr Burt
related to the aged only. It is difficult to say which fact in Mr
Ritchie's return is the more saddening, the relief of 401,904 aged
paupers in a single year, or that in the same period 553,587 _children
under sixteen were pauperized_.

The following table (p. 276) summarizes the facts elicited by the return
as to the paupers relieved during twelve months. (It should be observed
that, of the 1,573,074 persons enumerated, 211,082 were in receipt of
medical relief only. Of the 401,904 paupers over 65, however, but 25,447
were in receipt of medical relief only.)

 PAUPERS RELIEVED IN ENGLAND AND WALES DURING THE
 TWELVE MONTHS ENDING LADY DAY 1892

-----------------+------------------------+--------------------------+
                 |         Indoor.        |         Outdoor.         |
   Ages.         +-------+--------+-------+-------+--------+---------+
                 | Males.|Females.| Total.| Males.|Females.|   Total.|
-----------------+-------+--------+-------+-------+--------+---------+
65 and over      | 68,490| 45,654 |114,144| 95,140|192,620 |  287,760|
16 to 65         |134,561| 97,723 |232,284|141,826|243,473 |  385,299|
Under 16         |       |        |111,782|       |        |  441,805|
-----------------+-------+--------+-------+-------+--------+---------+
  Totals         |       |        |458,210|       |        |1,114,864|
-----------------+-------+--------+-------+-------+--------+---------+

-----------------+--------------------------
                 |     Total Paupers.
   Ages.         +-------+--------+---------
                 | Males.|Females.|   Total.
-----------------+-------+--------+---------
65 and over      |163,630| 238,274|  401,904
16 to 65         |276,387| 341,196|  617,583
Under 16         |       |        |  553,587
-----------------+-------+--------+---------
  Totals         |       |        |1,573,074
-----------------+-------+--------+---------

Comparing the number of paupers in England and Wales, as shown by the
figures on p. 276 with the census population of 1891, we get:

 TOTAL PAUPERS IN 1891 COMPARED WITH TOTAL POPULATION
 (ENGLAND AND WALES ONLY)

Total Paupers relieved              1,573,074
Total Population, Census 1891      29,000,000
Paupers per 1,000                          54

Thus the paupers of all ages relieved in 1891 amounted to one in every
eighteen of the population of England and Wales.

What of those over 65? The facts are:

 PAUPERS AGED 65 AND UPWARDS IN 1891 COMPARED WITH TOTAL POPULATION
 OF THAT AGE (IN ENGLAND AND WALES ONLY)

 Total Paupers aged 65 and over           401,904
 Total Population aged 65 and over      1,372,900
 Paupers per 1,000                            292

_Thus of the population of England and Wales aged 65 and over in 1891,
one in every three was in receipt of poor relief!_

In 1899, and again in 1900, the Local Government Board published returns
relating to aged pauperism in those years, and Mr Burt, in 1903,
obtained a second return in continuation of that of 1891. We are thus
enabled to compare _one-day_ returns for five different periods and this
is done in the following table:

 PAUPERS, INDOOR AND OUTDOOR, RELIEVED ON CERTAIN DAYS DURING A PERIOD
 OF THIRTEEN YEARS (ENGLAND AND WALES ONLY)

                                             Ratio of Paupers
                    Paupers      Paupers      65 and over to
                    aged 16      aged 65     total population
                   and over.    and over.      of that age.
                                               (Per Cent.)
 1890 (1 Aug.)     Not known     245,687           18.0
 1892 (1 Jan.)      471,568      268,397           19.4
 1899 (1 July)      469,939      278,718           18.7
 1900 (1 Jan.)      494,600      286,929           19.2
 1903 (1 Sept.)     490,513      284,265           18.3

 [_Note._—In the Returns for 1892, 1899 and 1900 the numbers include
 persons in receipt of relief constructively by reason of relief being
 given to wives or children. In the Returns for 1890 and 1903 (Mr Burt's
 returns) such persons are excluded.]

Apart from seasonal changes—the number of paupers is, of course, always
higher in the winter than in the summer—it will be seen that the
proportion of paupers over 65 years of age to the total population of
that age has not varied much. On August 1st, 1890, there were 245,687
paupers of 65 years and upwards, or 18 per cent. of the total population
of that age. On September 1st, 1903, there were 284,265 paupers of 65
and upwards, or 18.3 per cent. of the population of that age.

We have only the figures of the 1892 return to throw light upon the
number of aged paupers relieved during one year. If we assume that still
the same proportion of aged pauperism exists, viz.: 292 in each 1,000,
then, in the present year, out of a total population in the United
Kingdom aged 65 and upwards of about 2,100,000, as many as 613,200
persons are pauperized.

This number includes both indoor and outdoor paupers, and the ratio of
indoor and outdoor paupers varies greatly in different places because of
the varying policies of Boards of Guardians. But this point need not
detain us. Outdoor relief may in some cases be injudiciously given and
in other places most cruelly refused. The fact remains that, taking the
country as a whole, we have the clearest evidence of the existence of
613,000 exceedingly poor aged persons.

More important it is to remember that, for one poor person who obtains
either indoor or outdoor relief, several who justly might claim it
refuse to avail themselves of the tender mercies of the Poor Law. The
poor, as a rule, will exhaust every penny of their savings and pawn
every stick of their furniture before they seek the workhouse door.
Moreover, the amount of genuine charity bestowed by the poor upon the
poor is wonderful. If, then, there are 600,000 aged paupers either
inside workhouses or receiving outdoor relief in the course of the year,
we may be quite sure that at least as many more are as urgently in need
of succour, and obtain it by increasing the poverty of their poor
friends rather than by seeking from the Guardians the loaf, the 2s. 6d.,
and the insults which too often constitute outdoor relief.

The reader will see how probable it is that, of the 2,100,000 persons
aged 65 and upwards now living in the United Kingdom, fully 1,750,000
are in a condition of poverty which at the worst is pauperism and at the
best is sore need. Some 613,000 of them are certainly in receipt of poor
relief during the year. Probably another 600,000 are only deterred by
horror of the workhouse from recourse to the Guardians. For the
remaining third, as for the other two-thirds, the life which has for
three-score years been a constant struggle with poverty meets its
hardest and cruellest phase at the close.

A certain number of extraordinary men exist who contrive to rear a
family upon 30s. a week, and to save enough to provide for their old
age. These are the few who are not merely themselves of a most frugal
disposition, but who have chanced to bestow their affections upon a girl
as abstemious and as thrifty as themselves. A pair of such character,
blessed with perfect health and not more than two or three healthy
children, may contrive to meet first the fall of earnings after 45 or
50, and finally old age itself, with a light heart. That such cases are
rare will only surprise those who have never had occasion to practise
thrift. Only a little less rare than the comfortable aged workmen are
those who contrive to provide for themselves a tiny pension for their
declining years, through the continuous sick pay of friendly society or
trade union, or through the superannuation benefit of the latter. There
are only 38 trade unions which provide a superannuation benefit, and
these have a membership of about 600,000. They pay between them about
£200,000 a year in old age pensions to about 25,000 members. How small
this number appears when we compare it with the total number of persons
over 65 in the United Kingdom, which is about 2,100,000 at the present
time!

The value of the practice and experience of Trade Unions is very great.
Summing them up, I showed in "Riches and Poverty," edition 1905, that
workmen who earn their living, not by the mere exercise of physical
strength, but by skill, are usually used up by the age of 60, and not
infrequently by the age of 55. The latter age may be regarded as the
limit of full-earning capacity for the average skilled workman. After 55
he is in the greatest danger of dismissal when trade becomes slack. From
a considerable number of inquiries, I arrived at the conclusion that the
full wage-earning capacity of the average skilled workman begins at
25-30 and ends at 50-55. Before 25-30 a man is inexperienced and not
valued so highly as after that age. After 50-55 the age factor again
begins to tell, and the workman trembles at thought of the future. Each
grey hair is a deadly enemy to his livelihood.

If the skilled workman can hope to earn the full wages of his trade
(full wages, it should be remembered, means about 40 to 46 weeks' pay
per annum in most trades) for but 20 to 30 years, what of the men who
are hewers of wood and drawers of water? The answer is that after 45
good wages are difficult to obtain, and that for the rest of their
lives, if not mercifully ended by death, the earnings are poor in the
summer, and often at zero in the winter. If we look at the "occupations"
(with what irony the term is used in this connexion) of the inmates of
workhouses at the census of 1901 we find:

 WORKHOUSE INMATES (OVER 10 YEARS OF AGE) AT CENSUS OF 1901

 MALES

 Clerks                                             1,079
 Coachmen and grooms                                1,848
 Carmen, carriers                                   1,546
 Seamen                                             2,052
 Dock labourers                                     2,355
 Agricultural labourers                             9,469
 Gardeners                                          1,232
 Coal-miners                                        1,570
 Blacksmiths                                        1,381
 Carpenters, joiners                                2,274
 Bricklayers                                        1,212
 Bricklayers' labourers                             1,397
 Painters, glaziers                                 2,487
 Cotton operatives                                  1,218
 Tailors                                            1,594
 Shoemakers                                         3,061
 Costermongers                                      1,521
 General labourers                                 22,129
 Other occupations                                 31,287
 Without specified occupations or unoccupied       16,151
                                                  -------
                                                  106,863

 FEMALES

 Domestic servants                                 15,630
 Charwomen                                          8,176
 Laundry and washing service                        4,554
 Cotton operatives                                  2,128
 Tailoresses                                        1,245
 Milliners and dressmakers                          1,642
 Shirtmakers, seamstresses                          2,814
 Costermongers, hawkers                             1,159
 Other occupations                                  7,681
 Without specified occupations or unoccupied       32,220
                                                  -------
                                                   77,249
                                                  -------
         Total male and female                    184,112
                                                  =======

The large proportion of "general labourers" is very
striking, while those describing themselves as dock, bricklayers' and
general labourers together form one-fourth of the whole. It will also be
noticed that 9,469 agricultural labourers "followed the plough to the
workhouse door." In passing, I may remark that in the list of female
"occupations" the presence of 15,000 domestic indoor servants should not
go unnoticed.

The almost universal approval which the proposal to grant Old Age
Pensions elicited would probably have carried it to fruition long before
the date of the Old Age Pension Act, 1908, but for one thing and one
thing only—the question of cost. It is amusing to note that the "Small
Committee of Persons Interested in the Controversy respecting Old Age
Pensions,"[61] practically a Committee of the Charity Organization
Society, who actively opposed Old Age Pensions in 1899-1902, placed in
the forefront of their "objections" the following:

"That the cost would be an insuperable difficulty, for to grant 5s. a
week at age 65 in respect of the population of England and Wales only,
would involve about £20,000,000 per annum for the present recipients,
and by 1941 the figure would have risen to £36,000,000."

In "Riches and Poverty," edition 1905, I said:

"Our examination of the National Income and the manner of its
distribution disposes of this objection. The question resolves itself
into this—Ought the 5,000,000 persons who have an aggregate income
approaching £900,000,000 to be taxed to the extent of £15,000,000 to
provide pensions for the aged poor? If the facts illustrated in the
frontispiece of this volume could be brought home to every elector there
would be no doubt whatever as to the decision of the country on the
subject. With the gross assessment to Income Tax at £900,000,000 the
expenditure of £15,000,000 on a small provision for the aged strikes
one, not as extravagant, but as an exceedingly modest proposal to
mitigate the evils of the Error of Distribution.

"I have named £15,000,000, and that is all that the scheme would cost.
It is not a universal superannuation scheme that is wanted; I find it
difficult to regard very seriously the proposal that, for fear of
"pauperization" we should pay every person, rich and poor, aged 65 and
upwards, the sum of 5s. per week. The idea appears to be that if the
scheme is not made universal some stigma will attach to those who are
pensioned. Surely this is an exaggerated view. The majority of those
aged 65 are poor, just as the majority of the whole population are poor.
If there is a stigma in such a case it attaches to those who go to form
the top part of my diagram—to those whose absorption of an undue share
of the national income connotes poverty for millions at the other end of
the scale.

"My own feeling is that we should make the pension, like the
superannuation benefit of Trades Unions, _claimable_ by those aged 65
and upwards who have not an income of more than £1 a week or property
valued at more than £250. We should then probably have to provide for
about 1,400,000 to 1,500,000 pensioners, at a cost of £18,000,000 to
£20,000,000. Administration would cost about £500,000 and we should save
about £4,000,000 in poor rates. Thus the net addition to taxation would
be about £15,000,000."

Mr Asquith's Old Age Pensions Act of 1908 made the receipt of an Old Age
Pension a citizen right, claimable by every person filling certain
statutory conditions. These conditions are:—

 (1) That the person must have attained the age of 70.

 (2) That he is a British subject.

 (3) That his yearly income does not exceed £31, 10s.

The receipt of poor relief (medical relief excepted), habitual idleness,
lunacy or conviction for crime, are statutory disqualifications.

The amount of the pension varies from 1s. to 5s. per week according to
the following sliding scale:

                                                             Rate of
            Income of Pensioner.                             Pension
                                                            per Week.
                                            £   _s._ _d._   _s._ _d._
 Not exceeding                              21    0    0      5    0
         £   _s._ _d._
 Exceeds 21    0    0  but does not exceed  23   12    6      4    0
    "    23   12    6       "       "       26    5    0      3    0
    "    26    5    0       "       "       28   17    6      2    0
    "    28   17    6       "       "       31   10    0      1    0
    "    31   10    0                                      No pension.

It was expressly stated in the Act that the disqualification of those
who had been in receipt of poor relief was to cease on December 31st,
1910, and the Budget of 1910-11 accordingly made provision for the
payment of the pensions to such paupers after that date.

The following statistics show the payments under the Act at December
31st, 1909 (the Act having come into force on January 1st, 1909):

 THE FIRST YEAR'S WORKING OF MR ASQUITH'S OLD AGE PENSION ACT

               Position at December 31st, 1909.

                 Number of     Amount Payable
                Pensioners.      per Annum.
 England          405,755        £5,043,332
 Scotland          76,037           966,370
 Wales             26,972           337,254
 Ireland          183,976         2,335,764
                  -------        ----------
                  692,740        £8,682,720
                  =======        ==========

It was a defect in the Act that the possession of a certain amount of
property, as well as the possession of a certain income, was not made
the disqualification that I suggested it ought to be. A man with £500 of
property, yielding an income of £20 a year, ought _not_ to be qualified
for an Old Age Pension.

It is notable that, in introducing his Budget of 1908, Mr Asquith, in
expounding his scheme of pensions, estimated that it would cost not more
than £6,000,000 a year. As we have seen, the cost has proved to be very
much greater. It is fortunate that the under-estimation was made. If
Parliament had known that the cost would be £9,000,000 instead of
£6,000,000 Old Age Pensions might not now be law, so slowly is the
lesson learned that, to a nation of 44,000,000 people, with an aggregate
income of nearly £2,000,000,000, an expenditure of £9,000,000 is a small
matter, relatively as small as though the reader expended a few
shillings.

