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Title: Riches and Poverty (1910)

Author: L. G. Chiozza Money

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Transcriber's Note:

Obvious printer errors have been
corrected. Hyphenation has been
rationalised.
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BRITISH INCOMES IN 1908-9

RICH COMFORTABLE
1,400,000 persons 4,100,000 persons
£634,000,000
£275,000,000

POOR
39,000,000 persons
£935,000,000

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

RICHES AND POVERTY

(1910)

BY

L. G. CHIOZZA MONEY, M.P.

ELEVENTH EDITION

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

First Published (5s. net) October 1905
Second Edition December 1905
Third Edition July 1906
Fourth and Cheaper Edition (1s. net) January 1908
Fifth Edition (1s. net) February 1908
Sixth and Seventh Editions (1s. net) March 1908
Eighth Edition (1s. net) May 1908
Ninth Edition (1s. net) December 1909
Tenth Edition, Revised (5s. net) March 1911
New and Cheaper Issue (1s. net) June 1913
Eleventh Edition (5s. net) March 1914

TO MY WIFE

PREFACE TO THE TENTH (REVISED) EDITION, 1910

T HE present edition of "Riches and Poverty" revises my estimates of the
distribution of the wealth of the United Kingdom down to the year
1908. The effect of the revision is to show that in the five years that have
elapsed since this work was first published, the distribution of wealth has
grown even more unequal. The comparative stationariness of money wages
of late years is a fact upon which the labourers themselves, and not less the
nation of which they form by far the greater part, are to be commiserated. I
write at a time when a great deal of discontent is becoming evident amongst
large masses of the population; it may be well for those, and they are many,
who have written in condemnation of that discontent, to ponder the
following pages, and in particular to compare the profits recorded by the
Inland Revenue Commissioners with the evidence as to wages collected by
the Labour Department of the Board of Trade.
My own view of the subject is, that the massing of capital in large units
has so considerably strengthened the hand of capital in its dealings with
labour that in recent years Trade Unions have comparatively lost much
ground. To-day the masters in many of our industries can exercise collective
powers much more effectively than Trade Unions. Combination amongst
employers in some trades has reached a point at which it has become
possible to rule alike the price of products and the price of labour.
While since 1900 nominal or money wages have been at a standstill, the
cost of living has continued to rise. The retail cost of food in London rose 9
per cent. in 1900-1908. Therefore British real or commodity wages have
fallen heavily since 1900. A London platelayer, when he has the privilege of
working seven days a week, can earn 21s. a week in 1910 as in 1900, but
the real value of the 21s. has fallen by about 9 per cent.; in effect, that is, he
earns 1s. 10d. a week less than in 1900. Now 19s. 2d. is not a just wage for
a London platelayer.
The statements which were made in the 1905 edition of "Riches and
Poverty" proved to be uncomfortable reading for many, and I have now a

great many books on my shelves in which they have been discussed. The
attempts to refute them have entirely failed. It is now generally accepted
that the number of Income Tax payers is approximately what I stated it to
be, and the increase of Income Tax assessments indicates that my estimates
of the income of the rich did not err on the side of liberality.
Work such as is attempted in these pages ought, of course, to be entrusted
to the hands of a permanent Census Department, empowered to collect
information, and instructed to analyse and diffuse it. In the absence of such
a Department, and in the lamentable condition of our national statistical
records, the conclusions of a private investigator are only too likely to be
called in question by those who do not stomach what he has to say. It may
be said that the disagreeable estimates I have presented in the frontispiece
of this volume rest upon private authority, and that they cannot be accepted
without great reservation. I should like to direct attention, therefore, to a
series of facts which are official, which cannot be denied, and which rest
upon the basis that they represent masses of property actually taxed.
I refer to the estates which pass at death in the United Kingdom year by
year, and which are valued for the purposes of the death duties. The
following facts, to which I called attention for the first time in "Riches and
Poverty," can be easily memorized, and every one ought to know them.
Year by year, as regularly as the seasons, properties pass at death in the
United Kingdom, free of all debts, absolutely net, to the value of, in round
figures, £300,000,000. Of this £300,000,000, the aggregate of
approximately 80,000 separate estates, as much as £200,000,000, or
thereabouts, is left by about FOUR THOUSAND (4000) PERSONS.
I repeat that these figures are not my estimates, but the official figures
ascertained and published by the Inland Revenue Commissioners. They can
be verified by any reader of this book by reference to the latest Official
Report of the Commissioners of His Majesty's Inland Revenue (Cd. 4868.
Price 1s. 7d.).
Those who are acquainted with the facts know, as Mr Balfour recognized
in reply to me in a debate in the House of Commons on September 13th,
1909, that the official figures I have quoted would be larger but for the

passing of property inter vivos in avoidance of the death duties. But, to take
the figures as they are, an under statement of the wealth of the rich, I put
this question to those who come to consider the estimates I have made:
If, in the United Kingdom, out of £300,000,000 a year passing at death,
as much as £200,000,000, or two-thirds of the whole, is left by only 4000
persons, does it not follow, as the night the day, that the distribution of the
national income must necessarily proceed on some such lines as those
estimated in the frontispiece to this volume?
And with that question I once more issue these pages to the public.
L. G. CHIOZZA MONEY
Chaldon, Surrey
October 1910

CONTENTS
PAGE

BOOK I
THE ERROR OF DISTRIBUTION

CHAPTER I
Thoughts arising out of a Great Controversy
The false assumption that customs duties can determine
prosperity 3
Evidences of riches and poverty as "arguments" 4
"Thirty per cent. of our population underfed" 5
A question of distribution 7

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

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

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

CHAPTER V
The National Accumulation
Estimate of the accumulated wealth of the United Kingdom 62
Public property, Imperial and local 65

The national and local debts private mortgages upon public
assets 67
British wealth in private hands 68
Foreign wealth in British hands 71
Average wealth per head 71

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

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

CHAPTER VIII
Those who Work and whose who Wait
Effect of congestion of capital upon distribution 93
Practical examples of the distributive process 94

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

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

CHAPTER X
Part of their Wages
Accident and disease concomitants of wages 125
Laxity of factory inspection 127
Accidents in factories and workshops 127
Diseases of occupations in factories and workshops 129

Accidents in mines and quarries 130
Accidents on railways 136
Accidents on ships 137
Accidents in certain engineering works 137
Aggregate of reported accidents and cases of industrial
disease 138
Phthisis as an industrial disease 139
Physical deterioration not an accident 140

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

CHAPTER XII
The Waste of Capital

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

BOOK II
TOWARDS ORGANIZATION

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

CHAPTER XIV
The Nation's Children
The renewal of the race 173
The verdict of anthropology 173
Injustice before birth and after 176
The innocence of the Factory Act 178
The Physical Deterioration Committee on reasonable care of
the infant 180
The mothers of the future 181
The mothers of the present 181
Women health inspectors 182
The public medical service 183

The small cost of a public maternity fund 184
A Jewish example 185
The birth of a child a matter of national moment 187
Neglectful parents must be punished 187
The segregation of the unfit 187
Twenty-five million births in twenty years 189

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

CHAPTER XVI
The Home
An increasing population in a diminishing number of centres 209
Our many poorhouses 210
The years taken from the lives of the poor 211
Crowding and overcrowding 212
Tenement statistics 212

Overcrowding on area has increased 213
Not only death and disease but ugliness to be fought 215
Where further building should be prevented 217
The housing question as a land question and as a capital
question 218
The community should be landlord 218
The taxation of land on its selling value would assist in
municipalizing area 219
The small area needed to rehouse our city populations 220
The municipality must plan its extensions in advance 221
Some examples from Germany 222
An example in the United Kingdom 223
How land and capital enter into the housing problem 229
National housing loans needed 231

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

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

CHAPTER XIX
The Aged Poor
Two million persons over 65 years of age and most of them
poor 272
Mr Thomas Burt's return of aged paupers 273

Mr Ritchie's return of number of paupers relieved during a
year 275
Of the population aged 65 and over, one in three is a pauper 277
Probable number of aged paupers 278
Length of the working life 280
The Charity Organization Society and cost 283
Mr Asquith's Old Age Pension Act 284
First year's working of Old Age Pensions 285
Old Age Pensions at 65 286
286

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

CHAPTER XXI
The Main Instrument of Taxation
Through an Income Tax taxation can be applied according to
"ability" 291
The British Income Tax an ancient impost 291
The so-called "Land" Tax of 1692 was an income tax 292
The "Land" Tax of 1692 and the present Income Tax
compared 295
A graduated Income Tax taxes unearned increment 296
The Income Tax in 1905 described 297

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

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

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

CHAPTER XXIV
Conclusion
Progress in 40 years 330
Some items in material progress, 1867-1903 332
What Dudley Baxter wrote in 1867 333
The poor within our borders to-day are as large in number as
the entire population in 1867 338
The employer the effective schoolmaster 340
A poor government is a weak government 341
Sir Robert Giffen on taxation 341

We must have regard to both palliatives and remedies 342
Public ownership of capital must replace private ownership 343
The substitution of the public shareholder for the private
shareholder not difficult 344
The uplifting of work through the reduction of toil 345
The statesman must take up the tools of the scientist 346
The appeal to the few 348
The appeal to the people 348

Index 351

RICHES AND POVERTY

BOOK I
THE ERROR OF DISTRIBUTION

CHAPTER I
THOUGHTS ARISING OUT OF A GREAT CONTROVERSY

D URING recent years a considerable share of the thoughts of men has
been devoted to the consideration of one part of our fiscal policy,—
that part which is concerned with Customs duties. In public and in private,
on hundreds of platforms and in thousands of homes, the ancient issue has
been debated between those who hold that Customs duties should be
imposed for revenue purposes only and those who contend that Customs
duties may be used as instruments with which to direct wisely the
agricultural, industrial and commercial development of a nation. In the
arguments which have been adduced by both sides in this controversy a
large part has been taken by evidence of the prosperity or want of prosperity
of the United Kingdom, as though Customs policy were the sole factor in
determining the wealth and progress of a people. Blind to the fact that a
wise Customs policy can at best enable a nation to make the most of its
natural advantages, extreme disputants have been engaged on the one side
in piling up incontestable evidences of British wealth and on the other side
in producing equally incontestable evidences of British poverty. The Free
Trader has revelled in import and export, shipping, banking and revenue
statistics, while the Protectionist has reminded us of the existence of
millions on the verge of hunger, of hundreds of thousands of paupers, and
of tens if not hundreds of thousands of unemployed. The Free Trader has
demonstrated that, as a whole, we are a wealthy and a prosperous people.
The Protectionist has been able to throw doubt upon that wealth and
prosperity chiefly because it is an indisputable fact that, whatever may be
true of our accumulated wealth and total income, every British city has its
slums, its paupers and its out-of-works. The Protectionist has been unable to
resist the Free Trade evidence as to the magnificence of our commerce and
shipping and the increasing national income recorded by the Inland

Revenue Commissioners. The Free Trader has had reluctantly to admit the
existence, in our wealthy country, of social disorders and masses of extreme
poverty which are terrible blots upon our prosperity. If one side has dwelt
almost exclusively upon signs of wealth and the other side almost
exclusively upon evidences of poverty, what else could be expected when a
highly complicated problem became the shuttlecock of faction? Even
honest politicians become afraid to make statements which may be treated
as "admissions" when party feeling runs high. The more should we
welcome the notable utterance of Sir Henry Campbell-Bannerman at Perth
on June 5th, 1903:
"But I take it (the Chamberlain policy of 'Preference') as confined to
food, and it amounts to this, that the cost of the necessaries of daily life is to
be raised to the people of this country in order that the Colonial producer
may do more business, make larger profit, and the landowner get better
rents. Now the pinch of this does not fall upon the well-to-do. It may be an
inconvenience to a great number of people, but the real pinch of it falls
upon a needier class altogether, who are sadly large among us. What is the
population of the Colonies which I have named? About thirteen millions.
This is the population who will share more or less the benefit of this new
arrangement. In this country we know, thanks to the patience and accurate
scientific investigations of Mr Rowntree and Mr Charles Booth, that there is
about 30 per cent. of our population underfed, on the verge of hunger.
Thirty per cent. of 41 millions comes to something over 12 millions—
almost identical as you see with the whole population of the Colonies. So
that it comes to this, that for every man in the Colonies who is benefited,
one head is shoved under water in this country. I think I might set down that
fact as almost enough of itself to condemn any scheme, however plausible.
Surely the fact that about 30 per cent. of the population is living in the grip
of perpetual poverty is, or ought to be, a sufficient answer to the Prime
Minister's complacent suggestion that we can now afford to try experiments
which fifty years ago were not to be thought of."
These words have been widely used as a reply to the assertion that we are
a prosperous people. Their true meaning is, that while we have acquired
great wealth, and enjoy a considerable national income, that wealth and that
income are not so distributed as to give a sufficiency of material things to

all our population. As for their use as an "argument" for Protection, we have
but to turn to that land favoured of nature, the United States of America, to
find records of poverty fully as distressing as our own.
Mr Robert Hunter, the American sociologist, thus summarises the
poverty of the United States of America: "There are probably in fairly
prosperous years no less than 10,000,000 persons in poverty; that is to say,
underfed, underclothed, and poorly housed. Of these about 4,000,000
persons are public paupers. Over 2,000,000 working men are unemployed
from four to six months in the year. About 500,000 male immigrants arrive
yearly and seek work in the very districts where unemployment is greatest.
Nearly half of the families in the country are propertyless. Over 1,700,000
little children are forced to become wage-earners when they should still be
in school. About 5,000,000 women find it necessary to work, and about
2,000,000 are employed in factories, mills, etc. Probably no less than
1,000,000 workers are injured or killed each year while doing their work,
and about 10,000,000 of the persons now living will, if the present ratio is
kept up, die of the preventable disease, tuberculosis."
We have, then, to thank the fiscal controversy for this: In the belief that
evidence of prosperity, or the reverse of prosperity, is a proof or disproof, as
the case may be, of the wisdom of a particular Customs policy, we have
been reminded at once of our riches and of our poverty. Through the
controversy over that absurd phrase the "balance of trade," worthy
landsmen have been reminded that the United Kingdom possesses half the
world's seagoing ships, and poor clerks have learned with astonishment that
our oversea investments produce over £100,000,000 of profits per annum.
The unemployed workman, drawing from his beneficent trade union the
small allowance with which his own thrift has provided him, and which
barely keeps the wolf from his door, has learned that our imports of food
—"chiefly from foreign countries"—are worth £200,000,000 per annum.
Millions—other people's millions—have become common objects of the
newspaper column, and it is probable that a great part of our population is
now acquainted with the fact that the gross income brought under the
review of the Income Tax Commissioners is about £1,000,000,000 per
annum. It has also, alas, become familiar that our Poor Law expenditure
reaches £17,000,000 a year, and that, even in our best years of trade, many

of our skilled workmen are denied the means of earning their livelihood.
While demonstrating our prosperity the good Free Trader has paused to
write a cheque for a West Ham Distress Fund, or subscribed some shillings
for a children's slum party.
The object of these pages is to help the reader to form an accurate idea of
the distribution of the wealth which results from our industries and
commerce. 44,000,000 people in the United Kingdom work to produce
certain commodities, and a part of this output is exchanged for commodities
produced in other lands. We produce, we export, and we import, and our
home production increased by our imports and decreased by our exports
constitutes a great income which is divided up amongst us in such manner
that some of us are rich and some of us are poor. Let us endeavour to make
concrete our ideas on the subject of riches and poverty, that we make quite
sure what we mean when we speak of the wealth and prosperity of the
United Kingdom.

CHAPTER II
THE NATIONAL INCOME

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

to neglect its market value just as we must neglect that of the poor woman's
apple-pie.
With this reminder as to the production of unexchanged commodities,
which, while important, are yet but an exceedingly small part of the product
of the entire activities of our people, I proceed to an examination of the
money value of that greater part of the product which is bought and sold.
The collection of the Income Tax makes a more or less complete
inquisition into the profits or salaries received or earned by those whose
incomes exceed £160 per annum. Below that limit income tax is not
payable, but a small amount of the income of persons with less than this £3
per week does actually come under the review of the Commissioners.
If we take the figures of the latest period of which we have record, we
find that in the financial year 1908-9 (i.e. the twelve months ended March
31st, 1909) the following particulars of gross incomes were ascertained by
the Inland Revenue Officials (fifty-third Report of the Commissioners of
Inland Revenue, Cd. 5308, p. 105):—

GROSS AMOUNT OF INCOME BROUGHT UNDER REVIEW IN 1908-
9

Schedule A. Profits from the ownership of lands,
houses, railways, mines, etc. £269,900,000
Schedule B. Profits from the occupation of lands
(Farmers' Tax) 17,400,000
Schedule C. Profits from British, Indian, Colonial
and Foreign Government Securities 47,500,000
Schedule D. Profits from Businesses, Concerns,
Professions, Employments, etc., including certain
profits from places abroad 565,600,000
Schedule E. Salaries of Government, Corporation,
and Public Company Officials 109,600,000
£1,010,000,000

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

GROSS PROFITS ASSESSED TO INCOME TAX
(From Inland Revenue Report)[1]

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 [2]
1904-5 912,100,000
1905-6 925,200,000
1906-7 943,700,000
1907-8 980,100,000
1908-9 1,010,000,000

It should be observed that these figures are for gross income, and some
adjustments have to be made before we can arrive at the total income of that
part of the nation which has the mingled pleasure and pain of paying
Income Tax.
From the £1,010,000,000 brought under review in 1908-9, the Inland
Revenue authorities allowed the following deductions before arriving at
taxable incomes:—

(a) Exemptions in respect of incomes under £160
per annum £58,400,000
(b) Abatements on incomes ranging from £160
per annum to £700 per annum 120,300,000
(c) Life Insurance Premiums 10,500,000
(d) Charities, Hospitals, Friendly Societies, etc. 11,800,000
(e) Repairs to Lands and Houses 40,100,000
(f) Wear and tear of Machinery and Plant 22,900,000
(g) Other Allowances 52,700,000
Total Deductions £316,700,000

So that Income Tax in 1908-9 was actually collected not upon
£1,010,000,000 but upon £693,300,000.
But we have not to make all the above deductions in arriving at the actual
income of the income tax paying class. We have only to deduct those items
which are not the real income of that class, viz.:—

(a) Exemptions in respect of incomes under £160
per annum £58,400,000
(d) Charities, Hospitals, Friendly Societies, etc. 11,800,000
(e) Repairs to Lands and Houses 40,100,000
(f) Wear and tear of Machinery and Plant 22,900,000
(g) Other Allowances 52,700,000
£185,900,000

Deducting these items we get:—

GROSS ASSESSMENTS TO INCOME TAX CORRECTED[3]

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

This figure may be compared with the £719,500,000 given on page 11 of
"Riches and Poverty" (1905) for the fiscal year 1902-3. The increase is no
less than £104,600,000 in five years, and this increase is especially
commended to the notice of those critics who have worked so hard to
whittle away a little from my estimates of 1903-4. The onward sweep of the
figures has been magnificent; and accomplished facts now provide the
apologists of the rich with the task of explaining away another
£100,000,000 or so per annum.
To resume, the £824,100,000 arrived at above, handsome figure as it is, is
certainly not complete. There is unquestionably still a considerable amount
of evasion under Schedule D of the Income Tax. The landlords of
Schedule A cannot escape assessment because the tax is paid by occupiers
and deducted from rent, but there is a certain amount of under-assessment.
Under Schedules B, C and E evasion is, for the most part, difficult or
impossible. Under Schedule D,[4] however, a large number of incomes are
understated and many which ought to be assessed escape altogether. It is
almost as true to-day as it was in 1861 that, in the words of Mr Lowe's Draft
Report to the Income Tax Committee of that year, "Schedule D depends on
the conscience of the tax-payer who often, it is to be feared, returns
hundreds instead of thousands, and who is certain to decide any question
that he can persuade himself to think doubtful, in his own favour." It is
recorded by the Income Tax Commissioners in their Twenty-Eighth Annual
Report that when, in 1803, taxation at source was substituted for self-
assessment in the case of all income but business profits, the effect was to
make the produce of the tax at 5 per cent. in 1803 almost equal to that of 10
per cent. in 1799, showing that in the earlier year those who assessed
themselves unaccountably overlooked one-half of their incomes. Dudley

Baxter reminds us in his classical paper on the National Income[5] that in his
Budget Speech in 1853 Mr Gladstone quoted a remarkable instance of
evasion. When Cannon Street Station was constructed, twenty-eight persons
claimed compensation for the loss of annual profits which they estimated at
£48,000. The jury, after considering their case, awarded them £27,000.
They had returned their profits to the Income Tax Commissioners at £9,000!
In recent years the formation of limited liability companies has frequently
revealed profits far in excess of those previously stated under Schedule D.
Whatever figure we allow for such evasion must, in the nature of the case,
be conjectural. In "Riches and Poverty" (1905), p. 13, I estimated evasion
and avoidance as 20 per cent. of the declared profits. Twenty per cent. of
£365,000,000 (the profits of "Businesses, Professions, etc," assessed under
Schedule D) in 1902-3 was £73,000,000. We have since had remarkable
proof of the reasonableness of this estimate. In 1907-8 the gross
assessments to Income Tax rose by £36,000,000 (see p. 11). There is little
doubt that part of the rise was due to Mr Asquith's enactment (Finance Act,
1907, Clause 19) differentiating between earned and unearned incomes on
the condition that earned or partly earned incomes up to £2,000 a year
were declared by their owners. For the financial year 1907-8 does not
include the profits of the good year 1907 which (see Chap. 21) were not
assessed under our averaging system until 1908-9. It was the new personal
declarations which led to the revelation of income hitherto escaping tax,
and part of the £36,000,000 rise in assessments in 1907-8 is undoubtedly
part also of the estimate of £73,000,000 escaping tax which I made in
"Riches and Poverty" (1905). For 1908-9, therefore, I reduce my estimate of
income escaping tax accordingly. I now take it as £60,000,000 in 1908-9.
Another point for consideration is the amount of profit received by
persons in this country from places abroad. It is exceedingly difficult to tax
the whole of such profits. In 1908-9, £88,800,000, made up as follows, was
ear-marked by the Commissioners as profit received from abroad:—

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

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

The total profit received or receivable yearly in this country from oversea
investments it is impossible to estimate precisely, but there is good reason
to believe that it is not less than £140,000,000. It should not be imagined,
however, that the whole of the difference between this sum and that ear-
marked by the Commissioners escapes assessment. Undoubtedly some of it
eludes taxation, but a considerable sum, it should be remembered, is
included with ordinary business profits under Schedule D. A few
illustrations will make this clear. Messrs Armstrong, Whitworth & Co. have
a shipyard in Italy the profits of which are received in this country, but are
not distinguished from the ordinary profits of the company in the income-
tax assessment. The same is true of such a firm as Lipton Ld. which owns
extensive tea plantations in Ceylon. The profits made in Ceylon and
remitted to this country are included in and assessed with the general profits
of the business. There are a large number of firms which similarly own
foreign or colonial property or branches which are organic parts of their
businesses and are often the sources of their materials. When allowance is
made for these facts it is probable that some £115,000,000 of oversea
profits (including the nearly £90,000,000 or so actually ear-marked) are
assessed to income tax, leaving but about £25,000,000 unassessed.
Accepting these figures, we arrive at the following estimate of the total
income enjoyed by those persons who have over £3 per week:—

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

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

The foregoing figures relate to the fiscal year ended March 31st, 1909,
the latest period for which detailed figures are available.
It is necessary to point out again that while this fiscal year 1908-9
covered the assessment of the calendar year 1907, which was a year of great
profit-making, it did not fully assess the profits of that boom year. Under
Schedule D of the Income Tax the profits assessed in 1908-9 were the
profits of the three years 1905, 1906, and 1907. That is to say, the figures
just arrived at, £909,100,000, are an understatement of the true aggregate
incomes of those having upwards of £160 a year in 1907. The actual income
of the income tax payers in 1907 greatly exceeded £909,000,000.
In "Riches and Poverty" (1905) my equally conservative estimate of the
income tax payers' aggregate income for 1903-4 was £830,000,000. We
therefore get the following comparison:—

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

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

And this remarkable growth in five years is shown in spite of the fact that
I have allowed for £13,000,000 of income tax assessment as being due to
increased severity of collection, for I have assumed that £13,000,000 more
of existing home profits were revealed in 1908-9 than in 1903-4.
Now let us turn to the incomes which do not exceed £160 a year, and
which, therefore, are not assessable to income tax.
First of all, we have the class of small incomes which lie between the
manual workers and the income tax payers. We cannot hope, in view of the
poverty of the information which our present Census methods place at our
disposal, to estimate this part of the national income with any degree of
confidence, and we can at best arrive at a rough approximation. I estimate
that in 1908, of our "occupied" population, about 3,100,000 were neither
income tax payers on the one hand nor manual labourers on the other hand.
That is to say, they were petty tradesmen, civil servants, clerks, shopmen,
travellers, canvassers, agents, teachers, farmers, inn-keepers, lodging-
house-keepers, pensioners, and so forth, whose profits or salaries are below
£3 per week. At what rate can we estimate their average income?
The total includes a very considerable number of young persons between
10 and 20 years of age. The teachers, some 250,000 in number, include
pupil teachers of both sexes whose remuneration begins at a few shillings
per week, and as a whole the teaching profession is wretchedly paid. The
commercial and law clerks, some 500,000 in number, include juniors, office
boys, and poorly paid girl typists. As to shopkeepers, there is an
exceedingly large number of these distributing agents whose incomes are of
the slenderest dimensions. Unfortunately we do not know how many shops
in the United Kingdom have an annual value of less than £20, but their
number must be very great, and the petty tradesmen who keep them have to
work hard for poor returns. We have also to remember the quite
considerable number of shops which are branches of great distributive firms
and managed by shopmen with small salaries. As to shop assistants in
general, their salaries are exceedingly small. I am informed by the National
Amalgamated Union of Shop Assistants, Warehousemen and Clerks that the
average male assistant "living in" gets from £25 to £30 per annum plus
"premiums" and board and lodging, while "living out" the average is about

£74. Grocery and boot salesmen in the shops of big distributing companies,
who often are not required to "live in," get from 20s. to 30s. per week. The
wages of the "managers" of shops are sometimes as low as 25s. per week.
As for the value of the "living in," this may be illustrated by the fact that in
a certain West of London house, where "living in" is the rule, a man applied
for permission to "live out." He was told that he could do so, but that only
£5 per annum extra could be allowed him. In a return to the Board of Trade
for the purpose of statistics, the same employer would doubtless value the
same "truck" at £30 or £40 per annum. I have before me the wages paid to
the young women who work for a great multiple shop firm with 200 shops;
they range from 3s. to 11s. per week!
Passing to the class of commercial travellers and canvassers, there is
perhaps no calling in which earnings vary so greatly. While there are a
number in the income-tax class, there are thousands of men included in the
class we are now considering who live on "commission only," and
thousands more who are paid by generous employers 15s. to 25s. per week
plus a small commission. Advertisement and book canvassers are engaged
upon widely varying terms, and many of them have a very precarious
livelihood.
In "Riches and Poverty," edition 1905, I wrote: "Nearly the whole of the
farmers of the United Kingdom earn less than £160 per annum. Out of a
total profit of £17,500,000 as much as £11,000,000 is excused on the
ground that income is below £160. This £17,500,000 is the annual income
of an uncertain number of the larger farmers, probably as many as 300,000,
which gives an average income of about £60 per annum! In 1902-3, 302
farmers elected to have their actual profits assessed under Schedule D. They
were assessed at £10,974, which gives an average of only £37 per annum.
These 302 farmers paid an aggregate rental of £116,259!"
These remarks did not take sufficient account of the under-assessment of
farmers' profits under Schedule B. It would probably have been nearer the
mark to take one-half of the rental paid rather than the official one-third as
representing farmers' profits. If we did so, the profits of 300,000 farmers
would come out at say £26,000,000 instead of £17,500,000, and the average

profit would run to £87 per annum. Even this correction, however, would
leave the great majority of our farmers under the £160 income tax line.
These notes on some of the largest classes of persons which go to make
up the order of incomes immediately under consideration will serve to show
that we are dealing with working men and working women whose earnings
are exceedingly small. It should also be remembered that many of them are
subject to losses from terms of unemployment. Clerks and the poorer
travellers have little security of tenure, and at any given time there are many
out of work. Hundreds of applications are commonly received in reply to
single advertisements for clerks and travellers. To the petty tradesman bad
trade does not spell "unemployment," but it often spells keeping a shop
which does not keep its proprietor for many months.
Taking everything into consideration, and remembering that no large
incomes are introduced to weight the average, the upper limit being as low
as £160 per annum, I do not think we can estimate the average income of
the 3,100,000 persons at more than £75 per annum, and I should put the
figure lower if I did not assume that a certain amount of interest is drawn by
some members of the group. This estimate gives £232,000,000 as the
annual income of those who are not "manual" workers, but whose incomes
are not assessed to income tax because they are less than £3 per week.
I have thus assigned to these members of the lower middle classes no
greater earning power than they possessed in 1903. I think I am well
advised in this. As will be seen later, wages have been almost stationary of
late, and there is no reason to believe that clerks, commission men, etc.,
have fared better. Even as I write there comes to me a letter from a man
whom I employed when editing a newspaper some years ago. He says
(August 1910), "My present wage is 25s. per week, with no allowance for
lodging out when doing country work. It is easily understood that this is not
a sum which allows of luxuries for the present or provision for the future."
He is now a directory canvasser, one of thousands in the employ of a large
firm of publishers.
Since these pages went to the printer, a Committee of the British
Association has issued a Report (1910) on the group of incomes just
referred to which largely confirms the conclusions I presented in 1905. The

Committee arrive at an average earned income of £71 against the £75 which
I consider to cover both earned and unearned incomes. They treat of
4,000,000 people where I treat of 3,100,000, but that is because, while I
exclude manual labourers as a class, the Committee include many manual
labourers. Thus the Committee include sweeps in this intermediate class,
while I include them with the manual workers whose earnings we shall next
consider.
We now come to the largest class of the working population, the "manual
workers" commonly so called.
Including persons of both sexes and all ages, I estimate from the census
returns the number of manual workers in our population of 44,500,000 at
15,500,000. This number includes, in addition to all those engaged in
industrial, agricultural, and domestic service, soldiers, sailors, policemen,
and postmen.
In 1886 the Board of Trade conducted the only Census of Wages made in
the United Kingdom prior to 1907. (We have not yet had a report on the
later Census.) Sir Robert Giffen, who in his then capacity as Assistant
Secretary of the Board of Trade in charge of the Commercial Department,
directed the Census, describes in his General Report issued in 1893 (C.
6889) the method adopted. Schedules were sent out to employers, after
careful consideration of the circumstances of each industry, specifying the
various occupations of each trade and asking for details as to rates of
wages, the numbers employed at each rate, the hours of labour, and so forth.
As to industrial employment generally the following trades were
investigated: Cotton, woollen, worsted, linen, jute, hemp, silk, carpet,
hosiery and lace manufacture, smallwares, flock and shoddy manufacture,
coal and iron mines, metalliferous mines, paraffin oil works, slate mines
and quarries, granite quarries and works, stone quarries, china clay works,
police, construction and care of roads, pavements and sewers, gasworks,
waterworks, pig-iron manufacture, general engineering, iron and brass
foundries, iron and steel, shipbuilding (iron and wood), tin plate
manufacture, saw mills, brass and metal wares, cooperage works, coach and
carriage building, boot and shoe making, breweries, distilleries, brick and

tile making, chemical manure manufacture, and railway carriage and wagon
building.
The details obtained related to 355,838 men, 80,253 boys, 151,263
women and 48,772 girls, and were considered by Sir Robert Giffen to be
"representative of, perhaps, three-fourths of the manual labour classes of the
United Kingdom." He also expressed the opinion that the "broad results
shown by the census summary would not be sensibly modified by including
the great mass of other employments not comprised in that summary."
In the following table the Board of Trade summarised the proportion of
men, women, boys and girls working at various rates of wages, in 1886, in
the industries which I have mentioned:—

WAGES IN 1886. THE BOARD OF TRADE SUMMARY OF RATES OF
WAGES
(NOT ACTUAL EARNINGS) DERIVED FROM THE DETAILED
EXAMINATION
OF 38 SELECTED INDUSTRIAL OCCUPATIONS
Men. Women. Boys. Girls.
Per Cent. Per Cent. Per Cent. Per Cent.

