Page images
PDF
EPUB

almost certainty of a continued fall in the rate of interest, it would become necessary either to lower the amount of the pension or to increase the subsidy paid by the State. This difficulty the Labour Commission attempted to meet by proposing that, instead of being invested in Government stock, these funds should be employed for their 'proper object,' commerce and industry; that, instead of being a dead-weight burdening the market, the capital should be made living and fruitful, increasing the prosperity of the country and of the mass of its citizens. The more dangerous it is for a private person to 'put all his eggs in one basket,' the less, thought the Commission, would it be so for an institution having at its command a capital so extensive as that which the Caisse de prévoyance would have at its disposal. It was therefore proposed that these funds should be invested in such things as railways (thus anticipating their eventual reversion to the State), public works, agricultural banks, and banks for the purpose of advancing loans to those engaged in industrial undertakings. By such investments, which would be effected for the most part by district councils, a return of from 3 to 4 per cent. was confidently expected. During the course of the debate upon the project, M. Constans expressed himself as having, in consideration of past experience, no fear as to the possibility of investment of even twenty-five milliards of francs, double the amount which it was estimated the Caisse would have to dispose of; though he also suggested, besides Government stock, and stocks guaranteed by the State, the investment of the capital of the proposed institution in such things as working-men's dwellings and mortgages.

This project has been much criticised, especially as to its financial details, both by those who believe that they have a more excellent plan, and by others who offer no substitute for it. Amongst its more eminent critics is M. Eugène Rochetin, editor of the Journal des Economistes, who strongly condemned the employment of money contributed by working-men in any enterprise which did not offer absolute security; justly remarking that the high rate of interest hoped for by the Commission was in itself an indication of the risk which would be incurred by the employment of capital in the manner suggested in the Report. M. Rochetin himself proposes the formation of a National Assurance and Thrift Society upon mutualist lines. Any wage-earning Frenchman is to be able to assure his life for a sum varying from one to six thousand francs; and in addition may, by a further payment, obtain a life annuity of a maximum of 600 francs, or an equivalent capital sum, at the age of fifty years or over. One-third of the life-assurance premiums is to be borne by the State; the remaining cost is to fall in part upon the beneficiary, and in part upon employers, who are to contribute to a central fund a tax, proportioned to the amount of wages paid by them, which is to be at least equal to, and may be

double, the subscription of the workman. This tax M. Rochetin justifies by the doctrine that, since the employer is enriched by the labour of those whom he employs, he ought to contribute to their future subsistence. In spite of M. Rochetin's condemnation of the method of investment of capital proposed by M. Guieysse and his colleagues, he does not feel it inconsistent to suggest its employment in public works, such as the proposed canal from Paris to the sea or that proposed from the Atlantic to the Mediterranean: in the reafforesting of mountains and other lands: in the building of docks: the foundation of an Agricultural Bank: and in other similar works; besides communal and departmental loans and Government stock or stock guaranteed by the Government. The total cost to the State he estimates at about the same figure as that of the Labour Commission, with about four million adherents.

At the opposite pole to the mutualists are the socialists: those who wish the citizen to depend on the aid of his fellows as opposed to those who wish him to depend on the State. Between the two no love is lost, as may be gathered from the remarks applied by the Petite République to the Mutualist Congress held at Reims in 1898; such epithets as 'wretches' and 'renegades of the proletariat' being amongst the least virulent of those addressed to them. As might be supposed, French Socialists have a scheme for old-age pensions, formulated in a bill drawn by M. Escuyer and introduced into the late Parliament by M. Jaurès, and into the present, since he himself is no longer a Deputy, by certain of his co-religionists. Magnanimously allowing that the working-man who is to benefit should contribute a portion of the cost, it is proposed that his share should be one franc per month. The contribution of the employers is to be 1.50 franc per month for each Frenchman, or 2.50 francs for each foreigner, employed. The charge upon the State is fixed at 33.50 francs per annum per adherent. Every member is to have a pension of 500 francs at sixty years of age, or 400 francs if unmarried; besides gratuitous medical attendance and 1.50 franc sick pay per diem. If totally incapacitated by accident or illness from working, he is to enter into immediate enjoyment of his pension; and in case of his death after reaching the age of sixty his widow will be entitled to half his pension. No one with an assured income of 1,000 francs or more is eligible as a member, and any one with an assured income of less than 1,000 francs will have the right only to such a sum as is the complement of that amount. The total annual charge upon the State for an estimated membership of 10 million members would amount to about 358 million francs. This is to be an annual charge upon the budget, thus avoiding the difficulty of finding suitable investments; and it is proposed to meet it by (1) an income tax, estimated to produce 157 millions; (2) a succession duty which, taking advantage of an apparent indiscretion of a former Minister of Finance, is

estimated to produce 150 millions; (3) 20 millions from the Pari Mutuel, and (4) a conversion of the National Debt from 3 to 3, and later to 2 and to 2 per cent. This, it is estimated, will produce 168 millions per annum.