But it is, of course, a misnomer to speak of "expenditure" in this
connexion. The National Dividend is not diminished by the transfer of
£9,000,000 from the well-to-do to the poor. No more is _spent_ through
the transfer; all that takes place is a transfer of the power of call
for commodities, and a consequent change of the _form_ of a certain part
of the National Dividend, not a change of its _size_. The production of
luxuries is slightly—very slightly—stemmed; the production of
necessaries is slightly—very slightly—increased.

Mr Asquith's valuable Act needs to be amended by the reduction of the
pensionable age to 65 and to be supplemented by a State scheme for
sickness and invalidity insurance. (A minor defect which has revealed
itself is the continued disqualification of a man whose wife is in
receipt of relief.) The case for the amendment has been already
discussed in these pages; the case for invalidity insurance is that old
age is not the only determinant of dire poverty for the wage earner. The
facts adduced in Chapter 10 are eloquent of the need for succour which
exists in tens of thousands of cases.

[Footnote 60: The Royal Commission on the Poor Laws called for a similar
"year count" of paupers for 1907. It revealed that in that year of good
trade 1,709,436 persons were relieved by the Guardians in England and
Wales. This is 47.7 per 1,000 of the population. The later count fully
confirms that of 1892.]

[Footnote 61: This description is their own. See "Old Age Pensions"
(Macmillan & Co.) Introduction.]




 CHAPTER XX
 ADAM SMITH'S FIRST MAXIM OF TAXATION


Our next task shall be to examine the question of taxation in relation
to the Error of Distribution.

It is over one hundred and thirty years since Adam Smith penned his
famous maxims of taxation, the first and most important of which ran as
follows:

"The subjects of every state ought to contribute towards the support of
the government as nearly as possible in proportion to their respective
abilities; that is, in proportion to the revenue which they respectively
enjoy under the protection of the state."

The first part of the proposition, which lays it down that contribution
towards the support of government should be in proportion to ability, is
interpreted by the second part to mean that contribution should be in
proportion to income. The second half of the maxim is therefore
subversive of the first.

Let us compare the ability to bear taxation of three persons whose
respective incomes are: A £50; B £500; and C £10,000. If we accept Adam
Smith's explanation of his own maxim, we should apply taxation in
proportion to income. Note the effect of a tax of 10 per cent. upon the
three incomes:

 A         £50 less 10 per cent.  =    £45
 B         500    "      "        =    450
 C      10,000    "      "        =  9,000

Most clearly we see that to A, with £1 a week, the loss of 10 per cent.,
or five week's income, is a most serious matter—a crushing burden. With
£500 per annum, however, B, after the loss of 10 per cent. of his
income, is still left with a revenue ten times as great as that of A.
The taxation in B's case is serious but not overwhelming. C, after the
loss by taxation of one-tenth of his income, is left with the handsome
income of £9,000 a year, a sum which is more than sufficient to sustain
him in luxury. The loss in the third case is clearly a shadowy one; a
rich man has been rendered not quite so rich.

Thus, by taxing in proportion to income, we impose upon the poor man a
crushing burden; upon the small income a serious burden; upon the large
income a burden scarcely to be felt.

Obviously, then, the second part of Adam Smith's maxim is not a true
illustration of the doctrine of equality of sacrifice which is involved
in the use of the term "ability."

This has been partially recognized in our present system of taxation.
Those with incomes exceeding £160 per annum are made to pay a tax which
is not imposed upon those with less than that income. Further, the
income tax is roughly graduated. A graduated death duty is also imposed
in order to obtain a larger contribution from the rich than from the
poor.

I now urge that the doctrine of equality of sacrifice, which has already
been partially recognized, should be considered in relation to all the
facts treated in Book I.

We have seen that the great mass of the people, who do the greater part
of the work of the nation, who produce the material commodities without
which life could not be supported, receive so small a share of the total
product that while 39,000,000 persons enjoy an income of £911,000,000,
about 5,500,000 persons receive an income of £930,000,000. If then, we
had to raise £200,000,000 per annum by taxation and were to raise the
whole from the second class, the result would be:

 5,500,000 would have £930,000,000, } £730,000,000  or
     less £200,000,000              }     £133 per head.

 39,000,000 would have              { £911,000,000  or
                                    {     £23 per head.

The Error of Distribution is so great that, were the whole taxation
levied upon those above the line of £160 per annum, the comfortable and
rich classes would still be left about six times as rich as those below
that line.

An unanswerable case is thus made out for the repeal of the whole of the
customs duties on tea, coffee, cocoa, dried fruits and sugar, which bear
almost entirely upon the poorer classes. A heavy tax on tea or sugar is
a matter of indifference to the rich; to the poor it means a
considerable privation. Our indirect food taxes are a denial of the
doctrine of ability.

The customs and excise duties on alcoholic liquors must of course remain
on moral grounds, and the tobacco duty might well remain for the
present. We should thus tax the working classes through their luxuries
alone, while the workman who dispensed with drink and smoked in
moderation would be practically untaxed. The general recognition of this
fact, combined with the cheapening of tea, coffee and cocoa, would not
be without its effect upon the nation's drink bill, and in so far as its
recognition reduced our revenue we could count it gain.

Reverting to the facts illustrated in the frontispiece, the effect of
the abolition of the food duties would be slight in relation to the
extraordinary inequalities of income, but a just and certain step,
nevertheless, in the direction of amelioration. Just as a small burden
is great to a narrow income, so a small relief is a great boon, and
fully 10,000,000 of our people would feel in an appreciable degree the
removal of the food duties. The step has been urged by reformers for
many years; considered in relation to the Error of Distribution it is
seen to be an exceedingly small measure of justice, which needs little
rhetoric to enforce its claims.

To proceed with the application of the doctrine of ability to taxation
in view of the facts as to the National Income, we come to the
consideration of the Income Tax and Death Duties.




 CHAPTER XXI
 THE MAIN INSTRUMENT OF TAXATION


Through the income tax we go directly to the person upon whom we desire
to levy taxation, and take from him such portion of his earnings or
other profits as we consider to be his just contribution to the revenue.
Through the income tax we can, if we care to do so, cause each subject
of the State to contribute towards the expenses of government according
to his ability.

It is the purpose of this chapter to show that the income tax could be
so amended that, so far from being counted an obnoxious impost, it would
be regarded as a just and proper instrument of taxation.

       *       *       *       *       *

It is generally believed that the British Income Tax was originated by
Pitt in 1798. As a matter of fact, however, the direct taxation of
incomes in the United Kingdom dates back many hundreds of years. For the
purposes of this work, I do not propose to trace the history of the
subject to an earlier date than 1692.

The Property and Income Tax imposed in that year is commonly known as
the "Land-Tax," and this name has given rise to a great deal of
misunderstanding.

In their twenty-eighth report (1885) the Commissioners of Inland
Revenue, in giving a detailed description of the Land-Tax of 1692, point
out that the impost "was in fact a Property and Income Tax, and moreover
that personal estate was quite as much the object of the charge as
land." So few people are aware of these facts that it may be well to set
out the actual provisions of the Act, as described by the Commissioners:

It (the Act of 1692) is entitled "An Act for granting to their Majesties
an aid of four shillings in the pound for one year for carrying on a
vigorous war against France"; and the second section enacts, "That every
person, body politic and corporate, etc., having any estate in ready
monies or in any debts owing to them or having any estate in goods,
wares, merchandise, or other chattels, or personal estate whatsoever
within this realm or without shall pay yield and pay unto their
Majesties four shillings in the pound according to the true yearly value
thereof; that is to say, for every hundred pounds of such ready money
and debts, and for every hundred pounds' worth of such goods, wares,
etc., or other personal estate the sum of four and twenty shillings."

The third section imposes a duty of four shillings in the pound upon the
profits and salaries of all persons having any office or employment of
profit (except naval and military officers).

And then the fourth section proceeds thus, "And to the end a further aid
and supply for their Majesties' occasions may be raised by a charge upon
all lands, tenements, and hereditaments with as much equality and
indifferency as is possible by an equal pound rate of four shillings for
every twenty shillings of the true yearly value, be it enacted that all
manors, messuages, lands and tenements, and all quarries, mines, etc.,
tithes, tolls, etc., and all hereditaments, of what nature soever they
be, shall be charged with the sum of four shillings for every twenty
shillings of the full yearly value."

The rules for assessments follow the same order, and show that the
charge on personal estate was as much to be attended to as that on land.
Thus the assessors are directed in the first place to bring in
certificates of the names of every person dwelling within their
districts, "and of the substance and values of them in ready money,
goods, chattels, and other personal estate." Every person is to be rated
for personal estate at the place where he shall reside, and, if not a
householder, at the place where he resides at the execution of the Act,
or if out of the realm, where he was last resident; "and for the better
discovery of personal estates," every householder is to give an account
of his lodgers.

But although the Act of 1692 was the first of those so-called Land-Tax
Acts, it was not until 1697 that the tax was imposed precisely in the
form which has been preserved to the present day, that is to say, as a
fixed sum for the whole kingdom, and to be raised in quotas specified in
the Act for each county, city or borough therein named. That Act was
renewed every year, with scarcely any difference in its provisions as to
the mode of assessment, and although the amounts charged upon the
counties, etc., varied according to the total sum required from the
kingdom, they were always fixed in due proportions to the original
quotas. The last annual Act, so far as land was concerned, was passed in
1797.

Now it is a remarkable circumstance that these Acts of 1697 and 1797
appear to mark, more strongly than before, the taxation of personal
estate as the primary object of the law.

After the clauses imposing upon goods, wares, merchandise, etc., and
upon pensions and offices, the fixed charge of four shillings in the
pound towards raising the quotas, that relating to land appears to treat
it as a subsidiary contributor, as it were, and for the purpose of
making up the sum due to the Exchequer after exhausting the other
resources. The words are: "And to the end the full and entire sums by
this Act charged upon the several counties, etc., may be fully and
completely raised and paid; be it enacted, that all lands, etc., shall
be charged by a pound rate towards the said several sums by this Act
imposed."

How the duty on personal estate was levied, or what was its proportion
in the quotas, we have no means of knowing. All that we do know is that
in Mr Pitt's time it had dwindled nearly to nothing; and that the tax
annually voted under the name of land tax had become a land tax in
reality. Thus we find in an assessment for the Tower Division in 1799
that the sum charged for personal estate was only £227, while the charge
for lands, etc., is £29,964; and in one of the few accounts of later
transactions which remain to us, that for the year 1823, we are
presented with a return of £5,416, 10s. 0d. as the ludicrous result of a
tax at one per cent. on the capital value of the personalty of Great
Britain.

The Commissioners go on to remark that it seems almost incredible that
year after year an Act should have been passed containing the most
minute directions for the assessment of personal estate, and yet that
nothing which could be called an assessment should have been made. They
suggest that "Perhaps the explanation may be found in another
peculiarity in the administration of this tax, the tendency to regard it
as a _fixed charge_ upon the subjects on which it was originally levied.
That this has been the case with land, both before and since 1797, is
well known, and if the same rule was applied to personalty it is easy to
conceive that, as the persons originally charged moved out of the
parish, or became destitute, or otherwise unassessable, their proportion
of the tax was shifted to the land as the readiest means of collecting
it."

A certain amount of personalty was still assessed in the time of Pitt,
however, as may be gathered from the following figures from the roll of
the Tower Division.

 "LAND-TAX." ABSTRACT OF DUPLICATES FOR THE TOWER DIVISION

------------------+-------------------+-------------------
                  |  Quotas for the   |
                  |    respective     |
    Charge for    |  years 1698 and   |
     the year     |    1699, under    |       Quota
       1693.      |    9 & 10 and     |     for 1702.
     4s. Aid.     |      10 & 11      |
                  |    William III.   |
                  |      3s. Aid.     |
------------------+-------------------+-------------------
   £    _s._ _d._ |    £   _s._ _d._  |    £   _s._ _d._
34,057   5    5   | 25,542  19   0¾   | 34,041  12   10
------------------+-------------------+-------------------

-------------------------------------------------------

                    Quota for 1799.

------------------+----------------+-------------------
                  |                |
                  |    Personal    |     Pensions
    Lands, etc.   |     Estate.    |        and
                  |                |      Offices.
------------------+----------------+-------------------
   £   _s._ _d._  |  £  _s._ _d._  |   £   _s._ _d._
29,964  15     0½ | 227  15   5    | 2,320   2   4½
------------------+----------------+-------------------

This specimen also shows how the original assessments of 1692 were
preserved until the time when, in 1798, over one hundred years after,
Pitt made provisions for the redemption of the old tax, and
simultaneously introduced a new Property and Income Tax based upon
better assessments.

Unaware of the real nature of the so-called "Land-Tax" and as it would
also appear, of the present "Property and Income Tax," it is often
suggested by fiscal reformers that the old Land-Tax of 1692 should be
reimposed upon present land revenues. Those who make the suggestion do
not realize that what they desire has already been done and is actually
in practice at this moment.

The old "Land-Tax" and the present "Income" Tax
thus compare:—

The "Land-Tax" of 1692.

 Section 2: Every Person ... having any estate in ready monies or in any
 debts owing to them or having any estate in goods, wares, merchandise
 or other chattels, or personal estate whatsoever ... shall yield and
 pay four shillings in the pound according to the true yearly value
 thereof.

 Section 3: All persons holding any public office or employment of
 profit (except military and naval officers) and their clerks, etc.,
 shall pay four shillings in the pound.

 Section 4: And to the End, a further aid and supply for their
 Majesties' occasions may be raised by a charge upon all lands,
 tenements and hereditaments ... by an equal pound rate of four
 shillings ... be it enacted that all manors, messuages, lands and
 tenements, and all quarries, mines, etc., tithes, tolls, etc. ... shall
 be charged with the sum of four shillings for every twenty shillings of
 the full yearly value.

The Present "Property and Income" Tax.

 Schedule D taxes the profits of trades and professions and from various
 forms of personal property.

 Schedule E taxes the salaries of all who hold public offices or
 employments, whether they be officials or clerks.

 Schedule A taxes the income from "all manors, messuages, lands and
 tenements, and all quarries, mines, etc., tithes, tolls, etc."

It is also remarkable that whereas Land and Houses are placed in
Schedule A, the first branch of our Income Tax, the so-called Land-Tax
of 1692 placed lands and houses in its third category. The Act of 1692,
moreover, as we have seen, made the taxation of personalty its first
aim, and brought in a charge on land, houses and other fixed property to
make up any deficiency.

With our modern Income Tax, fortunately, personalty does not escape as
it seems to have done in the seventeenth and eighteenth centuries, but
it is still true that a great deal of personal income evades taxation,
while it is impossible for fixed property to elude the assessors.

