A COUNTRY WITHOUT A POORHOUSE
How would you like to be sure of a pension from Uncle Sam in your old
age? How would you like to know that if your income after sixty-five
years of age was less than three hundred and ninety dollars a year, you
would get from the government at Washington at least enough money to
keep you alive?
That is the situation here in New Zealand. Every citizen is assured
that if old age finds him without sufficient money to live on, the
government will provide up to a maximum sum of one hundred and
ninety-five dollars a year. To widows with children larger pensions are
paid.
New Zealand has had an old-age pension law for more than a quarter of a
century, and everyone now seems to think it is a fine thing. Certainly
there are no poorhouses here, as we know them, and the old-woman beggar
is conspicuously absent.
According to New Zealanders, their country was the first in the world
to pass a non-contributory old-age pension law. In fact, I find New
Zealand claims to hold twelve “Firsts” in social legislation. After
listening to the enthusiastic talk of the people, I have been surprised
at what their country, situated in what we think of as the most remote
corner of the globe, has to show. According to my notes, New Zealand
was the first country to:
Provide non-contributory old-age pensions;
Introduce conciliation and arbitration of industrial disputes;
Establish universal penny postage;
Start government grading of butter, cheese, and hemp for export;
Go into the state insurance business;
Set up state maternity homes;
Open a government tourist department;
Give women parliamentary suffrage;
Operate state coal mines;
Organize a state department of public health;
Enact minimum wage laws for women and minors;
Build houses and sell them to workmen.
All these “firsts,” and the fact that she has the lowest death rate in
the world, back up New Zealand’s claim of being the “Newest England”
and a “Brighter Britain.”
The old-age pension law was one of the many acts for the benefit of the
common people put through by Seddon during his long term as premier.
He introduced the bill and fought it through to passage in the face
of considerable opposition. He took the position that pensions from
the state were not a matter of kindness or charity to those past the
ability to work, but only their rightful due.
The law is so worded that pensioners need feel no humiliation in
accepting state funds. Its introduction states that:
“It is just and right that every person who has for a number of years
assisted by his (or her) work in the development of the country, and
has also by payment of taxes contributed to its good government, should
be protected against want in his (or her) old age.”
The law provides that the pensioner must have been a resident of New
Zealand for twenty-five years prior to his application; that he must
not during that time have been imprisoned for five years for any
offence, and that he must not during the twelve years preceding his
application have been in jail four months or on four occasions for an
offence punishable by one year’s imprisonment. The applicant must not
during the past twelve years have deserted his wife and children and
must have lived a sober and reputable life in the year preceding his
application. All applications are made at the post offices, where such
as pass the examinations are given certificates, each entitling its
owner to a pension for one year. The certificates have to be renewed
every year.
Since the first pension law was enacted, the amount of the annual
allowance has been several times increased. Already the government has
paid out more than forty-five million dollars in doles to the aged, and
there are, I am told, about twenty thousand people now receiving these
pensions. This is considerably more than one pensioner to every hundred
persons in the country.
If the United States had a similar law, with the same proportion of
pensioners, we should have 7000 of them in Washington, almost 90,000
in New York, 40,000 in Chicago, 28,000 in Philadelphia, and a thousand
or more in each of a score of other cities. In the whole country we
should have a million and a half pensioners, and if each received
$180 a year, the amount of the average pension in New Zealand, the
total distribution of money among our old people would amount to
more than $288,000,000. As a matter of fact, this sum would be only
about $30,000,000 more than our government now pays out each year in
pensions for old soldiers and their dependents, not including the
payments to veterans of the World War.
One of Wellington’s big buildings is the government life-insurance
office. Here you may find out just how much the body politic is willing
to bet on the chances of life and death of its people. The government
has been in the life-insurance business for fifty years, but it has
never forbidden the private companies to operate, and competes with
them right along. Indeed, it is said that the latter are getting
most of the new business because they put more life and energy into
selling insurance than the state institution does. The government
life insurance company uses the postmasters as its agents, and thus
has offices at every crossroads. It requires as strict a physical
examination as any private company, but its rates are low and the
insured feel certain of their money. There are now some sixty thousand
state policies in force representing an insurance of about eighty-five
million dollars.
The state insurance business is managed like our private life-insurance
companies and upon similar calculations of the chances of life and
death. It sells some policies on the paid-up system and has also a
savings-fund plan. Special rates are granted to those who abstain from
intoxicating liquors, and another form of policy provides annuities for
government clerks after they are sixty years of age. Fire and accident
policies are also written in competition with the commercial companies.
One reason the government went into the business was the fact that the
companies operating in New Zealand at that time were charging rates
as high as those in the United States, England, and other countries,
where the “expectancy of life” is not so great as it is here. The New
Zealanders are wonderfully healthy. They live, on the average, eight
years longer than we do. It may be that their lives are lengthened by
the amount of protection and security they have from their various
government enterprises. Moreover, the country is not over-populated,
there is no competition with coloured or cheap foreign labour, a living
wage is guaranteed to all, farms may still be had on comparatively easy
terms, there is little poverty throughout the Dominion, and the general
level of comfort is high. The average wealth for all persons over
twenty years of age has been estimated at four thousand dollars, and
that notwithstanding the fact that there are few millionaires in New
Zealand and not many persons who are rich according to our standards.