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

It will be seen that the average rate of men's wages came out at 24s. 9d.
per week or, say, £64 per annum in a year of constant occupation. The
weighted average rate for both sexes and all ages comes out at 17s. 6d. per
week or, counting 52 weeks' work in the year, £45. 10s. per annum.
The Board of Trade also investigated the rates of wages in other
occupations, and the following table compares the £64 of the adult males in
general industries with the rates of wages paid to adult males in (1) railway
service, (2) building, (3) mercantile marine, (4) Royal Navy, (5) Army, (6)

domestic service, (7) asylums, (8) hospitals (in 1886 unless another date is
given):—

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

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

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

by including the great mass of other employments not comprised in that
summary."
In January 1893 Sir Robert Giffen gave evidence before the Labour
Commission and submitted the facts I have detailed. He prepared a general
estimate of the proportion of the national income then taken by the wage-
earning classes, and his evidence on this point (questions 6909 to 6914) is
summarized in the following table:—

EARNINGS OF MANUAL LABOURERS IN 1886
(Sir Robert Giffen's estimate for the Labour Commission)
Annual Average
Number. per Wage-Earner. Aggregate Earnings.

Men 7,300,000 £60 0 0 £439,000,000
Women 2,900,000 40 0 0 118,000,000
Boys 1,700,000 23 8 0 46,000,000
Girls 1,260,000 23 0 0 29,000,000
13,200,000 £48 0 0 £633,000,000

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

the average about 50 weeks out of 52, and were paid at the average rate of
£64 per annum!
In 1866 Leone Levi, in estimating the manual workers' earnings, assumed
that four weeks per annum were lost. Dudley Baxter in 1867 pointed out, in
criticism of Leone Levi, that if four weeks' "play" were all that need be
allowed "England would be a perfect Paradise for working men."[6] Dudley
Baxter, in view of the circumstances of his day, allowed ten weeks for
"play" in making his estimate, and there can be no question that he was
nearer the truth than Levi. At the present day the level of employment is
very much the same as it has been for the past forty years, while sickness,
accidents, and the weather are still with us. We need not wonder, then, if
Professor A. L. Bowley, who has given the subject of wages so much
attention, bases his estimates upon the loss of six weeks' work per annum
through sickness and holidays, and makes an additional allowance for
unemployment, while also assuming that 10 per cent. of the working
population only get casual or irregular work, bringing them in about half the
amount shown in the Wage Census.[7]
If the estimate given to the Labour Commission had allowed for six
weeks' "play," the average earnings of men, women, boys and girls would
have come out at £40. 5s. per annum instead of £48, and the aggregate
earnings, therefore, at much less than £633,000,000. Leone Levi's estimate
for 1884, allowing for only four weeks' play in the year, was £521,000,000.
This figure is too large, but it is over £100,000,000 less than that of Sir
Robert Giffen.
I now take the Wage Census figure of 1886 as a basis and correct it for
the upward movement of wages since that date by the wage index numbers
of the Board of Trade (Cd. 4954, which slightly corrects the index numbers
of Cd. 1761, used in "Riches and Poverty," 1905 edition, p. 24), which are
based on the mean of over 150 rates:—
Average Wage
(Men, Women and Board of Trade Index
Year. Children) per Week. Number 1900=100. *
s. d.
1886 (Wage Census figure) 17 6 82.86

1900 " " 21 1 100.00
1908 " " 21 3 101.02

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

We thus arrive at 21s. 3d. as the average weekly wage of the manual
workers in 1908. There is much reason to believe that this estimate errs on
the side of liberality. It is unfortunate that we have not a compulsory wage
census, and the method of estimation used here can pretend to no more than
approximation. It neglects the important fact that between 1886 and 1908
the ranks of women and child workers have swollen at the expense of adult
male workers. The 15,500,000 (estimated) manual workers of 1908
consisted as to a larger proportion of women and children than the
13,200,000 (estimated) manual workers of 1886. I regard the 21s. 3d.,
therefore, as the most liberal figure that can be put forward as the average
earnings of the men and women and child workers of the United Kingdom
in 1908.
We have now to decide what allowances should be made (1) for the great
army of casual, incompetent, and aged or ageing workers who figure in the
census returns as following definite occupations, and (2) for the loss of time
through unemployment, sickness, accidents, stress of weather, strikes,
lockouts, "bank" and other holidays, etc., in the case of the remaining
workers.
With regard to the first item, I do not think we are justified in estimating
the incompetents and casuals at less than 1,000,000 out of the 15,500,000.
For the purposes of the present estimate, I assume that these 1,000,000
workers earn, on the average, £25 per head per annum, or an aggregate of
£25,000,000. My view is that this is a liberal estimate of the earnings of
what may be termed the camp-followers of the industrial army.
With regard to the remaining 14,500,000, we have to form an estimate of
the amount of time lost per annum through voluntary or enforced leisure.
No certain information exists, and the widest differences of opinion have
been expressed on the subject. As I have said above, Dudley Baxter took ten

weeks; Leone Levi took four weeks; Mr A. L. Bowley takes six weeks plus
a further allowance for unemployment.
The Board of Trade, in their recent examination of fluctuations in
employment, made an analysis from the records of the Amalgamated
Society of Engineers, combined with information supplied by employers, of
the time lost in the engineering trade. They came to the conclusion that, in
an average year, perhaps 8 per cent. of working time was lost from all
causes, and expressed the opinion that in a good year the loss might fall to 4
per cent. and in a bad year rise to 15 per cent. or more (Cd. 2337, p. 101).
This would mean, for the engineering trade only, a loss of time varying
from only two weeks in the year to as much as eight weeks or more.
In other employments the widest variations exist. There are the quite
regular employments, such as the army, the navy, the postal service, the
police service, and, for the greater part, the railway service. There are
violently fluctuating employments, such as the building trades and the
shipbuilding trades. In all alike, sickness takes its toll, and unemployment
arises from accidents, from disputes, from "drink," and from seasonal
influences and depression, while, on the other hand, overtime occasionally
goes to swell the aggregate earnings.
I make the assumption that the average working year of the 14,500,000
remaining wage-earners consists of 44 weeks. Applying the average wage
already arrived at (21s. 3d. per week), we get an average annual earning of,
say, £46. 15s., which gives us £678,000,000 as the probable aggregate
earnings of the 14,500,000 workers. Adding the £25,000,000 assumed to be
earned by the remaining 1,000,000, we arrive at £703,000,000 as the total
earnings of the manual labourers in 1908.
It is probable that this calculation does not take sufficient account either
of the changes of occupations since 1886, or, as has been already pointed
out, of the changes in the respective proportions of men, women and
children employed. The average wage of the 1886 Census, taken as the
basis of the calculation, was, it is necessary to insist, exaggerated by the
omission of the most ill-paid workmen, while the returns upon which it was
based, framed as they were by employers, are only too likely in a proportion
of cases to have put the wages paid in the most favourable light. The

employers again, who filled in the forms, were only some 75 per cent. of
the firms applied to by the Board of Trade, and it is a fair inference that
those who neglected to reply had no excessive pride in the records of their
wage-sheets. I submit, therefore, that as the 1886 average wage figure is a
liberal estimate,[8] the figure which I have deduced from it does not, in all
probability, err on the side of under-estimation.
Professor Bowley estimates the total paid in wages in 1901 as
£705,000,000,[9] and the Board of Trade in the Fiscal Blue Book of 1903
(Cd. 1761) say:—
"From investigations based on the Board of Trade Census of Wages
(1886) combined with the recorded changes of wages since that date and
the distribution of the working population among various industries as
shown in the census returns, the total wages bill of the United Kingdom has
been estimated at between £700,000,000 and £750,000,000, according to
the state of employment."
The estimate which I have given, therefore, differs but little from those of
Professor Bowley and the Board of Trade.[10] I prefer to use the smaller
figures on several grounds. In the first place, the allowance for "play" is a
conservative one. In the second place, I have the gravest doubts as to the
propriety of including in the estimates of the wages of domestic servants,
sailors, and others, an allowance for the value of "lodging," as is done in the
figures used. To include so many shillings a week for the accommodation
afforded by a seaman's bunk or a general servant's fraction of an attic is to
flatter "earnings" out of all resemblance to the truth. The free cottages and
other allowances to agricultural labourers are often of a scarcely marketable
character. We may be justified in valuing an unhealthy hovel at 1s. 6d. per
week, in view of the fact that the labourer, if he had it not, would need to
pay rent elsewhere, but in too many cases the "cottage" is fit not for
inhabitation but for demolition. In the third place, no allowance is made for
the excessive rents paid by workmen in London and other large towns.
These rents are really part of the working expenses of the wage earners, and
there is as good ground for making deductions on account of them as there
is for deducting wear and tear of machinery in the case of income-tax
incomes.

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

THE NATIONAL INCOME IN 1908

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

It will be seen that the income tax exemption limit of £160 per annum
splits the national income into two almost equal parts. Of a total income
amounting to £1,844,000,000 in 1908, those with over £160 per annum took
£909,000,000, while those with less than £160 per annum took
£935,000,000.
[1] Figures examined in "Riches and Poverty" (1905), Chapter 2.
[2] In "Riches and Poverty" (1905), Chapter 2, I estimated this figure at
£900,600,000.
[3] It has been too freely assumed in calculating the national income that the
gross assessments represent actual income.
[4] As Schedule D is an exceedingly important gauge of national prosperity,
it may be well to remind the reader of its precise application. It is a tax upon
all income derived from trades, industries and professions, and from all
sources not specified under the other four Schedules. Profits from businesses
established in places abroad are assessable under it. The assessments are
made annually, and are generally based upon the mean of the income received
during the preceding three years. Fuller particulars will be found in Chapter
21.
[5] "National Income." R. Dudley Baxter. Macmillan & Co. 1868.
[6] "The National Income," Dudley Baxter.

[7] "Economic Journal," Sept. 1904. Page 458.
[8] Take, for example, the boot and shoe trade. The Wage Census for 1886
(Cd. 6889, p. xiii.) gives the average earnings in boot and shoe factories (both
sexes and all ages) as £48 per annum. In 1908, more than twenty years after,
the Board of Trade "Labour Gazette" shows, from employers' returns, that (in
a July week) 60,337 boot workers took only £58,147 in wages, which is about
19s. per week or £49, 8s. in a year of 52 such weeks. With regard to this trade,
it is clear that either the 1886 estimate was too liberal, or that earnings have
been practically stationary in the twenty years.
[9] "Economic Journal," September 1904.
[10] If, however, the reader prefers to rely upon the larger estimates he will
find that the general conclusions of this and the following chapter remain
practically unaltered.

CHAPTER III
DISTRIBUTION OF THE NATIONAL INCOME

T AKING the population of the United Kingdom, 1908, at 44,500,000,
and the total income at £1,844,000,000, we get an average income per
head of about £40.
Thus, if the income of the nation were equally distributed amongst its
inhabitants, a family of five persons would enjoy an income of about £200
per annum.
But how is the £1,840,000,000 actually divided amongst our people?
Contrasts between great riches and extreme poverty are every day presented
to our eyes. Can we do anything to reduce to a definite shape our vague
conceptions of riches and poverty?
Investigation of the material at our disposal has convinced me that it is
hopeless to do very much in the way of detailed classification of incomes.
Our census methods are ridiculously inadequate, and our inquisition into
individual incomes is but partial. It is possible, however, to depict the
subject of distribution in broad outlines with considerable accuracy.
As we have already noticed, the £160 line at which assessment to income
tax begins, divides the national income into two almost equal parts. Those
persons who have more than £160 per annum enjoy an aggregate income of
£909,000,000. Those persons who have less than £160 per annum enjoy an
aggregate income of £935,000,000.
Let us endeavour to discover how many persons have an income of £160
and upwards.
A certain amount of confused light is thrown on the subject by the returns
of the Inland Revenue Department. Under Schedules D and E, which relate
to profits from "Businesses, Concerns, Professions, Employment, etc.," to
use the official language,[11] the commissioners give us a record of the
number of individual assessments which are made. A summary of these is
as follows:—

INCOME TAX. SCHEDULES D AND E.
PROFITS FROM BUSINESSES, CONCERNS, EMPLOYMENTS, ETC.
Number of Gross Income
Assessments. Assessed.

(a) Persons not employees 416,661 £109,900,000
(b) Firms (number of partners
not known) 53,663 80,500,000
(c) Public Companies (number
of shareholders
unknown) 37,937 291,000,000
(d) Local Authorities 11,985 24,000,000
(e) Bankers, Coupon dealers,
etc., deducting tax on
behalf of the Revenue not available 33,100,000
(f) Employees (Schedule D) 114,074 27,100,000
(g) Employees (Schedule E) 471,564 109,600,000
1,105,884 £675,200,000

We have thus a record of 1,100,000 assessments, but these assessments
do not always correspond to individual tax-payers.
Item a, "Persons not employees," gives us the fact that 416,661
individuals are taxed in respect of trading or professional profits. Item b
reveals the existence of 53,663 firms with an unknown number of partners.
Item c covers a great many large and small shareholders. Item d covers a
large number of investors who have lent money to local bodies. Item e
similarly covers many persons of property deriving interest from various
securities which are taxed "at the source." In items f and g each assessment
refers to an individual.
Further, these 1,100,000 assessments are made under Schedules D and E
only, which cover but £675,000,000 out of a total gross assessment to

income tax of £1,010,000,000 in 1908-9. There remain to consider
Schedules A, B, and C.
A moment's reflection will show that from these three schedules, which
deal respectively with realty, farmers' profits, and government securities, we
can expect little assistance. The assessments under Schedule A are made
upon tenants, who in the majority of cases are not the actual and ultimate
tax-payers. The number of assessments is enormous; we do not know it, but
it would not help us if we did, for it has no relation whatever to the number
of property owners. Under Schedule B, as is explained elsewhere,[12] there
are few income tax payers. Under Schedule C certain interest from home
and foreign government securities is taxed, but not by assessment on the
actual tax-payers.
To sum up, the number of assessments to income tax is not known, and,
if it were known, it would be very much greater than the number of
individual tax-payers. Two-thirds of the income tax is collected, not directly
from the persons who owe the tax, but indirectly or "at the source." It is
possible for an individual tax-payer to appear more than once in each
schedule. With delightful humour the Inland Revenue Commissioners give
a hypothetical case of a composite income of £5000 per annum, made up as
follows:—

HYPOTHETICAL COMPOSITE INCOME

Schedule. Amount.

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

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

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

(a) The 416,661 persons not employees have an
average income of £260
(f) The 114,074 employees taxed under
Schedule D have an average income of 230
(g) The 471,564 employees taxed under
Schedule E have an average income of 230

Many of these individuals have other sources of income beside their
earnings, but the low mean income of each class remains remarkable when
that fact is taken into account. Classes f and g cannot possibly deceive the
Income Tax Commissioners as to their incomes, for the law compels
employers to tell the authorities exactly what their employees earn. With an
average as low as £230 it is clear that the majority of salaries lie between
the exemption limit of £160 and £200 a year. The under payment of the
middle class stands revealed.
If the reader takes note of these facts he will be less surprised by the
results of the analysis to which we will now proceed.
We now turn to what information is available upon the subject of
individual incomes. So far as the poorer classes of income tax payers are
concerned, some clear light is afforded by the Income Tax Commissioners
in a table showing the number of persons claiming abatements. This table,
which is of great importance, is given on page 37.
These abatements are claimed by certain individuals who satisfy the
Commissioners that their entire incomes, from every source, lie between
£160 and £700 per annum. Thus we get definite information that in 1908-9,
779,552 individuals declared their incomes to be within these limits.
The record of the number of abatements is worth particular attention. In
1893-4 the limit of exemption was £150. In the following year the

exemption limit was raised £10 to £160, and for the first time an abatement
was allowed upon incomes up to £500. In 1898-9 abatements were
introduced on incomes up to £700.

INDIVIDUAL INCOMES BETWEEN £160 AND £700
Defined by claims for abatements
Abatements
£160 on £100 on £150 on £120 on £70 on
£120 on
incomes incomes incomes incomes incomes
incomes of
Year. exceeding exceeding exceeding exceeding exceeding
under £150
£160 but not £400 but not £400 but not £500 but not £600 but not
and under
exceeding exceeding exceeding exceeding exceeding
£400.
£400. £500. £500. £600. £700.
1893-4 509,397
1894-5 436,325 13,010
1895-6 Exemption 449,003 20,375
1896-7 limit and 464,017 23,492
1897-8 abatement 481,306 26,056
1898-9 altered— 495,791 31,669 11,115 3,940
1899-1900 see next 515,680 Abatements 38,055 16,861 6,714
1900-01 column. 530,014 extended— 42,123 20,520 8,647
1901-02 554,727 see 46,967 23,899 10,490
1902-03 575,444 following 49,610 26,737 11,982
1903-04 603,338 columns. 51,922 27,777 12,879
1904-05 612,548 53,384 29,227 13,483
1905-06 622,437 56,305 31,100 14,886
1906-07 628,818 58,704 33,150 16,607
1907-08 638,482 64,560 39,166 22,272
1908-09 648,310 66,523 40,721 23,998

Rate of
Total Annual Increse in
Income Tax.
Year. Abatement No. of Abatements
Pence in the
Granted. Granted.
£.
1893-4 509,397 7
1894-5 449,335 8
1895-6 469,378 20,043 8
1896-7 487,509 18,131 8
1897-8 507,362 19,853 8
1898-9 542,515 35,153 8
1899-1900 577,310 34,795 8
1900-01 601,304 23,994 12
1901-02 636,083 34,779 14
1902-03 663,773 27,690 15
1903-04 695,916 32,143 12
1904-05 708,642 12,726 12
1905-06 724,728 16,086 12
1906-07 737,279 12,551 12
1907-08 764,480 27,201 9 to 12
1908-09 779,552 15,072 9 to 12

It will be seen that since 1897-8 there has been a rapid increase in the
number of abated incomes. This has been caused not by the sudden growth
of incomes of this class, but by (1) the abatements being better understood,
and (2) heavier taxation making it better worth while for individuals to
claim the abatements. With the income tax at 1s. and 1s. 3d. it became
worth while to fill up the form. We have, then, to thank the late war, and the
increased taxation which followed it, for putting at our disposal a fairly
complete record of the number of individual incomes between £160 and
£700. Probably the record is still incomplete, and we must make an
allowance for the fact. It is probable also that a certain number of persons of
small income who ought to pay tax escape assessment. Both counts,
however, are certainly well covered by adding a small percentage to the
number of individual incomes revealed by the claimed abatements. In
"Riches and Poverty," edition 1905, with the actual claims made standing at
about 700,000, I suggested that 50,000 would be a fair estimate of the
number not claiming abatements or who escaped taxation. But in five years
some 80,000 new claims have been made. Over 27,000 of these were made
in 1907-8; this was probably due to the clause in the Finance Act of 1907

compelling all employers, and not companies alone, to divulge their
employees' incomes, thus bringing to light non-assessed incomes and
causing claims for abatements by their owners. My estimate of 50,000 I
should, in view of this further information, raise to 90,000 or 100,000, and
at the present time I am inclined to think that some 40,000 incomes between
£160 and £700 must still be regarded as either escaping tax or as being not
reviewed in the abatements table. We thus arrive at, in round figures,
820,000 as a near approximation to the number of individuals who possess
between £160 and £700 per annum.
The aggregate income of the 779,000 persons granted abatements in
1908-9 is not given in the report. We can, however, estimate it closely, and
this is done in the following table, figures being added for the 40,000
persons whom we have assumed either to neglect to claim abatements or to
escape taxation altogether:—

INDIVIDUAL INCOMES BETWEEN £160 AND £700 (1908)
Estimated
Aggregates.

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

To proceed, we see that some 820,000 persons enjoy an estimated
aggregate income of £274,700,000 per annum. But the total income of the
income tax paying classes we have already seen to be £909,000,000. There
remains therefore, to form an estimate of the number of persons who enjoy
the balance of £634,000,000.
Our best clue to these persons, who individually possess incomes
exceeding £700 a year, is to be found in the number of rich men's houses in
the United Kingdom.
In Great Britain an Inhabited House Duty is levied upon the occupiers of
all houses and residential business premises of an annual value exceeding
£20. The duty being graduated, we obtain records of the houses of Great
Britain classified according to their rentals. The duty is not levied in
Ireland.
The Inland Revenue report gives us the following interesting record.

GREAT BRITAIN ONLY: PRIVATE DWELLING-HOUSES OF £20 AND
UPWARDS: 1908-9
Class of Number of Class of Number of
House. Houses. House. Houses.
£20 and under £25 384,583 £20 and over 1,473,214
25 " 30 256,906 25 " 1,088,631
30 " 41 414,663 30 " 831,725
41 " 50 104,949 41 " 417,062
50 " 61 125,051 50 " 312,113
61 " 80 61,498 61 " 187,062
80 " 100 38,898 80 " 125,564
100 " 150 44,953 100 " 86,666
150 " 200 16,563 150 " 41,713
200 " 300 13,649 200 " 25,150
300 " 400 5,207 300 " 11,501
400 " 500 2,416 400 " 6,294
500 " 600 1,187 500 " 3,878
600 " 700 723 600 " 2,691
700 " 800 472 700 " 1,968
800 " 900 323 800 " 1,496
900 " 1000 176 900 " 1,173
1000 and over 997 1000 " 997

The figures refer to Great Britain only, but the number of income tax
payers in Ireland is small, the payment of income tax in that country, in
1908, being but £996,000 out of £31,860,000 paid by the United Kingdom
as a whole.
If there were a constant ratio between incomes and rentals, and if every
private house contained but one family, the record of houses would be a
sufficient clue to the number of income tax payers; but there is no such
correspondence, and a considerable proportion of the houses are let in
tenements.
In London persons with an income over £160 a year rarely pay a rental
less than £30. In the provinces a rental as low as £25 may sometimes
represent an income tax payer. Many £25, £30, and even £40, and more
houses in London and elsewhere are tenement dwellings. Some notorious

London slums consist of houses of about £30 annual value. In West London
6s. a week, £15, 12s. a year, commands two poor rooms.
Some residential shops, etc., not included in the above list, house income
tax payers, but usually the well-to-do shopkeeper lives away from his shop,
the upper part of which is let to poorer persons.
These considerations make it impossible to deduce the aggregate of
income tax payers from the house record, but it is a suggestive fact that in
Great Britain there were in 1908 only 1,088,631 private houses of £25 and
over. It is clear that the number of persons with incomes exceeding £160 a
year cannot much exceed that figure, even when allowance is made for the
Irish houses not included in the record.
As we have ascertained from the income tax abatement claims the
approximate number of income tax payers between £160 and £700 a year,
we are enabled to neglect the difficult relation of small rentals to incomes,
and to concentrate our attention upon a simpler and more satisfactory
problem, the number of houses likely to be in the occupation of persons
with upwards of £700 a year.
It is submitted that persons in the Metropolis possessing an income of
over £700 per annum are unlikely to occupy private dwelling-houses of an
annual value below £60. Indeed, London householders with incomes below
£700 sometimes pay higher rentals than £60. Against this fact we must,
however, place the existence of many blocks of flats of high rentals which
pay Inhabited House Duty, not per flat, but per block. I think we may
balance the one consideration against the other, and assume that the private
dwelling-houses in London exceeding £60 in annual value roughly
correspond to the number of persons with £700 per annum and upwards.
In the provinces and Scotland rentals are lower, and I think we may
safely draw the line at £50, in view of the fact that we are excluding, as in
London, all residential shops, public houses, etc.
The number of houses in Great Britain of the classes referred to is as
follows:—

PRIVATE DWELLING-HOUSES IN GREAT BRITAIN
LIKELY TO BE IN THE OCCUPATION OF PERSONS
WITH £700 PER ANNUM AND UPWARDS (1908-9)
Annual Value. Metropolis. Rest of England. Scotland.
£50 to £61 76,141 10,739
61 to 80 18,502 37,075 5,921
80 to 100 10,033 24,875 3,988
100 to 150 12,593 28,411 3,949
150 to 200 5,110 10,075 1,378
200 to 300 5,541 7,427 681
300 to 400 2,645 2,437 125
400 to 500 1,408 960 48
500 to 600 748 424 15
600 to 700 504 210 9
700 to 1000 746 212 13
£1000 and
over 826 145 26
58,656 188,392 26,892

If the reader has not before examined the subject he will probably be
exceedingly surprised to find that there are so few rich men's houses, and
therefore so few rich men, in Great Britain. In England and Wales there are
247,048 houses and in Scotland only 26,892 houses likely to contain
persons with incomes exceeding £700 per annum. There are nine times as
many such houses in England as in Scotland. This corresponds closely to
the income tax assessments. The yield of the income tax in Scotland is but
one-ninth or one-tenth of the yield in England.
We have to add an estimate for Ireland. The yield of the income tax in
Ireland is very small, about one-third of the yield of Scotland. If, then, we
add 9000 houses for Ireland, we shall probably be near the truth.

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

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

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

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

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

Between £160 and £700 820,000
Exceeding £700 280,000
Total 1,100,000

I think that this estimate of 1,100,000 may be accepted with confidence
as a near approximation to the actual number of individual incomes which
exceeded £160 per annum in 1908-9.
Taking 1,100,000 as a trustworthy figure, we are in a position to show
how the population of the United Kingdom is divided by the line of income
tax exemption. If we assume that each of the 1,100,000 persons is the head

of a family of five persons, we get, by obvious calculation, the following
result:

THE EQUATOR of BRITISH INCOMES

£909,000,000 per annum
taken by
5,500,000 people
having Incomes of £160 and upwards
per annum

£935,000,000 per annum
taken by
39,000,000 people
having Incomes below £160
per annum

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

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

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

These striking facts are expressed in diagrammatic form on page 45.
Broadly speaking, it is shown that one-half of the entire income of the
United Kingdom is enjoyed by about 12 per cent. of its population.
But a still more extraordinary conclusion emerges from the facts we have
examined. Of the 1,100,000 income tax payers, 820,000 are persons with
incomes over £160 and not exceeding £700. The aggregate income of these
820,000 persons we estimated at £275,000,000 (page 39), and the estimate
is a liberal one. By subtraction from the total income of the income tax
classes (£909,000,000) we see that the 280,000 rich persons with over £700
per annum possess an aggregate income of £634,000,000 per annum. The
facts are clearly shown in the following table and in the diagram which
forms the frontispiece of this volume:

RICHES, COMFORT, AND POVERTY, 1908

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

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

Persons with Incomes between £160
and £700 per annum and their
families, 820,000 × 5 4,100,000 275,000,000
Poverty
Persons with Incomes of less than
£160 per annum and their
families 39,100,000 935,000,000
44,500,000 £1,844,000,000

Thus, to the conclusion that one-half of the entire income of the nation is
enjoyed by but about 12 per cent. of its population, we must add another
even more remarkable, viz.: that more than one-third of the entire income of
the United Kingdom is enjoyed by less than one-thirtieth of its people.
The broad outlines thus drawn I shall not attempt to amplify, for, as will
be gathered from the nature of the available material, such amplification
would be of little value. Nor would any useful purpose be served by any
arbitrary division of our population into "upper," "middle," and "working"
classes. The three divisions of population at which we have arrived,
although arbitrary, have naturally arisen in the course of our inquiry, and
with some propriety we may term them respectively the Rich Classes, the
Comfortable Classes and the Poor Classes.
The great fact emerges that the enormous annual income of the United
Kingdom is so badly distributed amongst us that, out of a population of
44,500,000, 39,000,000 are "poor" in the sense that their incomes do not
exceed £160 a year. It is no longer incredible that in a population of
44,500,000 people, enjoying an aggregate income of £1,844,000,000, there
exist "30 per cent. living in the grip of perpetual poverty." When we realize
that 39,000,000 out of our 44,500,000 are poor, measured by a very modest
standard of income, the statistics of Booth and Rowntree cease to surprise
us. In analysis, the United Kingdom is seen to contain a great multitude of
poor people, veneered with a thin layer of the comfortable and the rich.

It will be of interest to compare the above statistics with those which
appeared in "Riches and Poverty," edition 1905. The statement then
presented was based on the Inland Revenue figures of 1903-4, and the
frontispiece bore the heading "British Incomes in 1904." For the purposes
of comparison, the 1905 edition figures may be attributed to 1903, since the
fiscal year 1903-4 is as to nine months in 1903. Similarly, the figures
arrived at in the above pages may be dated 1908, an interval of five years
separating the two investigations.
The following is the comparison arrived at, after adjustment of the earlier
figures by raising the estimated number of income tax payers in 1903 from
1,000,000 to 1,050,000, for the reasons given on page 38.

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

The result is to show that, in the five years, the wealthy classes have
increased their share of the national dividend, both actually and relatively.
We shall later find this conclusion confirmed by a comparison of the
respective growths of taxed incomes and wage rates.
The stationariness of wages is a fact which closely demands the attention
of the nation.
[11] For a fuller explanation of these Schedules reference should be made to
Chapter 21.
[12] See Chapter 21.
[13] The change in the proportions through the adjustment is insignificant
and negligible, as will be seen by reference to the original estimate.

CHAPTER IV
THE ESTATES OF RICH AND POOR

O UR review of the extraordinary facts relating to what has been called
with grim humour the "National" income, prepares us for an
examination of the estates of rich and poor.
Legal distribution of the property of deceased persons can only be made
upon payment of certain taxes, commonly called death duties, and legally
known as the Estate, Legacy and Succession duties. The nature and extent
of these duties I shall discuss in a later chapter. At this point I am only
concerned with the facts which are brought to light in the collection of the
chief death duty, the Estate duty, as since varied, of the great 1894
Budget[14] of the late Sir William Harcourt.
The principle of graduation was very properly applied to this duty, and
accordingly we obtain, through the reports of the Inland Revenue
Commissioners, an exceedingly valuable record, not only of the total value
of the property which is "left"—it is a suggestive term—by the deceased,
but of the classification of that property in large and small estates.[15]
The Estate Duty is payable upon all estates which exceed £100 net (net,
that is, after the discharge of all debts due by the deceased) and the Inland
Revenue authorities undoubtedly pass under review the greater part of the
property which is thus legally taxable. There must be a certain leakage, of
course, for such heritages as household furniture, cash in money or notes,
bearer bonds, and so forth, are sometimes divided up amongst the relatives
of a departed property owner without account to the State, and it is difficult
properly to assess unquoted securities, goodwills, trade stocks, furniture,
etc. Moreover, large sums pass inter vivos. How much property thus
escapes official observation we do not know, but it is probably a
considerable amount.