I have taken the trouble to set out the foregoing details at some length
because the fact that Schedule A of the Income Tax, like Section 4 of
the Act of 1692, is a Land-Tax, appears to have escaped the attention of
many of those who desire to tax the unearned increment which so often
accrues to the owners of land. At the present moment, the owners of land
contribute 14 pence in the pound of its annual revenue to Imperial
Taxation under Schedule A. In the case of a small landowner with an
income of £750 a year that may be enough. In the case of a great
landowner with a rent roll of £20,000 a year it is certainly too little.
If, then, we would justly tax the income of those who derive unearned
revenue from land, we must graduate our income tax. In doing so,
fortunately, we shall not tax merely one form of unearned increment. The
conclusive proof of unearned income is the possession of a great income.
Whether it arises from rent, or from interest, or from the direct
taxation of labour is a secondary consideration. Whether its owner has
bought broad acres with profits drawn from the exertions of others, or
whether he has bought railway stock or foreign investments with the
proceeds of the sale of broad acres, we need not inquire. The great
income, the fact that the individual who receives it is one of the small
number of people who enjoy one-third of the entire income of the
country, is sufficient proof of "ability" to contribute generously to
the revenues of what should be the rich government of a rich State. And
it is difficult to imagine a rich man so wanting in that social instinct
which we call patriotism that, when once his extraordinary position in
relation to his fellows is made clear to him, he will not consent freely
to make such contribution.

       *       *       *       *       *

The Income Tax, as it now exists, is an instrument of extraordinary
clumsiness and complexity. An intelligent foreigner, coming freshly to
the examination of its curious provisions, would be driven to the
conclusion that a junta of bureaucrats, intent upon hiding the mysteries
of statecraft from the knowledge of the vulgar, had of set purpose
wrapped its machinery and intention in every device of obscurement which
perverted ingenuity could suggest.

In "Riches and Poverty," edition 1905, I gave an account of the Income
Tax as it then stood. I reproduce the account in order to make the
subsequent alterations clearer.

Incomes, from whatever source arising, which do not exceed £160 per
annum, are entirely exempt from the tax.

Incomes between £160 and £700 are allowed certain abatements which are
equivalent to a rough graduation of the tax. The following table shows
the nature of the abatements:—

 INCOME TAX ABATEMENTS

 Amount of Annual Income.      Abatement.
  Between £160 and £400           £160
     "     400  "   500            150
     "     500  "   600            120
     "     600  "   700             70

The following table shows how the abatements graduate the Income Tax
when the nominal rate of tax is 1s. in the £.

 INCOME TAX. EFFECT OF THE ABATEMENTS ON INCOME TAX AT 1s.

                                         Actual Rate of
              Abatement    Income after  Taxation when
 Income.       Allowed.      Abatement.    the Tax is
                                          1s. in the £.
    £              £             £       Pence in the £
   180           160            20            1.33
   240           160            80            4.00
   300           160           140            5.60
   400           160           240            7.20
   440           150           290            7.90
   500           150           350            8.40
   540           120           420            9.33
   600           120           480            9.60
   640            70           570           10.68
   700            70           630           10.80
   740           nil           740           12.00

Thus, when the Income Tax is at 1s., an income of £180 pays less than
1½d. in the £, an income of £300 pays less than 6d. an income of £500
pays less than 8½d., and an income of £700 pays less than 11d.

I now give an explanation of the various Schedules under which the tax
is collected. The abatements, it should be understood, refer to all the
Schedules.

       *       *       *       *       *

Schedule A, sometimes called Property Tax or Landlords' Tax, is assessed
upon the rents received by the owners of lands, houses, etc. It is
directly assessed upon occupiers, who, if they are tenants, deduct the
tax from their next payment of rent. Thus it is a Land and House Tax
which the landowner or houseowner cannot possibly escape.

It should also be explained that the term "Lands," as used in connexion
with Schedule A, refers to Agricultural lands, and the farm-houses and
farm buildings, etc., thereon. The term "Houses" refers to houses,
business premises, etc., together with the gardens, pleasure grounds or
yards upon which they stand.

Owners of agricultural lands are allowed to deduct for repairs
one-eighth of the rent. Owners of houses and other buildings are allowed
to deduct for repairs one-sixth of the rent.

       *       *       *       *       *

Schedule B covers profits from the _occupation_ of lands, and taxes the
incomes of farmers, nurserymen, and market gardeners.

Farmers' profits (unless farmers elect to be dealt with under
Schedule D) are assumed to be one-third of the annual rent of their
farms. Thus a farmer paying a rent of  £480 or less is not subject to
income tax, as one-third of £480 is £160, and incomes of £160 or less
are not taxable. Nurserymen and market gardeners, however, are taxed on
their profits in the same way as in the case of other business men.

The chief point to which I direct attention is that very few farmers pay
income tax at all.

The arbitrary assessment of farmers at one-third the rent of their farms
is an absurdity. A farmer paying a rental of £480 is usually a
well-to-do man, but he escapes income tax because his income is assessed
as £160. A farmer who pays a rental of £600 and who in an average year
probably makes at least £400 a year, is, on the one-third basis,
assessed at £200. The income tax of farmers is for the most part paid
for them by the industrial classes, who are taxed _pro tanto_ to relieve
agriculture.

       *       *       *       *       *

Schedule C deals with profits from British, Indian, Colonial and Foreign
Government Securities. So far as possible these profits are taxed "at
the source." Thus the Bank of England, in paying Consols dividend,
deducts income tax, and leaves the fundholder to claim repayment
afterwards if his income should be less than £160 per annum.

       *       *       *       *       *

We now come to that important branch of the tax known as Schedule D.

The profits included in this Schedule consist of those from trade and
industry, from professions, from all employments or vocations except
public offices, from oversea investments which are not Government
securities, and from interest on loans secured on the Public Rates, etc.

In the case of income from trade, assessments are made upon the average
profits of the past three years. Let us suppose that a merchant in the
period, 1893-1902, made the following profits: 1893, £1,100; 1894, £900;
1895, £1,200; 1896, £1,300; 1897, £1,400; 1898, £1,400; 1899, £1,500;
1900, £1,600; 1901, £1,200; 1902, £1,200; 1903, £1,500; 1904, £1,600.
The table on page 301 shows how the profits are assessed under Schedule D.

Thus, while between 1893 and 1904, the income was in two years above
£1,500, the assessment never rose above £1,500. The result, it will be
seen, is to deprive the State of the advantage of the maximum income.

It follows that the assessments under Schedule D, from this cause alone,
are always something less than the actual income of the persons assessed.

       *       *       *       *       *

 ILLUSTRATION OF THE PRINCIPLE OF AVERAGING UNDER Schedule D

-----------------+------------------------------------------------
    Profits.     |                   Assessment.
-------+---------+-------------+-------------+--------------------
       |         |   Year of   |  Amount of  |
 Year. | Amount. | Assessment. | Assessment. |      Remarks.
-------+---------+-------------+-------------+--------------------
       |    £    |             |      £      |
 1893  |  1,100  |             |             |
 1894  |    900  |             |             |
 1895  |  1,200  |             |             |
 1896  |  1,300  |    1896     |    1,066    | Average of £1,100,
       |         |             |             |   £900 and £1,200.
       |         |             |             |
 1897  |  1,400  |    1897     |    1,133    | Average of   £900,
       |         |             |             | £1,200 and £1,300.
       |         |             |             |
 1898  |  1,400  |    1898     |    1,300    | Average of £1,200,
       |         |             |             | £1,300 and £1,400.
       |         |             |             |
 1899  |  1,500  |    1899     |    1,366    | Average of £1,300,
       |         |             |             | £1,400 and £1,500.
       |         |             |             |
 1900  |  1,600  |    1900     |    1,433    | Average of £1,400,
       |         |             |             | £1,400 and £1,500.
       |         |             |             |
 1901  |  1,200  |    1901     |    1,500    | Average of £1,400,
       |         |             |             | £1,500 and £1,600.
       |         |             |             |
 1902  |  1,200  |    1902     |    1,433    | Average of £1,500,
       |         |             |             | £1,600, and £1,200.
       |         |             |             |
 1903  |  1,500  |    1903     |    1,333    | Average of £1,600,
       |         |             |             | £1,200 and £1,200.
       |         |             |             |
 1904  |  1,600  |    1904     |    1,300    | Average of £1,200,
       |         |             |             | £1,200 and £1,500.
       |         |             |             |
       |         |    1905     |    1,433    | Average of £1,200,
       |         |             |             | £1,500 and £1,600.

We next come to Schedule E, which covers the salaries of all Government
officials, and of the employees of Limited Liability Companies, County
Councils, etc. For obvious reasons this branch of the tax is very easily
assessed.

       *       *       *       *       *

It is necessary also to remind the reader that a second form of
income-tax is at present levied. I refer to the Inhabited House Duty,
which is payable by all householders (in Great Britain only—not in
Ireland) who live in houses of an annual value of £20 and upwards. The
rates are graduated as follows:—

                            Above £20.      Above £40.      Above £60.
                          Rate in the £.  Rate in the £.  Rate in the £.
 Private dwelling-houses       3d.             6d.             9d.
 Business premises used
     residentially             2d.             4d.             6d.

Houses used solely for purposes of trade, and in which no occupier
resides, are not subject to the tax.

In the last financial year of which we have record (1907-8) the duty
yielded £1,900,000.

The present Inhabited House Duty dates from 1851 when it was levied, to
replace the stupid window-duty, by Sir Charles Wood. It can only be
described as a clumsy income tax, and it bears very harshly upon poor
Londoners, compelled by their circumstances to pay heavy rents to be
near their work. To the heavy rent the State adds a second most unjust
Income Tax.

       *       *       *       *       *

In the above words the Income Taxes of 1905 were faithfully described in
their essential details. In the years that have elapsed various reforms
have been made.

In the Finance Act of 1907 the principle of _differentiation as between
earned and unearned incomes_ was introduced. Mr Asquith embodied the
principle in the following words (Finance Act, 1907, clause 19, section
1):

 "Any individual who claims and proves, in manner provided by this
 section, that his total income from all sources does not exceed two
 thousand pounds, and that any part of that income is earned income,
 shall be entitled, subject to the provisions of this section, to such
 relief from income tax as will reduce the amount payable on the earned
 income to the amount which would be payable if the tax were charged on
 that income at the rate of ninepence."

As the nominal rate of tax was 1s., earned incomes thus enjoyed a
substantial reduction. The abatement system, described on page 297,
continued to apply to both earned and unearned incomes, so that two very
roughly graduated scales of taxation came into existence, which are
illustrated on page 304.

The number of tax-payers who understood what had been done for them may
be described as negligible. Without working out such a table as that on
p. 304, the income tax payer remained in ignorance of what treatment had
been meted out to him. The moral effect of a considerable reform was
almost completely lost.

In the famous Finance Act of 1909, which did not pass into law, owing to
the action of the House of Lords, until the present year (1910), Mr
Lloyd George, succeeding Mr Asquith as Chancellor of the Exchequer, made
alterations in the Income Tax as excellent in principle and as obscure
in operation as that just described.

He raised the nominal rate of taxation to fourteen pence
in the £, and left the rate for earned incomes at ninepence,
thus increasing the differentiation between earned and
unearned incomes. He also introduced a new step in
differentiation by enacting that earned incomes exceeding
£2,000 a year but not exceeding £3,000 a year should
pay twelve pence instead of fourteen pence in the £.

 THE EFFECT OF MR ASQUITH'S DIFFERENTIATION OF THE INCOME TAX, 1907

-------+---------+-----------------------------------
       |         |   Income Tax on Earned Incomes.
Income.|Abatement|-------------+----------+----------
       | allowed.| Tax payable.| Nominal  | Virtual
       |         |             |   Tax.   |   Tax.
-------+---------+-------------+----------+----------
    £  |    £    | £  _s._ _d._|Pence in £|Pence in £
   160 |   160   |    ...      |  Exempt  |   ...
   200 |   160   |  1  10    0 |     9    |   1.8
   300 |   160   |  5   5    0 |     9    |   4.2
   400 |   160   |  9   0    0 |     9    |   5.4
   500 |   150   | 13   2    6 |     9    |   6.3
   700 |    70   | 23  12    6 |     9    |   8.1
   800 |   Nil   | 30   0    0 |     9    |   9.0
 1,000 |    "    | 37  10    0 |     9    |   9.0
 2,000 |    "    | 75   0    0 |     9    |   9.0
-------+---------+-------------+----------+----------

-------+---------+-----------------------------------
       |         |  Income Tax on Unearned Incomes.
Income.|Abatement+-------------+----------+----------
       | allowed.| Tax payable.| Nominal  | Virtual
       |         |             |   Tax.   |   Tax.
-------+---------+-------------+----------+----------
    £  |    £    | £  _s._ _d._|Pence in £|Pence in £
   160 |   160   |    ...      |  Exempt  |   ...
   200 |   160   |  2   0    0 |    12    |    2.4
   300 |   160   |  7   0    0 |    12    |    5.6
   400 |   160   | 12   0    0 |    12    |    7.2
   500 |   150   | 17  10    0 |    12    |    8.4
   700 |    70   | 31  10    0 |    12    |   10.8
   800 |   Nil   | 40   0    0 |    12    |   12.0
 1,000 |    "    | 50   0    0 |    12    |   12.0
 2,000 |    "    |100   0    0 |    12    |   12.0
-------+---------+-------------+----------+----------

In order to give further effect to the principle of graduating the
Income Tax, Mr Lloyd George at the same time imposed a Supplementary
Income Tax, or Super-Tax, upon persons whose incomes exceeded £5,000 a
year.

The Super-Tax is nominally 6d. in the £, but in practice it is always
less. For the Super-Tax of 6d. is payable only upon that part of the
income which exceeds £3,000 a year. That, reflection will show, creates
a _graduated_ Super-Tax, thus:

 THE LLOYD GEORGE SUPER-TAX AS IT REALLY IS

 ---------+-----------+--------+-----------------+------------+------------
          | Abatement | Income |                 |  Nominal   |  Virtual
  Income. |    on     | really |   Tax payable.  |  Rate of   |  Rate of
          |  Income.  | Taxed. |                 | Super-Tax. | Super-Tax.
 ---------+-----------+--------+-----------------+------------+------------
     £    |     £     |   £    |   £   _s._ _d._ | Pence in £ | Pence in £
    5,000 |  Exempt   |  ...   |       ...       |    ...     |    ...
    5,001 |   3,000   |  2,001 |    50   0    6  |     6      |    2.4
   10,000 |   3,000   |  7,000 |   175   0    0  |     6      |    4.2
   50,000 |   3,000   | 47,000 | 1,175   0    0  |     6      |    5.6
  100,000 |   3,000   | 97,000 | 2,425   0    0  |     6      |    5.8
 ---------+-----------+--------+-----------------+------------+------------

It will be seen that it is a great gain under this system to have £5,000
a year rather than £5,001. The extra £1 of income costs the tax-payer
£50, 0s. 6d. Thus a premium is placed by the State upon false
declarations, for if a Government is so unfair as to tax £1 of income
£50, 0s. 6d, who can blame a tax-payer who retorts in kind?

It will be seen that it is impossible for the alleged 6d. Super-Tax to
reach 6d. It can at the highest reach 5.9 pence.

But while the Super-Tax is so unfortunate in method it is excellent in
principle, and largely carries into effect the suggestions made in
"Riches and Poverty," edition 1905. It effects a rough graduation in the
taxation of incomes over £5,000 a year, and extends the gamut of the
Income Tax scale from zero at £160 a year to 19.8 pence in the £ at
£100,000 a year.

I am now able to show the total effect of all the obscure provisions
which it has been my misfortune to attempt to describe in plain
language. The table on page 307 gives a faithful picture of the Income
Tax, as graduated and differentiated by all the reforms made down to
1910. The table is the expression of the following provisions, existing
in 1910, which I recapitulate for its better elucidation.