Disregarding such phrases as 'the robbery of the working-man,' 'the exploitation and oppression of the working-man,' and similarly extravagant terms, made use of by the authors of the above scheme, it is, taken on its merits, probably the soundest of any proposed. If a socialistic scheme is to be introduced-and it will not be denied that any State-aided old-age pension scheme is eminently socialistic-it seems only reasonable that it should work upon lines laid down by Socialists. In view of the continued fall in the rate of interest, no scheme which requires the investment of a large sum of money could prosper for long. The payment of pensions by means of an annual tax avoids this difficulty; and the further difficulty of dealing with those who have already arrived at old age when the scheme comes into force is avoided in a similarly summary

manner.

Further, any scheme which proposes to assist the poorer classes to make provision for their old age should include life assurance. This, by enabling provision to be made for the family in case of death, would remove the objection which seems to be felt for deferred annuities, a method of saving which has, no doubt, an appearance of selfishness. There should, moreover, be no forfeiture of deposits, if in arrears; for a man who has made any payment with a view to securing a provision against his old age has at least the right to the return of that sum if unable or unwilling to make further deposits. It is doubtful, however, whether the budget, either of France or of England, could bear the large amount of additional taxation required by any such scheme. Mr. Booth, estimates the cost of his planwhich seems the soundest, because the most widely extended and most simple of the English schemes-at seventeen millions sterling yearly. In order to meet this he lightly proposes to put an additional threepence on the income tax; a halfpenny on sugar; twopence on tea; and a further tax upon drink. It may be questioned whether any Chancellor of the Exchequer could be found sufficiently courageous to propose these taxes, with the exception, possibly, of that last named. Undoubtedly, to force employers to contribute, against their will, to an Old-Age Pension Fund, which seems to be a favourite feature of French and other Continental schemes, is a mere attempt to raise wages by law; and the fall of wages in Germany since the introduction into that country of the insurance system now in force goes far to prove this; though it may, no doubt, be said to be post but not propter. But the question of cost is one of the least serious raised by any old-age pension scheme. Such a scheme should be an incentive to, not a reward of, thrift. It is

questionable whether any incentive to thrift is needed in England, where the average deposit in the Savings Bank is higher than that of any other European country. The 'widespread expectation that something should be done' seems to be, as a member of the Royal Commission on the Aged Poor characterised it, somewhat vague.' Mr. Holland remarks that it is unreasonable to expect young men, even of thoroughly deserving character, to pay much attention to the . . . contingencies of old age.' But, as this is the very object to effect which a State-aided pension scheme is proposed, his words would seem to bear out the opinion that the matter has not that importance generally attached to it; and that the improvement which is constantly taking place in the financial and moral conditions of labour' will remove from it that degree of importance which it now has. Undoubtedly if the question can be solved by that means, such a solution is the most to be desired; for, after all, State or State-aided old-age pensions are, as Bismarck called them, merely 'a bribe1;' and the 'bribing' of the Romans by their Emperors with bread and circuses can hardly be said to have tended to their moral improvement.

ARTHUR F. WOOD.

1 Mr. W. H. Dawson in the Westminster Gazette, the 15th of August, 1898.

PARLIAMENTARY GOVERNMENT

IN JAPAN

THE meagre telegrams from Yokohama appearing in our journals at long intervals give but little clue to the constitutional problem now engaging the energies of Japanese politicians. Four hundred leagues to the West a more absorbing spectacle rivets our attention. We look with difficulty beyond the confines of that Forbidden City, of which the European Powers are slowly driving back the gates, and in our anxiety to discover a clue to the Far Eastern question we are apt to forget that it is being answered not only from the West but from the East. Japan has strengthened her armaments and adjusted her finance; she has also set herself to establish the foundations of constitutional freedom, without which strength and prosperity are robbed of half their value. Looking constantly towards the mother of Parliaments, she is in some measure acting over again the events of our own past, so that it is possible to study certain aspects of our constitutional development without the aid of history. The progress of centuries is hurried into a lifetime, and while in less than fifty years the Japanese nobles have yielded to the Crown and the Crown to the people, a period has now arrived when the leaders of thought in Japan have determined to establish a system of party government and party cabinets such as obtains in England. In this connection the last two sessions of the Diet have been exceptionally interesting from an Englishman's point of view. But to understand the bearing of the questions involved a word or two of preface are necessary, in order to refresh the memory of those who have forgotten the somewhat intricate influences at work in the revolutionary Japan of the sixties.

When the Emperor's nominal authority was converted into a reality by the overthrow of the Shogun in 1868, the work was largely due to the four clans of Satsuma, Choshu, Hizen, and Tosa. Their aim was to destroy the Shogunate and to create an Imperial Government, and though many other motives actuated them, these were the two main ideas of the revolution which grew in importance and left political results. No sooner, however, was the Imperial Government

« PreviousContinue »