The per-capita deposits in New Zealand banks are steadily increasing,
showing that the country is accumulating wealth. In 1890 the average
was just under one hundred dollars for every one of the population;
twenty years later it had risen to a little more than one hundred and
twenty-five, and the latest figure is two hundred dollars. The present
assets of the six principal banks total more than three hundred and
forty millions of dollars, and their liabilities come to less than
three hundred millions.
The postal savings banks are banks of deposit, paying interest of from
3¼ to 4 per cent. on all accounts. At present the deposits approximate
a total of $220,000,000 held by about 680,000 depositors. This equals
one savings account to every 1.8 persons of the population. Deposits as
low as one shilling, or twenty-five cents are taken, but no interest is
paid on any sum below $5 or above $25,000. On sums up to $2500 the rate
is 4 per cent.; on larger amounts it is 3¼ per cent.
[Illustration: On the beautiful curved shore of Hawke Bay, protected
from the ocean by a breakwater, is Napier, the chief shipping point of
a large meat- and wool-producing district.]
[Illustration: In the Mt. Cook Range of the Southern Alps are ten peaks
more than ten thousand feet high. The great Tasman Glacier provides
thrills for the most expert mountain climber.]
New Zealand has its building and loan associations, though not to the
same extent as the United States. The farmers have also organized all
sorts of coöperative associations. The stock of the New Zealand Loan
and Mercantile Company, a big firm which buys up produce and ships
it abroad, is owned chiefly by the New Zealand growers from whom it
buys. I have visited a big store, the stock of which is held by its
customers. It has a large capital, and its manager told me that it paid
ten per cent. dividends. It is much like one of our department stores,
with the prices marked on all articles offered for sale. Many of the
meat-freezing establishments are managed by stock companies, in which
the sheep and cattle owners are interested, and most of them pay good
dividends.
There is a National Provident Fund, which any one between the ages
of sixteen and fifty may join, provided that his income during the
three years prior to joining has not been more than fifteen hundred
dollars. No medical examination is required. A contributor to the
Fund is protected in case of incapacity to work, his children and
widow receive an allowance upon his death, and on reaching the age
of sixty he receives for the rest of his life a pension of from two
dollars and a half to ten dollars a week, according to the scale of
his contributions. Married women contributing to the Fund get a bonus
of thirty dollars on the birth of each child. The applicant joins
by filling in a form at a postal money-order office or local office
of the Fund and paying his first weekly contribution. Although the
Fund is only about ten years old, it has nearly twenty-two thousand
contributors.
Another institution in which New Zealand takes especial pride is the
office of the Public Trust, the first institution of its kind in
the world. Through this the government acts after the fashion of our
commercial trust companies. A public trustee is appointed for the whole
country and he has under him a staff of lawyers of high reputation.
Suppose a man dies intestate; the Public Trust administers his estate.
If you want to make your will, the Public Trust will draw it for you
and you may make the Trust your executor. Suppose you have been acting
as trustee to an estate and wish to lay aside your responsibility; the
Public Trust will take it over. If an insane person has no guardian,
the Public Trust will look after his affairs. Unless expressly directed
otherwise, all money coming into the office goes into a common fund.
This is invested by the public trustee in first-class securities for
the benefit of the estates in his charge.
The Public Trust now handles estates and funds to the value of more
than one hundred and twenty-five million dollars, and the amount is
growing every year. More than thirty thousand wills are on deposit in
the office, an evidence of the increasing public confidence in the
institution. Although it was established to give the people service
at low rates and not to make money, and though its fees are never
above three per cent. the office has been so well managed that it not
only pays for itself, but yields a profit of more than fifty thousand
dollars a year. While it is a government institution, the Public Trust
provides its own buildings and pays taxes and postage just as if it
were a commercial enterprise. Its employees are under the civil service
and hold office during good behaviour.
Practically every New Zealand post office is a telegraph office, a
telephone office, a savings bank, a government life-insurance and
pension agency, and a money-order office, so you see postman and
postmaster have plenty to do. There are now government telephones
almost everywhere, although they are not so numerous in proportion
to the population as they are in the United States. Telephones are
still considered somewhat in the class of luxuries. In the hotels, for
example, one rarely sees a telephone in every room, but there will be
an instrument in the hall on each floor.
But there is another side to the picture of New Zealand’s government
activities. A man is worth not what he makes, but what he has left
when his debts are paid. It is the same with a nation, and New Zealand
has rapidly rolled up a huge public debt. At the end of the century
it owed about two hundred and twenty million dollars, or more than
three hundred dollars per head, or fifteen hundred dollars per family
of five. This debt kept on growing, and then was more than doubled by
expenditures in the World War, which were a tremendous burden to a
small country like New Zealand.
Suppose the same conditions to prevail in the United States with its
one hundred and five million inhabitants. Instead of the twenty-two
billions we now owe, we should owe more than eighty-seven billion
dollars, or almost exactly four times the sum that we and our children,
and our children’s children for generations to come, must be heavily
taxed to pay.
On the other hand, it must be remembered that nearly half the total
debt of New Zealand is invested in railroads, telephones, telegraphs,
hydro-electric systems, farm land, and loans to settlers. These
investments pay interest, and are represented by assets of much greater
value than the amount of borrowed money spent upon them.