_Incomes not exceeding £160 a year pay no tax. Small and moderate
incomes are relieved from taxation by being only taxed in part, i.e.
"abatements" are allowed according to the size of the income. Over £700
a year there are no abatements. Unearned incomes are taxed at the
nominal rate of fourteen pence in the pound. Earned incomes not
exceeding £2,000 a year are taxed ninepence in the pound. Earned incomes
over £2,000 a year, but not over £3,000 a year, are taxed one shilling
in the pound. Finally comes what is called the "Super-Tax." Incomes,
whether earned or unearned, over £5,000 a year are taxed an extra
sixpence in the pound on such part of the income as exceeds £3,000._

 EFFECT OF THE INCOME TAX IN 1910

 -------+---------+--------------------------------------
        |         |           Earned Incomes.
 Income.|Abatement+----------------+----------+----------
        |allowed. |  Tax payable.  | Nominal  | Virtual
        |         |                |  Rate.   |  Rate.
 -------+---------+----------------+----------+----------
    £   |    £    |  £   _s._ _d._ |Pence in £|Pence in £
     160|   160   |                |  Exempt  |
     200|   160   |    1  10   0   |     9    |    1.8
     300|   160   |    5   5   0   |     9    |    4.2
     400|   160   |    9   0   0   |     9    |    5.4
     500|   150   |   13   2   6   |     9    |    6.3
     700|    70   |   23  12   6   |     9    |    8.1
     800|   Nil   |   30   0   0   |     9    |    9.0
   1,000|    "    |   37  10   0   |     9    |    9.0
   2,000|    "    |   75   0   0   |     9    |    9.0
   2,100|    "    |  105   0   0   |    12    |   12.0
   3,000|    "    |  150   0   0   |    12    |   12.0
   3,100|    "    |  180  16   8   |    14    |   14.0
   5,000|    "    |  291  13   4   |    14    |   14.0
   5,100|    "    |  350   0   0   |  14 + 6  |   16.5
  10,000|    "    |  758   6   8   |  14 + 6  |   18.2
  50,000|    "    |4,091  13   4   |  14 + 6  |   19.6
 100,000|    "    |8,258   6   8   |  14 + 6  |   19.8
 -------+---------+----------------+----------+----------

 -------+---------+--------------------------------------
        |         |          Unearned Incomes.
 Income.|Abatement+----------------+----------+----------
        |allowed. |  Tax payable.  | Nominal  | Virtual
        |         |                |  Rate.   |  Rate.
 -------+---------+----------------+----------+----------
    £   |    £    |  £   _s._ _d._ |Pence in £|Pence in £
     160|   160   |                |  Exempt  |
     200|   160   |    2   6   8   |    14    |    2.8
     300|   160   |    8   3   4   |    14    |    6.5
     400|   160   |   14   0   0   |    14    |    8.4
     500|   150   |   19   8   4   |    14    |    9.8
     700|    70   |   36  15   0   |    14    |   12.6
     800|   Nil   |   46  13   4   |    14    |   14.0
   1,000|    "    |   58   6   8   |    14    |   14.0
   2,000|    "    |  116  13   4   |    14    |   14.0
   2,100|    "    |  122  10   0   |    14    |   14.0
   3,000|    "    |  175   0   0   |    14    |   14.0
   3,100|    "    |  180  16   8   |    14    |   14.0
   5,000|    "    |  291  13   4   |    14    |   14.0
   5,100|    "    |  350   0   0   |  14 + 6  |   16.5
  10,000|    "    |  758   6   8   |  14 + 6  |   18.2
  50,000|    "    |4,091  13   4   |  14 + 6  |   19.6
 100,000|    "    |8,258   6   8   |  14 + 6  |   19.8
 -------+---------+----------------+----------+----------

The table on p. 307 shows, as the mere relation of the complicated
provisions does not show, both the virtues and the faults of Mr Lloyd
George's Income Tax. There is graduation, but it is effected so clumsily
that it positively bristles with anomalies. Consider, for example, the
gross anomaly of making a man with £3,000 a year pay only £150, while a
man with £3,100 a year must pay £180. Or, again, of asking from the
£5,000 man a £291 tax, and demanding £350 from the £5,100 man. Perhaps
the worst feature in the scale, however, is the fact that unearned
incomes from £701 to £5,000 pay the same rate.

       *       *       *       *       *

Now let us consider the reform of the Income Tax.

In the first place it is suggested that the Inhabited House Duty should
be entirely abolished. As has been already pointed out, it is a clumsy
second Income Tax and its incidence is most unequal. It is not paid in
Ireland, and too much of it falls upon poor clerks and tradesmen in
London and other big towns. It is urged here that if we properly reform
the Income Tax it should not be necessary to levy a second one under
another name.

It must be frankly recognized that, in principle, the Income Tax reforms
urged in "Riches and Poverty," edition 1905, have been largely conceded.
Method is so important in this connexion, however, that it is necessary
to insist that the Income Tax still needs serious revision.

Why is it that so much misplaced ingenuity has been applied to our
Income Tax law by successive Chancellors of the Exchequer? Why these
alleged rates of Income Tax, which on inquiry prove to be nominal, and
the enactment of a clumsy Super-Tax to amend a sufficiently clumsy
Income Tax? Why should it be necessary to arrive at a "sort of"
graduation by a series of provisions, which few men, inside or outside
the legislature, pretend to understand?

The explanation is that we have not a complete Census of Incomes. The
point is of the first importance. The establishment, within the limits
of a very small possible margin of error, of the number of British
Income Tax payers in 1903, which I effected by a careful examination of
so far uncorrelated facts in "Riches and Poverty," edition 1905, brought
to light the then unsuspected fact that about 750,000 out of about
1,000,000 Income Tax payers actually declared their individual aggregate
incomes from all sources for the purposes of Income Tax.

These declarations, as already explained, were made by the smaller
Income Tax payers in order to avail themselves of the abatement system,
the abatements being granted only to those persons with incomes not
exceeding £700 a year _who made declarations_. _In effect, those of this
class who do not declare are heavily fined._

The number of the declarants was further increased in 1907 by Mr
Asquith's differentiation of the Income Tax.

Mr Asquith enacted, as we have seen, that persons who earned their
incomes, and whose incomes did not exceed £2,000 a year, should enjoy a
lower rate of taxation _if they declared their incomes_.

This led to declarations by a fresh batch of Income Tax payers, and it
became possible for Somerset House to collect and publish a new set of
most valuable statistics. Unfortunately, the precise facts of the case
have neither been collected nor published, important as the knowledge of
them is if we are to tax wisely and justly. Nevertheless, there is
little doubt that the new batch of declarations between £700 and £2,000
a year raised, or will soon raise, the proportion of Income Tax payers
making personal declarations to over nine out of eleven of the whole
body.

The question immediately suggests itself: Why should not the balance of
two out of eleven, or thereabouts, be compelled to fall into line with
the majority? This balance consists, of course, of the well-to-do and
rich, chiefly those who derive their incomes from property. These
persons are not taxed directly at all. The State relies upon what is
called "taxing at the source." That is, dividends are taxed at the
company's offices before they are distributed, and rents are taxed
through the occupier, the occupiers being left to recover the Schedule A
tax from the landlords and houselords.

This reliance upon an indirect form of "direct" taxation leads, of
course, to much income escaping tax, for rich people, it will be seen,
have not to make a return of their incomes, but are in the happy
position of letting the State catch them when it can. No other country
levying an Income Tax does this thing; yet we perversely maintain that
there is no system so effective as ours. Happily, the Finance Act of
1909 (passed in 1910) still further increases the number of those who
are to declare.

First, as to earned incomes, as noted above, Mr Lloyd George enacted
that earned incomes over £2,000 but not over £3,000 are to continue to
pay one shilling in the £, and that those over £3,000 are to pay
fourteen pence. It follows that a new batch of declarations will be
forthcoming from those, or most of those, between £2,000 and £3,000, in
order to get the shilling rate.

Again, a Super-Tax is to be levied upon all those whose incomes exceed
£5,000 a year, of whom there are not less than 14,000 or 15,000. This
Super-Tax is to be collected by Special Commissioners. How will these
Special Commissioners know to whom to apply? Obviously they have not a
list of the fortunate 15,000. They will doubtless go to work by sending
a form asking for a return of total income to all people who _appear_ to
be very rich.

All the inhabitants of big houses, and, indeed, all the obviously rich,
will receive a declaration form to fill up. And, of course, in order to
catch the 15,000 the Commissioners will have to send notices to many
times that number of people, for it is really exceedingly difficult to
decide by appearance or reputation whether a man has £2,500 or £5,000 a
year. The Budget provides that every person sent a form must fill it up,
whether or not he has £5,000 a year. Consequently, at the very top of
the scale, the Income Tax Commissioners will come into possession of
personal declarations relating to 50,000 or more of our moneyed
citizens.

And yet we shall not arrive at complete declarations from all Income Tax
payers. Nearly all persons who earn their incomes will declare, but as
to unearned incomes there is a big hiatus.

Small unearned incomes up to £700 a year will be mostly declared in
order to get the abatements.

Very big unearned incomes must be declared, as we have seen, through the
demands for Super-Tax.

_But, between £700 a year and £5,000 a year, the unearned scale is
ungraduated, and, save for the people with less than £5,000 a year,
asked in error to declare by the Super-Tax Commissioners, there will be
no personal declarations._

Surely this ought not to be. If the poor are to declare and the very
rich are to declare, why should not the middle incomes be declared? Why
should the State continue to rely, in respect of the considerable amount
of income concerned, upon taxation at the source? The question becomes
the more urgent when we reflect that the fresh batch of declarations
brought in by Mr Asquith's differentiation scheme of 1907, noted above,
brought to light many millions of "new" income (see p. 14). Every new
revelation of existing income, of course, lowers taxation _pro tanto_.

Perhaps the final argument for universal personal declaration of income
is furnished by the following enactment of the Budget of 1907:

Finance Act (1907), Section 21.

"Every employer, when required to do so by notice from an assessor,
shall, within the time limited by the notice, prepare and deliver to the
assessor a return of the names and places of residence of any persons
employed by him."

We thus go behind the backs of small tax-payers to their employers, and
compel the divulgence of incomes which are usually the _total_ incomes
of the employed. Yet the employer who, by our direction, hands his
employee over to the tax-collector, is not compelled by us to declare
his own total income, unless (1) he has no other income than his
Schedule D income, or (2) he is a payer of Super-Tax.

Given a Census of Incomes it would become possible to arrive at a
practical and just Income Tax.

We could set up a plain graduated scale of taxation, differentiated up
to a certain point as between earned and unearned incomes, making it
quite clear to the tax-payer what is demanded from him and revealing to
him the justice or injustice of our methods by enabling him to compare
his rate of taxation with that of those richer or poorer than himself.

We need not abandon taxation "at the source." We could levy on property
incomes at the source a certain rate of tax, say 1s. in the £. Then when
the total income was declared, the tax-payer would point out upon what
items, if any, 1s. in the £ had been deducted at the source and pay the
balance of the tax.

Let us take a hypothetical case—that of a barrister earning £2,000 a
year, and deriving a further £1,000 from rents and a further £300 from
Consols. The total income, £3,300, let us suppose taxed under the
graduation scheme at 14d. in the £. The Income Tax on the £1,000 of
rents would be paid by his tenants and deducted from the rents paid him,
while the Bank of England would deduct 1s. in the £ from the interest on
the Consols. Declaring his total income at £3,300 he would pay the
balance due, thus:—

     Total Declared Income.                 £  _s._ _d._
       £3,300 at 14d.                      192  10   0

 Taxed at the source:—
       (1) Schedule A. 1s. in the £ on
             £1,000 of rent, deducted by
             tenants                 £50
       (2) Schedule C. 1s. in the £ on
             £300 of interest deducted
             by Bank of England      £15
                                     ---    65   0   0
                                          ------------
               Balance of Tax Payable--   £127  10   0
                                          ============

If, upon the introduction of such a system, local assessors were
empowered to ask every householder assessed for local rates at £20 a
year and upwards _to declare his income in the place where he resides_,
there would undoubtedly be a great increase in the Income Tax
assessments. A great part of the evasion of Income Tax results from
persons being taxed at their places of business, where there is often
little evidence of means. In a man's own neighbourhood it is difficult
grossly to understate income.

For several years I put down in the House of Commons the following
suggested amendment to the Finance Bill:

Every person upon whom notice is served in manner prescribed by section
forty-eight of The Income Tax Act, 1842 (which section relates to the
delivery of notices by assessors), requiring him to make a return of his
income chargeable to duty under any and every schedule of the Income
Tax, shall make a return, in the form required by the notice, which
shall show the amount of his aggregate income from all sources, whether
he is or is not chargeable with duty, and upon what part or parts of
such aggregate income, if any, Income Tax has already been paid under
the Income Tax Acts by deduction at the source, and in default shall be
liable to a penalty under section fifty-five of The Income Tax Act,
1842.

On one occasion some twenty Members of Parliament consented to put down
this amendment with me, but every attempt to obtain its enactment has
failed. Until it is obtained there can be no just graduation of the
Income Tax, and tax-payers who declare their incomes under the existing
law will continue to pay too much because others pay too little.

       *       *       *       *       *

Some smaller matters claim our attention.

A minor but not unimportant reform, for which we have to thank Mr Lloyd
George, is the concession made to small Income Tax payers who have young
children, a concession which the present writer believes he was the
first to urge in the House of Commons. The Finance Bill of 1909 (Sect.
68) provided that Income Tax payers with incomes not exceeding £500
should be entitled to exemption from taxation to the amount of £10 for
each child under the age of 16 years. The effect of this provision is
far-reaching. A clerk with £200 a year and three young children gets the
£160 abatement and £30 abatement in respect of his children. His
_taxable_ income is thus reduced to £10 and his payment of Income Tax to
7s. 6d.

On the same ground, respect for the principle of ability to pay, the
Income Tax law should provide for special abatements in case of the
illness of salary earners, special misfortunes, the support of poor
relatives, etc. It is found possible to work such provisions in Prussia;
it ought to be found possible to do so here.

       *       *       *       *       *

The importance of a thorough revision of the Income Tax law is growing.
The view urged here is that the citizen's subscription to the National
Club should not only be justly proportioned to his means, but presented
to him intelligibly, and collected without waste or undue interference
with business.

The phenomenon of an annual Budget debate has come to be regarded as a
necessary Parliamentary evil, but is there any justification for it?

When the nation has decided, through its representatives, for good
reasons or for bad reasons, that a certain sum of money must be raised
for public purposes, it is not the function of the Chancellor of the
Exchequer _qua_ Chancellor of the Exchequer to decide whether the
purposes are good or bad, or whether the sum is too large or too small.
As a member of the Government, the Finance Minister has, of course, a
voice in deciding what sums should be spent and upon what purposes, but,
as Chancellor of the Exchequer, his duty is not to reason why but to
find the money. In the finding of the money, ought there to be, year by
year, a long and painful discussion as to how it should be done?

