Chapter II: Preface: To the Tenth (revised)

EDITION, 1910

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

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

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

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

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

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

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

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

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

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

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

L. G. CHIOZZA MONEY

CHALDON, SURREY _October 1910_

CONTENTS

PAGE BOOK I THE ERROR OF DISTRIBUTION

CHAPTER I THOUGHTS ARISING OUT OF A GREAT CONTROVERSY

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

CHAPTER II THE NATIONAL INCOME

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

CHAPTER III DISTRIBUTION OF THE NATIONAL INCOME

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

CHAPTER IV THE ESTATES OF RICH AND POOR

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

CHAPTER V THE NATIONAL ACCUMULATION

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

CHAPTER VI THE MONOPOLY OF CAPITAL

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

CHAPTER VII THE AREA OF THE UNITED KINGDOM

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

CHAPTER VIII THOSE WHO WORK AND WHOSE WHO WAIT

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

CHAPTER IX PROFITS, BAD TRADE AND UNEMPLOYMENT

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

CHAPTER X PART OF THEIR WAGES

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