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.