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

Class of Estate. 1904-5 1905-6 1906-7

Value. Value. Value.
Number. Mill. Number. Mill. Number. Mill.
£. £. £.
A. Estates not Dutiable:
Bankrupt Estates 1,628 — 1,552 — 1,704 —
Estates not exceeding £100 net 15,931 0.9 15,462 0.9 16,039 0.9
Total A 17,559 0.9 17,014 0.9 17,743 0.9
B. Estates Liable to Duty:
Small Estates:—
(1) Not exceeding £300 gross 18,505 3.5 18,262 3.5 18,995 3.7
(2) Between £300 and £500 gross 8,846 3.6 8,907 3.6 9,311 3.7
Net Capital Values"—
but
Exceeding not
£100 over £500 5,853 2.5 5,728 2.5 5,990 2.6
" 500 " 1,000 10,098 8.4 9,894 8.1 10,516 8.6
" 1,000 " 10,000 16,704 60.4 16,130 58.8 17,098 61.6
" 10,000 " 25,000 2,295 41.8 2,254 40.4 2,473 42.5
" 25,000 " 50,000 883 34.6 931 36.4 909 34.9
" 50,000 " 75,000 288 18.9 277 19.5 314 19.6
" 75,000 " 100,000 161 15.0 139 12.1 127 11.3
" 100,000 " 150,000 128 14.0 133 18.2 159 19.2
" 150,000 " 250,000 89 21.6 91 18.6 104 22.4
" 250,000 " 500,000 44 17.6 70 23.9 58 21.3
" 500,000 " 1,000,000 23 17.2 21 13.1 18 12.9
" 1,000,000 " 2,000,000 ↑ ↑ ↑ ↑ ↑ ↑
" 2,000,000 " 3,000,000 1 5.9 8 13.5 10 34.1
" 3,000,000 ↓ ↓ ↓ ↓ ↓ ↓
Total B 63,918 265.1 62,845 272.2 66,082 298.5
Total Estates 81,477 266.0 79,859 273.1 83,825 299.4

Average of
Class of Estate. 1907-8 1908-9 1904-5 to
1908-9
Value. Value. Value.
Number. Mill. Number. Mill. Number. Mill.
£. £. £.
A. Estates not Dutiable:
Bankrupt Estates 1,663 — 1,802 — 1,670 —
Estates not exceeding £100 net 16,475 0.9 15,875 0.9 15,956 0.9
Total A 18,138 0.9 17,677 0.9 17,626 0.9
B. Estates Liable to Duty:
Small Estates:—
(1) Not exceeding £300 gross 19,340 3.7 19,481 3.7 18,917 3.6
(2) Between £300 and £500 gross 9,736 3.9 9,640 3.8 9,288 3.7
Net Capital Values:—
but
Exceeding not
£100 over £500 6,374 3.0 6,422 2.9 6,074 2.7
" 500 " 1,000 10,782 9.1 10,729 9.1 10,404 8.6
" 1,000 " 10,000 17,356 65.4 17,266 64.5 16,910 62.1
" 10,000 " 25,000 2,341 40.3 2,328 40.4 2,338 41.0
" 25,000 " 50,000 908 35.5 918 34.4 910 35.1
" 50,000 " 75,000 278 19.8 297 19.5 291 19.4
" 75,000 " 100,000 144 14.0 155 13.9 145 13.2
" 100,000 " 150,000 109 16.4 136 16.8 133 16.9
" 150,000 " 250,000 90 18.7 78 17.3 90 19.7
" 250,000 " 500,000 51 20.1 50 20.1 54 20.6
" 500,000 " 1,000,000 17 16.6 15 8.3 19 13.6
" 1,000,000 " 2,000,000 4 4.6 6 9.2 ↑ ↑
" 2,000,000 " 3,000,000 1 2.6 1 2.2 7 18.1
" 3,000,000 2 8.6 2 5.0 ↓ ↓
Total B 67,533 282.3 67,524 270.9 65,580 278.3
Total Estates 85,671 283.2 85,201 271.8 83,206 279.2

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

DEATHS IN UNITED KINGDOM

Year. Deaths.
1904 707,000
1905 670,000
1906 681,000
1907 679,000
1908 677,000
Average Deaths per annum 1904-1908 = 683,000.

We see that the mean number of deaths in the five years 1904-8 was just
over 680,000 per annum.
We now inquire, as to these 680,000 persons who die in the United
Kingdom in a year, how many leave property of sufficient value to be
brought under the notice of the tax-gatherers, and what is the value of the
property left by them.
These questions are answered in considerable detail by the table on pages
52 and 53, which shows, for each of the last five financial years of which
we have record, the numbers and values of the estates reviewed.
It will be seen that, taking the average of these five years, we get the
following summary facts:—
Deaths per annum 683,000
Sworn Estates per annum, number 83,206
Estates of less value than £100 net each per annum 17,626
Estates exceeding £100 net each per annum 65,580
Net value of Dutiable Estates per annum £278,300,000

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

The Chief Registrar of Friendly Societies, Mr Stuart Sim, in his latest
Report (No. 105 of 1909), p. 44, gives us the Summary of Registered
Provident Societies and Thrift Institutions, which appears on page 56.
The total funds, £439,000,000, represent the savings of some millions of
people, but the total number of "members," nearly 34,000,000, must not be
taken to stand for so many individuals. There is, of course, much
duplication in the membership, one individual being sometimes member of
two, three, four, or more societies or clubs. A carpenter, earning 30s. a
week, may be a member of his trade union, member of two friendly
societies, have a few pounds in the Post Office Savings Bank, and be a
depositor in a building society, thus figuring as "five members" in the list.
The list is not complete, for it does not cover the industrial insurance
companies, which waste in costly management so large a part of the sums
paid them, and unregistered friendly societies and slate clubs.

THRIFT INSTITUTIONS: SUMMARY OF REGISTERED PROVIDENT
SOCIETIES
AND CERTIFIED AND POST OFFICE SAVINGS BANKS AT DEC. 31st,
1907.
No. of No. of
Nature of Institution. Funds.
Returns. Members.
Building Societies: £
Incorporated Societies 1,852 565,047 57,300,118
Unincorporated Societies 58 58,000 15,989,111
1,910 623,047 73,289,229
Friendly Societies, etc.:
Ordinary Friendly Societies 6,563 3,416,869 19,346,567
Societies having Branches 20,640 2,710,437 25,610,365
Collecting Friendly Societies 55 9,010,574 9,946,447
Benevolent Societies 73 29,716 337,393
Working Men's Clubs 1,036 272,847 381,463
Specially Authorised Societies 162 70,980 532,717
Specially Authorised Loan Societies 618 141,850 897,784
Medical Societies 96 313,755 65,513
Cattle Insurance Societies 60 4,029 8,570
Shop Clubs 7 12,207 1,349
29,310 15,983,264 57,128,168
Co-operative Societies:
Industries and Trades 2,267 2,461,028 53,788,917
Businesses 399 108,550 984,680
Land Societies 146 18,631 1,619,716
2,812 2,588,209 56,393,313

Trade Unions 652 1,973,560 6,424,176
Workmen's Compensation Schemes (1) 59 99,371 164,560
Friends of Labour Loan Societies 248 33,576 260,905
Total Registered Provident Societies 34,991 21,301,027 193,660,351
Banks. Depositors. Deposits.
Railway Savings Banks 18 64,126 5,865,072
Trustee Savings Banks (including
Investments in Stock) 222 1,780,214 61,729,588
Post Office Savings Bank (including
Investments in Stock) 15,166 10,692,555 178,033,974

Total Certified and Post Office
Savings Banks 15,406 12,536,895 245,628,634

Grand Total 50,397 33,837,922 439,288,985

(1) The figures given include 64,700 members, and £105,475 funds undistributed, at 31st
December 1907, in respect of Schemes whose Certificates had expired or were revoked at that date.
Note.—Where Returns are made to a date other than 31st December the particulars at the nearest
date available are given.

On the other hand, it would be a profound mistake to regard the sum
shown—£439,000,000—as belonging entirely to manual workers. No small
part of the funds of building societies, savings banks, etc., belong to the
middle classes, and even professional men do not disdain to purchase
houses through building societies.
Additions must be made for the tiny stocks of little shopkeepers and the
"furniture" in poor houses, but on the latter account those who know what
the furniture of the poor usually consists of will make modest estimates of
its value. Its exchange value is almost negligible, and its value in use is that
it is a factor in the sordid discomfort of the poor home, being in that respect
not unworthy of the ugly walls which enclose it.
Altogether it is probable that we may estimate the total property of the
poor at less than £500,000,000 in 1908, and regard this sum as belonging
chiefly to a great mass of people, forming by far the greater part of the
39,000,000 persons under the line of Income Tax exemption. Probably
about £15,000,000 of this sum passes at death per annum, and only a small
part of it, chiefly the house property, comes under review by Somerset
House.
With the facts we have reviewed we are in a position to arrive at a just
idea of the respective proportions of rich and poor estates. On page 59 will
be found a table which shows the nature of those proportions. I have taken
the averages of the past five years arrived at in the tables on pages 52-53,
and have made a rough division between rich and poor by drawing the line
at the possession of property worth £1,000 net capital value.

To give a true idea of the division of deaths in the two classes, it is
necessary to make allowance in the rich class for the deaths of the children
of the well-to-do. It may be taken that, in addition to the 20,000 adults who
die every year possessed of estates worth upwards of £1,000, 7,500 children
and young persons die in well-to-do homes. I then place in the upper part of
the table the number of deaths remaining after deduction from 683,000 of
all the other figures in the table.
In arriving at the amount of property left by the poor I have assumed that
of the £15,000,000 of savings estimated as passing at death per annum,
£5,000,000 does actually come under review in the first few lines of the
table on pages 52-53. The balance, £10,000,000, I have brought into the
account as corresponding to the 592,294 deaths in the first line of the table
on p. 59.
With these explanations the table will speak for itself, and its tale is a
startling one. We see that, drawing the line between the rich and poor
arbitrarily at the possession of £1,000, of the 683,000 persons who die in a
year, 28,397 die rich or very rich, leaving £259,700,000, while 654,603 die
poor or very poor, leaving between them only £29,500,000.
The figures over £10,000 are worth special attention:—

FORTUNES OVER £10,000 EACH (NET)
Year. Number. Value.

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

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

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

Deaths. Propery Left.
POOR AND VERY POOR
Died with so little property that no
affidavit was sworn (Property
estimated at £10,000,000, see p. 58) 592,294 £10,000,000
Died Bankrupt 1,670 —
Died leaving less than £100 net 15,956 900,000
Died leaving between £100 and £500 net 34,279 10,000,000
Died leaving between £500 and £1,000 net 10,404 8,600,000
Total Poor and Very Poor 654,603 £29,500,000
RICH AND VERY RICH
Died under age without property 7,500 —
Died leaving between £1,000 net and
£10,000 net 16,910 62,100,000
Died leaving between £10,000 net and
£1,000,000 net 3,980 179,500,000
Died millionaires 7 18,100,000
Total Rich and Very Rich 28,397 £259,700,000

Total Rich and Poor
683,000 £292,500,000

170 persons per annum die worth £150,000 each; 80 die worth over
£250,000 each; 26 die worth over £500,000 each; and 7 die worth about
£2,500,000 each.
Thus, in an average year, 26 persons die leaving between them far more
than is possessed by 654,000 poor persons who die in one year. Again, in a

single average year, the wealth left by the few rich people who die
approaches in amount the aggregate property possessed by the whole of the
living poor.
[14] Finance Act, 1894 (57 & 58 Vict. c. 30).
[15] It was in the first edition of this work that attention was first drawn to
this new source of information.

CHAPTER V
THE NATIONAL ACCUMULATIONS

W E pass from the consideration of the property which is left at death in
a single year to the estimation of the value of the total capital stock of
the United Kingdom.
We can proceed by two different methods. We can argue from the
property left by those who die in a single year to the property possessed by
the living, or we can capitalize that part of the national income which is
derived from property. The former method was used as long ago as the
'fifties by Porter in his "Progress of the Nation." The second method has
been employed by many statisticians, notably by Sir Robert Giffen.
In the following table I have formed an estimate of the accumulated
wealth of the nation at the present time, dividing it into three categories:—
(1) "National" property in the proper sense, i.e. property in the possession
of the Imperial Government or Local Authorities.
(2) Land and Capital Stock within the United Kingdom owned by private
individuals, and
(3) Property in foreign countries and British Possessions owned by
persons in the United Kingdom.

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

(1) Public Property (Imperial and Local)
(a) Imperial Property £550,000,000
(b) Local Property 1,370,000,000
£1,920,000,000
Subtract (1) National Debt (£762,000,000)
and (2) Local Loans (£600,000,000) 1,362,000,000
£558,000,000
(2) Property in the United Kingdom owned by Private
Individuals:—
(c) Agricultural Lands and the
Farmhouses, Buildings, Fences,
Roads, Ditches, etc., thereof.
Profits under Schedule A of
Income Tax (1908-9)
£52,000,000 capitalized at 20
years' purchase £1,040,000,000
(d) Houses, Business Premises, etc., and
their Lands. Profits under
Schedule A of Income Tax
(1908-9) £217,000,000
capitalized at 15 years' purchase 3,255,000,000
(e) Other Profits from Land under
Schedule A of Income Tax
(1908-9) £1,300,000 capitalized
at 25 years' purchase 32,000,000
(f) Farmers' Capital. Estimated at £6 per
acre for 47,000,000 acres under
cultivation 282,000,000

(g) The National Debt (neglecting the
small amount held abroad) 762,000,000
(h) Local Debts 600,000,000
(i) Capital of Miscellaneous Trades:—
(1) Profits of Miscellaneous
Businesses, Professions,
etc., taxed under
Schedule D of Income
Tax in 1908-9 (allowing
for profits assumed to
escape taxation
£60,000,000, see p. 16),
and deducting for profits
from abroad
(£25,000,000, see p. 16),
were £444,000,000.
One-half of this sum
(£222,000,000) assumed
to be from capital and
capitalized at 10 years'
purchase 2,220,000,000
(2) Profits of small traders who
are not Income Tax
payers are in part derived
from capital 100,000,000
(j) Railways. Profits taxed under
Schedule D 1908-9 =
£43,000,000 capitalized at 25
years' purchase 1,075,000,000
(k) Mines and Quarries. Profits taxed
under Schedule D 1908-9 =
£18,000,000 capitalized at 5
years' purchase 90,000,000

(l) Gasworks. Profits taxed under
Schedule D 1908-9 = £7,800,000
capitalized at 20 years' purchase 156,000,000
(m) Ironworks. Profits taxed under
Schedule D 1908-9 = £5,100,000
capitalized at 5 years' purchase 25,000,000
(n) Waterworks. Profits taxed under
Schedule D 1908-9 = £6,200,000
capitalised at 20 years' purchase 124,000,000
(o) Canals. Profits taxed under
Schedule D 1908-9 = £4,200,000
capitalized at 20 years' purchase 84,000,000
(p) Markets, Tolls, Fishings,
Cemeteries, etc. Profits taxed
under Schedule D 1908-9 =
£1,400,000 capitalized at 20
years' purchase 28,000,000
(q) Other Interests and Profits taxed
under Schedule D 1908-9 =
£7,700,000 capitalized at 20
years' purchase 154,000,000
(r) Furniture, Works of Art, etc., in
Private Houses. Assumed to be
one-sixth of the value of
"Houses" in Schedule A (see
item d) 540,000,000
£10,567,000,000
(3) Property in Places Abroad Owned by Persons in the United
Kingdom
(s) Interest from Indian, Colonial and 805,000,000
Foreign Government Securities
taxed under Schedule C 1908-9

= £32,200,000 capitalized at 25
years' purchase
(t) Interest from Indian, Colonial and
Foreign Securities, including
Railways, taxed under
Schedule D 1908-9 =
£56,600,000 capitalized at 20
years' purchase 1,132,000,000
(u) Other Profits from abroad derived
from property assumed to have a
capital value of about 700,000,000
£2,637,000,000
Summary
(1) Public Property £558,000,000
(2) Property in the United Kingdom owned by
Private Individuals 10,567,000,000
(3) Property in places abroad owned by persons
in the United Kingdom 2,637,000,000
£13,762,000,000
To the explanations given in the table itself some further notes may be
added. For the greater part, the estimates are based, it will be seen, upon
Income Tax statistics. The items thus arrived at are near approximations to
the truth. The table also contains some necessarily rough estimates of
uncertain items.
The matter of public property is an exceedingly difficult one to deal with.
In item a I have estimated that our warships and stores of naval and military
material, Imperial shipyards, dockyards and arsenals, public offices,
galleries, museums and their contents, government factories and workshops
and their plant, post office, telegraph and telephone capital, etc., are worth
£550,000,000 at a conservative estimate. The capital value of all our ships,
allowing for depreciation, cannot be less than £150,000,000, and naval
works and material must be worth fully £80,000,000. Army material and

military works are of less value, but can scarcely be estimated at less than
£120,000,000. The value of the post office, telegraph and telephone
businesses at only 15 years' purchase of the profits would be £60,000,000.
The Suez Canal shares are worth £28,000,000. Thus £550,000,000 as an
estimate of the total value of all Imperial property is not an excessive
figure.[16]
The public property in the care of local authorities, as trustees for the
nation, is exceedingly great. It is convenient to consider common lands in
this connexion. Probably there are some 2,000,000 acres of common lands
in England and Wales—all that remains unfilched of full many times that
area.[17] If we value these commons at an average of £25 per acre—some of
the commons, as in Surrey, are worth from £200 to £2,000 an acre, valued
at present market rates—we get £50,000,000.
Roads are an important item in the national valuation—they are almost
all that is left to the nation of the nation's area. There are about 22,000 miles
of main roads and about 97,000 miles of minor roads. These have value as
land and value as highways, but if we value land and construction together
at an average of only £5,000 per mile we arrive at about £600,000,000 as a
conservative estimate of the value of the roads of the United Kingdom.
There remain to consider the values of the parks and other land, buildings
(including offices, houses, schools, markets, asylums and workhouses),
bridges, sewers, lighting systems, gasworks, electric light and power
undertakings, tramways, waterworks, reservoirs, etc.
The outstanding debts of the local authorities of the United Kingdom are
now about £600,000,000. The whole of this amount has been spent upon the
objects referred to and they are worth considerably more. I submit that it is
a very conservative estimate to value local government property at 20 per
cent. more than the amount of the outstanding loans or say £720,000,000.
We thus arrive at £1,370,000,000 as a rough but reasonable estimate of
the value of the local property. Adding it to the £550,000,000 of Imperial
property we get £1,920,000,000 as a valuation of that portion of the
accumulated wealth of the United Kingdom which is in the collective
ownership of the nation.[18]

But, against the possession of these large amounts of property we have to
set the mortgages upon the public assets which are represented by the
National Debt and Local Debts. These, of course, are not directly secured
upon Imperial and Local Government property, but upon the Imperial and
local revenues. It is convenient, however, to regard them as mortgages, and
to deduct them as I have done in the table. Making this deduction, I am able
properly to include the amount of the national debt and local debts in my
estimate of the value of private property (see items g and h). This gives a
true view of the subject. The people of the United Kingdom collectively
own relatively little property. In the time to come this will be remedied, for
local authorities are rapidly acquiring reproductive undertakings. Until they
are paid for, however, by the discharge of the loans raised to acquire or
equip them, we do well to remember that they are mortgaged to individuals.
Therefore, in deducting the debts from the valuation of public property and
in adding them to the private property I submit that I am presenting an
accurate picture of the actual position.
To sum up this part of the subject, the people of the United Kingdom
collectively possess property worth £1,920,000,000 and are collectively
indebted to a few of their number in the sum of £1,362,000,000. Thus, all
that they may be said to own collectively is property worth the
comparatively insignificant sum of £558,000,000.
I pass to the private property which is commonly called "national"
wealth.
In item c agricultural lands and the farmhouses and other buildings
thereon are valued at £1,040,000,000. In 1898 the Royal Commission on
Agriculture arrived at the value of lands by taking 18 years' purchase of the
profits of 1893. The value of agricultural land is now rising with the
appreciation in the price of food.[19]
Item d "Houses," it should be clearly understood, covers not only
dwelling-houses, but factories, workshops, offices, and all other premises
save farmhouses. It also includes, as is so often overlooked, both house
value and land value. In capitalizing at 15 years' purchase, the market value
of the property is certainly not overstated. The £3,255,000,000 so arrived at
is a handsome sum and by far the most considerable item in the list. It

includes, in the value of factories and other business premises, a
considerable amount of trade capital.
It should not be forgotten that we are speaking of economic valuation,
not of intrinsic value. Houses which rank for no small part of the
£3,255,000,000 are of small intrinsic value, their economic value being
only produced by the sheer necessities of those whose needs must find a
roof. London contains great areas of filthy brick-work which are worthy to
be destroyed, but worth many millions to the houselords who draw rents
from them.
Item f deals with farmers' capital. Here I have used the figure arrived at in
1905 by R. H. Inglis Palgrave.[20] After careful examination of the amounts
of capital per acre employed in various parts of the country, Mr Palgrave
considers £6 an acre an excessive estimate, but Major Craigie, who has
given the subject much attention, is inclined to think it too low.
Items g and h have been already referred to.
Item i (1) is an estimate of the amount of capital employed in the
miscellaneous trades and professions taxed under Schedule D of the Income
Tax. I have assumed that one-half of the estimated profits were derived
from capital, and this half I have capitalized at 10 years' purchase. The
amount so arrived at—£2,220,000,000—may be regarded as a reasonable
estimate, not as an accurate one. In 1908, it may be pointed out, the nominal
"paid up" capital of registered joint-stock companies amounted to
£2,123,000,000.
Under i (2) £100,000,000 is put down as a rough estimate of the capital
employed by small traders whose incomes are less than £160 per annum. I
think that £100,000,000 is a liberal estimate, but it should be noted, against
this opinion, that in 1885 Sir Robert Giffen's estimate was £335,000,000. In
either case the figure is sheer guesswork; there is no proper statistical
material.
Items j to q need little comment. I point out, however, that the profits of
mines, quarries and ironworks are capitalized at only 4 years' purchase by
some authorities in view of their exhaustible character.

Item r relates to furniture, works of art and other movable property. I
have estimated this to amount to one-sixth of the item "Houses" (d). It is
right to point out, however, that this estimate is very much at variance with
former ones. Sir Robert Giffen in 1885 took one-half of the value of
"Houses," and Mulhall and other statisticians have commonly used this
estimate. But is it reasonable? I think not. In the first place the item
"Houses" covers a great number of business premises the contents of which
are valuable but are already estimated for in item i. The item also covers the
value of all the land connected with the premises. Deducting for land and
for business premises, could we, even as to the balance, assert that the
average private dwelling contains furniture and other effects worth 50 per
cent. of the cost of the structures? Enquiry has shown me that such an
estimate would be only warrantable in the case of rich houses. But rich
houses, as we have seen, are comparatively few, and "comfortable" houses
not many. Coming to the great bulk of the small dwelling houses of the
United Kingdom the furniture and effects are so poor that their value,
unfortunately, as compared even with that of the mean houses which shelter
them, is small, and in many cases negligible.
In taking one-sixth instead of one-half of item d in arriving at item r
therefore, I feel that I am making the most liberal possible estimate. To
make the figure about £1,600,000,000, as we should do by taking the
traditional one-half of the value of "Houses," would, I submit, be very wide
of the mark.
The total value thus estimated of the property in the United Kingdom
owned by individuals affords a striking contrast with that owned by the
State. It amounts to £10,567,000,000.
We have now to consider the third category: "Property in places abroad
owned by persons in the United Kingdom." The items speak for themselves
and are capitalized at very reasonable rates. We get the remarkable fact that
certain persons in this country own about £2,600,000,000 of property in
places abroad.
The grand total of the whole estimate is £13,762,000,000—£300 per head
of the population, or say £1,500 per family of five persons.

[16] There is also, of course, the value of the trained personnel of both army
and navy, which could not be taken at less than £250 per soldier and £400 per
sailor, but I confine this estimate to the value of "property" commonly so
called.
[17] There are no commons in Ireland and Scotland.
[18] In 1885 Sir Robert Giffen estimated Government and local property at
£500,000,000, but I do not know his reasons for naming that figure.
[19] Lord Eversley seems to think that 25 years' purchase meets the
conditions of 1905. See discussion in the Royal Statistical Society's Journal
for March 1905.
[20] "Estimates of Agricultural Losses." Paper read to the Royal Statistical
Society in March 1905.

CHAPTER VI
THE MONOPOLY OF CAPITAL

I N view of the facts as to rich and poor estates which we examined in
Chapter 4, it is obvious that to state that the accumulated wealth of the
United Kingdom probably amounts to £300 per head of the population, or
£1,500 per family of five persons, is to mask in averages a great inequality
of distribution.
Reverting to the Death Duty records, it is possible, by means of them, to
give a true idea of the manner of distribution amongst our people of the
greater part of the nearly £14,000,000,000 of capital.
I again direct attention to the tables on pages 52 and 53. Year after year,
with extraordinary constancy, a certain amount of money passes in each
class of estate. So small are the variations in relation to the magnitude of the
totals that it is hardly necessary to average the five years in working at the
figures.
If about 65,000 persons die every year leaving about £279,000,000, what
is the ratio to these figures of the numbers and property of the living?
The question thus raised is an exceedingly interesting one. Porter in his
"Progress of the Nation" seems to have assumed a ratio of 45 to 1, but I do
not think that the true figure can be so high as this.
The British Crown, since Queen Anne, has passed at the following dates:
Anne, 1702
George I., 1714
George II., 1727
George III., 1760
George IV., 1820
William IV., 1830
Victoria, 1837
Edward VII., 1901

George V., 1910

Thus, in 208 years, the Crown has passed eight times, or, on the average,
once in about 26 years.
I have investigated the dates at which a considerable number of well-
known estates have passed at death during two centuries and have found the
most remarkable variations in different families. The Earldom of Suffolk
has passed at average intervals of 16.7 years between 1731 and 1898. The
Earldom of Coventry has passed at intervals of 22 years between 1712 and
1843. These are intervals which are well under the average, while above the
mean are cases quite as remarkable. The Earldom of Essex, between 1709
and 1892, has passed only four times, giving an average of 45.7 years. The
Earldom of Bathurst, again, between 1775 and 1892, passed only five times,
giving an average of 43.4 years.
Taking the mean of a large number of actual cases, I get an average of
29.2 years and I have decided to take 30 as a round figure which cannot be
far from the truth. Assuming, then, that there are thirty living property
owners for every dead one in the final column of the table on page 53, I
have constructed the table entitled "The Division of Property: An Argument
from the Dead to the Living," which appears on pages 74 and 75. The
figures in columns 1 and 2, taken from the table in Chapter 4, are multiplied
by 30 to form the figures in columns 3 and 4. The results are exceedingly
interesting.

THE DIVISION OF PROPERTY: AN ARGUMENT
FROM THE DEAD TO THE LIVING
THE DEAD
Averages of the Death Duty
Records in the five years
CLASSES OF ESTATE
1904-5 to 1908-9.
(1) (2)
PERSONS. PROPERTY.
£
Less than £100 net 15,956 900,00
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 by 30 upon the AVERAGE
assumption that each dead VALUE OF
CLASSES OF ESTATE
property owner in column 1 ESTATES PER
corresponds to 30 living ones. 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
Net Estates
Gross Assessments
Reviewed for
to 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, Funds, Money lent on Trade Assets,
Cash in the
Shares, and Mortgages, i.e. Book
Size of Estates House and in
other like Bonds, Bills, Debts, Stock,
Bank.
Securities. etc. 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 Property
Policies of Agricultural
Size of Estates Goods Apparel and Business
Insurance. Land.
etc. 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 -*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
* Capital transferred in the year to other classes exceeded that brought into these classes.