We have also become accustomed to regarding the Budget as a great and
glorious secret, to be carefully guarded until the Chancellor of the
Exchequer makes his annual speech. Does the tradition of secrecy rest
upon necessity? For my part, I call the necessity in question. I affirm
that our annual Budget need present no difficulties; that it is not
inherently a difficult thing to accomplish; and that the conception of a
Budget as a great secret, to be carefully hidden until Budget Day, is an
altogether childish conception. There is some excuse for reserving a
child's Christmas presents until he wakes up and finds the gifts of
Santa Claus in his stocking on the morning of December 25th, but there
is no excuse whatever for the ridiculous secrecy with which tradition
shrouds the annual Budget statement.

I do not deny that secrecy has been necessary in connexion with such
Budgets as have been put on record in the past. Of what have these
Budgets consisted? Year by year, a number of clumsy, inefficient and
indefensible taxes have been tinkered by successive guardians of the
national purse. Tea taxes, coffee taxes, beer taxes, sugar taxes,
alleged income taxes, double inheritance duties, have had bits carved
off them, or bits attached to them, without rhyme or reason. Year after
year, Mincing Lane has been in throes of excitement as to whether there
was to be a penny on tea, or a penny off tea. Cunning gentlemen have
rushed in tea to evade a suspected inclination to tax that article
further, or sugar brokers have been excited at the prospect of making
something, or losing something, over a little less or a little more on
sugar. We are a grave and respectful people, or assuredly we should
laugh at this annual exhibition of mingled greed and incompetency. If as
much intelligence were put into the making of boots, none of us would be
able to walk.

The subject is made additionally interesting by the fact that all along
men have known perfectly well how taxes ought to be levied. It is 130
years since Adam Smith wrote his first maxim of taxation, which I have
already quoted:

 "The subjects of every State ought to contribute towards the support of
 the government as nearly as possible in proportion to their respective
 abilities; that is, in proportion to the revenue which they
 respectively enjoy under the protection of the State."

As long ago as 1848 John Stuart Mill wrote ("Principles of Political
Economy," Book V. Chapter 2):

"As, in a case of voluntary subscription for a purpose in which all are
interested, all are thought to have done their part fairly when each has
contributed according to his means, that is, has made an equal sacrifice
for the common object; in like manner should this be the principle of
compulsory contributions: and it is superfluous to look for a more
ingenious or recondite ground to rest the principle upon.... To take a
thousand a year from the possessor of ten thousand would not deprive him
of anything really conducive either to the support or to the comfort of
existence: and if such _would_ be the effect of taking five pounds from
one whose income is fifty, the sacrifice required from the last is not
only greater than, but entirely incommensurable with, that imposed upon
the first. The mode of adjusting these inequalities of pressure, which
seems to be the most equitable, is that recommended by Bentham, of
leaving a certain minimum of income, sufficient to provide the
necessaries of life, untaxed.... The exemption in favour of the smaller
incomes should not, I think, be stretched further than to the amount of
income needful for life, health, and immunity from bodily pain."

In passing, this quotation may be commended to those who regard the
exemption of very small incomes from taxation as a tenet of modern
Socialism. Here we have it propounded in 1848 by John Stuart Mill, who
got it from Jeremy Bentham.

It is in spite of such admired utterances as these that we have still,
in the year 1910, such outrages upon common sense as taxes upon sugar,
taxes upon petrol, taxes upon cocoa, taxes upon business contracts,
taxes upon marriage certificates, and a great party in the State is at
this hour ardently desirous of adding to the number of such stupidities
by thousands or even tens of thousands.

When we inquire for the reason for the existence of such unbusinesslike
and costly stupidities, we find a simple explanation. It has been held
in the past universally, and is held in the present by many, that the
Government has no business to inquire into the incomes of the people it
governs. Lacking knowledge of incomes, it has been obviously impossible
for Governments to tax people according to their ability to bear
taxation. Consequently, Chancellors of the Exchequer have had to devise
all sorts of trumpery and costly expedients to get by indirect means
what should have been got honestly and directly.

In short, the first condition of fair budgeting is a Census of Incomes.
Given that, we are able to throw away all the lumber of indirect
taxation and of inefficient taxation. And it should be observed that
fair budgeting means simple budgeting—budgeting admitting of no annual
argument. The annual budget wrangle is the effect of our devious methods
of taxation.

Given universal declarations of income, and an end could speedily be
made of our present array of taxes. We could decide upon some minimum of
income which should be totally exempt from taxation on the ground that
it represented the smallest sum upon which a family can be sustained in
health and decency. Above that margin, we could arrange a graduated
scale of taxation which should present to each citizen a fair bill for
public expenses. That bill could be made payable in two or even four
instalments, to make the payment an easy matter for the tax-payer. This
arrangement once made, any increase of taxation would simply call for a
proportionate increase from each tax-payer. Argument would not lie in
the province of the Chancellor of the Exchequer, for the matter would be
finally settled. Argument would begin and end with the decision of
Parliament to spend certain moneys; _that would not be a_ _Budget
argument, but an argument upon public policy in expenditure_. And the
plainer the bill for taxes, the more closely expenditure would be
scanned.

My remarks, of course, must not be taken to condemn taxes upon alcohol
or taxes upon inheritances. And beyond lies the question of the
acquisition of monopolies by the State, and the consequent reduction of
taxation by reason of the State carrying on revenue-producing
undertakings.




 CHAPTER XXII
 THE DEATH DUTIES


In "Riches and Poverty," edition 1905, it was urged that the then
existing Estate Duties, ranging from 1 per cent. to 8 per cent., might
be sensibly increased. The revisions which have been made since 1905 are
clearly shown in the comparative table given on the next page, which
reviews in part the Estate Duties of the Budgets of 1894, 1907 and 1909.

The rates of Death Duty have been thus raised to about the level
suggested in "Riches and Poverty," edition 1905.

The scale does not represent the whole of the Death Duties. Not only is
the corpus of the property taxed under the scale, but the remainder,
after such taxation, is taxed again under separate scales of Legacy and
Succession Duties. I do not enter into the details here, but, generally,
such complications are to be deprecated. Let the State take its
equitable toll, but let it do so on a single progressive scale, and not
tax, and tax again, first taking a percentage from the estate, and next
taking a further percentage from the bit of the estate taken by a
brother or cousin or aunt of the deceased.

As will have been gathered from Chapter 4 the increase of the duties on
estates over £10,000 was more than justified. The great bulk of the
national wealth is held in estates of over £10,000 each. The following
facts (see Chapter 4) relating to the estates which pass in an average
year should never be lost sight of:

 THE HARCOURT (1894), ASQUITH (1907), AND LLOYD GEORGE (1909)
 DEATH DUTIES

 -----------------------+---------+--------------------
                        |         |
    Value of Estate.    |Harcourt,|   Asquith, 1907.
                        |  1894.  |
                        |         |
 -----------------------+---------+--------------------
 Exceeds   But not over |Per cent.|     Per cent.
     £          £       |         |
       100        500   |  1      |         1
       500      1,000   |  2      |         2
     1,000     10,000   |  3      |         3
                        |         |
    10,000     25,000   |  4      |         4
    25,000     50,000   |  4½     |         4½
    50,000     75,000   |  5      |         5
    75,000    100,000   |  5½     |         5½
   100,000    150,000   |  6      |         6
   150,000    250,000   |  6½     |         7
   250,000    500,000   |  7      |         8
                        |         |
   500,000    750,000   |  7½     |         9
   750,000  1,000,000   |  7½     |        10
                        |         |/--------^---------\
                        |         |On First      On
                        |         |Million.  Remainder.
 1,000,000  1,500,000   |  8      |   10         11
 1,500,000  2,000,000   |  8      |   10         12
 2,000,000  2,500,000   |  8      |   10         13
 2,500,000  3,000,000   |  8      |   10         14
 3,000,000              |  8      |   10         15
 -----------------------+---------+--------------------

 -----------------------+-------------+---------------
                        |             |     Rates
    Value of Estate.    |Lloyd George,| suggested in
                        |    1909.    |  "Riches and
                        |             |Poverty," 1905.
 -----------------------+-------------+---------------
  Exceeds   But not over|  Per cent.  |  Per cent.
     £           £      |             |
       100          500 |      1      |      1
       500        1,000 |      2      |      2
     1,000        5,000 |      3      |     3-4
     5,000       10,000 |      4      |     5-6
    10,000       20,000 |      5      |      7
    20,000       40,000 |      6      |      8
    40,000       70,000 |      7      |      9
    70,000      100,000 |      8      |     10
   100,000      150,000 |      9      |     11
   150,000      200,000 |     10      |     12
   200,000      400,000 |     11      |}
   400,000      600,000 |     12      |}    13
   600,000      800,000 |     13      |     14
   800,000    1,000,000 |     14      |     15
                        |             |
                        |             |
                        |             |
 1,000,000              |     15      |     16
                        |             |
                        |             |
                        |             |
                        |             |
 -----------------------+-------------+---------------

 DEATHS AND ESTATES IN THE UNITED KINGDOM

  About 700,000 persons, including children, die every year.

  Of these, about 620,000 die almost or quite penniless.

  The balance of 80,000 persons leave £300,000,000.

  Of these, 4,000 persons leave £200,000,000.

It is only necessary to state these extraordinary facts to show the
justice of Mr Lloyd George's reform of the Death Duties.

It is of interest and importance to show what a small proportion of the
capital passing at death is actually taken by the State. The following
figures show, for the years 1894-5 to 1908-9, the total amount of all
the Death Duties (i.e. not only the principal "Estate Duty," the rates
of which are given on p. 321, but of the Legacy and Succession Duties,
Settlement Estate Duty, etc.), received during the year, the total
estates upon which the duties were paid and the average aggregate rate
per cent. of the whole of the duties:

 DEATH DUTIES PAID: 1894-5 TO 1908-9

                                                Average
 Fiscal Year.      Total      Total Estates.   Aggregate
               Death Duties.                  Rate of Duty
                                               per cent.
                    £               £
 1894-5         10,894,385     194,465,000        5.61
 1895-6         14,088,608     249,942,000        5.63
 1896-7         13,878,274     245,883,000        5.64
 1897-8         15,449,190     270,326,000        5.71
 1898-9         15,732,578     271,901,000        5.78
 1899-1900      18,409,293     312,819,000        5.88
 1900-1         16,721,129     284,884,000        5.87
 1901-2         18,513,714     295,829,000        6.26
 1902-3         17,913,177     296,382,000        6.04
 1903-4         17,326,137     291,161,000        5.95
 1904-5         17,258,431     284,309,000        6.07
 1905-6         17,344,925     296,233,000        5.85
 1906-7         18,958,763     319,579,000        5.93
 1907-8         19,108,256     304,093,000        6.28
 1908-9         18,310,280     294,662,000        6.21

These figures were prepared by Somerset House and given to the House of
Commons in September 1909 in answer to a question of Mr Thomas Gibson
Bowles.

In 1908-9, in spite of the increase of rates in 1907, the Death Duties
took but £18,300,000 or a little over 6 per cent. of property worth
£294,600,000.

But this is a partial statement of the facts. There is little doubt that
the estates passing yearly are worth nearer £400,000,000 than the
£300,000,000 which is officially reviewed and taxed. So that the total
burden of the Death Duties in 1908-9 was really about 4½ per cent.

There has been some talk in this connexion of diminishing and wasting
the national capital. The national capital was conservatively estimated
in Chapter 5 as about £13,000,000,000. The Death Duties are now taking
about £20,000,000 a year. £20,000,000 is contained just 650 times in
£13,000,000,000, so that, even if the £20,000,000 a year were wasted,
the national capital would waste away in six and a half centuries. But
the £20,000,000 a year is not lost: it is transferred from private
pockets to the State and used a hundredfold for the better advantage of
the nation than if it were not so transferred. One may go further and
say that if it were not taken and used for the furtherance of reform,
the national capital would cease to make increase. Expenditure upon
Education alone needs to be doubled if British work is to fructify in
the near future.

Some attention was given on page 76 to the question of the avoidance of
Death Duties by gifts _inter vivos_. The Finance Act of 1909 increased
to three years the period before death during which gifts passing _inter
vivos_ should be liable to Death Duties. It will be of interest to see
whether this checks the avoidance of Death Duties which has given us
such remarkable statistics as those recorded on page 76-77.

It is not necessary to dwell at length in this chapter upon
considerations connected with the dangers to Society involved in the
monopolization of wealth by a few people, for they were treated at some
length in earlier pages. I may usefully direct attention, however, to a
speech made by the President of the United States of America, Mr Taft,
in September 1909, in which he said:

 "Let the State pass inheritance laws which shall require the division
 of great fortunes among the children of descendants, and shall not
 permit the multi-millionaire to leave his fortune in a mass. Make more
 drastic the rule against perpetuities which obtain at common law, and
 then impose a heavy graduated inheritance tax enabling the State to
 share largely in the proceeds of such large accumulations of wealth
 which would hardly have been brought about save under its protection
 and aid. Thus gradually and effectively the concentration of wealth in
 one or few hands will be neutralized, and the danger to the Republic
 obviated."

These are the words, not of a Socialist, but of the elected of the
Conservatives of the United States. They may fittingly end our
consideration of the revised Death Duties.

The reformed Income Tax and Death Duties of 1909 will furnish, with all
their faults, a handsome revenue, and it may already be claimed that
what was urged in "Riches and Poverty," edition 1905, as to the means of
national regeneration, has been amply verified by accomplished facts.




 CHAPTER XXIII
 OF REVENUE WITHOUT TAXATION


After dealing at some length with the details of British taxation it is
well to point out why it is necessary for the British Government to
raise so much revenue by taxes.

It appears to be commonly taken for granted that in the matter of
national ways and means a source of revenue is the same thing as a
source of taxation. Perhaps it is not surprising that this idea is
prevalent in Britain, for of a truth we have scarcely any national
revenue save what is derived from the more or less just taxation of
British citizens.

Save in its power to levy taxes, the United Kingdom, as a State, is one
of the poorest in the world.

The British Government, as compared with many other governments, is
singularly lacking in property. It follows that it is singularly lacking
in natural State revenue. As a matter of fact, the only items of British
State property worth mentioning are (1) the Post Office, which brings in
about £5,000,000 a year; (2) a few Crown lands, which bring in about
£500,000 a year; and (3) The Suez Canal shares, bought by Lord
Beaconsfield, which bring in about £1,000,000 a year.

The total British State revenue from property is thus about £6,500,000,
and that is all. If the Government wants any more money it has to tax
the governed, a fact which arouses various emotions.

The consequence is that, as public expenses increase, our taxes
constantly swell. The items of natural State revenue are too small, even
if elastic, to meet the growing bills. This is found out by all parties.
A politician out of office may, and usually does, denounce new taxes,
but we never find the same politician, after taking office, taking off
the taxes he has denounced; he simply cannot do it. The Conservatives,
it will be remembered, were unfriendly to Sir William Harcourt's Death
Duties, but when they came into power they not only did not repeal them,
but it is a fact that they seriously considered increasing them.

I do not think it can be reasonably alleged that taxation has yet
reached an intolerable level, indeed the facts on that head are
sufficiently made plain in these pages. At the same time, I suppose that
none of us desires to increase the burden of taxation more than is
necessary.