Ground Rents and Total Gross
Size of Estates Other Property.
similar Burdens. Capital Values.
£ £ £
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

L ET 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
Class of Owner. Acres.
Owners.
Peers and
400 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 Waste 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.
[21] Cf. Marshall, "The fundamental attribute of land is its
extension."—"Principles of Economics," Book I, p. 221.
[22] "Great Landowners." John Bateman (Harrison).
[23] These classifications are purely arbitrary.
[24] See C 6980, page 79.
[25] It has been constantly stated that the land rents of the United Kingdom
amount to £250,000,000. Such an estimate is unwarranted.
[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.
[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

W E 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, £1,353
wages at works, rates and taxes, etc., and miscellaneous

expenses
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
Price
Value of
of
Name of Company. Shares Dividend.
Shares
or
(1905).
Stock.
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.
[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.
[29] The State has now agreed to buy out this undertaking.
[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

I F 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. and
Northumberland Durham. East West Scotland.
Worcestershire.
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 Probable
Gross Average Gross Index No. of
Number of Wages Index
Assessments to Income of Tax Incomes.
Income Tax No. 1900=100.
Income Tax. Payers. 1900=100
Payers.
£ 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

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
Wages Index Wages Index
No. Number

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

Number out
Date. Membership. Per Cent.
of Work.
1900
January 521,833 14,252 2.7
February 524,872 15,114 2.9
March 524,199 11,821 2.3
April 525,865 13,075 2.5
May 531,608 12,645 2.4
June 533,119 13,992 2.6
July 533,499 14,566 2.7
August 534,331 15,971 3.0
September 536,242 19,520 3.6
October 535,668 17,750 3.3
November 539,175 17,715 3.2
December 540,102 21,496 4.0
1901
January 545,539 21,682 4.9
February 543,487 21,159 3.6
March 544,688 19,618 3.8
April 547,197 21,018 3.6
May 544,460 19,487 3.4
June 541,651 18,605 3.4
July 539,422 18,164 3.9
August 543,971 21,025 3.7
September 542,917 20,180 3.7
October 544,827 19,995 3.8
November 545,832 20,614 3.6
December 554,018 25,703 4.6
1902
January 553,218 24,470 4.4
February 561,708 24,072 4.3
March 551,270 20,241 3.7
April 550,958 21,349 3.9
May 549,023 21,926 4.0
June 554,893 22,832 4.2
July 550,169 21,859 4.0
August 551,565 24,549 5.5

September 553,870 27,522 5.0
October 548,442 27,270 5.0
November 549,197 26,454 4.8
December 552,415 30,302 5.5
1903
January 547,671 27,685 5.1
February 549,843 26,471 4.8
March 559,129 24,096 4.3
April 554,901 22,665 4.1
May 554,524 22,102 4.0
June 556,695 24,804 4.5
July 555,743 27,394 4.9
August 561,946 30,751 5.5
September 558,508 32,179 5.8
October 555,105 32,358 5.8
November 562,954 33,614 6.0
December 559,897 37,501 6.7
1904
January 561,226 36,767 6.6
February 563,824 34,388 6.1
March 567,232 33,950 6.0
April 561,611 33,706 6.0
May 571,384 36,002 6.3
June 573,373 34,066 5.9
July 568,272 34,494 6.1
August 575,061 37,006 6.4
September 575,575 39,005 6.8
October 576,642 39,396 6.8
November 577,268 40,244 7.0
December 573,726 43,435 7.6

Unemployment—continued

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

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
Houses. Unemployed.
(1901)
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

I N 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
Non-Fatal
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
Killed Disablement 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.
Inches. Inches. Lbs. Lbs.
11 to 12—
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.
[31] Since these pages went to press, another large scale disaster at Bolton
has killed over 300 miners.
[32] See Mr Fenwick's Return "Mines (Fatal Accidents)," No. 140. 1905.
[33] Annual Report on Factories and Workshops, 1900, page 336.
[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

T HE consequences of the error of distribution now demand our attention.
The congestion of so much of the entire income and accumulated
wealth of the United Kingdom in a few hands has a most profound
influence upon the national development. It means that the great mass of the
people—the nation itself—can progress only in such fashion as is dictated
by the enterprise or caprice of a fraction of the population. The possessors
of wealth exercise the real government of the country and the nominal
government at Westminster but timidly modifies the rule of the rich. When
we say that about one million people command one-third of the entire
income of the nation we mean, broadly, that one million people have under
their control the lives of one-third of the population or of 15,000,000
people. When we say that about five million people command one-half of
the entire income of the country we mean, broadly, that five million people
control the lives of one-half of the population, or of 22,000,000 people.
Expenditure is a call for material or immaterial commodities, and a demand
for commodities is a demand for labour. That call rules the continuous
series of employments which form the main activities and which mould the
lives and character of our people. If the call be for worthy things, our
people are directed into noble occupations. If the call be for unworthy
things, labour is misdirected and degraded.
The self-degradation of a limited number of unduly rich persons would
be a little thing from a national point of view if its effects could be confined
to the rich themselves. Unfortunately, those effects are not a stagnant pool
which we may avoid, but a stream which flows through and pollutes the
lives of the majority of our people. A working man may resist the
temptation to ape the vices which are bred of idleness, but the highest
standard of morality cannot save him from degrading his manhood in the
service of waste. Without his knowledge the product of his toil may be
bartered for the toy of a moment, and the skill of his hands pass to the
foreigner in exchange for the means of wanton luxury. The rare steam coal

of South Wales, got in blood and tears in a fiery mine, may be exported to
France in exchange for a racing automobile. It would matter little that a
limited number of drones inhabited the hive if they had no command of the
work of the community. It matters everything when these drones, by their
expenditure, can each command thousands of workers to attend their
idleness.
There are certain well-defined servants of the rich wholly devoted to their
pleasure, such as menial servants, grooms, stablemen, gardeners, makers of
expensive articles of food, clothing, furniture, etc., hotel servants, many of
the inhabitants of the rich quarters of towns and of fashionable pleasure
resorts, many tradespeople and their shop assistants, and other workers.
Again, there are certain well-defined servants of the poor, such as petty
tradespeople, general storekeepers, the workmen and officials engaged in
institutes, charities, free libraries, municipal tramways and other services,
public gardens, and so forth. There is often, however, no clear distinction
between those who serve the few rich and those who serve the many poor.
Every trade, however useful nominally, has to give of its best to be poured
into the cup of luxury and spilt in wanton extravagance. Our 1,300,000
builders, our 1,400,000 metal workers, engineers and shipwrights, our
1,300,000 textile workers, our 1,300,000 clothiers, and all the other persons
engaged in our "useful" industries, furnish their large quota of products for
the rich and their small quota of products for the poor. The edict of the rich
man goes forth and industry hastens to obey it. Bricks from Berkshire
which are sadly needed for the building of decent cottages for agricultural
labourers are taken into Surrey to form part of one of the vulgar and
pretentious red-brick villas which mock every canon of architecture and
make hideous the most beautiful portions of that Garden of England. Good
fir from Sweden, imported in exchange for the toil of Lancashire or the
sweat of Cleveland, roofs in the tenth, fifteenth or twentieth bedroom of the
man who has more rooms than children, and more menial servants than
guests, while the Census shows us that in England and Wales there existed,
in 1901, 3,286,526 tenements of fewer than five rooms, of which 251,667
had but one room, 658,203 but two rooms, 779,992 but three rooms and
1,596,664 but four rooms. The mechanic, the electrical worker, the girl at
the loom, all appear to be usefully employed in contributing to the well-

being of the nation. As a matter of fact, the lion's share of the wealth they
create goes to add to the income of a few, while the remainder is distributed
amongst a number so great as to constitute nearly the whole of the
population. If we consider the case of the cotton industry alone, it appears,
on the surface, that 582,000 workers (172,000 men and 410,000 women and
children) are most usefully employed in the production of articles of the
first necessity. They do work, each year, upon some 16,000,000 cwts. of
raw cotton which they manufacture into about £120,000,000 worth of
cotton goods. But trace the history of these goods. Are they consumed by
the countrymen of the people who make them? Alas! no. Of the yearly
output of £120,000,000, as much as £100,000,000 is exported to foreign
countries and British Possessions, chiefly to foreign countries. Only
£20,000,000 worth of the magnificent output of our cotton workers is
retained by our 44,000,000 people. In addition there is a consumption of a
few million pounds worth of imported cotton goods. Can it be true that our
population need to renew their household and personal stock of cotton
fabrics to the extent of a value of but 10s. per head per annum? Of course it
is not true. From cotton is manufactured, for the person, dresses or blouses
of muslin, lawn, cambric, prints, mercerized stuff, etc., shirts and
underclothing in great variety for both sexes, handkerchiefs, lace, hosiery,
etc., and for the household, cotton sheets and other bed furnishings, curtains
of lace, cretonne and muslin, towels, dusters, and a host of other things. Yet
so poor are the mass of our people that 10s. per head per annum furnishes
them with all the cotton goods which they can afford to buy for both their
persons and their households. Great is their need and small are the means
available for its satisfaction. If it were not so, our cotton trade would need
many thousands more bales of raw cotton per annum, first to supply a quite
ordinary home demand and second to export to the foreigner to obtain in
exchange the satisfaction of other ordinary needs.
In the following table I have estimated a demand for cotton goods by a
household of five persons. The prices are wholesale and relate to the
materials only. It should be distinctly understood that nothing is included
for retail profit or for the manufacture of the materials into garments. I have
estimated for all the cotton goods used on the person or in the household,
not forgetting the cotton linings commonly used in woollen clothing.

CALL (AT WHOLESALE PRICES) BY A HOUSEHOLD
OF 5 PERSONS, FOR COTTON MATERIALS
For the Person:
(1) The Man £0 16 0
(2) The Woman 1 90
(3) Three Children 1 21
For the Household 1 10 6
£4 17 7

In framing this estimate I have imagined an exceedingly modest standard
of comfort, one such as few readers of these lines would probably care to
adopt, and the prices, as I have said, refer to the wholesale cost of the
material only. Yet, modest as it is, the estimate works out at nearly 20s. per
head. Given such a modest demand, our cotton trade would need to produce
about £45,000,000 worth of cotton goods per annum for home consumption
alone. As we have seen, it finds a call for only £20,000,000 worth, a great
part of which, of course, is absorbed by the "rich" and "comfortable"
classes.
It is a deeply significant fact that a nation of 44,500,000 people,
producing by its manifold activities a total income of £40 per head per
annum, should be able to afford to retain of its total output of cotton fabrics
but 10s. per head per annum.
Let us turn to our woollen and worsted industries. Here we have in an
average year an output worth some £65,000,000 of which £23,000,000 is
exported, leaving £42,000,000 for home consumption. In addition there is a
considerable importation (£12,000,000) of woollen and worsted goods,
chiefly woollen goods, of a character which we do not ourselves produce,
from France. Thus we have a total home consumption worth £54,000,000
per annum. This amounts to about 25s. per head per annum, a sum which, in
view of our climatic conditions, is, if anything, less satisfactory than that for
cotton consumption. Again let us picture our working-class household of

five persons and inquire what might be its most modest imaginable
expenditure upon articles made of wool:—

CALL (AT WHOLESALE PRICES) BY A HOUSEHOLD
OF 5 PERSONS, FOR WOOLLEN AND WORSTED GOODS.
MATERIALS ONLY
For the Person:
(1) The Man £3 7 10
(2) The Woman 2 9 9
(3) Three Children 3 0 0
For the Household 3 0 0
£11 17 7

In working out this estimate in detail, I have again postulated a low
standard of comfort. Thus the man is assumed to have but one new woollen
suit and one new pair of trousers per annum, and an overcoat once in two
years. It is also assumed that the children are partly provided for by
adaptation of their parents' discarded garments. Even so, the estimate works
out at 47s. per head. At this rate there would be a call for about
£105,000,000 of woollen and worsted goods by the 44,500,000 people of
the United Kingdom. As a matter of fact, the call is for only £54,000,000
worth, or about 25s. per head on the average. But who is the Average Man?
He is a creature of the statistician. The real truth is, of course, that quite a
small number of people consume a very great part of our total present
annual call for £54,000,000 worth of woollen and worsted goods. The
masses of the people spend a sum which is a small fraction of the average
expenditure of 25s. per head.
Again, let us consider the boot and shoe industry. Here I have no reliable
estimate as to the value of production, but we know that employment in the
trade is sometimes exceedingly bad, and that in Leicester, Northampton and
elsewhere the greatest distress exists from time to time because the boot
manufacturers have overtaken demand. What does this mean? There are

some 7,000,000 houses in England and Wales not assessed to the Inhabited
House Duty because they are under £20 in annual value. It is safe to say
that each of the inhabitants of each of these 7,000,000 houses would gladly
purchase three pairs of boots and shoes if they had the means to do so, and
would then not be overburdened with footwear. That means that a need
exists at this moment for 7,000,000 × 5.2 (the average number of persons
per house in this country) × 3 = 109,000,000 pairs. That great demand,
obviously, could be renewed, did means allow, within 12 months.[35]
Yet, in November 1904, the Mayor of Leicester (Mr S. Hilton, of Messrs
S. Hilton & Sons, boot factors) dealing with the question of want of
employment in the boot industry said:
"I think the present great need of Leicester is a new industry. We cannot
expect, at any rate for some considerable time, that much more employment
will be derived from the boot and shoe trade, at least, not sufficient for a
growing population. The rapidity with which boots and shoes are turned
out, owing to the improved machinery and modern methods, will supply all
the demands for some time to come, and the man who may be the means of
introducing some additional industry in this town, which will not only
prove remunerative to the employer, but provide work for the many men
and youths who are in need of it, will be a benefactor to the town."
With improving methods and machinery, there must, sooner or later,
arrive, in every industry, a time when output overtakes visible demand, and
when that time arrives, as it is alleged to have done in Leicester, great
suffering is caused to many hard-working people. Their trade slips from
them, and the matter of re-adjustment, the establishment of new industries,
the transition to other employments, entails severe distress. But who can
truly say that the boot trade has yet reached, in this country, the maximum
of possible output? Certain it is that there are many who need new footwear
and cannot afford it, even while Leicester men look vainly for employment.
The real truth would appear to be that Leicester is suffering from the under-
consumption of those who, if they had the means, would buy boots. I have
shown that 100,000,000 pairs at least could be readily absorbed in Great
Britain. Yet men are unemployed at Leicester and the Mayor calls for a new
industry!

The fact is, of course, that while 7,000,000 or more poor householders
lack the means to buy boots, some tens of thousands of unduly rich
households are squandering those means and in effect commanding men to
leave the boot trade to take up industries which shall serve their pleasures.
In relation to the trades which supply the materials of clothing the census
returns give evidence that our industries are not developing healthily. It
should be remembered, however, that it is impossible to measure the growth
of luxury by the census returns, although it makes a certain impression in
them. The labour of tens of thousands who follow nominally useful
occupations is actually devoted to waste. This may be illustrated by two
typical cases which recently were brought to the notice of the public. On
February 8th, 1905, in the King's Bench Division, a millionaire, well-
known in financial circles (his name matters not, for I take the case not to
reproach an individual but because it is a typical one) sued a West-End firm
of contractors and caterers for damages. It appears that in July 1903 he gave
a dinner party with a concert and supper, and engaged the defendant firm to
erect behind his residence in Grosvenor Square a temporary supper-room
for the occasion. He gave instructions that "no expense was to be spared."
The electric light was installed in the temporary structure, and from this or
another cause, a fire occurred, and the temporary structure perished a few
hours before its time. Out of this arose the claim for damages, which failed,
the jury awarding the contractors their counter-claim for the work done.
It is not the merits of the action to which I direct the reader's attention.
What would the mere statistics tell us of the men who were engaged in
erecting the temporary supper-room "regardless of expense"? We should
find them described as following quite useful occupations:
Building Contractors.
Electrical Engineers.
Plumbers.
Carpenters.
Painters.
Upholsterers.
Carmen.
Labourers, etc.

As a matter of fact the skill and labour of these honourable callings were
turned to sheer waste at the command of the millionaire financier. With the
same expenditure of time and effort, and with the same consumption of
material, those men might have decently housed one or two families for
life. Had they been free to choose between the housing of a poor family and
the carrying out of a rich man's caprice, can we doubt which work they
would have chosen? But they were not free to choose, and inquiry would
probably show that they are constantly employed to do similar work in rich
men's houses. Their lives are wasted to the nation at large, and devoted to
the fancies of a few. In return, they are handed wage-money which is too
often unearned by those who pay the bills. Thus A the financier commands
B to waste his precious skill, and at the same time commands certain other
persons, C and D, to devote part of their labour to sustaining B while he
wastes his time and does nothing for them in return.
Let me give another pertinent illustration:
In July, 1904, a great deal of attention was aroused by a case in which a
West-End dressmaker was fined for working her girls at illegal hours. Her
excuse was that she was compelled to get finished at very short notice a
frock to be worn at Ascot by a certain rich lady. Considerable comment was
aroused by the case, especially in view of the fact that a play with a purpose
in which a similar incident was introduced was being played at the time in a
London theatre.[36] I was particularly struck with the fact that the
fashionable customer who caused the trouble was chiefly censured for her
dilatoriness and want of consideration in ordering her frock at the last
moment. But the gravamen of the offence lay not in ordering the frock late
but in ordering it at all. The chief point is not one within the scope of the
consolidated Factory and Workshop Act of 1901, but a much greater one,
which goes deep down into the roots of the problem of want and poverty in
the richest country in the world. For the special Ascot frock, the garment
costing anything from 10 to 50 guineas, made to be worn once and then cast
aside, is a perfect illustration of the misdirection of life and waste of labour
which is caused by the error in the distribution of the national income. For
every special Ascot frock worn by one woman, whether that frock be made
in legal or illegal hours, a number of other women go insufficiently clad.

Such illustrations might be multiplied indefinitely. At the great Albert
Hall Charity Bazaar held in 1904 a titled lady present wore a magnificent
dress which had been completed literally at the eleventh hour of the
previous evening by a number of young women whose economic condition
is such that only the best of health and the best of fortune can save them
from becoming the objects of "charity" in the time to come. As in the case
of the temporary supper-room, these girls, to judge by the census of
occupations, would appear as following useful occupations. From the point
of view of the national welfare, they had better be paid wages for digging
holes and filling them up again.
While the rich consume the means of living of the poor we need not be
surprised if useful trades languish. A rich person can but consume a limited
quantity of useful commodities. After that consumption, having still a great
superfluity, he seeks other diversions, and the orders go forth which swell
the ranks of the wrongfully employed.
At the other end of the scale, what is the possible expenditure upon goods
by the poor? The answer which has been given to this question by the
researches of Mr Charles Booth in London and of Mr Seebohm Rowntree in
York is seen to be one which can only be regarded as inevitable in view of
the figures we have examined. Mr Booth concluded that 30.7 per cent., or
nearly one-third of the population of London were probably living in
"poverty." Mr Rowntree found that in York, a typical provincial city, in a
year of good trade, 7,230 persons, representing 15½ per cent. of the
working classes, or 10 per cent. of the entire population of York, were living
below a primary poverty line drawn at an income of 21s. 8d. per week for a
family of five persons paying only 4s. per week for rent. Mr Rowntree also
found 13,072 persons living in York under conditions which were but little
above the primary line, making a total of 20,302 persons, or 28 per cent. of
the population of York, living in want.
Mr Rowntree's primary poverty line of 21s. 8d. per week was arrived at
thus.[37] He considered necessary expenditure under the three heads: (1)
Food, (2) Rent, (3) Clothes, fuel and other necessaries. To begin with food,
he framed a dietary which contained no butcher's meat or butter, and
allowed such a luxury as tea but once a week. The only meat was bacon and

very little of that. It was a dietary "more stringent than would be given to
any able-bodied pauper in any workhouse in England or Wales." Taking the
lowest co-operative store prices, he found that this dietary would cost 3s.
each for the adults and 2s. 3d. each for the children per week. Thus the cost
of food alone would be 12s. 9d. per week. Allowing for rent and rates 4s.,
we arrive at 16s. 9d. per week. To this Mr Rowntree added for clothing,
fuel, and all other necessaries 4s. 11d. per week, making, in all, the 21s. 8d.
referred to. Here is the estimate in detail:—

MR ROWNTREE'S PRIMARY POVERTY LINE
s. d.
Expenditure on Food 12 9
Rent and Rates 4 0
Clothing, including Boots 2 3
Fuel 1 10
Lighting, washing materials,
furniture, crockery, etc. 0 10
21 8

It will be seen that nothing is allowed for drink, or tobacco, or
newspapers, or postage stamps, or any relaxation whatever. Yet 15 per cent.
of the working people of York were found to be living below a primary
poverty line conceived on such a scale as this. For boots, clothing,
underclothing, hats, furniture, glass, crockery, utensils, curtains, washing
materials, and gas or oil, only 3s. 1d. per week or £8 per annum (32s. per
head per annum). Need we wonder, then, if Lancashire is only called upon
by 44,000,000 British people for £20,000,000 worth of cotton goods?
The Board of Trade recently gave us (Cd. 2337) some useful studies of
workmen's budgets which show that even Mr Rowntree's 3s. 1d. per week
for goods is a larger sum than is expended by most workmen's families with
about 21s. per week. The Board of Trade examined 1,944 workmen's
budgets with the following results:—

AVERAGE EXPENDITURE ON FOOD BY URBAN
WORKMEN'S FAMILIES IN 1904
Average
Balance of
Number no. of Average Average
income after
of children weekly expenditure on
expenditure on
Families. living at income. food.
food.
home.
s. d. s. d. s. d.
Under 25s. 261 3.1 21 4½ 14 4¾ 6 11¾
Between 25s. and
30s. 289 3.3 26 11¾ 17 10¼ 9 1½
Between 30s. and
35s. 416 3.2 31 11¼ 20 9¼ 11 2
Between 35s. and
40s. 382 3.4 36 6¼ 22 3½ 14 2¾
Above 40s. 596 4.4 52 0½ 29 8 22 4½

As the Board of Trade point out "It is not to be supposed that the returns
received represent in their exact proportions the different grades of
working-class incomes in the towns of the United Kingdom. The higher
range of family incomes is unduly represented in the returns, partly owing
to the fact that the more intelligent operatives have supplied returns more
readily and more accurately than those belonging to the unskilled labouring
classes."
It is of interest to note that the 261 budgets under 25s. per week averaged
21s. 4½d. per week, which closely corresponds to Mr Rowntree's primary
poverty line. The expenditure on food is seen to be 14s. 4¾d. or 1s. 6¾d.
more than was allowed by Mr Rowntree. Thus only 6s. 11¾d. per week is
left for all other expenditures, including rent, fuel, light, clothes and
furniture. If we take the class above, between 25s. and 30s., we see that
only 9s. 1½d. is left after payment for food. Even in the class earning from
30s. to 35s. the food bill leaves but 11s. 2d. per week for rent and all other
requirements.
If we pass from the town to the country and inquire into the condition of
the agricultural labourer we find an even smaller command of comfort. At

the census of 1901 the number of agricultural labourers, shepherds, etc.,
was 956,000. What of cottons or woollens or boots or furniture can these
command? The late Mr Arthur Wilson Fox in the invaluable Report (Cd.
2376) on the wages of agricultural labourers, which was such a labour of
love to him, shows that their total earnings including the value of all "truck"
vary from 14s. 6d. per week in Oxfordshire to 22s. in Durham, the average
being 18s. 3d. for the whole of England. In Wales the average is 17s. 3d.; in
Scotland 19s. 3d. and in Ireland only 10s. 11d. The expenditure on clothing
in England varies between £6 and £10 by a family of six persons; in Ireland,
of course, it is much less.
The simple truth is that the total demand for clothes and underclothes,
hats, boots, furniture, china, glass, ironmongery, domestic utensils and other
comforts by about 20,000,000 of people out of our population of
44,500,000 is exceedingly small. The greater part of slender incomes is
absorbed by the cost of food and drink, and after provision is made for rent,
fuel and lighting, the balance amounts to a few odd shillings. We need not
wonder, then, that our textile industries have to meet such a modest home
demand, or that the Mayor of Leicester cries out for a new industry to
employ "surplus labour."
Let us consider the position of bootmakers as customers for the textile
trades. The Census figures of 1901 for the boot trade were as follows
(England and Wales; 22,000 dealers included):

PERSONS EMPLOYED IN BOOT AND SHOE TRADE,
1901, ENGLAND AND WALES
Men (over 20) 165,589
Women (over 20) 31,734
Boys and youths 32,715
Girls 21,105
Total 251,143

The average earnings of these workers are actually less than £1 per week.
The Board of Trade publish monthly the earnings of a representative
number of them, derived from particulars furnished by employers. The
"Labour Gazette" for August 1910 showed that in July 1910, 60,337 boot
workers took £58,147 in a week, or about 19s. per week. After paying for
rent and food, how little is left to provide custom for the makers of cottons
or woollens. And equally, when textile workers draw meagre wages, how
little is left, after the gratification of primal needs, to provide custom for the
maker of boots.
Thus the error in the distribution of income connotes an error in the
distribution of our population amongst useful and useless, noble and
ignoble, industries. Too few of our population are engaged in the
manufacture of houses, boots, textiles, and furnishings. Too many of our
population are engaged either in the direct production of luxuries or in the
production of useful articles to be exchanged for foreign luxuries. The great
masses of our people are under-served; a small proportion of our people are
over-served. There is enough labour put forth to give material happiness
and comfort to all, but so much of the labour runs to waste that only one-
ninth of our population can be said fully to possess the means of comfort.
Considerations such as these make us understand how futile it is to boast
of the aggregate trade, internal or external, of a nation, or to term that
wealth "national" which is the possession of a few.
[35] Some notes of mine on this subject in the "Daily News" brought me the
following letter from the provinces:
"You very rightly, I think, referred on Monday and Tuesday to the subject
of boots. Here is my own experience. I am a railway man, in constant work at
30s. per week. I am the happy, or otherwise, father of six healthy children.
Last year I bought twenty pairs of boots. This year, up to date, I have bought
ten pairs, costing £2, and yet at the present time my wife and five of the
children have only one pair each. I have two pairs, both of which let in the
water; but I see no prospect at present of getting new ones. I ought to say, of
course, that my wife is a thoroughly domesticated woman, and I am one of
the most temperate of men. So much so, that if all I spend in luxuries was
saved it would not buy a pair of boots once a year. But this is the point I want
to mention. During 1903 my wages were 25s. 6d. per week, and I then had the
six children. My next-door neighbour was a bootmaker and repairer. He fell
out of work, and was out for months. During that time, of course, my
children's boots needed repairing as at other times. I had not the money to pay

for them being repaired, so had to do what repairing I could myself. One day I
found out that I was repairing boots on one side of the wall, and my
neighbour on the other side out of work, and longing to do the work I was
compelled to do myself. I shall never forget the feelings that passed through
my mind as I thought of the circumstances; and so it came home to me again
when I read your reference to the boot trade, and I decided I would forward
this to you. Most surely, as you say, if the 30,000,000 could and would buy
those 50,000,000 pairs of boots you mention, there need not be any slackness
in the boot trade; but, as you say again, if your reference to the question is the
means of making people think seriously about it, much good will be done."
Thus between my correspondent who sorely needed boots, and his
neighbour the bootmaker there stood a wall—and our commercial system.
[36] "Warp and Woof," by Mrs Alfred Lyttelton.
[37] "Poverty," a Study of Town Life, by B. Seebohm Rowntree
(Macmillan).

CHAPTER XII
THE WASTE OF CAPITAL

I T has been observed by Professor Marshall that "perhaps £100,000,000
annually are spent even by the working classes, and £400,000,000 by the
rest of the population of England in ways that do little or nothing towards
making life nobler or truly happier."[38] In view of the fact that the "working
classes" are the bulk of the nation, and the "rest of the population" a relative
handful, this estimate points to a little waste by the many, and much waste
by the few. The fact is, of course, that if the working classes, after
prolonged study of dietetics and hygiene, spent their incomes in the most
economical way possible, and refrained entirely from alcoholic liquor and
tobacco, they would still be unable, save in exceptional cases, to command
the means of a noble and truly happy life. As for the "rest of the
population," if we consider the 5,000,000 persons who enjoy an income of
£909,000,000 per annum, we see very clearly that their superfluity is so
great that they could easily add to the fixed capital of the nation at the rate
of £500,000,000 per annum, and still have left incomes sufficient, if wisely
expended, to command a very considerable degree of comfort. As things
are, an enormous amount of wealth is wasted every year upon current
expenditure of an ignoble character, even while every city and every
industry needs the application of more capital.
Nothing is more striking in the estimate of capital which we formed in
Chapter 5 than the small proportions of the total when considered in
relation to the extent of the national income. For the total, it should be
remembered, includes the value of the land of the United Kingdom.
Subtracting it, we see that the wealth which has been added to the land is
worth not more than about £8,000,000,000, whereas the national income
amounts to £1,840,000,000. Thus, in the United Kingdom we have
accumulated stock, apart from the market price of the land, only to the
extent of about four years' income.
The facts which correspond to these figures are that, in every county and
in every township, there are more ugly and uncomfortable houses than

beautiful and convenient ones, more inefficient plants than well-equipped
businesses, more badly clothed than well-clothed people, more evidences of
poverty than of wealth. On every hand we see the need of capital, but while
its application is so sorely needed, the few rich who command so much of
the national income pour it out in wanton extravagance. The growth of
luxury has been accompanied by an increasing want of enterprise in
industry and commerce. Even in London the most fruitful opportunities lie
neglected. The port is inefficient; the Thames highway has been neglected;
north and south Londoners remain strangers because of lack of transit
facilities; street traffic is archaic; the important railway termini are dirty,
inconvenient and unconnected. All these and many less important things cry
aloud for the application of capital. In London and in every other town there
is a housing problem, and the housing problem is a problem of capital. If
the income of the last 20 years had been patriotically expended there would
be no housing problem to-day, and the fixed capital of the country would be
very much greater than it is.
Another significant fact is the very considerable investment of British
capital abroad, probably amounting, as we have seen, to about
£2,600,000,000. These investments are often spoken of as "our foreign
investments." There is a grim irony in the phrase. For what in essence are
these investments? They left our shores, originally, in the form of exported
manufactures, the product of British labour. We had no gold to lend, but
some amongst us could command and lend the fruit of our work. These
exported products were sent away from our shores by a mere handful of
rich persons who saw in foreign or Colonial loans or enterprises the
opportunity of gaining a higher rate of interest than at home. Year by year
there is returned to those who made the investments, or to their successors
in title, a tribute of foreign and Colonial commodities which goes to swell
our imports. In 1908 this yearly tribute of imports, for which no present
exports have to be exchanged, amounts to about £130,000,000 or
£140,000,000. Whether the nation as a whole gains by this tribute depends
entirely upon the wisdom and patriotism of those who receive it. If we
could ensure its wise use as capital for the promotion of the general welfare,
then the United Kingdom would gain materially by the lien which a few of
its people possess upon foreign and Colonial activities. But we have no

guarantee as to the manner of its use, and too often it but serves to bring to
this country commodities which in no way make life "nobler or truly
happier." I do not mean that articles of luxury are necessarily imported in
payment of the interest on "our" oversea investments, but certain it is that
the limited class which owns them are the chief consumers of luxuries. It
should never be forgotten that, as has already been pointed out in these
pages, the most ordinary raw material may become a vehicle of luxury, and
the commonest forms of labour its servants. Certain imports, e.g. motor cars
or Steinway grand pianos, can be ear-marked as luxuries, but potatoes from
Jersey wasted in a long dinner or Douglas pine from Canada built into a
racing pavilion are "luxuries" more to be deplored than the importation of
Valenciennes lace or Sèvres porcelain by persons of refinement.
It may be well to remark, in passing, that to place a heavy customs duty
upon imported luxuries would in no way benefit the nation at large. It
would merely stimulate the production of luxuries in the United Kingdom,
and so increase the already considerable number of persons engaged in the
trades of luxury.
That we have incidentally gained by acting as a world money-lender is
indisputable. The case of Argentina is a familiar one. British exports have
been largely lent to that country for the construction of railways. Those
railways have cheapened Argentine transport, and so placed at our disposal
cheap bread and meat. But this benefit has been incidental and, moreover,
shared by the world at large. Against such incidental gains we have to place
the criminal neglect of our own country. While capital has gone overseas in
a never-ending stream, the people whose united activities produced the
commodities embodied in that capital have remained poor for lack of the
proper investment of capital at home. Large sections of the British people
have unconsciously worked for the benefit of the foreigner and of the
British Colonist, never realizing that their own country sorely needed all the
capital that their labour could create.[39]
We cannot even lay the flattering unction to our souls that the British
capital which has been sent abroad has gone entirely to build foreign or
Colonial railways, or to develop other useful industries, nor, in so far as it
has been usefully employed, can we claim much credit for the fact. The sole

motive which has influenced the individuals who have thus disposed of the
products of British labour has been individual gain. That gain they have
sought without regard to any consideration of patriotism. Foreign nations
have had our capital indifferently for war or for peace, for building railways
or for constructing warships. A generation ago we wickedly poured our
capital into Turkey. A generation ago were born hundreds of thousands of
British children who, for lack of the full employment of British capital on
British soil, are to-day creatures of the abyss.
The flow of capital to places abroad continues to this hour. If South
Africa is booming, the possessors of capital hasten to gather dividends on
soil thousands of miles away, and with the interest received in this country,
direct British labour to noble or ignoble ends, as may seem good in their
eyes. If a foreign war is proceeding, they hasten to lend the belligerents as
many millions as may be required at anything from five to eight per cent.,
and with the interest they give righteous or unrighteous "work" to other
British sons of freedom. If a South African mine or a Japanese war loan
offers apparent opportunities of quicker profits than putting fresh capital
into British ironworks, or founding a new British industry, it is the end of
South Africa or Japan which is served. Three per cent. gained at home, of
course, is not so desirable as ten per cent. gained abroad. If, therefore, a
housing scheme at home promises to yield but three per cent., while the
employment of coolies in South Africa promises ten per cent., South Africa
and the coolies are "developed"[40] and the housing scheme collapses. This
is by no means a rhetorical flourish; it is the statement of a case not more
extreme than hundreds which occur every year.
If I have dwelt upon our oversea investments (I use the possessive
pronoun for the sake of simplicity of expression) it is because they illustrate
in a very forcible way the misuse of British capital. But the neglect of
British interests which they illustrate is small indeed when compared with
the waste of income upon the pursuit of pleasure and the foundation of
worthless industries at home. If the whole of our oversea investments had
been made since 1860, the average amount so invested would be not more
than £50,000,000 per annum. That consideration enables us to view the
matter in its due perspective. The foreigner and the Colonist have gained
through the profit-hunting of the few possessors of British wealth, but only

to the extent indicated. The oversea investments, with all the taint of
national shame which attaches to many of them, sink into insignificance
when we consider the wanton waste of labour which has occurred at home.
Since 1860 probably as much as £6,000,000,000 of income which should
have passed into reproductive capital has been thrown away in forms of
expenditure which have been to the degradation of the community. Had that
£6,000,000,000 been employed in the promotion of cheap transport, in the
attachment of agricultural workers to the soil, in the acquisition of land by
municipalities, in the provision of healthy homes for the people, the
problems which confront us to-day would be of a different order, and it
would not be possible for the dire poverty of one-third of our people to be
basely used as a weapon of political warfare.
And while so much of the labour which might have added to the nobility
and happiness of the British people has been wasted by direction of a small
fraction of their number, no small part of our employed capital is but the
tool of mischief. For just as individual capital goes abroad to seek its usury
without regard to principle or patriotism, so at home it engages in the most
profitable enterprise known to its limited intelligence, without regard to
morality or the national welfare. It is often more profitable to appeal to
what is worst in human nature than to seek to supply it with things healthy
and honourable. "Is there money in it?" is the only touchstone which
individual capital applies to enterprise.
Obviously there must be reciprocation between the demand for luxurious
articles and the capital employed in their production. The misdirection of
labour which we examined in the last chapter connotes a considerable
misdirection of capital. Thus the effects of luxurious expenditure are two-
fold. There is dissipation of income in the payment for luxurious immaterial
commodities which call for no fixed capital, and again there is the
expenditure of income upon luxurious material commodities which call
capital to their creation. In either case the result is waste. The menial
servant is an illustration of the first process. He is divorced from production
and his work lost to the nation at large. The commodity which he sells is
obsequious hand-service, degrading alike to himself and the person he
serves. The purchase of a motor-car is a striking example of the second
process. To produce it a considerable plant is required and capital flows to a

business profitable because its customers are rich persons who view low
priced articles with suspicion.
A striking illustration of a combination of the two processes is afforded
by a fashionable hotel and restaurant. Here we have a large amount of
capital sunk in an enormous building which is sustained entirely by the
expenditure of the wealthy. A host of menial servants are employed, whose
lives are a denial of manhood and womanhood. In addition there are
nominally useful occupations associated with the conduct of the business. It
calls for the manufacture of food, of utensils, and of furniture, and a large
number of tradesmen and their nominally useful assistants are regularly
employed in connexion with its supplies. A hotel of 700 bedrooms directs
the services of an army of people, most of whom would appear in the
Census as following useful occupations. The whole concern is for the most
part an organization for the waste of capital and labour, and its manifold
activities are called into existence by the orders of a very limited number of
unduly rich people who desire that hand-service shall be at their command
at a moment's notice wherever they may be.
Even more extraordinary is the organization of entire districts in the
service of wealth and luxury. Nothing can be more pitiable than the
spectacle which is presented by a neighbourhood the inhabitants of which
are economically dependent upon the patronage of a limited number of
well-to-do residents. The local tradesmen, the local builders, the local
carters, the local nurserymen, the local physician, the local boat-builders,
the entire local organization, with its little capital and much labour, is under
the economic over-lordship of a few persons whose patronage sustains the
entire machinery. Little that is useful is produced in the district; but by a
process which none of its inhabitants could explain there are imported into
it commodities from all parts of the country. Parasites upon parasites, they
scramble for the expenditure of the well-to-do, and often contrive to make
fat livings out of them. Thus, through the initial evil, the underpayment of
labour at one end of the scale, there is created at the other end a class of
luxury providers who have no conception of their true position in our social
system, or of their uselessness to the community at large.