Is it not well, then, to ask ourselves whether taxation need be the only
hope of State revenue? Here comes in a rather curious fact. We have
passed through troubled days in which additional taxation has been
denounced as "Socialistic," and the "Observer" newspaper tells its
readers constantly that modern Socialism simply means taxation.

_As a matter of fact, it is because the British Government has been one
of the least Socialistic in the world that it finds itself in 1910
raising so much of its revenue from taxation._

The Germans are heavily taxed, but they are so much poorer than the
British people that the sum they raise in taxes is much smaller than the
sum raised here. It should not be forgotten that, in considering German
taxes, we have to add the taxes raised by the governments of its various
kingdoms and States to the taxes raised by the German Imperial
Government. When that is done it will be found that the total amount so
raised, although considerable, is not nearly enough to meet the Imperial
and national expenditure. What is the explanation? I commend it most
earnestly to the politicians and publicists who fill the air with
clamour about Socialism.

Consider the following extract from the official description of German
Taxation in Blue Book, Cd. 4,750:

 To make any profitable comparison of direct taxation in England and
 Germany, it is necessary to take into consideration in the case of the
 latter not merely the Imperial taxes, but also the taxes levied by the
 Federal States. It is also important to remember that a _large portion
 of the States' expenditure, in Prussia as much as 47 per cent., is
 covered by the profits of railways and other industrial undertakings,
 the State being thus enabled_, pro tanto, _to dispense with taxation_.

Varying, but usually considerable, proportions of the State revenues of
the kingdom of Bavaria, the kingdom of Saxony, the kingdom of
Wurtemberg, the six Grand Duchies, the five Duchies, and the seven
Principalities, not to mention the free cities, are derived similarly
from State undertakings, ranging from railways to forests, and from
mines to china factories.

I beg the reader to realize that but for these enormous State natural
revenues the Germany of to-day would not be able to build Dreadnoughts
or to sustain the greatest army in the world. Successful State Socialism
has been the backbone of German finance, and the secret of a big
expenditure and the maintenance of the greatest army in the world and
the second largest navy in the world by a poorer country than ours, in
which (basing ourselves on the official Income Tax Statistics of
Prussia) we are able to affirm that one-half of the people are under the
income line of £45 a year (17s. 3d. per week).

Germany derives from her Customs Duties, believed by ill-informed people
here to be the chief feeder of her revenues, about £30,000,000 a year.
This may be contrasted with a single item of German State Socialist
revenue:

 NET PROFITS OF THE PRUSSIAN STATE RAILWAYS

           £
 1906  33,480,000
 1907  34,323,000
 1908  31,180,000

Surely it is worth the gravest consideration here that one-half the
State revenue of Prussia, the chief State of the German Empire, is
derived from the ownership of railways, forests, mines, and other
national undertakings. And there can be little doubt that Germany will
soon own and control her Power supply. _In 1910 the State railways of
the entire German Empire will yield a net profit of about £50,000,000,
meeting, in effect, the bill for German armaments._




 CHAPTER XXIV
 CONCLUSION


Lest there be any lack of perspective in our view of the distribution of
wealth and of the material progress of the working classes, I preface
this concluding chapter with a note upon former investigations of the
national income.

In 1868, Dudley Baxter, in his classical paper on the National Income
read to the Royal Statistical Society, estimated that in 1867, the
population being 30,000,000, the manual workers, then estimated to
number 10,960,000, took £325,000,000 out of a total national income of
£814,000,000. Thus the average wage of the manual workers (men, women
and children) was estimated at nearly £30 per head per annum.

Professor Leone Levi estimated the amount of wages taken by the manual
labourers in 1866 at £418,000,000, but he allowed for "play" only four
weeks in the year, whereas Baxter, for very excellent reasons which he
stated in his paper, allowed for 20 per cent. of lost time. Thus a great
part of the difference in the two estimates is accounted for.

In the "Economic Journal" for Sept. 1904, Professor A. L. Bowley, basing
his calculations of the total amount paid in wages largely upon the
figures of the Board of Trade Wages Census of 1886, making allowance for
enforced leisure, and also for the army of casuals and incompetents,
arrived at £350,000,000 as the sum paid in wages in 1867. This is a
striking confirmation of Dudley Baxter's estimate, for it is arrived at
by an entirely different route.

If, then, we adopt the estimate of Baxter we shall probably be as near
the truth as is now possible. Accepting it, we find that the manual
workers in 1867 took about 40 per cent. of the national income.

The manual workers in our present population of 44,000,000 maybe
estimated at 15,000,000 and they take, as we have seen, about
£700,000,000 out of a total estimated income of £1,840,000,000, or less
than 40 per cent. of the whole.

Thus the position of the manual workers, in relation to the general
wealth of the country, has not improved. They formed, with those
dependent upon them, the greater part of the nation of 1867,—forty-three
years ago,—and they enjoyed but about 40 per cent. of the national
income according to the careful estimate of Dudley Baxter. To-day, with
their army of dependents, they still form the greater part of the
nation, although not quite so great a part, and, according to the best
information available, they take less than 40 per cent. of the entire
income of the nation.

But, as will be seen from the figures given, the actual income of the
manual workers has increased. In 1867 it amounted to about £30 per head.
At the present time it amounts to about £46, 15s. per head.

And not only have money wages thus risen, but the purchasing power of
money has considerably increased in the last generation. The retail cost
of food, clothing, and furniture has fallen; but, on the other hand,
coal and rents have risen.

Between the increase in money wages and the increase in the purchasing
power of money there can be no question that the actual position of the
wage-earner has considerably improved in the last forty years. Amongst
other results, the death-rate has fallen, paupers have decreased, and
criminals have decreased. These and other important facts are shown in
the table on page 332.

 SOME ITEMS IN MATERIAL PROGRESS 1867-1908

 ------------------------------+-----------------+------------
                               |      1867.      |   1908.
 ------------------------------+-----------------+------------
 Population                    |   30,500,000    | 44,500,000
                               |                 |
 Average earnings of manual    |                 |
   workers (men, women and     |                 |
   children)                   |       £30       | £46, 15s.
                               |                 |
 Consumption of imported       |                 |
   food per head:              |                 |
     (_a_) Wheat per head, lbs.|     140         |    272
     (_b_) Sugar  "   "    lbs.|      44         |     76
     (_c_) Rice   "   "    lbs.|       6         |     18
     (_d_) Tea    "   "    lbs.|       3¾        |      6
                               |                 |
 Consumption of Beer           |                 |
   (Gallons per head)          |   27.78 26.62   |
                               | (1881 earliest  |
                               |figure available)|
                               |                 |
 Deaths                        |     634,008     |  676,634
                               |                 |
 Death-rate (per 1,000)        |      20.8       |    15.2
                               |                 |
 Criminals convicted           |     19,450      |   15,500
                               |                 |
 Paupers (England and Wales)   |                 |
   Jan. 1st                    |     958,824     |  911,588
                               |                 |
 Deposits in Post Office and   |                 |
   Trustee Savings Banks       |   £46,283,132   |£245,600,000
                               |                 |
 Price of bread per 4 lb. loaf |       8d.       |   5.8d.
                               |                 |
 Board of Trade consumption    |                 |
   Index number (prices of     |                 |
   45 commodities expressed    |                 |
   as percentages of those of  |                 |
   1900)                       |      136.0      |   102.8
                               |      (1871)     |
 ------------------------------+-----------------+------------

With our knowledge of the conditions of the present, these facts are
only relatively satisfactory, and serve but to fill us with horror of
the past. We see that more bread is consumed to-day than in 1867, but
remember that 40 persons perish from exposure and starvation in the
streets of London year by year.[62] We see that the death-rate has
declined from 20.8 per 1,000 to 15.2 per 1,000 between 1867 and 1908,
but remember that in the latter year as many as 113,000 children
perished in England and Wales under the age of twelve months. We see
that the average wage has risen, but also that it now amounts to but
£46, 15s. per annum on a liberal estimate. We see that prices have
fallen, but remember that, in 1908, one-third of our population, in
spite of lower prices, have not sufficient means to command a proper
supply of the common necessaries of existence, no matter how severe
their thrift.

Writing in 1868, in the paper already referred to, Baxter wrote, in
dealing with the question of real earnings as distinguished from nominal
rates of wages, a passage which strikingly illustrates the conditions of
labour in his day:[63]

 "Another point is the age at which a manual labourer ceases to be an
 effective. I am afraid that 60 years is about the average; six or seven
 years earlier than the Middle Classes. After that age a man becomes
 unfit for hard work; and if he loses his old master, cannot find a new
 one. In some trades, a man is disabled at 55 or 50. A coal-backer is
 considered past work at 40. I have endeavoured to be on the safe side
 by taking 65 as the termination of their working life, and have
 excluded all above that age from my calculation of wages.

 "But the most important point of all is the allowance which must be
 made for what workmen call 'playing'; that is to say, being 'out of
 work,' from whatever cause, whether forced or voluntary. It is here
 that I am at issue with Professor Levi. He estimates the lost time at
 no higher average than 4 weeks out of the 52, and thinks it
 sufficiently covered by omitting from the wage-computation all workmen
 above 60 years old, i.e. the non-effectives. If this were the real
 state of things, England would be a perfect Paradise for working men!
 If every man, woman, and child returned as a worker in the census had
 full employment, at full wages, for 48 weeks out of the 52, there would
 be no poverty at all. We should be in the Millennium! Far other is the
 real state of affairs; and a very different tale would be told by
 scores and even hundreds of thousands, congregated in our large cities,
 and seeking in vain for sufficient work.

 "I will take a good average instance (and a very large one) of the way
 in which wages are earned in the building trades. These trades form a
 whole, and include carpenters, bricklayers, masons, plasterers,
 painters, and plumbers, and number in England and Wales, about 387,000
 men above 20 years of age. In London their full time wages average 36s.
 a week. In the country they are lower, 30s. to 28s. or 26s.; growing
 less the farther we go northward. The full-work average may be taken at
 30s. But it is only the best men, working for the best masters, that
 are always sure of full time. These trades work on the hour system,
 introduced at the instance of the men themselves, but a system of great
 precariousness of employment. The large masters give regular wages to
 their good workmen, but the smaller masters, especially at the East End
 of London, engage a large proportion of their hands only for the job,
 and then at once pay them off. All masters, when work grows slack,
 immediately discharge the inferior hands, and the unsteady men, of whom
 there are but too many even among clever workmen, and do not take them
 on again till work revives. In bad times there are always a large
 number out of employment. In prosperity much time is lost by keeping
 Saint Monday, and by occasional strikes. There are also 40,000 men
 between 55 and 65 years of age, who, in the building trade, are
 considered as past hard work, and who suffer severely by want of
 employment....

 "Let us turn to another great branch of industry, the Agricultural
 Labourers: whose numbers are, men, 650,000; boys, 190,000; women,
 126,000; and girls, 36,000. Continuous employment has largely increased
 since the New Poor Law of 1834, and good farmers now employ their men
 regularly. But in many places such is not the custom. Near Broadstairs,
 in Kent, I was told that, on an average, labourers are only employed 40
 weeks in the year.... Turn next to the cotton manufacture, including
 143,000 men, 82,000 boys, 150,000 women, and 121,000 girls; altogether,
 496,000. We all know their periodical distresses. It may be said that
 these were accidents. They are not mere accidents, but incidents,
 natural incidents, of our manufacturing economy. They are sure to recur
 under different forms; either from gluts, or strikes, or war; and they
 must be allowed for in computations of earnings.

 "I come lastly to instances from trades at the East End of London,
 where I have lately had a great deal of experience. It is there that
 the struggle for existence is most intense, from London being the
 resort and refuge of the surplus population of other parts of the
 country. The London Dock Labourers earn, when on full time, 15s. a
 week; but so great is the competition that even in ordinary years they
 are employed little more than half their time. During the past year 5s.
 a week has been considered tolerably lucky....

 "Cabinet-makers stand well in the lists of trades, their nominal wages
 for the Kingdom being set down at 30s. a week. But the cabinet-makers
 at the East End, a very numerous body, are in what is called the 'slop
 trade,' and are ground down by the dealers, who own what are called
 'slaughter-houses,' in which they take advantage of the necessities of
 the small manufacturers (expressively called 'garret masters') and
 compel them to sell their upholstery at little above the cost of
 materials. Between dealers and want of work, I am told that numbers of
 the 'slop' cabinet-makers are not earning 7s. 6d. a week.

 "None but those who have examined the facts can have any idea of the
 precariousness of employment in our large cities, and the large
 proportion of time out of work, and also, I am bound to add, the loss
 of time in many well paid trades from drinking habits. Taking all these
 facts into account, I come to the conclusion, that for loss of work
 from every cause, and for the non-effectives up to 65 years of age, who
 are included in the census, _we ought to deduct fully 20 per cent. from
 the nominal full time wages_.

 "I will cite one more fact in confirmation. The average number of
 paupers at one time in receipt of relief in 1866 was 916,000, being
 less than for any of the four preceding years. The total number
 relieved during 1866 may, on the authority of a Return of 1857, be
 calculated at 3½ times that number, or 3,000,000.[64] All these may be
 considered as belonging to the 16,000,000 of the Manual Labour Classes,
 being as nearly as possible 20 per cent. on their numbers. But the
 actual cases of relief give a very imperfect idea of the loss of work
 and wages. A large proportion of the poor submit to great hardships,
 and are many weeks, and even months, out of work before they will apply
 to the Guardians. They exhaust their savings, they try to the utmost
 their trade unions or benefit societies; they pawn little by little all
 their furniture; and at last are driven to ask for relief. I am not
 astonished at their reluctance, for what do they get? After waiting in
 a crowd and in the most humiliating publicity, they get an order for
 the stoneyard, with 6d. a day, and a loaf per week of bread for each of
 their family. Sometimes, rather than accept the relief, they die of
 starvation."

These words were written over forty years ago, but it would need little
emendation to give them application to-day. The growing strenuousness of
modern industry makes it more and not less difficult for the ageing to
earn a living. The increased use of machinery and the greater division
of labour have made experience of less value than of yore. The ageing
man resorts to hair dye to conceal the honourable age which is to rob
him of his livelihood. Baxter's remarks about the building trades are
absolutely true of to-day, but they now apply not to 400,000 men, but to
1,000,000. "All masters, when work grows slack, immediately discharge
the inferior hands.... In bad times there are always a large number out
of employment." The position of agricultural labourers has improved, but
chiefly because their rapidly decreasing numbers have placed a premium
upon their services. Even so, in parts of the country removed from
coal-mines, the most pitiable conditions prevail. Kettle broth is still
part of the menu of the Wiltshire labourer.

In the East End of London the economic position of the dock and
riverside labourers is much the same as Baxter described it, while in
the furniture trade the "garret masters" are still with us. True—most
honourably true—it is also that still the workers endure great hardships
before they will apply to the Guardians. "They exhaust their savings,
they try to the utmost their trade unions or benefit societies; they
pawn little by little all their furniture; and at last they are driven
to ask for relief."

The Board of Trade, after a careful examination of the question of
unemployment in 1904, arrived at the general conclusion that "The
average level of employment during the past four years has been almost
exactly the same as the average of the preceding forty years" (Cd.
2,337). The conditions of employment, the want of security of tenure,
are very much what they were in 1867.