There remains to consider the tremendous waste of capital which arises
from (1) unnecessary competition and (2) weak or bogus company
promotion.
In the game of competition frequent attempts are made to establish
superfluous businesses in many branches of trade. While industry remains
unorganized such waste of capital must continue, for lacking an estimate of
the quantity of commodities required in any particular department, the
limits of consumption can only be found by fruitless attempts to discover an
unsatisfied demand. This blind application of capital, not to service, but in
the hope of gain, accounts for the waste of large quantities of labour.
Turning to company promotion, it is certain that hundreds of millions of
capital have been wasted in the last twenty years through the dangling of
fancy baits before the possessors of unearned increment. The company
promoter obtains from Somerset House the names and addresses of
shareholders in such concerns as those referred to in Chapter 8, and so is
enabled to send to persons who have already tasted the joys of "waiting" a
prospectus promising them even larger slices of unearned increment than
they already receive. So other millions derived from labour pass into
channels of waste.
The waste and misdirection of capital is a far-reaching matter. Lacking
capital, which simply means lacking tools, labour cannot be economically
exerted, whether in agriculture, in manufacturing, or in distribution. For the
use of tools we leave the great mass of our population dependent upon a
comparative handful of rich persons. That dependence amounts to an
economic serfdom which places the direction of the lives and labours of the
people in the hands of the few. The unduly large share of the national
dividend possessed by the rich produces in them grave faults of character
and purpose which make them indifferent administrators of the capital
without which labour is powerless. The unduly small share of the national
dividend possessed by the poor is the source of a stream of moral and
physical evils which, mingling with the waters of death which descend from
the high levels of luxury, produces effects whose causation is only obscure
as long as we neglect the study of the Error of Distribution.
[38] "Principles of Economics," Vol. i., p. 786.

[39] The same is true of France. Our neighbours across the Channel have
fully £1,500,000,000 invested in places outside the country.
[40] At Johannesburg on April 15th, 1905, Mr Lionel Phillips is reported to
have said: "The Chinese were housed, fed and looked after better than the
working population of England." It may well be.

BOOK II
TOWARDS ORGANIZATION

CHAPTER XIII
THE GOLDEN KEY

T HE misdirection of labour and the waste of income can be checked if
we would have it so. It is in our power, as a nation, to employ the
wealth of the community for national ends and to increase abundantly the
fertility of labour. It is true that we want "more trade," and it is also true that
we need better use of the results of the trade that we have. The problem of
poverty is neither obscure nor insoluble; its cause is clear from the
extraordinary series of facts we have examined; its solution becomes
equally clear when we realize what ample means of remedy we have at our
command. We perceive that the chief ramifications of the social problem
are but varying effects springing from one cause, the waste of labour. We
realize that Poverty, in a nation of 44,000,000 persons possessing an
aggregate exchange income of about £1,840,000,000, need be with us only
as long as we care to tolerate it. Each social or political problem takes on a
new aspect when we consider it, as we should consider it, in relation to the
income of the nation and its distribution.
Unfortunately, the facts of the case have been studied by few people, and,
in so far as they have been published at all, it has been in pages inaccessible
to the public. Of our 44,000,000 people, it is doubtful if as many as a
hundred have studied the subject matter at first hand. Even in relation to
taxation, the question of distribution is rarely discussed. It is but necessary
to listen to a debate on the income tax in the House of Commons to
perceive that on the subject of "ability" the vaguest conceptions exist. Our
most ardent reformers discuss their plans without reference to the economic
framework of the society which they propose to reform. As a result, we get
a vast amount of misdirected effort, a dreary outpouring of vague and
empty rhetoric, a pitiful misconception on the part of the public as to the
true condition of their finances, industries and commerce, and a succession
of timorous proposals for reform ludicrous in relation to the nature and
magnitude of the problems with which they seek to deal.

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

CHAPTER XIV
THE NATION'S CHILDREN

L ET us begin at the beginning with what should be the chief care of the
reformer—the child.
Every year in the United Kingdom there are some 700,000 deaths and
some 1,200,000 births. The social structure which we seek to improve thus
offers us a double hope. However degraded, however enfeebled, however
criminal many of the units of the present generation may be, they must pass
away. Unit after unit is cancelled; unit after unit is replaced. The child, save
in a small percentage of cases, is given to us an unsullied page, upon which
we may write what we will.
If the reader would realize fully the truth which I have just expressed, let
him ponder the following utterance by Professor D. J. Cunningham when
under examination by the recent Inter-Departmental Committee on Physical
Deterioration. After referring to the manner in which changes in the
condition of life affect the growth of an individual class, and more
especially how poverty with its squalor, its bad feeding, and its attendant
ignorance as to the proper nurture of the child, lowers the physical standard
of the poor, he went on to say:
"In spite of the marked variations which are seen in the physique of the
different classes of people of Great Britain, anthropologists believe, with
good reason, that there is a mean physical standard which is the inheritance
of the people as a whole, and that no matter how far certain sections of the
people may deviate from this by deterioration (produced by the causes
referred to) the tendency of the race as a whole will always be to maintain
the inherited mean. In other words, those inferior bodily characters which
are the result of poverty (and not vice such as syphilis and alcoholism) and
which are therefore acquired during the lifetime of the individual, are not
transmissible from one generation to another."
I break the quotation to accentuate the conclusion:

"Therefore, to restore the classes in which this inferiority exists to the
mean standard of national physique, all that is required is to improve the
standard of living, and in one or two generations the ground that has been
lost will be recovered."
According to Dr Alfred Eichholz, H.M. Inspector of Schools, fully 90 per
cent. of the children born in poor neighbourhoods are healthy. Dr Edward
Malins, President of the Obstetrical Society, gives it as his opinion that 80
to 85 per cent. of children are born physically healthy, whatever the
condition of the mother antecedently.[41] The weight of new-born children,
he thinks, is, speaking generally, not below the average—there is a constant
reversion to the race standard.
It is probable that these statements of Dr Eichholz and Dr Malins require
some modification. Other evidence goes to show that it is far from true that
the majority of children born in poor neighbourhoods are healthy. Thus Dr
Henry Ashby, of Manchester, a leading authority on the diseases of
children, said in a letter to the "Lancet" on October 1st, 1904:—
"My own experience in the out-patient room entirely confirms the
opinion that the nutrition of the mother has a very important bearing on the
nutrition of the fœtus and that the statement that the percentage of
unhealthy births among the poor is small is not justified by facts. We
constantly see fully developed infants a day or two old brought by
midwives or neighbours exceedingly badly nourished, blue and feeble, and
who are clearly ill fitted, as the event indeed proves, to withstand the
conditions of an external existence. There must be numbers of such born in
this city that perish within a few weeks of their birth, and who fail to thrive
for even a day. There is no question of syphilis; they are the children of
poor mothers who have lived lives of hard wear and tear during pregnancy,
are themselves badly nourished and weakly, and have felt the pinch of
poverty, though often perhaps poverty of the secondary sort. I have a strong
conviction also that the infants of the poorer and weaker mothers, even
though they are born fairly well nourished, are difficult to rear, and easily
waste even when under fairly favourable conditions in a home or hospital."
Evidence to the same effect was given to the Physical Deterioration
Committee, but unfortunately ignored in their report. It seems to a layman a

common-sense view that if, in the period when a woman has to eat to "feed
two," she is badly nourished, and exposed to undue fatigue, the child must
suffer. Nevertheless, the striking phrase of Dr Malins, "Nature intends all to
have a fair start," may be fully accepted, and Professor Cunningham's
words of hope require no modification. What we have to remember is that
pre-natal as well as post-natal conditions must be improved if we wish to
rehabilitate our stock. If we have not a renewed opportunity with each birth,
at least we have it, save in quite exceptional cases, in the person of each
pregnant woman. The weight of evidence goes to show that the influence of
heredity upon disease has in the past been greatly exaggerated. The chief
causes of deaths from debility, atrophy and premature birth are to be found
in the evil environment and malnutrition of the mother during pregnancy.
The unborn child fights hard for its life, but in a number of cases,
sufficiently large seriously to affect the total population, it is born unfit. It
either succumbs rapidly or lingers on to be a curse to itself and its kind.
These all-important facts once realized, an avenue of hope stretches out
before us. 1,200,000 new births every year; 1,200,000 new units added to
the national stock, and the possibility of ensuring that nearly the whole of
them shall be born healthy. Here is Nature ever endeavouring to reform the
race—ever offering us opportunity. Combine with knowledge of this
opportunity knowledge of the means to take advantage of it. Combine with
the determination to secure reform the application of national wealth to
truly national ends and all things become possible.
Under what circumstances are the children of the new generation now
born? It follows from our examination of incomes that a large proportion of
our new births are of mothers who exist in conditions of extreme poverty.
Fully one-fourth to one-third of the 1,200,000 are born to want and squalor.
In England and Wales, at the census of 1901, of a population of 32,527,843,
there were 12,983,109 persons belonging to families living in four rooms or
less. In one room each lived families forming 507,763 people. In two rooms
each lived families forming 2,158,644 people. In three rooms each lived
families forming 3,186,640 people. In four rooms each lived families
forming 7,130,062 people.

If the one-third of very poor could be gifted with all the virtues, if drink
were abolished and every penny spent upon scientific principles, we have
seen that they would still be unable to command a healthy existence. One-
third of our hope of the future is thus mortgaged. One-third of the new-born
go to feed the ranks of misery and to form, such of them as do not perish in
infancy, the raw material of the social problems of those who are to follow
us.
In England and Wales, in 1908, 940,000 children were born. In the same
year 113,000 infants died under one year of age, or 120 per 1000 births. The
conditions which exist in some of our towns can be gathered from the
following figures:—

INFANT MORTALITY
(Rates per 1000 births in 1908)
Towns with High Rates. Towns with Low Rates.
Stalybridge 206 Reigate 80
Farnworth 209 Tunbridge Wells 83
Aberdare 198 Hornsey 75
Rhondda 182 Guildford 71
Burnley 194 Winchester 88
Batley 186 Watford 88
Longton 199 Ilford 98
Tunstall 198 Salisbury 95

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

But death is only one of the symptoms we have to consider in this
connexion, and death itself were preferable to the survival of a large
proportion of the children of neighbourhoods where the rate of infantile
mortality reaches one in every three or four births. Death is the extreme
case. Those who do not die in infancy have physical degeneracy as their
portion, and, in a world where virility and energy were never more needed
by the labourer if he is to bargain successfully for a decent livelihood, enter
the fierce lists of modern industry with enfeebled bodies. Docile units thus
flood the casual labour market, or, totally unfitted for labour, swell the
ranks of the "residuum."
A woman ought not to work for the last three months of her pregnancy or
during the three months after her child is born. Further, if the child is to be
fed as Nature intended it should not be weaned until about the seventh or
eighth month of its life.
What cognizance does the law now take of these simple physiological
facts? The Factory Act is not aware that pregnancy precedes childbirth. It
recognizes, however, that children are born, and provides that the occupier
of a factory or laundry shall not allow a woman to be employed "within
four weeks after she has given birth to a child." Thus a feeble attempt is
made to protect the working mother for a month after childbirth, but no law
whatever protects the child. It is legal for the mother to go back to the
factory on the twenty-ninth day and leave the child to take its pitiful chance.
The "four week" provision is largely a dead letter. How is an employer to
"know," when a woman applies to him for work, that she bore a child a
fortnight before her application? And who shall blame the woman for
seeking work, when she must work or starve? Miss A. M. Anderson,
Principal Lady Inspector of Factories, gives the following three cases found
in a single town in one week's inquiry:—[42]
A. B., aged 24, unmarried, jute worker, had to leave work, being unfit,
seven weeks before confinement. Became destitute, and found work with
new employer, saying nothing about the baby. Earns 9s. 8d. per week.
C. D., aged 34, married, jute spinner; the child illegitimate. Went back to
work three weeks after childbirth. The new employer knew nothing of the

confinement.
F. F., aged 32, married, jute spinner. Went back to work in 15 days—to a
new employer. Earns 11s. to 12s. per week. Father out of work and
disappeared one week after the birth. The woman's mother "takes care" of
the new baby and two other children, the eldest of whom earns 8s. a week
in a jute mill. Thus 19s. or so per week supports two adults and three
children. They all live in a single room which is very dirty.
In spite of an overwhelming mass of evidence as to the devastating effect
of the employment in factories and workshops of pregnant women and
mothers, the Physical Deterioration Committee's recommendations on the
subject were exceedingly timid. They appear to have been impressed with
the terrible consequences of the employment of women "from girlhood, all
through married life and through child-bearing"; they realized that "the
decreasing physical capacity of the child-bearing woman brings her at last
some relief at the hands of the manager of the mill and she is sent away,
often to take up the equally unsuitable occupation of charwoman or house
scrubber." But, after setting out pages of good reason for action, the
Committee, in effect, came to the conclusion that little or nothing could be
done, because they were reminded of "the enormous practical difficulties
that would accompany any sort of legal prohibition." Even as to extension
of the period after confinement during which employment is forbidden, a
point as to which, as in many other matters, we are falling behind Western
civilization as a whole, the Committee did not advocate the enactment of a
longer period than four weeks. They pinned their faith to a medical
certificate as to fitness, and production of proof that reasonable care is made
for the child in a municipal crèche or otherwise. They also strongly urged
the application of "voluntary assistance" in the shape of maternity funds.
Thus lastly they came to the crux of the matter, the subject of "ways and
means." The cause of the Committee's timidity is only too plain. It is
impossible to make a recommendation of any value which does not entail
expense. What is the use of talking of "medical certificates," unless we can
ensure that, when the medico has certified unfitness, the poor mother shall
have the means of refraining from work? Of what use to talk of "reasonable

care" of the infant, unless the means of reasonable care be provided, and
what form of care other than that of the mother is "reasonable"?
The whole aspect of the question is changed when we consider the extent
of our national resources. Miss Anderson, in the invaluable memorandum
on the subject which she supplied to the Committee, said: "It ought not to
be impossible to link together in one great national provident and protective
association all the isolated, half-informed societies and agencies at work in
aid of maternity and for the saving of infant life. More than that, I believe,
with Miss Squire (Lady Factory Inspector), that all over the country, but
particularly in the great centres in the Midlands and the North, it needs only
an organizing mind and purpose to bring such a national movement into
being."
The Committee did not take up the idea of a "national movement." They
preferred to urge that "voluntary assistance" should devote itself to the
formation of maternity funds. But a problem of so much gravity demands
national effort, and the use of the national purse. Out of the labour of the
poor is drained the rents, profits and dividends which make the gross
assessment to income tax in 1908-9 as much as £1,010,000,000. Of this
sum, how much is needed to deal with the problem of the poor mother?
We have to consider not alone the woman who works in the factory, but
also the woman who works in the home. A large proportion of the latter are
necessitous and ignorant, lacking both the means to feed themselves and
their children properly, and the training to apply the means if they had them.
The case is one in which education and supply must go hand in hand, and
both education and supply should be provided for nationally.
In the school the teaching of personal and domestic hygiene to scholars
of both sexes should begin at an early age. In the case of girls, infant
hygiene should be added in the higher standards. Girls should not leave
school or continuation classes until they have been seriously trained in
domestic duties. At present we herd them in classes of 60 or 80, and leave a
teacher, herself often ignorant of the chief duties of womanhood, to impart
to them a smattering of matters of secondary importance. Able to write
badly, to cipher inaccurately, and to read a novelette, the girl goes forth

from the school "educated," and more ignorant of essential things than the
untutored savage.
If we would have these children technically trained in domestic economy
and hygiene, acquainted with the dietetic value of simple foods, and sent
out into the world fit to take their places in the national economy, we must
make up our minds to increase our expenditure upon education. We must
have more teachers and better trained teachers.
But, if we put our hands earnestly to this work tomorrow, many years
would elapse before we could rear a new generation of mothers. What of
the mothers who now lack education—of the vast number of girls who are
now passing from school into the world they are so unfit to play a part in?
Work upon the right lines has already been commenced at Preston, St
Pancras, and other places. Let me outline the admirable scheme of Dr J. F.
J. Sykes, the Medical Officer of Health for St Pancras.
St Pancras is a poor and crowded London Borough in which, as in many
other such neighbourhoods, infants are dying at a younger and younger age
from increased immaturity at birth, from diminished capacity to resist
disease and from increased rearing "by hand." It is but necessary to take one
walk through its mean streets to see that St Pancras is breeding a degenerate
race. The Borough Council has awakened to the terrible evil which
increasingly threatens them. They have a most capable medical officer and
they have appointed women inspectors to act under his authority. These
women inspectors perform the important function of following up the
weekly official returns of births. There are about 130 births a week in St
Pancras, and all of them cannot be visited by the present small staff, but an
endeavour is made to visit every necessitous case. To all the mothers,
whether visited or not, a card or leaflet of useful information is sent by post.
Dr Sykes does not teach the mothers how to wean or artificially feed their
children, but to suckle their babies and to avoid weaning them before their
first teeth appear. To the many indigent mothers the women inspectors give
advice as to regimen and diet and, where artificial feeding is absolutely
necessary, how best to proceed. Endeavour is also made to reach and advise
pregnant women. Throughout, the chief aim is to reduce hand-feeding to the
smallest possible proportions.

In cases of poverty requiring temporary assistance, the women inspectors
give cards of introduction to the Charity Organization Society, or to the
Poor Law Guardians. Where health is deranged or there is a desire or
necessity to wean, introduction to a doctor or a hospital is arranged for.
Where the husband is out of work the case is notified to the Labour Bureau.
In every case the hygienic, sanitary and domestic circumstances of the
mother and infant are carefully inquired into and reported upon.
This practical work, now in operation in St Pancras, and with variations
in some other places, is what is wanted everywhere if we are to rescue the
poor children of the new generation. The appointment of sufficient Women
Health Inspectors by local authorities must be made compulsory. In "Riches
and Poverty," edition 1905, I wrote: "The Health Inspectors must of course
be directed by a capable Medical Officer enjoying a permanent
appointment. It is most important that Medical Officers of Health
everywhere should have the same security of tenure which they have in
London. At present they hold office as a rule at the goodwill of the local
authority." Mr Burns's Housing Bill of 1909 has secured this important
reform. In future every county will have its independent Medical Officer,
unafraid of local influence.
Closely allied to the work of the Health Inspector is that of the medical
man, and here is raised a point of the utmost importance. Above all, if we
are in earnest about this matter of breed, the public medical service should
be greatly enlarged as part of the machinery of a Ministry of Health, and the
sale of soothing syrups and other "patent" medicines absolutely prohibited.
[43] The Medical Officers of Health should be able to marshal a liberal

service of trained medical skill in defence of the national well-being. Also
at their command should be an ample supply of Health Visitors and trained
and certificated nurses. The creatures, nearly always ignorant and
frequently unclean, who now "assist" poor women in their time of trouble,
are responsible for part of the infant mortality which swells our death
returns. I shall never forget some of the "monthly nurses" I have met in the
homes of the poor. One ancient dame I found swilling stout. She leered at
me out of a beery eye and explained that she liked stout "because it made
her feel as though she could sing." Needless to say, she strongly
recommended the same joyful fluid to her patients.

The excellent Notification of Births Act of Lord Robert Cecil (1907)
should be adopted (or its adoption enforced—the Local Government Board
has power to enforce adoption) universally, in order that Health Visitors
may do their work effectually.
Given a properly organized public medical service we could begin at the
beginning, with the unborn child. The pregnant woman could obtain, free of
charge and as a matter of course, advice upon her diet and conduct. Through
such a service, it would be a simple matter to administer a Public Maternity
Fund. It is probable that, of the 1,200,000 births per annum, as many as
300,000 are in necessitous families. We cannot afford to allow 300,000
children to be starved before and after birth every year.
The nation must set its face against the employment of married women in
factories or workshops, and gradually extend the period of legal prohibition.
There is only one proper sphere of work for the married woman and that is
her own home. In the case of factory workers the employer must be made to
furnish a maternity fund if he wishes to employ married women. Thus
penalized he will probably prefer not to employ them—to the very great
advantage of the labour market and the nation. There are several model
factories in the United Kingdom where the female workers are dismissed
upon marriage. This is found to prevent the girls falling victims to loafers
who desire to play three days a week. The Jewish community amongst us,
the very aliens who are despised by the race they are supplanting in the East
End of London, set us an example which we should do well to imitate. The
Jewish children are much healthier and stronger than their Gentile
neighbours because they are better mothered. Jewish women find their true
avocation at home. The Jew, however poor, does not live on his wife's
earnings, and it would be counted shame for a Jewess to work during
pregnancy or after childbirth.
But what of the poor woman in her home? We can safely confer upon our
medical officers and women inspectors power to report upon and advise the
assistance of necessitous cases, before and after childbirth. The mother and
child must be fed. Nature must be allowed to fulfil her desire to give the
new unit of population a fair start in life. The cost would be surprisingly
small. If 300,000 cases were assisted to the extent of £10 each it would

entail an expenditure of only £3,000,000 per annum. With £10 per case a
great deal could be done.
By assistance to the extent of £10 each I do not necessarily mean a
money payment. Often the assistance which is most wanted is personal
help. The poor Jewish women of East London have the aid of that excellent
institution the Sick Room Helps Society, which is practically a charitable
institution, the poor mothers contributing less than one-third of the
expenditure. The "Sick Room Helps" provided by this Society are thus
described by Miss Bella Löwy:
"They had to take the place of the house-mother when, through confinement or sickness, she was
laid low, and when, were it not for their ministrations, the children and husband, and the home
(sometimes consisting of one room only) would be absolutely uncared for. The Helps were only sent
in where there was no woman or girl old enough and able to do the work. The Sick Room Helps, for
the time being, took the place of the housemother, washed the baby, got the children ready and sent
them to school, cooked the food, tidied and cleaned up the home, saw that any accumulation of
washing was done. In fact, she attended to the hundred and one little things which required to be seen
to even in the most modest home, and they could readily understand how much more cleanliness and
order became indispensable when the family had to live, eat and sleep in one room only. The advent
of the Sick Room Helps also ensured for the mother peace of mind, as well as of body, at a time
when she sorely needed both, and if she knew that her husband and children were well-cared for and
well looked after she was assisted on the road to health and strength, and was, thereby, enabled to
take up afresh the routine of her numerous daily duties. Formerly the poor mothers used to grudge
themselves even a few days of enforced idleness, and, by premature activity in getting up and about,
they but too often sowed the seeds of illness and sickness, and brought untold troubles on themselves
and their families. Notwithstanding that these facts were well-known and were perfectly obvious to
every thinking person, the opposition to what was erroneously termed a new form of pauperization
had been very great. But an institution which not only benefited the recipients by nursing them when
it was imperatively necessary, but, at the same time, gave employment to deserving women, enabling
them to support themselves, and, perhaps, their family, could not be accused of encouraging
pauperism in any way."

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

In this connexion a municipal milk service, which will be discussed in
these pages hereafter, would be of the first importance, and it would be
found a simple matter to supply pregnant women and nursing mothers with
an ample quantity of pure milk. Such a supply might be made universal and
be specially supplemented in necessitous cases. In any case, the mother has
a special claim upon the community and that claim should be recognized.
The birth of a child is a special tax upon the family in which it occurs, a tax
which is deliberately avoided by many people. Yet the unit not only belongs
to its family; it is an integral part of the nation, and entitled to the care of a
country which desires strong and healthy citizens.
Such provisions should be accompanied by drastic punishment of parents
who neglect their duties. Upon report of the Health Officer, the prosecution
and punishment of offenders against the nation's children would swiftly
follow. We must make the man who neglects his child, which is also the
nation's child, feel that he is the greatest criminal of them all.
It is impossible to leave the subject of the birth of the new generation
without reference to the necessity for the segregation of the unfit. It must be
made no longer possible for the habitual drunkard, the vagrant, the criminal,
the mentally defective, to reproduce their terrible kind. The subject is so
rarely brought before the public that few people realize the nature and
extent of the danger. Fully two per cent. of our existing elementary school
children will never be fit to direct their own lives. The State has but one
duty in the matter and that is to protect society from the breeding of the
unfit, while protecting the unfit from themselves. The child of the habitual
drunkard is often feeble-minded. The child of the feeble-minded is
frequently an idiot. Need we wonder, while the State has no control of the
feeble-minded, that our lunatic asylums are ever growing too small for their
pitiable populations. Our criminal and workhouse records are full of
testimony as to the terrible results of the unchecked propagation of the
insane by the mentally weak. A few years ago, at Daventry, a couple were
charged with neglecting their ten-year-old son. It was stated that the child
was in the habit of smoking a pipe and drinking beer, supplied by the father.
A doctor stated that the boy was a perfect savage. He was undersized and
threatened to be an idiot or a criminal. The boy was sent to the workhouse
while the mother and father, described as "mentally weak," were sentenced

to one day's imprisonment and are now free to bring forth sui generis.
Another recently reported case which I noted was that of a partly paralyzed
old man who applied for out-relief to the Oulton Guardians. He has had
thirty children and the youngest, a girl, is described as "practically an
imbecile." From her, doubtless, and from others of the brood, the terrible
strain will proceed. Mr Amos W. Butler, speaking at the American
Association for the Advancement of Science, gave particulars of the
descendants of a feeble-minded woman. She was the mother of two
daughters, who were free to marry because, like their parent, they were not
actually insane. One of them, Rachel, has married twice, and borne eleven
children, three of whom are dead. One of the survivors is a criminal and the
others are degenerates. The other daughter, Kate, has four children, all
feeble-minded, two of them illegitimate. One of them became the wife of a
feeble-minded paralytic and has had five awful children. The direct
descendants of the woman first mentioned number twenty-nine, and in ten
years twelve of them have spent an aggregate of twenty-two years in
asylums and orphans' homes.
These details may be nauseating, but of what use to shirk them? It is only
when we realize that such propagation is going on unchecked that we see
our duty clear in the matter. We then also see that segregation of the unfit
would not increase our burdens, but decrease them.
Segregation recognized as a painful duty, it would no longer be necessary
to make any reservation when speaking of the hope that lies in the child.
Our 1,200,000 new births per annum would soon regenerate the race.
During the next twenty years about 25,000,000 children will be born in the
United Kingdom.
[41] See evidence before the Physical Deterioration Committee.
[42] Cd. 2175, p. 117.
[43] In this connexion it should be observed that there are 28,000 surgeons,
physicians and medical practitioners in the United Kingdom. The number
(one to about 300 families) is probably larger than the nation needs, but even
to organize the whole of them as public servants, and to make the medical
service entirely free, would cost only about £10,000,000 per annum, allowing
for salaries ranging from £250 to £1,000.

CHAPTER XV
THE SCHOOL

I N a commonwealth a man would need a healthy mind in a healthy body
to be true to himself, and to every man. In an unorganized community, in
which each man must needs struggle with his fellow for the right to live,
and in which to be unselfish is to be weak, and to be weak is to go to the
wall, a man needs a healthy mind in a healthy body in order to set up
himself and those dear to him in a fortress impregnable, with ramparts
against competitors, secret stores against time of siege, and insurance
policies against the horrors that threaten weak women and young children
whose champion has departed.
As things are now, we have then, not merely to train the boy to be a man
for manhood's sake, but to fit him to fight what has been pleasantly called
"the battle of life." He must be not only strong but artful, not only
intelligent but cunning, not only brave but aggressive, not only fit to work
but fit to bargain, not only an artist but a shopkeeper.
Knowing what we do of the hardness of the competitive system, how
unfair we are to these children whom we affect to "educate." We dose them
with a little book-learning and pass them on to seek employers. Nothing has
been taught them by way of preparation for the real education upon which
they are about to enter. They are wholly ignorant of the nature of the
machine of which they are about to become an insignificant part. They
plunge into the hard work which henceforth is to be their portion and little
that has been taught them is of value in connexion with it. The boy is
compelled to play a game for wages without knowledge of the rules.
Business presents itself to him as an impenetrable mystery, the secrets of
which are known but to a few. He becomes a producer of things which in
some way, he knows not how, are sold and bought and come to yield him a
certain or uncertain wage. He does not see, nor, if he saw, would he
understand, the balance sheet which sums up the processes which yield him
a part only of his production. He is not competent to measure the extent of

the injustice which he suffers. It is a game played between a few who know
and many who do not know.
From the beginning of the child's life, the Error of Distribution plays its
part. The opportunity offered the child varies directly with the income of its
parent. The frontispiece of this volume measures not income alone; it
measures also the degree of opportunity which is offered to the children
respectively of the rich, the comfortable and the poor. Since the bulk of the
people are poor, the greater number of the nation's children are handicapped
at the start. Individually they are deprived of their birthright. Collectively
the community is deprived of the proper value of their strength, their
intelligence, their genius.
The last point is rarely discussed. Intellect and genius are the possessions
of no single class. Year by year we kill off units of our population who
might live to work good for their kind. Year by year we brutalize men who,
given opportunity, might enrich our literature or ennoble our art. Year by
year we waste the greater part of the gifts of our people. Here and there
some rare combination of muscle and brain rises superior to circumstance
and lives to command the class which would have repressed him. These
exceptional cases serve to remind us of the ability which is lost. We know
only of the soldiers who live to be commanders. Probably greater generals
than Napoleon have perished as privates in their first battle. That is
unavoidable, for in battle some must die. But in the arts of peace the
sacrifice of potential commanders need not go on. Given equality of
opportunity, the marshal's baton in each private's knapsack, and the nation
need not waste one of its great men.
If we are in earnest in this matter of the problem of poverty, we must
hasten to equalize opportunity, and having begun with the unborn child,
continue our work in the school. We must seek to make the school a
preparation for life and endeavour to build up, out of the new generation,
citizens who understand, and who, understanding, will see to it that they
remain not poor.
In the first place, we have to attend to the child's body. Through the
school we can see that the child is properly clothed and properly fed.
Through the school we can teach the child to understand its physical nature

and to respect it. In a certain class of trumpery novel, the "tubbing"
Englishman is distinguished from the unclean foreigner. The simple fact is
that the Englishmen who "tub" are quite exceptional specimens of their
kind. Few of the 9,000,000 houses of the United Kingdom are provided
with tubbing apparatus, and even the London County Council has lately
built "model" cottages which contain no bath. We must change all that. The
Germans are setting us the example of introducing shower baths into their
public elementary schools, and all the children are bathed once a week.
They soon get to enjoy it, and it is rarely that a child objects. Mr George
Andrew, in his valuable report to the Scottish Education Department on the
schools of Berlin and Charlottenburg,[44] says that in the poorer localities
this weekly bath system is found to have an educational effect upon the
parents. The mothers, influenced by the knowledge that their children's
underclothing will be scrutinized, supply them with clean things. Thus even
that least amenable of subjects, the parent, may be reached through the
child.
In "Riches and Poverty" edition 1905, I wrote:—
"In the matter of school hygiene and the physical training of children, the
introduction of the medico into the school is all-important. At present,
proper hygienic inspection of our schools does not exist. Medical officers
should be appointed both to see that school buildings are absolutely healthy
and to care for the personal health of the pupils. Upon entering the school,
the child should undergo a preliminary examination and from thence
onward remain under the care of the school doctor. The preliminary
examination would decide the question of fitness for normal instruction;
defective children would be drafted into special classes."
In 1907 the Education (Administrative Provisions) Act made it the "duty"
of local education authorities "to provide for the medical inspection of
children immediately before, or at the time of, or as soon as possible after,
their admission to a public elementary school" and the "power" of such
authorities to make arrangements "for attending to the health and physical
condition of the children." It is earnestly to be hoped that this "power" will
be exercised; at present many authorities are blind to it. The reader may
judge from a single example the importance of using the schools as a means

of physical control and training. Dr Ralph H. Crowley, the Medical
Superintendent of the Bradford Education Authority, conducted an inquiry
into the physical condition of the school children of Bradford in 1907. The
results make painful reading.
Let us begin with the "general condition" of the Bradford children. The
examination as to cleanliness was made by observations of the head, ears,
and neck, and by rolling up the sleeves of the children. The following
approximate figures were arrived at:

CONDITION AS TO CLEANLINESS
Number. Per Cent.
Clean 10,000 22.2
Somewhat dirty 22,000 49.0
Dirty 11,500 25.5
Very dirty 1,500 3.3

I think we must agree with Dr Crowley that these figures "show a
deplorable state of things." What is to be said of "home life" and
"education," which between them fail to teach a child to be clean?
Here are some saddening details as to the condition of the heads of girls:

CONDITION OF GIRLS' HEADS
No. of Girls. Per Cent.
Clean 7,000 30
Nits present 8,500 35
Lice present 8,500 35

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

CONDITION OF CLOTHING
No. of Children. Per Cent.
Good 10,000 22
Average 19,000 42
Bad or very bad 16,000 36

As for boots, the results are worth the consideration of British
bootmakers. As many as 6,500 children had foot-gear so bad that in many
cases "it was difficult to see how what were meant for boots managed to
keep on the feet."
Condition as to nutrition was judged broadly, irrespective of cause. Dr
Crowley divided the schools into three classes—better class schools, poor
schools, poorest. I take the case of the poorest schools:

C. SCHOOLS—POOREST
Nutrition. Infants. Upper School.
No. Per Cent. No. Per Cent.
Good or sufficiently good 51 30.7 105 24.4
Below normal 58 34.9 183 42.6
Poor or very poor 57 34.4 142 33.0

Taking the three groups of schools together, we find that 1,019 children
out of nearly 2,000 were "below normal" in point of nutrition. More than
one-half, that is, were suffering from chronic semi-starvation. Of the 1,019,
as many as 344 were described as "poor or very poor."
Very instructively Dr Crowley measured nutrition against mental
capacity, and showed clearly how often unhealthy minds are the product of
unhealthy bodies. Of children of exceptional intelligence, 62.7 per cent.
were of good nutrition. Of dull children only 24.9 per cent. were of good
nutrition.
Dr Crowley concluded his significant report with these words:

"No increased facilities for higher education or technical instruction can
in any way take the place of attention to the physical side of our children.
The future of our nation will depend, not on the ability of the few, but on
the fitness of the many, and this fitness must be secured at all cost. It is for
us as a nation a matter of life and death."
To proceed, anthropometric statistics should be carefully compiled, and a
sickness register kept, so that the nation may judge of the progress made in
restoring its stature. The teeth would have special attention and the school
dentist would work hand in hand with the school doctor. Children need few
dosings, but in special cases cod liver oil or a suitable tonic could be
administered, as is done in Belgium.
In cases of defective nourishment the child must be fed, whatever the
character of the parent. No fears as to the loosening of parental
responsibility need stand in the way in this essential matter, for drastic
punishment of neglectful parents should go hand in hand with our care of
the child. Nothing, in my opinion, is so likely to encourage the feeling of
parental responsibility, and to shame careless mothers, as the knowledge
that at the school the child is regarded as a valuable commodity. In this
connexion it would be well for the Board of Education to insist upon
periodical reports, not less frequently than every three months, to parents
upon their children. A carefully written report upon the progress of the
scholar in all departments would be calculated to stimulate the better
feelings of the parent.
The greatest timidity was shown by the Physical Deterioration
Committee in dealing with the important subject of underfed children. The
report runs:
"By a differentiation of function on these terms—the School Authority to
supply and organize the machinery, the benevolent to furnish the material—
a working adjustment between the privileges of charity and the obligations
of the community might be reached. In some districts it still may be the case
that such an arrangement would prove inadequate, the extent or the
concentration of poverty might be too great for the resources of local
charity, and in these, subject to the consent of the Board of Education, it

might be expedient to permit the application of municipal aid on a larger
scale."
It is the State that must furnish the "material," not as a matter of charity,
but from motives of the purest common sense. The timidity of the
Committee is the more remarkable when the evidence presented to them is
examined. Dr Eichholz made a special investigation into the conditions of
the Johanna Street Board School, Lambeth, as a type of school in a very bad
district, and he considers that 90 per cent. of the children are unable, by
reason of their physical condition, to attend to their lessons in a proper way.
His estimate of the underfed children in the elementary schools of London
is 122,000, or 16 per cent. of the whole.[45]
Those alone who have had to do with voluntary free breakfast schemes
can have any idea of the terrible hunger of the children who attend them.
The hugging of the mug of cocoa, the ravenous swallowing—it cannot be
called eating—of the slices of bread, make one shudder to think that, but for
such isolated voluntary effort, the poor children would in an hour or so be
entering a school at which their attendance is compulsory to—study! And
for one helped by voluntary effort how many go hungry to their tasks,
utterly unable, through physical weakness, to do their work!
Those who have grasped the importance of the utterance of Dr D. J.
Cunningham, quoted in the last chapter, will heartily agree with Sir Shirley
Murphy, L.C.C. Medical Officer of Health, that "the child has got to be
fed." The chief deterrent to many is fear that parents will be demoralized by
free meals at the schools. It must be realized by those who entertain this
fear that the parents are often already thoroughly demoralized, and that their
demoralization in the great majority of cases has resulted from the
conditions imposed upon them from their birth by our social system. They
are what they are because of circumstances over which their control was
nominal. The reader, or myself, if transplanted to Lambeth at a few months
old, and nurtured as they were nurtured, would at this moment be what they
are. "There, but for the Grace of God, goes myself," is the reflection which
every man should make when he contemplates the waste products of the
civilization of which he himself is a favoured part. That truth realized by
any man, it is never again possible for him, if he has more than the average

share of the nation's income, to grudge a part of the amount by which his
income exceeds the average to raise to a higher level the children of those
whose lives have been a crying injustice from their cradles—of those who
have, with all their faults, done more than their share of the hard labour of
the world.
In 1906 the Education (Provision of Meals) Act enacted that a local
education authority "may take such steps as they think fit for the provision
of meals for children in attendance at any public elementary school in their
area" to the extent of a halfpenny rate and no more. So, with extreme
timidity, the legislative machine advances.
Games, physical drill, gardening and swimming, should be taught to
every child, under proper medical control. I assume the existence of
playgrounds in some ample shape—each school having its indoor and
outdoor places of recreation and its school garden. A great object is to keep
the child from the street. For the same reason, the school grounds should be
open on summer evenings and during all vacations. It is a simple matter to
make the vacations a time of real holiday for every child—filled with lively
interest and healthful sport. With the physical exercises and teaching of
games and, indeed, with all other departments of school life should be
associated what Rousseau considered to be the chief moral principle that a
child should learn—to do harm to no one. That carries with it the teaching
of "manners" in their best sense. Nor should graces of person be neglected.
The boy should not be allowed to slouch about with his hands in his
pockets. If he does, he is only too likely to slouch into casual labour
hereafter.
Clean, neatly clad, healthy, well-nourished, upright, self-respecting and
therefore respectful of others, feeling its strength in every limb, well-
mannered, capable of lucid expression—is it beyond our powers to make
the average child all this? Not if these things are as well worth
consideration as the resistance of an armour-plate, the trajectory of a rifle-
bullet, or the virtues of a smokeless powder. Not if the proper study of
mankind is man.
Having made provision for the body, we may now turn to the mind. I
have referred to the child's power of expression, and I think that the average

elementary scholar's incapacity to think clearly or to express its ideas with
lucidity show how much we have missed the way in our educational
methods. We have forgotten that to "educate" is literally to "lead out." The
two guiding principles or characteristics of the German school curriculum
as described by Mr George Andrew are: (1) The principle of "Anschauung"
(observation, intuition, concrete), and (2) The development of oral
expression.
"Anschauung" literally means "looking at" and as an educational
principle it means observation of the concrete as paving the way to the
abstract. The child begins school with the supply of words and conceptions
which it has gained from infancy in its own house. These have to be
corrected and completed; the child's concepts are enriched by fresh
observations and by gradual steps it is advanced from the familiar to the
strange, from the known to the unknown. In the youngest classes the
instruction in reading, writing, arithmetic, drawing, nature study, is all in
varying degrees based on "Anschauung," and later the same principle of
observation is to be traced in the teaching of such subjects as geometry,
geography, and history, where models, pictures, maps, and plans are
continually resorted to in order to deepen and vivify the ideas gained from
the printed page. Mr Andrew thus contrasts infant teaching in Scotland with
that in Berlin:
"In Scotland, infant classes generally begin with the alphabet and the elementary reading-book, the
object-lesson being something of an "extra," in which much useful and stodgy information is often
imparted to the youthful mind—not always on subjects within its range of actual experience—and
then retracted under an incessant fire of jerky interrogatories.
"The Berlin child begins in a different way. With him the "observation lesson" is the starting-point.
It is maintained that the child in his natural intercourse at home with his parents, brothers and sisters,
and playmates, has equipped himself with a certain rudimentary supply of words and ideas, which
concern themselves mainly with objects that have fallen within his own range of vision. He has
learned to speak in a language, the purity or corruptness of which will largely depend on his
environment. It is on these two lines, his rudimentary knowledge of simple objects and his power of
simple speech, that his first school instruction proceeds, individual words and their constituent
sounds with (the corresponding letter names) being reached by a gradual analytical process. In the
"observation lesson" such objects as are in the schoolroom, or again, the child's body and limbs, his
food, his clothes, his home, his street, etc., anything, in fact, which he can see, or has seen, are made
use of. But even in this early "observation lesson" one cannot fail to note how the foundations are
laid for developing oral expression—for teaching the child Sprachfertigkeit. Just as the child comes
to school with his rudimentary ideas, and has these gradually corrected and extended by
"observation," so also in this lesson the power of speech he brings with him is taken up and

developed from the beginning. He is asked to describe what is placed before his eyes; he is made—
and this is naturally the first difficulty—to speak in a distinctly loud tone of voice; and he is made to
answer in a sentence or sentences. For example, the teacher's watch was taken as the subject of an
"observation lesson" in a class of pupils newly come to school. One heard such little sentences as
"This is a watch"; "from the watch hangs a chain"; "on the face of the watch are figures," etc. Every
now and then some child is made to recapitulate the whole account, e.g. to repeat the above three
sentences—a process to which great importance is attached."

Thus from the beginning the child is taught to observe and to express
lucidly what it has observed, and this excellent principle—this real
"education"—is followed throughout its school life. As a result the children
become self-reliant in utterance, able to think clearly and to express their
ideas orally or in writing in logical order and appropriate language. Thus,
whatever the influence of the home the child gains a proper use of its
mother-tongue. In our own country the vocabulary of the home remains the
vocabulary of the child, and I know of nothing more painful than to listen to
the talk of our "educated" elementary school children in poor
neighbourhoods.
There is no subject in the curriculum to which the principles of
observation and development of expression are not applied with success.
Thus, arithmetic is not taught by rule-of-thumb, as is too often the case in
our schools, but from the beginning the child is led to "count with
understanding." The child does not merely learn a series of mechanical
rules. He understands the process he employs and can give a lucid account
of his knowledge. It is perhaps hardly necessary to add that he studies the
metric system, and becomes familiar with the arithmetic of business
operations.
Our elementary school curriculum must be made to include the study of
the sciences as a matter of course and not as special subjects. Unfortunately,
public opinion is still lamentably absent on this point. An ex-Prime Minister
is not ashamed to state publicly that he is ignorant of science, and the
majority of those who have received what is known as a "liberal" education
could not intelligently explain the ringing of an electric bell or the action of
their own hearts. This deplorable neglect of science is sadly handicapping
us as a nation in every department, and it is a notable fact that the majority
of recent scientific discoveries have been made in other lands. In "Riches
and Poverty," 1905, I mentioned the following as especially notable: X-

Rays, Germany; Radium, France; Synthetic indigo, Germany; Artificial
Silk, France and Germany; Incandescent gas light, Germany; Wireless
telegraphy, Italy. Since then the English Channel has been crossed by a
flying machine—from the French side. I notice that Mr Andrew, in the
report already referred to, while acknowledging that science was generally
treated excellently in the German schools, obtained a "vague impression
that rather much was attempted." Is that vague impression to be wondered
at, in view of the pitiable condition of science teaching in the United
Kingdom?
As a matter of fact, nothing is more fascinating to the average child than
the science-lesson. The child is instinctively a scientist; its mind is ever
searching for the reason of things, and the average British parent is every
day through his ignorance of science compelled to evade the simple but
very reasonable inquiries of his offspring. It should be our object at the
school to encourage the child's wonderings, and to do what we can to
cherish the wise habit of wondering. The savage at least wonders when he
sees a locomotive. The average "educated" citizen has long ceased to
wonder either about the science that moves his train or the science that
lights his house.
It is easy to understand how well the two guiding principles of German
teaching fit the study of science, or of nature-knowledge, to use the
terminology of the Charlottenburg curriculum. The material aim of the
course is to give the pupil knowledge of nature in a form suited to his grasp,
including, be it observed, the laws of health. Then there is the formal aim—
to train the pupil's powers of observation, and to develop his powers of
thinking, and to awaken his sympathy with plant and animal life and
admiration for the beauty of Nature. At Charlottenburg Natural History is
taught under the three sub-divisions A. Botany, B. Zoology, and C.
Anthropology. Under the third is taught animal physiology, the laws of
health, and first aid in cases of accident. In connexion with Botany, school
excursions for the study of plant life are organized. I can imagine no more
useful discipline for a town dweller. In the domain of physical science, the
pupils are led on to the knowledge of Nature's laws and to the causes of
common things. Particular attention is paid, Mr Andrew tells us, to such
phenomena or principles as are of importance in domestic, industrial and

commercial life—those of domestic life applying to the girls, the latter two
to the boys. Light, heat, magnetism, electricity, mechanics, sound,
chemistry and mineralogy are taken. Experiment is largely employed, and
the apparatus used is adequate and admirable, in this respect being a
striking contrast to the mean outfit which is usually considered good
enough in the United Kingdom. The reflection is forced upon one that, in
the region of foreign competition, with which this work is not concerned,
they will be formidable antagonists, these scientific German children, in the
time to come.
In connexion with the teaching of hygiene in schools we can do much to
encourage abstinence from intoxicating liquors. If in the study of
physiology the harmful effects of alcohol upon the kidneys and other organs
is made clear to the children, a very wholesome fear of "drink" will be bred
in them.
The little we are doing in the way of teaching domestic economy and
cooking to girls needs much strengthening. These subjects should be
compulsory in the highest classes of all girls' schools. There is perhaps no
other country in which poor women are so ignorant of cooking as in the
United Kingdom. There is no simple national dish which every one knows
how to make, and it is rarely that poor Englishwomen can make a decent
soup or have any idea of the proper cooking of vegetables.
As a preliminary to the abolition of child labour under the age of 16, the
introduction of the principle of compulsion in connexion with continuation
classes is badly needed. The children are now set free at the most dangerous
period of their lives, and nothing but good could arise from compelling their
attendance at classes which, in the case of girls, should deal with infant and
domestic hygiene, cookery, and dressmaking, and in the case of boys with
science, technics and languages.
In 1908 I introduced into the House of Commons a measure to establish
compulsory day continuation schools in England and Wales. The Bill was
prefaced with a memorandum which pointed out:
"According to the census of 1901 there were in England and Wales about
4,600,000 persons of both sexes between the ages of 14 and 21 years.

According to the reports of the Board of Education the number of pupils
aged 15 to 21 years attending day and evening continuation schools of all
sorts is only about 387,000."
The Bill itself was as follows:
1. This Act may be cited as the Continuation Schools Act, 1909.
2. The earliest age at which a child shall be entitled to any exemption from obligatory school
attendance shall be fourteen years, and the Education Acts, 1870 to 1902, are hereby repealed in so
far as they permit the partial or total exemption from school attendance of children under fourteen
years of age.
3. Every child whose age exceeds fourteen but does not exceed seventeen years shall be deemed to
be a continuation scholar, and is hereinafter so termed in this Act.
4. Every education authority shall establish classes (hereinafter termed a continuation school) for
the continued education and technical training, without fees, of all continuation scholars in its district
who do not attend approved day secondary or day technical schools.
5. The continuation school shall be carried on at hours which do not terminate later than six o'clock
p.m., and every continuation scholar shall attend the continuation school for a period of not less than
six hours per week.
6. Sufficient school places, and sufficient teachers, scientific and technical apparatus, material,
tools, or plant, et cetera, shall be provided to enable every continuation scholar controlled by the
education authority to be instructed in industry or agriculture, or in domestic economy, in the English
language and literature, in the principles of hygiene, and in the duties and obligations of citizenship,
and the scheme and curriculum of each continuation school shall be subject to the approval of the
Board of Education.
7. For the purposes of the administration of this Act, the education authority may co-opt any
number of local employers not exceeding six.
8. Every employer shall permit every continuation scholar in his employ time in which to attend
the continuation school, and, failing to permit such attendance, shall be liable on summary conviction
to a penalty not exceeding two pounds for every day upon which his employee therefore fails to make
his due attendance at the continuation school.
9. Every parent or responsible guardian of a continuation scholar who fails to attend a continuation
school shall be liable on summary conviction to a penalty not exceeding ten shillings for every day
upon which the continuation scholar fails to attend the continuation school, unless the non-attendance
is due to the fault of the scholar's employer, or to illness, accident, or other unavoidable cause.
10. It shall be the duty of the education authority to prosecute the parent or responsible guardian or
the employer of any continuation scholar who is absent from the continuation or other approved
school save through illness, accident, or other unavoidable cause:
Provided that no continuation scholar shall be required to attend a continuation school held beyond
two miles, measured along the nearest road, from the residence of the continuation scholar.
11. The cost of carrying out the provisions of this Act shall be paid out of moneys provided by
Parliament.

So much is said about the example of Germany that it may serve as a
stimulus to those who think the above provisions too drastic to observe that
my Bill was based upon the scheme which is in actual operation at Munich
and which may soon be in operation for all German children.
It is by the adoption of such rational methods in our schools that we may
give opportunity to the new generation. If they exhibit ability they can
advance to, and benefit by, a secondary education which shall fit them to
perform the highest service for the State. If their abilities are of a meaner
order, we shall at least send them out into the world well-equipped mentally
and physically for their life's work and keep a guiding hand upon them after
their school days are ended.
With such an education the individual unit of industry would have
strength and understanding to contend for a better wage and be fitted to do
better work. He would also take thought as to the constitution of the society
of which he forms a part, and employ intelligently the franchise which in
the past he has so frequently used to his own undoing. In an individualistic
society such a unit would be better fitted to hold his own. In the wise
collectivism towards which we are steering, he would be fitted to do his
whole duty to his fellows and himself.
The relevance of education to the main theme of this book demands little
comment. It is obvious that, if we are to provide a proper physical and
mental training for our people we must spend more money. Better schools,
better playgrounds, better apparatus, more and better trained teachers,
classes not exceeding 30 pupils per class, the introduction of the school
doctor and school dentist, the provision of meals, the compulsory
continuation schools—all these things are needed and all these things are
costly. It is only want of reflection upon the enormous resources at the
disposal of the State which makes so many people timid in educational
reform. Take the matter of school doctors, for instance. On page 64 of the
Report of the Physical Deterioration Committee will be found:
"Dr Eichholz thought it (the medical inspection of school children) was
the greatest need in school organization."

Therefore, you would say, Dr Eichholz and the Committee would urge
that the "greatest need" be properly supplied. Alas! the report goes on:
"On the ground of expense he would confine a general examination to the
poorest schools, and considered that in London the work could be done by
ten young men at £250 each."
The Committee, speaking for themselves, say:
"The Committee believe that, with teachers properly trained in the
various branches of hygiene, the system could be so far based on their
observation and record, that no large and expensive medical staff would be
necessary...."
Always the idea appears to be uppermost that this is a poor, a very poor,
country, which cannot afford to do the things which it would wish to do.
That teachers "properly trained in the various branches of hygiene," which
certainly do not cover the diagnosis of disease, should be considered
competent to decide which children should or should not undergo medical
examination amounts to an expression of opinion that we cannot afford to
provide the schools with their "greatest need."
I refer the timid to the fact that the gross assessments to Income Tax in
1908-9 were over £1,000,000,000. The practical point is this. Of the
£1,000,000,000, can we spare a few millions for the purposes mentioned in
this chapter?
[44] Cd. 2120.
[45] It is of interest to observe that Mr Robert Hunter estimates that 70,000
of the school children of New York arrive at school either breakfastless or
underfed. This estimate accounts for 13 per cent. of the school children of the
city.

CHAPTER XVI
THE HOME

I T is an amusing statistical fact that at the census of 1901 our
"overcrowded" England had but 558 persons to the square mile, or one
person to 1.15 acres, or one family to about 6 acres. If in 1901 the
population of England and Wales had been distributed evenly over the area
there would have been a distance of 240 feet between each person. In 1871
a similar distribution would have removed each person from his neighbour
by 288 feet. Thus England is little more "crowded" to-day than it was a
generation ago. It is useful to remind ourselves by these statistical exercises
that the country is indeed nearly empty, and the towns very full. In the
75,000 acres of the administrative county of London were crowded, at the
census of 1901, 4,536,541 people, a number as great as the entire
population of Australia, almost as great as the entire population of the
Dominion of Canada, and more than one-tenth of the entire population of
the United Kingdom. In London and 75 other great towns in England and
Wales are crowded about 15,000,000 persons or about one-half of the entire
population of the country. As London and the great towns grow, the
countryside is increasingly depopulated, and not the countryside alone.
Many small towns are decreasing in size. Thus an increasing population is
ever huddling closer together in a diminishing number of centres.
The greater number of our new births, then, are in crowded districts. The
figures of Book I. tell us, also that the greater number are in urban houses of
a rental under £20 per annum. The rental values of the houses of Great
Britain in 1907-8 were as follows:

HOUSES OF GREAT BRITAIN, 1907-8
The figures do not include Ireland, but they include all
residential shops, lodging-houses, hotels, farm-houses, etc.,
in Great Britain.

Under £20 (Exempt from House Duty), 6,875,000

£20 and over (Charged to House Duty). 1,912,000
8,787,000

Of the 8,787,000 houses fully 7,000,000 are obviously the homes of the
very poor, as we should expect if the statements made in the earlier parts of
this book are true. In various districts the accommodation which can be
bought for £20 a year varies greatly, as has been already pointed out. £20
per annum may command a decent home in some parts of the provinces or
Scotland, or a filthy tenement in East London or Manchester. Broadly
speaking, the majority of the houses under £20 are fit for demolition. They
rank in our estimate of capital (Chapter 5) for a great deal of money; they
command an enormous amount of rent, but, I repeat, they are chiefly fit for
destruction. In a minority of cases they are indecent or insanitary; in a
majority of cases they are either old or ugly or uncomfortable. Rarely are
they fit habitations for a self-respecting people. The same is true of many of
the houses up to £40 and even £50 per annum in London and other crowded
centres. Many £40 dwellings in London are crowded tenement houses, each
of several reeking floors.
What overcrowding means to the lives of those who suffer it may be
illustrated by the table prepared by Sir Shirley Murphy, which compares the
sanitary areas of Hampstead and Southwark in respect of expectation of
life. I have added the fourth column to give prominence to the accusing fact
that the poor are robbed not of means alone but of life itself:

EXPECTATION OF LIFE IN HAMPSTEAD
AND SOUTHWARK, MALES ONLY, IN 1897-1900
Expectation of
life in Southwark
Age Hampstead Southwark
less than that in
Hampstead by
—— —— —— ——
Years Years Years Years
At birth 50.8 36.5 14.3
5 57.4 48.7 8.7
10 53.3 45.0 8.3
15 48.7 40.6 8.1
20 44.2 36.4 7.8
25 39.8 32.4 7.4
30 35.5 28.6 6.9
35 31.3 25.0 6.3
40 27.5 21.9 5.6
45 23.8 18.9 4.9
50 20.3 16.2 4.1
55 17.0 13.6 3.4
60 14.1 11.3 2.8
65 11.5 9.1 2.4
70 9.2 7.0 2.2
75 7.1 5.2 1.9

In Hampstead only 6.3 per cent. of the population live more than two in a
room in tenements of less than five rooms, and only 11.1 per cent. of the
population live in tenements of one or two rooms. In Southwark, on the
other hand, 22.3 per cent. of the population are in the first category, and
31.6 per cent. in the second category. The table enables the reader to
measure the years which are stolen from the lives of the inhabitants of

Southwark. The area of Hampstead is 2,248 acres and the population
68,416. The area of Southwark is 544 acres and the population 89,800. We
should never forget that there are two sorts of crowding, one of which is
measured by room or tenement, the other by area.
The Census definition of "overcrowding" by room or tenement is a very
modest one. It applies to tenements containing more than two occupants per
room, bedrooms and sitting-rooms included. Accepting this definition there
were 392,414 overcrowded tenements in England and Wales at the Census
of 1901, which were the homes of 2,667,506 people, or 8.2 per cent. of the
total population.
That is bad enough, but if we take a more reasonable definition of
"overcrowding" and apply the term to all tenements (by tenement is meant a
separate occupation, whether a house or part of a house) of three rooms or
less we find that in 1901, in England and Wales, as many as 5,853,047 or 18
per cent, of the entire population occupied tenements of either one, two or
three rooms. A further 7,130,062 persons or 21.9 per cent. of the population
of England and Wales were housed in 4-roomed tenements. The complete
tenement figures are as follows:

TENEMENTS (SEPARATE OCCUPATIONS,
WHETHER HOUSES OR PARTS OF HOUSES)
IN ENGLAND AND WALES. 1901
Percentage of
Number of Total Average
Number of Occupants of
Rooms in Population in Occupants per
Tenements. Tenements.
Tenements. each group of Room.
Tenements.
1 Room. 251,667 507,763 1.6 2.02
2 Rooms. 658,203 2,158,644 6.6 1.64
3 Rooms. 779,992 3,186,640 9.8 1.36
4 Rooms. 1,596,664 7,130,062 21.9 1.12
5 or more
Rooms. 3,750,342 19,544,734 60.1 ——
7,036,868 32,527,843 100.0 ——