As for pauperism, it is difficult to congratulate ourselves upon
improvement since 1867 when we remember that in England and Wales alone
1,500,000 to 2,000,000 persons are in receipt of relief in the course of
a single year. This statement rests upon ascertained facts, as will be
found by reference to the statistics given in our examination of the
question of Old Age Pensions. The population of England and Wales being
about 36,000,000 (1910) this means that _one person in every twenty_ has
recourse to the Poor Law Guardians during a single year.

If our national income had but increased at the same rate as our
population since 1867 it would, in 1908, have amounted to but about
£1,200,000,000. As we have seen, it is now about £1,840,000,000. Yet the
Error of Distribution remains so great that while the total population
in 1867 amounted to 30,000,000, we have to-day a nation of 30,000,000
poor people in our rich country, and many millions of these are living
under conditions of degrading poverty. Of those above the line of
primary poverty, millions are tied down by the conditions of their
labour to live in surroundings which preclude the proper enjoyment of
life or the rearing of healthy children. The comparatively high wages of
London are accompanied by rents high in proportion and frequently by
waste of income and time upon travelling expenses. In so far as the
manual labourers have been reduced in proportion to population it has
been to swell the ranks of black-coated working men, clerks, agents,
travellers, canvassers, and others, whose tenure of employment is
precarious, whose earnings are very low, and whose labour as we have
already noted is largely waste.

We have won through the horrors of the birth and establishment of the
factory system at the cost of physical deterioration. We have purchased
a great commerce at the price of crowding our population into the cities
and of robbing millions of strength and beauty. We have given our people
what we grimly call elementary education and robbed them of the elements
of a natural life. All this has been done that a few of us may enjoy a
superfluity of goods and services. Out of the travail of millions we
have added to a landed gentry an aristocracy of wealth. These, striding
over the bodies of the fallen, proclaim in accents of conviction the
prosperity of their country.

There leaps to the mind the mordant lines in which Ruskin, thirty years
ago, wrote a "modern version" of the Beatitudes[65]:—

 Blessed are the Rich in Flesh, for theirs is the Kingdom of Earth.

 Blessed are the Proud, in that they _have_ inherited the Earth.

 Blessed are the Merciless, for they shall obtain Money.

There is no whit of exaggeration in these lines. The passage of thirty
years has but added to their sting. Thirty years of accumulation of the
results of toil in hands other than those of the toilers have had for
consummation the accusing series of facts which are examined in the
early chapters of this book. Deprivation for the many and luxury for the
few have degraded our national life at both ends of the scale. At the
one end, "thirteen millions on the verge of hunger," physically and
morally deteriorated through poverty and unloveliness. At the other, the
inheritors of the earth, "senseless conduits through which the strength
and riches of their native land are poured into the cup of the
fornication of its capital."

Blessed indeed are the Rich, for theirs is the governance of the realm,
theirs is the Kingdom. Theirs is a power above the throne, for it has
been a maxim of British politics that our government should be a poor
government, and a poor government cannot contend in the direction of
affairs with the imperium of wealth. This may be illustrated by our
attempts to "educate" the mass of the people. For a few brief years the
government, with small funds raised with timorous hands, does a little
to form the mind and character of the child. Even in these early years
it consents that the future proud citizen of Empire shall be improperly
fed and badly housed. These early moments passed, the mockery of
"education" ceases, and the child, taught by the State to read, to
write, and to cipher, becomes a unit of industry. At this point begins
the serious training of the citizen. Forthwith he is inducted into some
more or less worthy employment, that employment, as we have seen,
resulting from the great expenditure of the few and the poor expenditure
of the many. Careers are thus chiefly shaped by the wealthy, for theirs
is the greatest call. The demand for luxuries is too great; the demand
for necessaries is too small; the unit of industry is fortunate,
therefore, if he is inducted into useful service. The State washes its
hands of his development. The educational sham over, the real education
of life begins. So far as the State calls for privates of industry it is
chiefly to make them soldiers, sailors, makers of guns, builders of
battleships. The development of all things useful, of railways, of
canals, of roads, of cities, of houses, is resigned to the blind call
for commodities and the intelligence of individuals who, in search of
private gain, seek, without regard to the national well-being, to profit
by that blind call.

Yet the manner in which its people are employed matters everything to a
nation. It is not sufficient to give the child a smattering of
knowledge. We need to take a collective interest in the general
education of our citizens, and that education is the result of
expenditure. The consumer gives the order. Given a fairly equable
distribution of income, the call will be as to the greater part for
worthy things, as to the smaller part for luxuries. Given a grossly
unequal distribution, and the call for luxuries will be so great as to
divert a considerable part of the national labour into channels of waste
and degradation.

To keep a government poor is to keep it weak. The poor government may
resolve to educate, but it will have no means to carry out its resolve;
its teachers will be underpaid; its schools inefficient. The poor
government may pass Housing Acts; it will but call for better houses
that will not come when it does call for them. The poor government may
piously resolve to create small holdings; there will be no means to
carry out the pious resolve. The poor government may, at periodic
intervals, look the question of Unemployment in the face; its
legislation will but reflect its poverty, and be in its provisions an
acknowledgment that the power to employ, the power to govern, is in
other hands.

Even those who have striven to hold fast the curious faith that
civilization comes, not through collective service, but through
individual strife, are constrained to admit that much waste is going on.
It is noteworthy that Sir Robert Giffen, in one of his last essays on
Taxation, said:[66]

"When the proportion (of income appropriated by the state) becomes
one-tenth or less it is doubtful whether the state can do best for its
subjects by making the proportion still lower, that is, by abandoning
one tax after another, or whether equal or greater advantage would not
be gained by using the revenue for wise purposes under the direction of
the state, such as great works of sanitation, or water supply or public
defence. In other words, when taxes are very moderate and the revenue
appropriated by the state is a small part only of the aggregate of
individual incomes, it seems possible that individuals in a rich country
may waste individually resources which the state could apply to very
profitable purposes. The state, for instance, could perhaps more
usefully engage in some great works, such as establishing reservoirs of
water for the use of town populations on a systematic plan, or making a
tunnel under one of the channels between Ireland and Great Britain, or a
sea-canal across Scotland between the Clyde and the Forth, or purchasing
land from Irish landlords and transferring it to tenants, than allow
money to fructify or not fructify, as the case may be, in the pockets of
individuals. Probably there are no works more beneficial to a community
in the long run than those like a tunnel between Ireland and Great
Britain, which open an entirely new means of communication of
strategical as well as commercial value, but are not likely to pay the
individual _entrepreneur_ within a short period of time."

Here we have a reflection of the uneasy feeling that all is not well in
the disposition of the income of the community. Very true it is that
"individuals in a rich country may waste individually resources which
the State could apply to very profitable purposes." Even were the means
by which "Captain Roland fills his purse" moral, we should need to look
to Captain Roland's expenditure. The effects of the robbery do not end
with the impoverishment of the despoiled. The despoiler proceeds to
spend the contents of his fat purse, and in spending he buys bodies and
souls, and builds up vested interests in degrading occupations.

In the foregoing pages I have pointed both to mere palliatives of
existing evils and to real remedies which go to the root of things. Our
attempts to reform, our strivings towards organization, must in practice
have regard both to palliatives and to remedies. We have to keep in mind
both the impoverished and sometimes degraded creatures which are effects
of past and existing causes, while dealing drastically and radically
with the causes themselves. At present the greater part of the labours
of social reformers are directed to dealing with a succession of
distressful effects. Here are slums; how shall we rehouse their inmates?
Here are paupers; what shall we do with them? Here are unemployed; how
shall we keep them going until they find employers? Here are aged poor;
can we, should we, give them pensions? We owe a present duty in all
these and many other matters. The effects must be dealt with and
ameliorated. It is beyond question that there is a clear call to succour
the aged, to care for the weak, to aid poor women in their time of
trouble. The sufferer, the affected individual, the disease, must be
dealt with. But ever we must keep before us the causes which bring into
being the raw material of our social problems; ever we must have clear
vision of the crime of poverty in a wealthy country; ever we must seek
to come to grips with the original sin.

To deal with causes we must strike at the Error of Distribution by
gradually substituting public ownership for private ownership of the
means of production. In no other way can we secure for each worker in
the hive the full reward of his labour. So long as between the worker
and his just wage stands the private landlord and the private
capitalist, so long will poverty remain, and not poverty alone, but the
moral degradations which inevitably arise from the devotion of labour to
the service of waste. So long as the masses of the people are denied the
fruit of their own labour, so long will our civilization be a false
veneer, and our every noble thoroughfare be flanked by purlieus of
shame.

There is already a beginning made. A few hundred millions have been
applied as public capital in the ownership by many municipalities of
such services as tramways, gasworks, and waterworks. As we saw in our
examination of the national wealth, such capital is yet but a tiny
fraction of the whole, and it still bears a great mortgage and pays
interest to private hands. That interest, in process of time, will
disappear through the operation of sinking funds, and then, as to
certain services, the community will enter into its own with no tribute
to pay to private usurers. From the small beginnings made we must seek
to advance, nor need we be deterred by those who implore us to hasten
slowly. If Rome was not built in a day, Washington was built in not many
days, and the factory system itself is little more than a century old.
The lapse of a single generation might see well advanced the building of
our new city.

It would be a great pity if anyone were to imagine that the changes
necessary to secure the just reward of all forms of labour are either
difficult to effect or likely to cause dislocation in the making. As has
been pointed out, the greater number of our industrial concerns are
already shaped in the form of limited liability companies, the
shareholders in which are dumb, while the management is in the hands of
paid officials. In 1902-3, while private firms were assessed to Income
Tax on £193,000,000, public companies were assessed on £239,000,000. In
1907-8 the respective figures were £183,000,000 and £259,000,000. The
re-shaping proceeds apace. The reform which needs to be effected is to
substitute the community at large for the dumb shareholders. Management,
ability, invention, would be properly rewarded, as they are now rewarded
in some cases, and as they are not now rewarded in many cases. The only
change would be the gradual substitution of the community for the
shareholders, and the consequent disappearance of unearned incomes. Such
portions of the product as were necessary for application as new capital
would be so applied by the community. For the rest, the whole of the
product would go to labour. Saving, the necessary saving, without which
labour would go without tools, would be simply and automatically
effected, and capital would take its true and rightful place as the
handmaiden of labour.

Let us not go further without a vision and a hope. That vision, that
hope, is not of a regimented society, but of a community relieved from
nine-tenths of its present irksome routine and carking care. If the
individual is to be set free it can only be in a society so organized as
to reduce the labour employed in the production of common necessaries to
a minimum. That minimum cannot be secured without the organization of
each of the great branches of production and distribution. Common needs
can be satisfied with little labour if labour be properly applied. The
work of a few will feed a hundred or supply exquisite cloth for the
clothing of fifty. The work for a few hours per day of every adult
member of the community will be ample to supply every comfort in each
season to all. Thus set free, the lives of men will turn to the
uplifting, individual work which is the pride of the craftsman. The
dwellings of men will contain not only the socialized products within
common reach, but the proud individual achievements of their inmates.
The simple and beautiful clothing of the community will chiefly be made
of fabrics woven in the socialized factories, but it will often be
worked by the loving hands of women. A happy union of labour economized
in routine work and labour lavished upon individual work will uplift the
crafts of the future and the character of those who follow them. The
abominations of machine-made ornament will disappear, and art be wedded
to everyday life. Each new invention to save labour in mining, or
tilling, or building, or spinning, will be hailed with joy as a release
from toil and a gift of more time in which to do individual work. The
inventor, the originator, now unhappily compelled to hunt for a
capitalist and bow low his genius before some individual distinguished
only for that gift of acquisitiveness, that business ability, which is
the lowest attribute of mankind, will see his idea put to the test and
reap not unholy gains, but the honour of his fellows if it is not found
wanting. The painter, no longer compelled to paint the portraits of the
rich and not necessarily beautiful, will ally his gifts with the common
life of men and be carried in triumph before the enduring monuments of
his genius. The organizer, the man of arrangement, will be invited to
exercise his talent, not in over-reaching and despoiling his fellows,
but in planning their welfare in a thousand new schemes of development.
No host of wasteful workers will be found in the industrial camp.
Accounts will be simple and clerks few. No travellers, agents or touts
will be needed to push doubtful commodities. The sham and the substitute
will be found only in museums. It will be obviously ridiculous to employ
any but good materials, for labour can only be economized by producing
the things which are the best of their kind. Policies of insurance,
those typical documents of a community of prey, will be read in the
public archives with much the same feelings as we now read a warrant for
the burning of a Bruno. The young men who now waste their time in ruling
up books in banks and insurance offices or in serving writs will find
manly and useful work. The production of commodities will be
commensurate with the labour put forth, unemployment will be one of the
few crimes known to the statute-book, and last, but not least, the
economic dependence of woman will cease.

The attainment of such ends will only be difficult as long as we refuse
to apply scientific methods to the ordering of common affairs. It is in
the domain of politics alone that men refuse to apply first principles
to the solution of problems. The mental daring which has accomplished so
much in engineering, in astronomy, in surgery, in every department of
science, is replaced in the sphere of politics by a timorous tinkering
with admitted evils. With things the scientist has worked marvels in a
single century. With those marvels the politician has done little. The
scientist has applied his skill to locomotion; the politician has
refused to avail himself of that skill in order to distribute the
population healthily. The scientist has stated the conditions of health;
the politician has refused to create those conditions. The scientist has
supplied the tools; the politician has neglected to take them up.

The problem of riches and poverty is of the simplest. It presents none
of the difficulties which attach to the measurement of the mass of the
sun, or the treatment of such a disease as cancer. Science has presented
us with such instruments that we can easily create a tremendous
superfluity of commodities if we choose to do so. We know how to
produce; we know how to transport the results of our production. The
appliances at our command, wielded by the labour of 44,000,000 people,
could furnish many more foot-tons of work than are needed to give proper
housing, suitable clothing and good food to every unit of the community.
There is here no impenetrable secret; we have read enough in the book of
Nature to control her forces to effect; our power of production is not
too small, but already greater than our need. As I have pointed out in
an earlier page, if invention went no further if science now came to a
standstill, we should have tools more than adequate to abolish poverty.

Unfortunately the politicians and the economists have never discussed
the question of poverty from this point of view. They have found men
buying and selling, and as buyers and sellers hunting for profits they
have discussed them. Volumes have been written on such subjects as
"rent," "interest," or "value," but nothing has been done to inquire how
much work is needed to feed, clothe and house a community, and how best
that work may be accomplished. In designing an engine, the man of
science considers the work to be done and the known means to do it. Is
it too much to ask that in ordering the affairs of a nation, statesmen
should consider the quantity of commodities needed to give material
happiness and the known means to produce and distribute them? To make
the best use of our energies, to profit fully by the discoveries and
inventions of the living and the dead, we must come to a common
agreement as to the work which needs to be done and determine that that
work shall be accomplished. For want of that agreement and
determination, for want, that is, of a wise collectivism, the greater
number of our people are poor.