It will be seen that, even in the 4-roomed tenements, there was an
average of 1.12 persons per room (room meaning every apartment in the
tenements, including sitting-rooms, attics, box-rooms, kitchens or
sculleries), and when we remember the small cubical content of many of
these "rooms" we see that as many as 12,983,109 persons, or 39.9 per cent.
of the population of England and Wales were certainly crowded, if not
"overcrowded."
In Scotland, at the Census of 1901, 969,318 families occupied 3,022,077
rooms, giving an average of only 3 rooms per family. Into the 3,022,077
rooms of all sorts were crowded 4,472,000 people.
While overcrowding, measured by room, slightly decreased between
1891 and 1901, overcrowding on area considerably increased. In the ten
years a considerable number of model dwellings—models, that is, of
everything that dwellings should not be—were erected, and much ground in
London and elsewhere which should have been left open, was covered with
buildings of every conceivable degree of ugliness.
As for existing houses, thirty years after the passing of the Public Health
Act of 1875, and fifteen years after the passing of the Housing of the
Working Classes Act of 1890, a considerable proportion are actually
insanitary, and only a minority conform to the most modest standard of
convenience and comfort. In the North of England and in the Midlands
there remain tens of thousands of houses built back-to-back, so that there is
no passage of air through them.
The Manchester Citizens' Association recently published, from the pen of
its secretary, Mr T. R. Marr, a little book,[46] which shows, by a coloured
map, that slum property, including many back-to-back and "converted"
back-to-back houses, form a great ring round the offices and factories of
Central Manchester. Its lessons are enforced by a series of photographs of
slum property. Here is a picture of a Salford court, upon which face the
living rooms of eleven houses. Standing out in the court, as a public
exhibition, are three rotten places of convenience, only one of them usable.
Here, again, is a photograph taken in St Michaels' Ward—taken, let us hope,
in the absence of St Michael. A group of four closets open on the street, and
beside them, surrounded by a group of slum children curiously watching the

photographer, is a tap which is the sole water supply of 22 houses. A third
picture, also taken in St Michaels' Ward, shows a stone-paved court of
eleven houses. There is one tap, an open ash-box, and several closets the
doors of which are torn from their hinges.
In Liverpool, according to a paper read before the Royal Sanitary
Institute in April 1905 by Mr Fletcher T. Turton, the Liverpool Deputy
Surveyor, there were still 8,600 back-to-back houses standing, the death-
rate in their area being about 60 per 1,000! Further erection of such houses
is forbidden by Mr Burns's Housing Act of 1909, but there are tens of
thousands already in existence.
In Leeds there are many of these back-to-back houses, without
ventilation, or yard, or private sanitary arrangements, let at rentals varying
from 3s. 6d. to 7s. 6d. per week. As many as three and four houses join at
one closet. The closets are frequently in yards, forty yards from the house.
In wet weather, rather than carry the waste water from the bedrooms the
length of the street, women may often be seen pouring it down the street
gully. On Sundays, when the inhabitants are all at home, the difficulty as to
sanitary accommodation is intensely aggravated.
In Sheffield, in the Potteries, and many other places, these abominable
back-to-back houses are to be found. Few workers' houses in the Potteries
have more than two bedrooms. The back-to-back houses in Sheffield
number 15,000, and sometimes as many as eight or ten persons are to be
found in their three little rooms. If we take only 7 persons to the house there
are 105,000 Sheffield people living in these dens.
If there are not back-to-back houses or cellar dwellings in London, there
are many squalid areas which contain greater aggregations of the poorest of
the poor than can be found in any other part of the country. In Marylebone,
Southwark, St Pancras, Holborn, Bethnal Green, Shoreditch, Stepney, and
Finsbury upwards of 30 per cent. of the inhabitants live in tenements of one
or two rooms. In Finsbury the proportion reaches 45 per cent.; in Shoreditch
and St Pancras 37 per cent. In Lambeth, Westminster, Paddington, Chelsea,
Kensington, Islington and Bermondsey 20 per cent. and upwards of the
population live in tenements of one or two rooms. Only, indeed, in
Lewisham, Wandsworth, Stoke Newington, Hampstead, Woolwich,

Greenwich, Deptford, Camberwell, Hackney and Fulham, do less than 15
per cent. of the inhabitants occupy tenements of one or two rooms. Not
even the school children of Ancoats or Deansgate, Manchester, exhibit the
degree of physical deterioration of those of Lambeth or West Ham.
It cannot be too strongly insisted that in connexion with the problem of
housing the people there is not merely the question of "overcrowding" or of
"crowding," whether in rooms or on area, to be considered. Not only death
and disease but ugliness and inconvenience have to be fought. The
speculative builder is covering suburban areas with mile after mile of
amorphous dwellings. Acre after acre of smiling meadow is disfigured.
Street after street of buildings of unredeemed ugliness reach out into the
beautiful country which lies so near to the 75,000 acres of London. Trees
are felled; every particle of verdure is scraped away. The town advances,
and before its grim threatenings Beauty flies. The lane becomes the street;
the hedge is replaced by cast-iron palings; beyond the hedge there arises the
row of "bay windows with venetian blinds" which figure in the
advertisements. Pass to the rear and you will find the 16 or 18 feet frontage
which the builder thought beautiful balanced by a "back addition" which
even the builder knew to be ugly. Facing the back-additions, across two
"gardens" together not so long as a cricket pitch, another row of rear
elevations, and so on, row after row. Such is the vision with which we
stimulate the fancy of the more fortunate of the children of the people. We
teach them drawing on the latest principles—free-arm—in the school. We
give them infinite ugliness as their environment outside the school. We have
still to learn that while the dwellings and surroundings of the people are
unlovely we cannot hope for a gifted race. We have yet to understand that
education begins when the child opens its eyes and ears to the sights and
sounds of the home and its surroundings. It is not alone that the people lack
monetary income. To the ill-distribution of wealth is added the ill-
distribution of the means of a beautiful life. The majority of our people are
denied the vision of beauty, and even those who receive fair wages perish
morally for lack of that vision.
From the centre to the circumference there passes all the evil thinking
and evil doing which the unnatural conditions of the centre have created in
the minds of men. The workman who leaves the centre for the new suburb

of Walthamstow is not surprised to find there the ugliness which he left
behind him. He does not expect to find Beauty—that is a commodity
confined to pictures. He does not wonder that man could be so blind as to
create a sore on the borders of one of the most beautiful spots which this
earth has to show. He owns his cottage with a smile, oblivious of the might-
have-been, and rarely if ever wonders why in a country containing nearly
80,000,000 acres his considerable rental can command so small a share of
the surface of his native land.
And surely it is for lack of vision that our efforts in connexion with the
housing problem are so misdirected. The rulers of our towns instead of
directing their attention to the outskirts have practically confined
themselves to tinkering at the centre. Blocks, palatial in size and unholy in
principle, have been erected and ironically dubbed "model dwellings." It is
true that in all big towns there are a certain number of workmen who must
live near their work, but there is usually a far larger number who have no
such tie. And the model dwellings referred to usually succeed in housing
not the class which must live near their work but the class who could well
go out beyond the suburbs. Thus the effect of tinkering in the centre is often
but to set free for the poorest of the poor the tenements deserted by the
better class who pass to the new dwellings. That is good in its way, but how
much better it would have been to relieve the centre by emptying out its
streets into the places beyond. To buy up slums in the centre and create
model dwellings is to play into the hands of the landlords—to increase the
value of the unbought slums. To empty out the centre of its movable
population is to leave a better selection of homes for those who must
remain, and to leave the slum landlord to mourn a fall in the value of his
"property."
A great deal is often said about unoccupied sites in towns and their
suburbs and it has even been suggested that efforts should be used to force
them into the market and compel building upon them. Here again is
exhibited a most lamentable lack of vision. In so far as town sites are
unbuilt upon let them remain so, and if their owners are waiting for a rise in
value let us take measures to make that waiting prolonged.

In a widely circulated leaflet on the land question I read: "If we pass
through the outskirts of any of our great centres of population, we see
pieces of land left practically derelict, with perhaps an old horse grazing
there disconsolately, or a few hens investigating a rubbish heap. A little
farther on we see houses being built and roads being laid out. We know that
still more houses are badly wanted, and we wonder why the land between is
not being utilized."
Here we have a reformer ardently desirous of filling up an open urban
space which, if he were wise, he would use his best endeavour to keep open
for ever. Seeing houses being built and roads being laid out "a little farther
on"—what kind of houses and what sort of roads, I wonder?—he is anxious
to turn out the disconsolate horse and pile up more houses in the intervening
space. It apparently does not occur to him that yet "a little farther on" there
is land enough for the housing of an army, and that a horse, however
disconsolate, is at the worst a prettier object than a speculative builder's
"villa."
Two things are necessary if the housing problem is to be grappled with
seriously and not resigned to private profit timorously modified by
municipal tinkering. The first is the control of land, and the second ready
access to capital. As has been truly said, the housing question is a land
question; as has been too rarely remembered, it is even more a capital
question.
There is only one effective way in which the community can control land
and that is to become its landlord. It is also true that there is only one
effective way in which the community can keep in its own hands the
"unearned increment" arising from the enhanced value of land created by
the presence and work of the community, and again that effective way is for
the community to own the land. There is no necessity, however, for the
town to play into the hands of suburban landlords by purchasing dear land.
It can evade attempts to corner land required by the community by going
out and beyond that land if it is held for a rise. Indeed it is better to leave a
zone between its present circumference and the site of its new housing area.
Even in London, it is a simple matter to reach land cheap enough for
successful housing operations. It is of the utmost importance that all

municipalities should without further delay secure considerable areas of the
agricultural lands which surround their townships.[47] By doing this well in
advance of their building operations they can insure that, as they themselves
raise the value of the land by developing it and establishing means of
transit, the whole of that value will remain in their hands. Moreover, if the
owners of the intermediate land thus see their market failing they will
gladly place a reasonable price upon their holdings. In this connexion it is
probable that the taxation of land upon its selling value may prove to be of
assistance. The man who controls a part of the area of his country and who
will neither use it himself nor allow others to use it should in any case be
taxed. I attach more importance, however, to the simple and effective policy
of widening the radius of operations until cheap land is reached.
It cannot be too clearly understood that simply to tax land on its selling
value is of itself no solution either of the land question or the housing
question. If land is priced by its owner at £1,000 per acre and he is holding
it to obtain that figure, we should not necessarily bring it into the market by
taxing it on its selling value. The price asked obviously includes all the rise
in value expected by the present owner in the near future; that is why the
price is held out for. If the land be taxed upon the capital value the owner,
unless very strong financially, would probably have to sell. To do so, he
would reduce the price and the land would be taken up by a second owner.
The expected rise in value would thus be discounted, and the second owner
having obtained the land at a lower rate, would be able to hold the land for
the rise in spite of the tax payable. Thus the tax would not necessarily bring
the land into use. Nor, if it did, would it necessarily be devoted to a
desirable use. Owner B is not necessarily more moral or public spirited than
owner A. Owner A held up the land, but owner B, having bought it, may put
it to such base uses that we could wish it had been held up a little longer.
Above all, therefore, we must have public control of area.
As the owner of its own sites, the township can be the arbiter of its own
developments. This has been clearly recognized in Germany, where, under
the encouragement and stimulation of the State governments, municipalities
are acquiring land beyond their existing borders. Considerable areas are
owned by many German towns. Stettin has 12,500 acres; Mannheim has
5,000 acres; Breslau has 12,000 acres; Frankfort has 11,000 acres.

Large as our population is, it is really remarkable to note how little area
would be required to rehouse the people of the towns. Taking the number of
families in the United Kingdom at 9,000,000, only 1,800,000 acres, or less
than one-fortieth part of the area of the country, would be required to house
five families to the acre. This simple calculation helps us to realize the point
referred to in a former page—how tiny an area now contains nearly the
whole of our 44,500,000 people.
Having wisely purchased land upon its borders, the municipality must
take thought as to the distribution of the population upon its new territory.
Plans must be made of the new roads, streets, open spaces, and transit
facilities long before they are actually required, so that each step in
development may be taken deliberately and that no new difficulties may be
built up to be the despair of the future. The well-governed city should study
its present and future area as the artist regards his prepared sheet of canvas.
Within its borders what varying effects may be produced! With the loving
care that the old Italians bestowed upon the preparation of their panels, the
municipality should plan the ground upon which the life of the city is to
move. It is a picture the arrangement of which means life or death to the
citizens; it may easily be made to glow with health and beauty.
Mr Burns's important Housing Act of 1909 has made it possible for local
authorities to plan out the future extensions of towns; it will be interesting
to see whether there is sufficient imagination in our local rulers to make the
provision fructify.
In one of the most valuable contributions to this subject which have been
published in recent years,[48] Mr T. C. Horsfall describes the thought and
trouble which is given to the planning of the extension of municipalities by
German Town Councils. Thus Stuttgart, in 1901, when preparing for a large
extension of the town borders (its present population is about 182,000),
obtained the advice of skilled architects, engineers, medical authorities, and
artists. The politico-economic aspect of the matter was also carefully
considered. The opinions, plans, and suggestions were then published in a
volume to enable all the people of Stuttgart to study the proposals for
extension.

Mannheim, again, which is chiefly a manufacturing town, prepared in
1901 building plans which provide for the requirements of industry and
housing, while always remembering the claims of Beauty. I quote the
following from Mr Horsfall: "The description of the building plan for
Mannheim, prepared by Professor Baumeister, which is published in
Numbers 69, 70, and 71 of the 'Centralblatt der Bauverwaltung,' shows that
the new part of the town will be provided with a remarkably complete
system of narrow railways for passenger traffic, and with an equally
complete system of railway lines of the ordinary width leading from goods-
stations in all directions, for goods traffic, which will enable every
manufactory to load goods on to trucks on its own premises. Carriage,
therefore, will be exceptionally cheap in the town. Yet the Town Council,
who are thinking so much of economical working, recognize that even their
poorest fellow-citizens are men and women, whose bodies and minds need
wholesome recreation and an abundant supply of fresh air, of light, and of
the influence of flowers and trees. The building plan, therefore, provides for
the creation of avenue streets of widths varying from 24 to 43 yards; and
Professor Baumeister adds: 'Of course care has been taken to provide open
spaces, decorative shrubberies, parks and sites for public buildings.' The
width of ordinary streets varies from 8⅓ to 21⅓ yards."
The German building plans provide in what districts factories may be
erected and determine (1) how much of building sites may be covered by
houses, and (2) the height of all buildings. Thus, even in cases where the
municipality does not own its own sites, it can in some measure control the
greed of the houselord. It cannot too strongly be insisted upon, however,
that absolute sovereignty of the manner of distribution of the people upon
area can only be obtained by acquisition of the land.
The practicability of going out and beyond the township and emptying
into the open country the crowded and enfeebled inhabitants of the cities
has been amply demonstrated in the United Kingdom. An object-lesson of
the most practical character is afforded by the beautiful garden city of
Bournville, which the beneficence and wisdom of Mr George Cadbury have
raised four miles from the gloomy city of Birmingham.

Most people have heard of Bournville, but few are aware that it is not
merely a village erected for the accommodation of Mr Cadbury's
employees, but a working model of what may be done to solve the housing
problem of great cities. The village of Bournville now no longer belongs to
Mr Cadbury, for he has bestowed it upon the nation, the gift being worth
not less than £200,000. In December 1900, the estate was handed over to
the Bournville Village Trust, which is under the final control of the Charity
Commissioners. In the Deed by which the property was made over to the
Trustees the founder has thus set forth its objects: "The founder is desirous
of alleviating the evils which arise from the insanitary and insufficient
accommodation supplied to large numbers of the working classes and of
securing to workers in factories some of the advantages of outdoor village
life, with opportunities for the natural and healthful occupation of
cultivating the soil.... The object is declared to be the amelioration of the
condition of the working-class and labouring population in and around
Birmingham, and elsewhere in Great Britain, by the provision of improved
dwellings, with gardens and open spaces to be enjoyed therewith."
The objects thus outlined have been carried out by the provision of
beautiful homes set in gardens which are at once a source of revenue and of
healthful recreation to their possessors.
Less than one-half of the breadwinners of Bournville are employed by
Mr Cadbury himself. The village is not a private preserve, as is so often
imagined, in which patronized cottagers live a bounty-fed existence, but a
free independent and public-spirited community which rules itself in
matters of detail through a Tenants' Committee or Council. A census of the
inhabitants made in December 1901 gave the following results:—

Proportion of Bournville Householders working in
Per Cent.
Bournville 41.2
Birmingham 40.2
King's Norton and Selly Oak 18.6
(manufacturing villages within

a mile of Bournville)
100.0

Occupations of Bournville Householders
Per Cent.
Factory workers 50.7
Clerks and Travellers 13.3
Mechanics, Carpenters, Bricklayers
and others 36.0
100.0

Having this working population of people paying rentals between 5s. 6d.
including rates and 12s. 6d. excluding rates, the rate of infantile mortality in
Bournville in 1903 was only 65 per 1,000 against 331 in the district of
Birmingham known as St Mary's.
The architectural beauty of Bournville has not been secured by
extravagant expenditure, but by tastefully treating good and simple
materials with due regard to utility. Mr W. A. Harvey, the architect, says:
"The idea of a cottage home that I have always endeavoured to keep in view
is one in which beauty is based on utility." There is nothing tortured,
nothing deliberately and queerly "quaint," no plastering of ornament. The
houses look comfortable because they are comfortable. The windows are
pretty because they are simple casements, the best possible sort of window.
A type of house which particularly pleased me had the following
accommodation:
Ground floor:
Living room, 17 feet by 16 feet with ingle-nook and bay window.
Scullery, 13 feet by 11 feet 3 inches, with bath sunk in floor.
Larder, 5 feet by 4 feet 6 inches. Coal cellar, watercloset, tool
shed and small paved yard. Verandah in front.

First floor:
Bedroom No. 1, 17 feet by 13 feet 6 inches.
Bedroom No. 2, 13 feet by 8 feet.
Attic Bedroom, 10 feet by 8 feet 7 inches.
Linen cupboard.
The total cost, including fencing, laying out garden, etc., was £280. The
house, it will be seen, has no "parlour," but one large living room measuring
17 feet by 16 feet without the ingle-nook and large square bay window. It is
an exceedingly attractive and comfortable room, and the sensible idea is
appreciated by many of the tenants. The tastes of others are met by the
ordinary arrangement of a separate kitchen and parlour.
The picturesque and comfortable houses have a charming setting. They
are set back from the road and grouped in such manner as to give each
house the best use of the sun—an important matter often neglected in the
planning of even expensive houses, and absolutely ignored by the
speculative builder. It follows that there are no monotonous roads in
Bournville; natural grouping arises from attention to aspect. Each cottage
has one-eighth to one tenth of an acre of garden. The gardens are laid out
when the houses are built, so that the tenant has not to begin by breaking up
uncultivated land. Lines of fruit trees are planted, and these, besides
yielding a good supply of fruit, form a pleasant screen between the gardens.
As a rule, the tenants take a keen interest in their gardens, and cultivate
them with great success. In addition to the cottage gardens there are about
100 allotments, which are eagerly sought after by the inhabitants of the
neighbouring manufacturing villages. There are two gardening classes for
young men. Two professional gardeners with a staff are in charge of the
gardening department, and are always ready to give whatever information
and advice may be required, but each tenant is responsible for the
cultivation of his own garden. It is a notable fact that the gardens are found
to yield, on the average, 1s. 11d. each per week. Gardening is lovingly
fostered by the Village Council already referred to. The members of this
Council, whose services are rendered voluntarily, are elected by ballot, and
the annual elections and by-elections evoke considerable interest. Through

this body arrangements are made for the co-operative purchase of plants,
shrubs, and bulbs in great numbers; gardening tools such as mowers, rollers
or shears, bought for the purpose, are let on hire; a loan library of gardening
books has been formed; also a gardening association with periodical
inspections of gardens; while lectures are arranged for the winter, and
excursions for the summer. Further, the Council has established and
managed with conspicuous success flower shows and an annual fête for the
children. The bath-house and children's playground are also under its
control.
The roads are 42 feet wide, and are all planted with trees. Out of the 100
acres laid out for building 14 acres have been reserved as open spaces,
including parks, green, and children's playgrounds. It is part of the plan that
in no part of the little community should children be far removed from a
proper playground.
I have already referred to the rate of infantile mortality in Bournville. It
may be added that the death-rate for 1904, as certified by the local Medical
Officer of Health, was 6.9 per 1,000. The rate for Birmingham for the same
year was 19.3. In his report for 1900 the Medical Officer of Health referred
to Bournville as follows:—"I have in my previous reports made mention of
the model buildings on the estate which has been laid out by Mr George
Cadbury. I cannot refrain from again mentioning how much I admire the
system he has adopted. The object of the dwellings has been to give plenty
of light and air with a good deal of air space to each house with sufficient
land adjoining, and so insure a 'breathing lung' for the inhabitants of these
houses. The houses are moreover built on modern principles, and no pains
have been spared to make them as dry and free from insanitary conditions
as possible. In addition, open spaces have been laid out so that at all times
there can never be any danger of increasing the density of the population
over the area on which the buildings have been erected. I cannot speak too
highly of these dwellings, and I can only hope that we may be able to keep
all dwellings as far as possible up to this standard."
To pass to the all-important financial side of the matter, the balance sheet
for 1909 gives the following results:

BOURNVILLE VILLAGE TRUST INCOME
AND EXPENDITURE, YEAR ENDED
DECEMBER 31ST, 1909
Income. Expenditure.

Total rents £9,249 Salaries £1,313
Other incomes 1,042 Office expenses 164
Rates, taxes, etc. 754
Maintenance, repairs
and renewals 1,531
Legal expenses 73
Miscellaneous 143
Maintenance of roads
and open spaces 244
Depreciation on
fencing, etc. 229
£10,291 £4,451

Balance excess of Income over Expenditure, £5,840.
The whole of this surplus profit is devoted to building new houses and to
buying and developing more land, so that Bournville automatically
increases in size year by year. At the present time it is growing at the rate of
about 50 houses, or say, 250 persons, per annum, and the rate of increase
will, of course, be progressive.
In considering the above figures it must be remembered that the
Bournville Trust in 1900 had the whole estate handed over to it by Mr
Cadbury as an absolute gift. No capital charges had therefore to be met. I
am informed by Mr L. P. Appleton, the building manager, however, that,
with regard to the houses erected by the Trust itself, they all show a net

return of 4 per cent. on the capital, after providing for ground rent, rates and
taxes, repairs, management and all out-goings.[49]
The respective parts played by land and capital in such a scheme should
be carefully noted. If a municipality acquired land at £100 per acre, and laid
out roads and sewers at a cost of £400 per acre, and erected upon each acre
ten houses costing £280 each, the total outlay per acre would be £3,300, and
per house £330. How little a considerable variation in the cost of land
affects the result will be realized from the following table:
Cost of Roads,
Cost of Land Sewers etc., Cost of Total cost of each
Cost of Land
per House. 10 per House building House and its
per Acre.
to the Acre. (£400 per House. Land.
Acre).
£ £ £ £ £
50 5 40 280 325
100 10 40 280 330
200 20 40 280 340
300 30 40 280 350

It is not commonly realized by many of those who write on the housing
question that building land is a manufactured article, and that when raw
land is secured housing is as far off as ever unless capital can be secured to
develop it. It would rarely be necessary for a municipality to pay more than
£200 per acre, but whether it paid £20 or £200 the cost of making roads,
sewers, etc., and of erecting the houses would remain the same. To house all
our people on the scale of ten families to the acre as at Bournville would
absorb only 900,000 acres of land, which could be acquired for quite a
moderate sum of money at a small remove from crowded centres, but the
cost of manufacturing the land and of manufacturing the houses would be
great.
Given the provision of healthy houses by a municipality, would they be
appreciated by those for whom they were intended? Here the experience of
Bournville is conclusive. The village has never a house untenanted and the
new houses are eagerly sought after long before they are completed. There

is a constant stream of applications, and this in spite of the fact that
Birmingham is distant four miles. Many of the men cycle to and from their
work in the big city. They do not come to Bournville for charity rents. They
have to pay about the same rentals as in Birmingham. The difference lies in
the substitution of a healthy and lovely home for a gloomy and
uncomfortable tenement.
There is nothing in the Bournville scheme which cannot be effectively
carried out by any municipality. Under the housing acts local authorities
possess the power to acquire land for present or future building operations,
the power to raise loans, and the power to build. The explanation of their
sluggishness in putting the acts into effect is to be found in the fact we have
already noted, viz. that the housing question is chiefly a capital question.
This was slightly recognized by the Housing of the Working Classes Act of
1903 which extended the period allowed by the 1890 Act for the repayment
of loans from 60 years to 80 years.
The vital importance of good housing makes it necessary to do something
to put capital cheaply at the disposal of local authorities for the purpose.
The housing question is a national one, and demands the use of national
capital. Again we touch the matter of ways and means and again we see the
advantage of considering social problems in relation to the income and
accumulated wealth of the country. Year by year, as we have seen, an
enormous amount of capital is wasted. British workmen, denied proper
housing, are paid something less than the value of their product, while the
margin is largely wasted in luxury at home or even sent out of the country
to establish water works in Argentina, supply the sinews of war to Japan, or
employ Chinese Coolies in South African mines. The time has come when
the nation must consider the nature of its resources, and study its own
development. We must see to it that the demand for houses, the primary
demand of a civilized man, is answered, not by the speculative builder, but
by the nation itself.
The proposal here made is a simple one. It is that National Housing
Loans should be raised and the proceeds placed in the hands of a permanent
Housing Board or Commission which should be empowered to guide, assist
and if necessary stimulate local authorities to rehouse their poor. The

Housing Board should have power to lend money to local authorities, for
the execution of approved schemes, for a period of 100 years at a nominal
rate of interest, say 1½ or 2 per cent., the loss to be made up out of the
proceeds of Imperial taxation. To deal effectively with the question, a yearly
loan of at least £20,000,000 would be needed for some years. Borrowing
this at 3 per cent. and lending it out at 2 per cent. would create a charge of
only £200,000 for each £20,000,000. If then we authorized an annual issue
of £20,000,000 for ten years—in all £200,000,000, the total annual charge
through loss of interest would be but £2,000,000. Such a loan, about two-
thirds of the cost of the late South African war, would not only rehouse one-
tenth of our people, but place local authorities in possession of assets
yielding a fine revenue,[50] which on the Bournville plan, could be used for
the progressive extension of housing schemes. With access to capital for
housing at 2 per cent., and 100 years in which to repay it, local authorities
would be eager to claim their share of the national housing provision. The
loan would only be granted on the approval of plans for the extension of the
town boundaries, for transit facilities, and of plans of the houses, gardens
and recreation grounds for which the loan was desired.
Failing action by the local authority, the Housing Board would make a
compulsory housing scheme[51] upon representation by the persons lacking
accommodation.
A drastic housing policy is needed as much in rural as in urban districts.
Want of housing accommodation is helping to thin our country population,
and the Housing Acts have been simply ignored in the past by Rural
Sanitary Authorities. On this head the Housing Bill of 1909 makes salutary
provisions giving county councils power to act in default of rural district
councils, and also giving power to the Local Government Board to order
schemes to be carried out within a reasonable time.
We have to do something more for the agricultural labourer than house
him, however, and here we touch another question intimately bound up with
national development—the land in its primary aspect as the basis of
agriculture and the source of food and material. This brings us to the
consideration of the empty country.

[46] "Housing Conditions in Manchester" (Manchester University Press
price 1s.).
[47] This point should be read in connexion with the more drastic proposal
made in the next chapter.
[48] "The Example of Germany," by T. C. Horsfall. Published by the
Manchester University Press.
[49] Near York Mr Joseph Rowntree has successfully carried out a housing
scheme upon Bournville lines, and provided at the modest rental of 4s. 6d. a
week (the rates are an additional 8d. per week) houses within the reach of
unskilled workmen. The cottages are thus described:
On the ground floor is a large living room (12 ft. 6 in. by 20 ft. 6 in.) with a
bay window and plenty of cupboard accommodation, a small pantry, and a
scullery fitted with a copper, bath, and sink. The copper is fitted with a patent
exhaust to carry the steam direct into the flues, thus preventing the discomfort
which often arises in small houses on washing day. The bath is fitted with a
drop-down lid, forming a table when the bath is not in use. Upstairs there are
three bedrooms, each fitted with a fireplace, and there is a large wardrobe on
the landing. The walls are plastered internally with adamant cement, which
dries very quickly, and assumes a smooth hard surface, and is thus more
sanitary than the ordinary plaster. All the rooms are fitted with picture
mouldings. Gas is supplied throughout the house, and city water is laid on.
The gardens are not so large as at Bournville and the houses of cheaper
construction. The rental named, 4s. 6d. a week, is found to yield a clear profit
of 4 per cent., which is devoted, in happy emulation of the Bournville
scheme, to the extension of the little community.
[50] On this point the experience of Richmond, Surrey, is of great value. In
the "Housing Handbook" Alderman W. Thompson shows what great financial
advantages Richmond will reap from its cottage building, although this was
carried out on land costing £700 an acre. The houses, built in 1894 and 1900,
cost from £162 to £276 each and let from 6s. to 8s. per week. Altogether there
are 132 houses containing 650 rooms and 132 sculleries, on six acres of
ground costing £4,250 for site; £1,857 for roads and sewers; £505 for
sundries, and £31,200 for building, being a total cost of £37,812 and an
average inclusive cost of £58 per room. The income gives a gross profit
which provides interest at 3¼ per cent. on capital outlay, a sinking fund
contribution of £486 per annum, and a net profit of £38 per annum. Thus a
large number of people have been well housed at a profit to Richmond. At the
end of 42 years from 1897 Richmond will have paid off the entire loan
through the operation of the sinking fund and be in possession of a property
worth £35,000 and producing a net income of over £1,600 a year. It is found
that the tenants take a great pride in their dwellings, and that their social
habits have greatly improved.
[51] The Grand Duchy of Hesse compels municipalities to borrow money
whether they like it or not. Hesse has determined that her people shall be
properly housed—a most wise and patriotic determination. The Duchy

therefore lays it down that the first duty of a municipality is to buy land that
its borders may extend in a proper and healthful manner. Further, under the
law of 1902, Town Councils which decline to build houses for the people can
be compelled to accept a loan from the bank and to lend the money so
obtained to a building society which is willing to do the work.

CHAPTER XVII
THE EMPTY COUNTRY

A LTHOUGH it is a well-known fact that the increase of population of
the United Kingdom is practically an addition to the urban population,
it may be well to preface consideration of the land question in its relation to
the national wealth and income by reminding the reader of the precise facts
of the case.
If we have regard only to the technical "Urban" and "Rural" Districts, we
get the following figures:

ENGLAND AND WALES: POPULATION OF URBAN
AND RURAL DISTRICTS RESPECTIVELY
Census of Urban Districts. Rural Districts.
1891 21,745,286 7,257,239
1901 25,058,355 7,469,448

Thus the urban population increased by 15.2 per cent., while the rural
population increased by 2.9 per cent.
Many of the so-called "Urban" Districts, however, are quite rural in
character, being often small towns dependent as business centres upon the
agricultural areas in which they are situated. In 1901 there were 215 Urban
Districts with populations below 3,000; 211 with populations between
3,000 and 5,000; and 260 with populations between 5,000 and 10,000.[52]
Having regard to these considerations the following figures are arrived
at:
(1) Classing with the Rural Districts all those Urban Districts which
had in 1901 populations below 10,000 we get:
Urban Population. Rural Population.
1891 18,964,882 10,037,643

1901 21,959,998 10,567,845

This gives an urban increase of 15.8 per cent. and a rural increase of 5.3
per cent.
(2) Classing with the Rural Districts those Urban Districts which
had in 1901 populations below 5,000 we get:
Urban Population. Rural Population.
1891 20,576,448 8,426,077
1901 23,803,714 8,724,129

This gives an urban increase of 15.7 per cent. and a rural increase of 3.5
per cent.
Combining the three tests, we see that the truth broadly stated is that the
rural population is almost stationary while the urban population is rapidly
increasing. The rural population is thus a diminishing proportion of the
whole.
In 23 rural counties in England and Wales actual depopulation occurred
between 1891 and 1901, ranging from a decrease of 7.5 per cent. in
Montgomeryshire to a decrease of 1.9 per cent. in Cornwall.
The Census Commissioners make an interesting test of depopulation of
rural areas by taking the 112 Registration Districts which are entirely rural,
and which had in 1901 an aggregate population of 1,330,319. Their
population at each census back to 1801 has been approximately as follows:

POPULATION OF 112 RURAL REGISTRATION
DISTRICTS, 1801-1901
Increase + or
Census Decrease - in
Population.
Year. preceding
decennium.
1801 932,364
1811 997,494 + 6.99
1821 1,139,137 + 14.20
1831 1,216,872 + 6.82
1841 1,288,410 + 5.88
1851 1,324,528 + 2.80
1861 1,321,870 - 0.20
1871 1,321,377 - 0.04
1881 1,313,570 - 0.59
1891 1,304,827 - 0.67
1901 1,330,319 + 1.95

The great advance in 1811-1821 was presumably due to the cessation of
the long war. In 1851-1891 actual depopulation occurred, but in 1891-1901
there was a gain of 1.95 per cent. Of the 112 districts, however, 73 showed
actual decrease in 1891-1901, the total increase being entirely due to an
advance in a few of the districts containing mines. It is clear that in the last
50 years there has been actual depopulation of strictly rural areas.
This becomes still plainer when we examine the facts given in the table
on page 237 as to the natural growth of the rural areas.