It is probable that the earliest readers of this book will be of those
who, like myself, are amongst the favoured few whose work brings them
pleasure and the means of happiness. To these the first appeal. Is it a
good thing, is it an honourable thing, to be one of the few whose bark
is borne upon the waters of wretchedness, whose fortunes float upon a
sea of unfathomable depths of despair? Look downwards and you shall see
monsters that once were human, frailties that once were women, devils
that once were children. These are the product of the individual strife
in which it is not always the noblest thing to succeed, but in which it
is ever a terrible thing to fail. Is success worth having which is
purchased at such a price?

The last appeal shall be to the poor. It is no escape from labour which
the thinking man offers the people. There are no honourable avenues to
ease and luxury in the organization which would abolish poverty. It is a
world of service which a civilization would substitute for a world of
serfdom and pain. But if, realizing that the world has no room for the
idle, the people would rise to a freedom only bounded by the knowledge
of, and necessity for, collective decision, then there is the broadest
avenue for hope and the clearest call to action. The achievements of
those who are gone, these are the inheritance of the people. The only
true riches of the nation, men and women, these are the people
themselves. The people have but to will it, and we set our faces towards
a civilization.

[Footnote 62: "Deaths from Starvation or Accelerated by Privation
(London)." Issued Sept. 14th, 1904.]

[Footnote 63: Quoted from Dudley Baxter's "The National Income," by kind
permission of the publishers, Messrs Macmillan & Co.]

[Footnote 64: In saying this Dudley Baxter committed one of the few
errors which can properly be laid to his charge. See Chapter 19.]

[Footnote 65: "Usury," a preface re-published in "On the Old Road."]

[Footnote 66: "Encyclopædia Britannica," Volume 33, page 200.]




INDEX


Abatements, Income Tax, 36, 297

Accidents, Industrial:
  Engineering Works, 137
  Factories and Workshops, 127, 128
  Mines, 133
  Railways, 136
  Ships, 137
  Total, all Trades, 138

Advertising, 253

Afforestation, 248

Aged Poor, 272

Agricultural Labourers' Wages, 109, 155

Agricultural Land, Value of, 62, 68

Agriculture, as Field for Employment, 240

Anderson, Miss A. M., on Maternity Funds, 180

Andrew, George, Report on German Schools, 192

Anthrax, 130

Area, Control of, 242

Area, Distinguishing Attribute of Land, 81

Area of United Kingdom, 81

Army Material, Value of, 66

Ashby, Dr Hy., on Poor Mothers, 174

Asquith, H. H., Death Duties, 321
  Differentiates Income Tax, 303
  Old Age Pensions Act, 284

Average Wage, 29


Back-to-Back Houses, 214

"Back to the Land," 242

Bateman, John, on Landowners, 82

Bathing in Schools, 193

Baxter, Dudley, on Conditions of Labour in 1868, 333
  On Income Tax Evasion, 13
  On Loss of Wages, 26
  On National Income in 1867, 330

Beaulieu, M. Leroy, on Eliminating Middlemen, 254

Beer Consumption, 332

Belgian State Railways, Success of, 265

Bentham, Jeremy, Suggested Exemption of Small Incomes from Taxation, 317

Births, in United Kingdom, 173

Board of Trade, Estimate of Wages, 30
  Wage Census, 21

Boot Trade, 147, 156

Bournville Garden City, 223

Bowley, A. L., Estimate of Wages, 30
  On Loss of Wages, 26
  On Wages in 1867, 330

Boy Labour in Mines, 136

Bradford School Children, Condition of, 194

Bread, Fall in Price of, 332

Bricklayers' Wages, 108

British Association, Committee on Small Incomes, 21

British Government, Poverty of, 326

Budget, Is an Annual Debate Necessary?, 315
  Tradition of Secrecy Unnecessary, 315

Building Societies' Funds, 56

Burns, John, Housing Act, 221


Campbell-Bannerman, Sir H., on Poverty, 5

Canals, Value of, 64

Capital, In Few Hands, 79
  In Relation to Housing, 229
  Of United Kingdom, 62
  Of Working Classes, 57, 80
  Waste of, 158

Capitalization of Usury, 101

Carpenters' Wages, 108

Casual Workers, Earnings, 27

Census, Inadequacy of, 123
  Of Incomes, Importance of, 308, 312, 315
  Of Wages, 21

Charity Organization Society, Thought Old Age Pensions Too Costly, 283

Children, National Responsibility for, 173
  Should be the Chief Care of the Reformer, 173
  Underfed, 196

Clerks, 18
  Number of, 253

Coal Distribution, should be Municipal, 269
  Miners, Number of, 268
  Production, 267

Collectivism, Assisted by Joint-Stock Principle, 344
  By Economizing Labour Creates Individual Freedom, 345
  Necessity of, 343
  And Revenue, 326

Combination Accentuating Error of Distribution, 269

"Comfortable" Persons, Number of, 48

Commercial Travellers, 19
  Number of, 252

Commons, Value of, 66

Company Promotion, 166

Competition Disappearing, 269
  Waste through, 255

Compositors' Wages, 109

Consumption of Food, Growth of, 332

Continuation Schools Advocated, 204

Co-operative Societies' Funds, 56

Cost of Living, 115

Cotton Trade, 143

Criminals, Decline of, 332

Crowley, Dr R. H., on Bradford School Children, 193

Cunningham, Professor D. J., on Physical Deterioration, 173

Customs Duties, 3


Death Duties:
  And Length of Life, 73
  Assessments, Stationariness of, 76
  Avoidance of, 53, 54, 77
  Described, 320
  Do they Waste Capital?, 323
  Still Low, 323

Death-rate, Fall of, 332

Deaths from Mining Accidents, 132

Deaths in United Kingdom, 54

Declaring Incomes, Importance of, 308

Differentiation of Income Tax, 303

Diseases of Occupations, 129

Distribution, Combination in, 256
  Of Capital, 79
  Of Income, 32, 47, 48
  Of Land, 82, 83
  Of Wealth in Practice Illustrated, 94

Doctor, in the School, 193

Dressmaking, 151

Dundee, Physical Deterioration, 139


Education, 181, 190
  Children should be Trained in Expression, 201
  Continuation Schools Necessary, 204
  Importance of Training in Observation, 199
  Science Teaching, 202

Education (Provision of Meals) Act, 198

Eichholz, Dr A., on Poor Children, 174

Electricity Should be Publicly Controlled, 257

Employers Compelled to Disclose Employees' Incomes, 311

Engineers, Unemployment amongst, 28
  Wages, 109

Estate Duties. See Death Duties

Estates, 1904-1908, 52
  Classified by Nature, 78
  Classified by Size, 52, 74
  Passing Per Annum, 52, 55
  Of Rich and Poor, 51

Expectation of Life, 211

Expenditure Directs Labour, 141


Factories, Accidents in, 127

Factory and Workshop Act, 125
  And Maternity, 178

Factory Inspection, 126

Farmers' Capital, 63, 69
  Profits, 19

Finance Act, 1907, 14, 302

Fiscal Policy, 3

Food, Consumption, Growth of, 332
  Duties for Revenue, 289
  Expenditure on, 154
  Price of, 115

Foreign Competition and Education, 202, 204

Foreign Investments, 14

Fox, Arthur Wilson, on Agricultural Wages, 155

Friendly Societies' Funds, 56

Furniture, Value of, 64, 70


Gas Companies' Profits, 105

Gas Works, Value of, 64

Genius not a Class Possession, 191

George, Henry, on Necessary Monopolies, 255

Germany, Large Revenue from Socialism, 328

Giffen, Sir Robert, Estimate of Aggregate Wages, 1886, 25
  On Wages, 22
  On Waste of Capital, 341

Government by the Rich, 270

Growth of National Income, 17


Hackney, Unemployed in, 119

Harcourt, Sir Wm., Death Duties, 321

Horsfall, T. C., on Town Planning, 221

Houses, Clue to Income Tax Payers, 42
  In Great Britain, 40, 43
  Value of, 62, 68

Housing, 88, 209
  Loans Proposed, 231

Hunter, Robert, on American Poverty, 5

Hygiene Should be Taught in Schools, 181


Income, Average in 1908, 32

Income Tax, Abatements, 36, 297
  As it is, Illustrated, 307
  Assessments, 12, 33
  Assessments, 1893-1908, 10
  Chapter on, 291
  Differentiation, 14, 303
  Evasion, 13
  Graduation Advocated, 312
  History of, 291
  Origin of Schedules, 292
  Payers, Growth of, 37, 112
  Payers Measured by House Rent, 42
  Payers, Number of, 44
  Payers over £700, 44
  Provisions Summarized, 306
  Reaches Unearned Increment, 296
  Reforms Advocated, 308
  Schedule A Described, 298
  Schedule B Described, 299
  Schedule C Described, 300
  Schedule D Described, 300
  Schedule E Described, 302
  Successor of "Land Tax," 291

Incomes, between £160 and £700, 39
  Of Lower Middle Classes, 20
  Of Middle Classes, 36
  Revealed by Employers, 311

Individual Freedom through Collectivism, 345

Industrial Accidents, 125

Infant Mortality, 177

Inhabited House Duty, 40, 89
  Described, 302

_Inter Vivos_ Avoidance of Death Duties, 77

Interest and Distribution, 93

Invalidity Insurance, 286

Inventions, Foreign Progress, 202

Iron Works, Value of, 64

Ironfounders' Wages, 109


Jews and Maternity, 185


Labour Exchanges, 124

Labour Party and Unemployment, 124

Land, and Town Planning, 218
  Nationalization, 242
  Of United Kingdom, 81
  Recovery in Agricultural Values, 246

Land-Tax, was an Income Tax, 292

Land Values, 86

Landowners, 82, 83

Lead Poisoning, 130

Legal Profession, Persons Employed, 254

Levi, Leone, on Manual Labourers' Earnings in 1866, 330
  On Unemployment, 25

Living, Cost of, 115

Lloyd George, D., Death Duties, 321
  Grants Special Abatement in Respect of Children, 314
  Income Tax Reforms, 303

Local Loans, 62, 67

London, Area of, 92

Lower Middle Classes, Incomes of, 17

Luxuries, Expenditure on, 160


McCleary, Dr G. F., on Milk Supply, 260

Mackenzie, Dr Leslie, on Milk Supply, 260

Malins, Dr E., on Poor Children, 174

Manual Workers, Number of, 21

Marshall, Professor A., on Waste, 158

Maternity amongst Poor, 178

Maternity Fund, Suggestion for a National, 184, 185

Medical Officers of Health, 183

Middle Classes, Small Incomes of, 36

Middlemen, Waste through, 253

Milk Distribution, Waste in, 259

Milk Supply, Should be Publicly Owned, 261

Mill, John Stuart, on Principle of Graduation, 317

Miners' Wages, 108

Mines, Value of, 64

Mining, Accidents, 130
  Employment, 268
  Royalties, 85

Misdirection of Labour, 150

Monopoly, Economy of, 256

Monopoly of Capital, 72

Monopoly of Wealth a Danger to the State, 141, 158, 324

Multiple Shops, 19, 254

Municipal Trading, Case for, 264
  Success of, 262


National Capital, 61

National Debt, 62, 63, 67

National Dividend, how Distributed, 47, 48

National Housing Loans Proposed, 231

National Income, Growth of, 50
  How Distributed, 47, 48
  In 1908, 31
  What it is, 8

National Medical Service, 183

National Property, 62, 65

Nationalization of Land, 219, 242

Navy, Value of, 66

Notification of Births, 184


Occupations Influenced by Wealth Distribution, 141

Old Age Pensioners, Number of, 285

Old Age Pensions, 272
  Cost of Not "Expenditure," 286

Old Age Pensions Act, 284

Organization of Industry, 124, 250

Overcrowding, 212

Oversea Investments, 14, 65, 160


Paupers, Day Counts of, 274
  Decline of, 332
  Relieved in a Year, 275, 276

Physical Deterioration, 139

Physical Training, 192

Poor, Property of, 57

Population, Growth of, 332

Poverty, Campbell-Bannerman quoted, 5
  In Old Age, 272
  Line, 153
  Measured, 49, 50
  Now Unnecessary, 347
  Of British Government, 340
  Shortens Life, 211

Power Supply, Should be National, 256

Prices, Fall of, 332
  Index Number, 332

Production, Combination in, 256

Production and Waste, 251

Profits Examined, 94
  Growth of, 111, 112

Progress since 1867, 332

Prosperity and Fiscal Policy, 3

Prussian State Railways, 329

Public Ownership, the only Path to Equitable Distribution, 262

Public Works and Unemployment, 124


Railway Capital, Watering of, 102
  Fares under Nationalization, 266
  Servants, Accidents, 136

Railways, Value of, 63

Rates, in Nature of Rent-charge, 90

Rent, and Profit, 97
  Estimate of Aggregate, 84, 85, 86
  Why Small Relatively to Profits, 86

Revenue without Taxation, 326

Rich, Estates of, 58
  Number of, 48, 50

Right to Work Bill, 123

Roads, Value of, 66

Rowntree, Poverty Line, 153

Rural Depopulation, 234

Ruskin, John, His modern version of the Beatitudes, 339


Savings, 55, 56, 80
  Growth of, 332

Savings Banks' Funds, 56

Science, Important to Teach, 202

Seamen, Accidents, 137

Segregation of Unfit, 187

Shop Assistants, 18

Shopkeepers, 18, 254

Site Value, 87

Smith, Adam, on Taxation, 287

Socialism, Reduces Taxation, 328

Super-Tax, 305


Taft, President, on Inheritance Duties, 324

Taxation and Distribution, 289
  Direct, Advocated, 318
  Doctrine of Ability, 288
  Indirect, Deprecated, 317
  Not the Only Means of Revenue, 326
  Should be Simplified, 318

Teachers, 18

Thrift Institutions, 56

Town Planning, 217, 221

Trade Capital, Value of, 63, 69

Trade Unions, Expenditure on Unemployment, 121
  Funds, 56
  Superannuation, 280
  Unemployment, 116

Tradesmen, 254

Transport should be a National Function, 256

Trust Rule, 269


Unemployed, Probable Number of, 122

Unemployment, 28, 107
  Amongst Trade Unionists, 116
  Cost of, 121
  During 40 Years, 337
  In America, 5
  In Middle Classes, 122
  Insurance, 123
  Only to be Remedied by Public Ownership, 270
  "Remedies" for, 123, 124

Unfit, Segregation of, 187

United Kingdom, Area, 81

United States, Industrial Fatalities, 6
  Poverty of, 5

Usury, 101


Wage Census, 21

Wage Earners, Number of, 21

Wage, Average, 29, 331
  Growth of, 332

Wages, 115
  Aggregate in 1908, 29
  Average in 1908, 27
  In 1886, 23
  Movement of, 27, 108, 111, 112
  Not Raised by High Profits, 101
  Stationariness of, 50

Waste of Labour, 251

Waterworks, Value of, 64

Wheat, Imports of, 245

Wheat Prices, 247

Whitehaven Colliery Explosion, 131

Woollen Trade, 145

Women Health Inspectors, 182

Women Workers in America, 6

Workhouse Inmates Classified, 281

Working Class "Capital," 80

Working Classes, Material Progress of, 330