THE MIGRATION FROM THE COUNTRY
Population. Excess of
Increase of Loss by
Births over
1891 1901 Population. Migration.
Deaths.

112 Registration Districts
entirely Rural 1,304,827 1,330,319 24,492 150,437 124,945
222 Registration Districts
which contain urban
districts with
populations under
10,000 4,176,219 4,215,326 39,107 414,816 375,709
Total of 334 Registration
Districts 5,481,046 5,545,645 64,599 565,253 500,654

It will be seen that in a rural population of nearly 5½ millions, the natural
increase by excess of births over deaths was, in 1891-1901, 565,253, but in
the same time 500,654 persons left these districts either for urban England
or for places abroad, so that the total increase in population was only
64,599.
Turning to the number of persons employed in agricultural operations of
all kinds, the table on page 239 shows the decline which has occurred.
This extension of the table given in "Riches and Poverty," Edition 1905,
p. 223, modifies it somewhat. The reduction of agricultural labourers is not
so great as the crude totals suggest. It is the women and boys who have
chiefly disappeared from British agriculture, and it should be observed that
248,500 wives and daughters disappeared in 1871 as compared with 1861
merely by reason of the fact that they were enumerated at the earlier date
but not at the later one. According to Lord Eversley's careful analysis
("Statistical Society's Journal," 1907), the actual decline of male
agricultural employment (men and boys) in Great Britain was from
1,657,000 in 1861 to 1,236,000 in 1901, or, in England and Wales alone,
from 1,449,000 in 1861 to 1,079,000 in 1901. This is a serious decline, but
not as great as is commonly supposed.
Nothing is commoner than the belief that the trend to the towns is only to
be observed in the United Kingdom. As a matter of fact it is confined to no
country and is, indeed, a world-wide phenomenon. Between 1851 and 1906
the urban population of France increased from 25.5 per cent. to 42.1 per
cent. of the whole. Between 1871 and 1905 the urban population of
Germany increased from 36.1 per cent. to 57.4 per cent. of the whole. In

both cases the population classed as "urban" is that contained in towns with
at least 2,000 inhabitants.

ENGLAND AND WALES: PERSONS EMPLOYED IN
AGRICULTURE, 1851-1901
Adults Young Persons
Census Total, all Ages.
(Aged 20 and over). (under 20).
of—
Men. Women. Total. Boys. Girls. Total. Males. Females. Total.
1851 1,141,000 336,000 1,477,000 328,000 100,000 428,000 1,468,000 436,000 1,905,000
1861 1,119,000 301,000 1,420,000 323,000 60,000 383,000 1,442,000 361,000 1,803,000
1871 972,000 122,000 1,094,000 277,000 52,000 329,000 1,249,000 175,000 1,424,000
1881 884,000 50,000 934,000 254,000 11,000 265,000 1,139,000 61,000 1,200,000
1891 816,000 40,000 856,000 237,000 6,000 243,000 1,054,000 46,000 1,099,000
1901 750,000 43,000 793,000 186,000 9,000 195,000 936,000 52,000 988,000

I remind the reader of these facts because it is necessary to distinguish
between what is true and what is untrue in the arguments used in support of
the cry "Back to the Land." As a general rule the stationariness of the rural
population is attributed to cheap imports, or to land tenure, or to want of
housing accommodation, or to the attractions of town life, or to the higher
wages offered in industrial pursuits. All these things are causes of migration
to the towns, but one of the most potent causes is rarely considered. It is the
application of machinery and improved methods to agriculture. To produce
a given quantity of food, far less labour is required than of old. Therefore,
even in a country like France, which is almost independent of imported
food, it is obvious that there must be a trend townwards as the labour
displaced from agriculture seeks other employment.
Thus, in considering land in its agricultural aspect we must not regard it
as containing an unlimited field of employment. Agricultural methods will
continue to improve, and the day will undoubtedly come when one man's
work applied in agriculture will literally feed a multitude.
But, having made that reservation, let us look at the French and German
figures in another aspect. We see that in France, although the urban
population has increased, it is still much less than one-half of the whole. In
Germany, again, the town population in 1910 is about 60 per cent. of the

whole. In our own country, if we counted as urban population the
inhabitants of all towns containing 2,000 and upwards, we should find it
amount to over 80 per cent. of the whole. While, therefore, not losing sight
of the reservation already made, it is clear that, in the United Kingdom,
causes other than the application of machinery to agriculture have operated
to produce urban congestion.
There was a time when no European country was so rich as England in
men who cultivated their own land. To-day there is no country in the world
in which cultivation and security of tenure are so widely divorced.
Whatever the trend to the towns in other countries may be, there is no other
country in which such a marked diminution in agricultural employment has
occurred as in the United Kingdom. The land which bred the bowmen of
Agincourt and the Ironsides of Cromwell now sends forth the men of whom
Sir Ian Hamilton wrote to Mr Horsfall "I will not give you, a Manchester
man, offence, if I say that their physique was hardly equal to the fine
standard of their determination and courage.... It is the fault of some one
that these brave and stubborn lads were not at least an inch or two taller and
bigger round the chest, and altogether of a more robust and powerful build."
Looking at the industry of our people as a whole, the main fact which
stands out is want of security of employment. Nearly the whole of our
industrial workers are earners of weekly wages, and of our sparse
agricultural population but a small proportion are owners. Compare the
position of France. There, fully one-half the population are attached to the
soil by virtue of ownership and secure in the mother-earth which nourishes
them. They may be poor, many of these peasant proprietors, but at least
they are not constantly on the verge of hunger; at least they have the
glorious privilege of independence.
Our empty country-side is universally admitted to be a great national
danger. It is not alone that we are so much dependent upon imported food; it
is that the imported food is for the consumption of a race degenerating in
the unwholesome environment of town life. Everywhere the cry of "Back to
the Land" is raised, but, as though to mock that cry, it is only answered by
well-to-do weekenders, attendance upon whom, in faked-up cottages from

which labourers have been ousted, has become one of our many degrading
trades of luxury.
We must be under no illusions. We must not believe that mature and
debilitated town-dwellers can be planted out in rows to gain a living by
entire devotion to agriculture. We can hope for but little from farm colonies
for the unemployed. Our chief hope, here as elsewhere, is in the children.
We must seek to attach our present rural population to the soil under such
conditions that their children may see hope where now there is none.
How shall we secure allotments and small holdings for the agricultural
labourer? Parliament in 1906-1909 has given much attention to rural
problems, and the Small Holdings Act of 1908, setting up Commissions
with power to make schemes for small holdings if County Councils neglect
to do so, extending to eighty years the period for which money may be
borrowed for the purposes of the Act, and giving powers for the compulsory
acquisition of suitable land, is now in operation. The Report for 1908 shows
that County Councils in England and Wales acquired 11,346 acres for small
holdings and 304 acres for allotments.
We may venture to hope for better results than this, but is it asking too
much of the nation, at this juncture, to broaden its conceptions? Why should
we not, having regard to the extraordinary facts as to our national wealth
and income, having regard to the admitted dangers of our present position,
having regard to the best disposition and welfare of our 44,500,000 people
upon their island home of 77,000,000 acres,—why, having regard to these
things, should we not determine to secure absolute control of area, and,
having secured it, to order the first essential of healthful life, proper
distribution upon area?
As has been already pointed out in these pages, the 77,000,000 acres of
the United Kingdom, outside the tiny spots called towns which occupy an
almost negligible fraction of the whole, produce a gross rental of only
£52,000,000. This is the sum at which the whole of the land of the United
Kingdom, save that small part which is attached to houses, was assessed to
Income Tax in 1908-9. It represents the rentals of agricultural lands as they
stand with all their farm-houses and other buildings, roads, ditches, fences,
etc. In 1898 the Royal Commission on Agriculture valued this land at only

eighteen years' purchase. Twenty times £52,000,000 is only £1,040,000,000
or about one-half of one year's income of the country. This, it will be
remembered, was the valuation of land which we adopted in Chapter 5.
The question I submit for consideration is this: Is it worth our while to
buy up our own birthright at the price of one-half of a single year's income?
The question should be answered with due regard to all the
considerations as to agriculture, housing and the distribution of population
and industries which have been advanced in these pages. The problem of
the town is before us, and not alone the question of the tilling of the soil. It
should also be answered with due regard to the question of food importation
and the probabilities as to the continuance of cheap supplies.
In 1875-6 the gross assessments of agricultural lands—an area very little
larger than at present, for, as has been shown, the largest town occupies a
relatively insignificant area—amounted to £67,000,000 or £15,000,000
more than at the present time. If we had bought in 1875, then, and rents had
remained the same, we should have lost capital, but would the value of the
land have remained the same? In thirty years we could have created a
considerable yeomanry,—men holding land from the State not in fee
simple, but nevertheless in absolute security of tenure. They could have
paid us rentals at which small holdings would be eagerly competed for, yet
rentals larger than are at present derived by the little sovereigns of the
British country-side from their tenants. Further, we should have stemmed
the current of humanity which for thirty years has flowed to the towns, and
done something, in the phrase of Ruskin, to "get as much territory as the
nation has, well filled with respectable persons."
My point as to the value that is and the value that might be is illustrated
by Sir Robert Edgcumbe's experiment with Rew Farm, in the parish of
Winterbourne St Martin, in Dorsetshire. Sir Robert bought this farm of 343
acres for £5,050, made a road through it, and sold it in small holdings at
prices ranging from £7 to £20 per acre. The land was eagerly taken up and
the experiment has been a great success. When Sir Robert bought the land
in 1888 the outgoing tenant was in financial straits—he could not make
Rew Farm pay. It was rented at £240 per annum and its net rateable value
was £215. It is improbable that a new tenant would have paid more than

£200. Yet, under small cultivation, the rateable value of Rew Farm rose
from the £215 of 1888 to £346 in 1902, a rise of 60 per cent. In the same
period, the rateable value of the parish of Winterbourne St Martin as a
whole fell from £2,807 to £2,073.
Apart from the question of small holdings, nothing is more probable than
a rise in the value of British agricultural land to a point far beyond any yet
attained. Already, within the last few years, a revolution has taken place in
our wheat supplies—a revolution which has gone unnoticed by the British
public, so long accustomed to its miraculous cheap loaf in the baker's shop
that the miracle has become, as is the fate of all miracles, a commonplace
and unregarded thing. The table on p. 245 shows the nature of the change
which has occurred:

UNITED KINGDOM IMPORTS OF WHEAT
AND FLOUR IN EQUIVALENT WEIGHT OF GRAIN
In Millions of Cwts.
1895. 1896. 1897. 1898. 1899. 1900.
Russia 23.0 17.2 15.1 6.4 2.5 4.5
Roumania 2.0 5.4 1.2 0.2 — 0.7
U.S.A. 45.3 52.8 54.1 62.0 60.2 57.4
Argentina 11.4 5.0 0.9 4.0 11.5 18.7
Canada 5.1 6.3 6.9 7.7 8.7 8.0
India 8.8 2.1 0.6 9.5 8.2 —
Australia 3.6 — — 0.2 3.0 2.9
Total of above and
other countries 107.2 99.6 88.7 94.4 98.5 98.6

1901. 1902. 1903. 1904. 1905. 1908.
Russia 2.6 6.6 17.3 23.7 24.8 4.6
Roumania 0.5 2.4 3.1 1.5 2.1 1.8
U.S.A. 66.8 65.0 46.7 18.5 14.5 40.7
Argentina 8.3 4.5 14.2 21.8 24.1 31.8
Canada 8.6 12.2 14.5 9.0 8.4 16.8
India 3.3 8.8 17.1 25.5 22.9 2.9
Australia 6.2 4.2 — 11.4 11.5 5.8
Total of above and
other countries 101.0 107.9 116.7 118.2 114.2 109.1

In 1902 America sent us 65,000,000 cwts. of wheat. In 1903 this great
supply fell sharply and in 1904-5 it was reduced to less than 20,000,000
cwts. In 1908 there was recovery, but this was but temporary. Sooner or
later the United States supply will wholly cease. By 1925 the United States
will have some 110,000,000 to 120,000,000 people to feed.
In "Riches and Poverty," 1905 edition, I wrote:—
"The United States failing, we still secured our imported wheat supplies
in 1904 and 1905, but at an increased price. Canada failed, but those
uncertain suppliers, India and Australia, came to the rescue. Argentina sent
us more than ever before and Russia also came into the export market. But

the facts as to America remind us that none of these suppliers can be relied
upon indefinitely, and some of them are notoriously uncertain. Canada has
done badly in 1904 and there will always be difficulties of climate to
consider. Moreover, the United States will in future come into the market as
a buyer and compete with us for the exports of North-West Canada and
Argentina. The sum is that we cannot for the future depend upon dirt cheap
wheat raised by scratch farming on virgin soil, and that, as a consequence,
the price of wheat will rise. As with wheat, so, sooner or later, with many
other foods. When it comes to putting more labour and manure, and less
luck, into farming in new lands, then conditions will be equalized, prices of
produce will rise, and the price of British land will rise also."
It is now (1910) only necessary to add that the price of wheat has moved
thus:

THE RISE IN WHEAT
Indian and
British Wheat. Foreign Wheat.
Colonial.
s. d. s. d.
s. d.
1894 (lowest on record) 22 10 22 10 23 6
1904 28 4 30 5 29 7
1905 29 8 31 2 30 8
1906 28 3 30 1 30 3
1907 30 7 32 4 33 10
1908 32 0 36 0 36 1
1909 36 11 39 2 40 3

Merely as a commercial speculation, then, it would be well worth our
while to invest £1,000,000,000 in buying up the United Kingdom. The land
is now probably at bed-rock price, and we should come in, as the slang
phrase goes, on the ground floor. The really dear land, that of the towns, we
could pass by. We want to get our industries and our people out of the towns
and with control of area we could do it. The State, as landlord from John
o'Groats to Land's End, could afford to dispense with the acquisition of the

tiny areas upon which the majority of our people are now crowded. Land
nationalization, viewed in this way, presents no insuperable financial
difficulties. On the contrary, it would put us in possession, at an absurdly
low price, of the opportunity to recreate our social structure and the means
to dispense with all taxation in the time to come. Under wise management
the national acreage could soon be made to yield a revenue from farms,
allotments, market gardens, houses, factories, forests, etc., of something
over three pounds per acre on the average, for it would house the greater
part of our people and produce a larger part of our food by intensive
cultivation. If we wisely use our resources, our 77,000,000 can be made to
produce, under methods of intensive cultivation and co-operation already in
practice, if not enough food to feed our population, certainly a larger
proportion of our supplies than at present.
Also worth consideration is the important matter of afforestation. There
are now but some 3,000,000 acres of woods and plantations in this country,
and many of these are badly managed, for forestry is almost an unknown art
in the United Kingdom. Landowners do not understand it; their agents do
not understand it. Yet its possibilities are enormous and might be realized
within twenty to thirty years of the simple financial operation which I have
suggested. There need be no acre of the 77,000,000 not useful or not
beautiful. Millions of acres of land now termed waste may be clothed in
verdure to yield a steady and certain income and make us largely
independent of imported timber. There is no greater authority on this subject
than Dr Schlich, and he gives it as his opinion, confirmed by thorough
investigation of British and foreign conditions,[53] that five or six million
acres could be brought under wood, thus producing the bulk of the timber
we require. Every acre afforested would require about £2 worth of labour.
After planting, each acre would need only about five days' labour a year,
but that means 30,000,000 days of work. The timber grown and cut, there
would be the transport, lumbering, and allied industries calling for labour.
Dr Schlich estimates that 500,000 men, or say 2,500,000 people, would find
employment through the afforestation of say six million acres, and the
estimate is based upon solid foundations.
It may be asked, why do the present owners of "waste" land miss such an
opportunity? The answer has several parts. Landowners are for the most

part (1) ignorant of the subject, (2) unprovided with capital, (3) unwilling to
wait. A business which does not begin to yield income for some 15 years is
not for the average private landowner. But the people, who have waited so
long for the right to tread their own soil, can wait these fifteen years and
other fifteen if need be.
Given the overlordship of area, the establishment of a permanent Land
and Housing Commission, the nationalization of the means of transport, the
establishment of well endowed schools of agriculture and forestry, and a
generation of well-born children, what possibilities open out before us!
Is this conception too large for a race which talks of Empire? In the
United States there is a private trust which was organized by a single
individual with a capital of 1,000,000,000 dollars—a trust which owns
territory, mines, railways, steamships and mills, and supports 1,000,000
people. Business transactions are growing greater, and must greater grow,
for the world cannot afford to peddle with its resources. The future is with
the men who realize that it is not more difficult to think in millions than in
thousands. Within the last few years we have spent on a war with a small
people £250,000,000 in the name of Empire. £250,000,000 is the price of
one-fourth of the entire area of the Mother Country. It is high time for a
little Imperial thinking in the home market.
[52] These facts are summarized from the Census Reports.
[53] See his excellent "Forestry in the United Kingdom."

CHAPTER XVIII
ORGANIZATION

I T has already been remarked in these pages that quite inadequate
numbers of persons are engaged in the production of many useful
articles. This would be true even if all the individuals enumerated as
producers in the census returns were fully employed upon existing plant and
under their existing managers. As a matter of fact, they are not fully
employed. Unemployment or short time always exists in greater or less
degree. Between inadequate numbers and inadequate employment of those
numbers the quantity of ponderable commodities produced in the United
Kingdom is so small, as we have seen, that only a small fraction of our
people are well housed or well clothed. A great multitude craves for
satisfaction of elementary needs, while a host of shopkeepers wait hungrily
for customers who cannot buy.
In the nineteenth century enormous strides were made in the invention of
machinery and labour-saving appliances and methods, and now, at the
opening of the twentieth century, we possess means more than ample for the
satisfaction of all. If invention now came to a standstill, we could, with such
science as we now command, produce, or obtain by exchange for our
production, far more food, houses, clothes, furniture and other commodities
than we actually need, and this while our population enjoyed ample leisure
in which to develop their higher faculties.
What, then, is at fault? Not only do the majority of our men work
arduously, but an immense army of women and young children are also
engaged in production and distribution. Of the population of England and
Wales between the ages of 20 and 55 only 179,946 males and 823,135
unmarried females figured in the Census of 1901 as "without specific
occupations." What is the explanation, then, of an insufficient and ill-
distributed production? The answer can be given in a few words. It is want
of organization which leads to such poor results from so much hard labour.
A poor stream of ponderable commodities filters through thousands of
unnecessary channels, and becomes the subject of many strange services,

each of which claims and gets some sort of reward. By the enumeration of
each of these services the total income which we examined at the beginning
of this book is made up. The Error of Distribution of the national income
connotes a wasteful and inadequate production.
Waste in actual production is still exceedingly great. In only a minority of
cases are factories equipped with the best plant and appliances. Model
factories, in which the most economical production is attained, are still
exceptional. There are tens of thousands of small employers who lack the
capital properly to equip their establishments, and who perforce waste
labour.
That is to speak of production as a whole, without reference to the nature
of the goods produced, but when we come to analyse the product, waste is
everywhere apparent. Labour, to be economically employed, should
produce only genuine articles, capable of application for a considerable
period to the purpose which they are designed to serve. As we know only
too well, a very great part of our manufacturing output is of articles which
make-believe, and it is only a small fraction of production in any branch of
industry which is the best of its kind. Our competitive system is largely an
endeavour to make profits out of the sale of trashy articles, the production
of which wastes alike the labour engaged in making them and the labour for
which they are exchanged. It is difficult to say which is more pitiable, the
waste of labour upon rubbish designed for the consumption of the poor, or
the waste of labour upon luxuries designed for the consumption of the rich.
Upon the waste connected with the trades and services of luxury I have
already dwelt at some length. Here it is only necessary to remind the reader
that it is of two kinds. There is the multiplication of servants and attendants
upon rich men and their houses and animals,[54] and there is the employment
of nominally useful workmen in the manufacture and repair of the
instruments of luxury.
Turning to the marketing and distribution of commodities we have many
forms of waste of labour to study. Each manufacturer in a trade, selling his
goods in competition with others, sends out his agent or agents to assert, not
always truly, that his wares are the best and the cheapest, and to secure
orders for them. Thus a large number of able-bodied men are divorced from

production and made a quite unnecessary factor in distribution. At the
Census of 1901, 64,322 commercial travellers were enumerated in England
and Wales, as against 44,055 in 1891! These men are usually of an
exceedingly capable type, whose work, better directed, might be of great
service in useful production.
Each factory, however small, must have its separate clerical staff, and to
thousands of men wasted as travellers we have to add tens of thousands
wasted as clerks. In the United Kingdom, in 1901, there were 439,972
commercial or business clerks, as against 300,615 in 1891.
The commodities produced by the wasteful competitive factories are
often, too often, dealt with by wholesale middlemen, agents, brokers,
factors, merchants, who, with their staffs of clerks and warehousemen
account for an uncertain but considerable number of the working
community. Our imports of food, which in an organized community could
so easily be handled by a single staff at each port, are scrambled for by a
great host of merchants, factors and commission agents.
A most conspicuous waste in distribution is in advertising, one of the
most unnecessary of all trades. In the game of competition, those often win,
not who supply the best goods, but who say that they supply the best goods.
As a result there has sprung up an enormous industry with many branches
which is engaged in pushing the sale of a few good and many worthless
articles. It "employs" thousands of male and female clerks and canvassers,
and directly and indirectly lays many nominally useful trades under
contribution. Printers, authors and journalists, enamellers, carpenters, bill-
stickers, paper-makers and others are engaged to furnish the materials of the
advertisements. Altogether it is probable that some 80,000 people find a
"living" in connexion with advertising, when they should be doing useful
work. Some part of the stream of useful commodities is directed to them,
and in return they give nothing. Individually, they may be honest,
industrious people, doing the work they are employed to do to the best of
their ability. From a national point of view they are wasting their time. It
may be added that when they are pushing the sale of "patent" medicines,
whiskies and complexion creams they are doing something worse than
waste time.

Chiefly arising out of our commercial system of distribution and the
crimes and misdemeanours which it creates, the various branches of the
legal profession absorb a considerable number of able-bodied men who
contribute nothing to the wealth of the nation but who are rewarded by a
large share of the national income. At the Census of 1901 as many as
27,184 barristers and solicitors and 42,339 law clerks were recorded.[55]
These 69,523 individuals with their dependents, probably numbering nearly
300,000 in all, help to attenuate the thin stream of ponderable commodities
which flow from the places where people labour to useful ends.
We pass to the work of the hundreds of thousands of retail shopkeepers
and their servants, and here again we find a vast amount of wasted labour.
In each trade in each district there are a quite unnecessary number of
tradesmen hunting for profits. It is not uncommon to find half-a-dozen
butchers' men calling for orders upon the householders of a single street.
It is sometimes represented to shopkeepers that any movement towards
collectivism threatens their livelihood. Shopkeepers will do well to
remember that it is unrestrained individualism which is their worst enemy.
In almost every branch of retail distribution the multiple shop principle is
eliminating the independent shopkeeper and substituting badly paid shop
"managers." Apologists of individualism boast of the economy which is
thus being achieved. Thus M. Leroy Beaulieu in his "Collectivism" (which
is an attack on collectivism) writes, "The tendency of civilization, where
freedom exists, appears to be towards a reduction in the number of persons
who live entirely by commerce, owing to the gradual substitution of large
for small industries that is now in progress. Would it be possible for
collectivism to act more rapidly or efficiently?" M. Leroy Beaulieu forgets
that the crushing of the small shopkeeper by private monopolists
accentuates the error of distribution, while collectivism economizes labour
for the general good.
What I have written does not apply, of course, to all fields of labour. It
has long been recognized that certain services can only be effectually and
efficiently performed under one management. Railways, tramways, water-
service, lighting, and so forth have come to be looked upon as "natural
monopolies." Even Mr Henry George, who thought that "Socialism tended

towards Atheism" and who considered that "limitation of working hours and
of the labour of women and children" could only be enforced by methods
which "multiply officials, interfere with personal liberty, tend to corruption
and are liable to abuse,"[56] admitted the existence of "necessary
monopolies" which might be treated as functions of the State. Indeed, it is
apparent to the most unthinking that between two points A and B there can
only be one best route for a railway, and that, therefore, railway service
between points A and B should be a monopoly. Similarly it would be an
obvious absurdity to construct two sewers in one road, competing with each
other for the removal of refuse, or for two or more gas managements to run
mains in the same streets. In these and many other cases it is clearly
recognized that economy of labour is consistent with monopoly alone, and
the only question that remains to decide is whether the necessary monopoly
should be in public or private hands. I do not purpose here to discuss that
question, for at this date it is scarcely an open one. An overwhelming
weight of opinion has decided that public ownership must go with
monopoly, wherever monopoly is shown to be necessary.
It is not so generally recognized that proper economy of labour and a
proper distribution of the products of labour can only be secured by:
(1) The conversion of all common services into monopolies, and
(2) The ownership of those monopolies by the public.
Nevertheless, the waste arising from hundreds or thousands of unnecessary
centres of production and distribution is becoming better understood, and in
the United Kingdom, as in America and Germany, big fish are increasingly
eager to swallow the little fish. Combination in the field of production is no
less common than the unification of control of stores and shops in the field
of ultimate distribution. Organization is in the air, and organization,
commenced by individuals for individual gain, can only end in the erection
of monopolies, which, for its own safety and health, the public, sooner or
later, will find itself compelled to control.
In the foregoing pages we have considered the proper use of area and the
healthy housing of the people as questions urgently calling for collective
action. The colonization of British land by the revival of agriculture and the

redistribution of industries is ultimately bound up with the development of
Transport and Power Distribution. The former is now a problem of private
monopoly which we have allowed to arise. The latter will become one if we
do not at once realize the possibilities of power distribution and determine
that they are of so far-reaching a character as to demand public ownership
from the beginning.
If we are successfully to take our industries and people out of congested
centres and spread them out over a considerable area we need cheap and
rapid transport and cheap and easily handled power. The transport and
power transmission of the future will be electrical. It is upon record that in
the early days of the steamship a Royal Commission "sat upon" the then
vexed question of "Steam versus Sails," and unanimously decided that sails
were the only practical wear for the Royal Navy. One is reminded of this
fact when one contemplates the slow progress made by electric traction in
this country, and the marked reluctance to experiment on the part of those
types of private and injurious monopolists—our great railway companies.
After much thought and with the assistance of a pushful American citizen
our London "Underground" is, as I write, electrified, many years after
electric traction was known in Darkest Africa, but so far as the greater part
of our transport system is concerned we are at a standstill. The field of
experiment is resigned to the Americans and the Germans.
The production and distribution of light, heat and power simply mean the
production and distribution of energy in the form we call electricity, and
since transport is simply motion we see that the future of lighting, heating,
transport and power is the future of electricity.
In the matter of transport there is perhaps something to be said for the
statesmen who, without the slightest conception of the possibilities of steam
power, allowed our railways and canals to be made sources of profit for
private speculators. They erred in ignorance of the magnitude and
importance of the subject. There will be no such excuse if we allow the
production and distribution of electrical power to become the sport of
private monopolists. If there is blindness in this matter it will be wilful
blindness. For each district there can be but one power supply consistently
with economy, and so much hangs upon the wise distribution of power that

it is most important the public should be made to realize the nature of the
interests which are at stake.
The adoption of the mysterious word "Electricity" is a most unfortunate
thing. If the public understood that electricity is Energy and that it is
transmutable at will into Power or Light or Heat, they would better realize
the possibilities of the future in town and country, and all that the proper
organization and control of Energy means to them. They would at once
resolve that the power of government must not be divorced from the Power
which will run in the electrical mains of the future, and by the aid of which
we can transform the face of our land.
Let me drop the word Electricity and use the simple term Energy. Energy
will be produced at a central power station and distributed over a
considerable area. The energy mains will carry the means of lighting, the
means of motion (transport), the means of heating, the means of
manufacturing in large, the means of manufacturing in small, the means of
cooking, the means of cleaning, to every person in that area. Energy will be
at the disposal of every factory, of every workshop,—and of every private
house. No building will be without its motors, large or small. Smoke and all
the waste and dirt of smoke will disappear.
I am not speaking of a remote future, but of possibilities which can
forthwith be realized. How important it is, then, that this Energy supply,
which is already entering and will increasingly enter into our everyday
lives, should be publicly owned from the first. Given private ownership, the
monopolists of Energy will run their mains where most profit is quickly to
be garnered instead of seeking, as we should seek, first profits in the
thinning out of towns and the restoration of the health of our people. If we
part with the control of power, it is Power indeed which we part with. We
should part, also, it is important to add, with a magnificent source of public
revenue, which will amount, in the time to come, to much more than the
revenue of our railways. It is only by securing the distribution of such
profits by public ownership that we can make any impression upon the
melancholy facts treated in the first part of this volume.
As I have already said, it is commonly recognized that such a function as
a tramway or water supply must of necessity be a monopoly, public or

private, if its working is to be economical. It is not difficult to show that the
control of the production and distribution of all articles of common use
must be unified if labour is not to be wasted. Just as one water main and one
alone is needed for the service of a row of houses, so, to use a familiar
illustration, one vehicle and one alone is needed to supply the same row of
houses with milk. If a number of milk-sellers are competing for the custom
of one small neighbourhood, as is usually the case, a quite considerable
number of able-bodied men, boys and animals are engaged in unnecessarily
traversing the same streets, one after the other, to do the work which could
be performed with much more ease, certainty and expedition by a fraction
of their number. Each of the small tradesmen has to keep a set of accounts
demanding his own attention or that of his wife or clerk. Each milk dealer,
again, has his separate supply of milk from the railway station, sent by
some farmer at a distance. Each of these doses of milk is the subject of a
separate transaction, wasting labour at both ends of the journey and in
transit. From first to last, the process is clumsy and tedious, wasting labour
at every stage. The waste is precisely of the same nature as would occur if
several water companies supplied a certain street with water and had their
mains running side by side. There would be just as much absurdity, and no
more, in serving my road by four water-mains as in serving it by the four
milk chariots which now pay it such frequent visits.
And to pursue this useful illustration a little further there is another
analogy between a water supply and a milk supply which should not be
forgotten. The importance of pure milk is not less than the importance of
pure water. The milk supply of towns is derived from a thousand tainted
sources, the precise nature of which is unknown both to the consumers and
to the milk dealers. I fear we should drink less milk if we could see the
handling of it—the literal handling of it—from the start. I have a lively
recollection of the last milking operation I witnessed. Suffice it to say that I
agreed, afterwards, that the butter made on the farm looked to be very fine
butter, and that I was entirely satisfied with an ocular demonstration of its
many virtues. As is pointed out by Dr G. F. McCleary, the Battersea
Medical Officer of Health,[57] "if large towns want clean milk they must not
look to outside authorities to get it for them." The ordinary milk farmer is a
conservative creature who does not appreciate the "faddist" with his