There is no doubt that among the causes of unrest one of the most serious, probably much more so than either employers or workmen are generally conscious of, is the long hours of work. Those who have had to hear questions arising out of labour disputes have noticed the state of tension produced by the weariness and strain of too prolonged and continuous work. Even in the domestic circle an overworked man is often found less amiable and more ready to find fault. A harassed manager and a deputation of jaded workmen may be really very good fellows and yet find that some comparatively small question raises strong feeling and mutual recrimination, and then leads to rash action resulting in open strife, strikes, and lock-outs, and the judicial proceedings which may be necessary in consequence of them. "A Skilled Labourer," writing in the Quarterly Review, mentions as the first of the four principal grievances of workmen—"the hours are too long." Long hours have been accepted on both sides partly because during the War the call of the country for increased output, especially of munitions, was so urgent, and partly because it was thought that higher profits would thereby be obtained, and certainly higher wages earned. It seems, however, well established that longer hours do not necessarily mean increased output. There is a limit to the time during which a man can do even routine work effectively. If men were to be regarded only as machines for turning out work of a certain class, very long hours would be bad business. Where the work involves special skill and thought the evil results of long hours, even measured simply by the gross amount done, are still more serious. Everyone who has had to do with young students and still more with parents disappointed by their sons' failures must again and again have found that the cause of failure was too many hours devoted to reading. The students acquired the habit of sitting over their books worrying their minds, but really absorbing nothing. A senior wrangler has been known to find five or six hours a day of real work at mathematics as much as he could stand. Of course, work involving little hard physical exertion and hardly any mental effort can go on much longer, but the very monotony which in some ways makes it easy, has a deadening effect. A factory operative minding a "mule" being asked: "Is it not very hard work always watching and piecing threads?" answered, "No, but it is very dree work." But the evil effects of too long hours are not confined to the fact that unrest or disputes arise from the state of feeling produced nor to the diminution of production due to fatigue. Recurrent strains continued over a long period indeed deteriorate even things which are inanimate. The "fatigue of metals" has been the subject of careful investigations. It is time that fatigue of human beings, even looked at as machines, were more fully considered.[5]
The great and often permanent physical injury caused by too prolonged work is specially serious for women. Many women are such willing workers that they go on overtaxing their strength. Among girls and women students the fatigue from overstrain in preparing for examinations, from which boys and men may rapidly recover, often results in permanent physical and even mental degeneration. Many who have watched the effects of such continuous study would advocate a complete sabbatical year in which systematic study should be suspended entirely for girls at some period between fourteen and eighteen.
It is impossible to have a healthy nation if the majority, or any very large part of it, work for excessive hours even in the factories where the best methods are employed to make the conditions as healthy as possible. Medical men of the highest authority regard the influence of too prolonged hours of work as one which urgently demands attention. Enlightened and experienced men of business like Lord Leverhulme have expressed very strong views on the subject. Man, however, cannot be looked on as a mere machine for production, nor is even health the only question for him as a human being. He must have time for other pursuits, for recreation, for a fuller life. As civilisation and education advance this need becomes stronger. The duller the work the greater the need for those who have any natural mental activity to find resources of interest outside. The pleasure derived from literature and science should be open to all. No one who knows working people can deny that the demand for it exists. A fitter on weekly wages used to show in a poor cottage one of the best collections of British butterflies and moths, made entirely by himself. Many of them had been captured late at night on Chat Moss. A hair-dresser has told how to watch the habits of birds was the delight of his Sunday bicycle rides; his assistant called attention to some little known poet whose works had a special appeal for him; another said it was the study in his rare holidays at the seaside and in local museums of some form of animal life—the name of it, now forgotten, would convey no meaning to most University graduates—that made his interest in life. You may find a large audience of workmen interested in a lecture on Shelley, and some of them as well acquainted with his poems as the lecturer. Such cases as these may perhaps be exceptional, but given opportunity and sympathetic help and advice, they might be multiplied almost indefinitely. Other men want time for cultivation of allotments, which ought to be within the reach of thousands of urban workers who find in them a perennial source of interest. A growing number take a keen pleasure in seeing something of the beauties of their own country. Tramping through the Yorkshire dales and knowing them well, it was interesting to meet one who knew them better, and to find that he was a chimney-sweep, who saved up his earnings to spend his holidays regularly there.
The success of the Workers' Educational Association shows both the strength of the demand among the workmen, and sometimes, too, among working women, for intellectual life and their capacity to make use of any opportunities offered for regular study. It is to be hoped that its promoters will not forget that some branches of natural science and literature, opening new realms of interest removed from the ordinary cares of life, are at least as important subjects for study as economic and social problems, and that one of the most important of such problems is how to give those who must earn their daily bread by work that is often dull and wearisome, the opportunity of sharing as far as possible in the intellectual life. We may well wish Mr. Mansbridge and his friends success as pioneers in the work of reconstruction, and renewed and extended activity when the pressure of War requirements is removed. It is to be hoped that the original ideals of the Association may never be forgotten.
The aim of the Association is neither technical, i.e., to make workmen better qualified for their special work, nor to attain a higher general education with a view to their obtaining employment of a different class and ceasing to be manual workers. It is to enable them, while continuing to earn their living by manual work, to participate in the fuller life given by intellectual activity. There are some subjects which can be pursued and studied thoroughly with pleasure and profit without any long or exact preliminary training. With some wise guidance in reading and some stimulating criticism to help him, the workman can really obtain all that is important from the study of the literature of his own language—to learn to know and to enjoy the best that has been written. It is of no importance that he will probably not become a "literary expert," able to trace the influence of this or that obscure writer of one age or country on the literature of another. It is to be hoped that he will not learn the kind of literary jargon affected by so many modern critics, or attempt in his essays to imitate those who think that obscurity indicates profundity. There are some sciences, too, especially certain branches of natural science, which can be pursued by men whose time is mainly taken up by manual work.
The idea of erecting an educational ladder by which all will proceed from the elementary to the secondary school and thence to the University, is a false one. Any such ladder must continue to be narrow at the top. It is impossible in any economic conditions that we are likely to see in our time that the majority of our people will be able to devote their whole lives to study until the age at which a University course can be finished. Indeed, for all classes there is a modern tendency to prolong the school period unduly, to keep boys under the discipline and following the methods of the secondary school until nineteen years of age, so that they finish a University course, which is also becoming more prolonged, after twenty-three, and then at last take up their vocational training. Neither parents nor the nation can afford to make such a course the normal one. It is no doubt of the greatest importance to secure a career for special talent so that poverty shall not prevent a really able boy or girl following such a course of study as would enable his or her talents to have their full scope. The old Grammar Schools, especially in the North of England, afford many examples of poor boys who by means of their school and University scholarships were enabled to obtain the best training the country could give, and so attain the highest positions in Church and State. These must necessarily be the few. It is a cruelty by means of scholarships to tempt those who have neither the financial means nor exceptional talent to try for a career in which there will really be no opening for them. Even with the limited number of scholarships which local authorities have been able to offer, there have been many cases in which bitter complaints have been raised that young people had been induced to prepare themselves for some walk in life in which there was no demand for their services. Of course, the more knowledge is required in various industries the more scope there will be for those who have had a long training, but there is nothing more injurious to the State than to turn out a number of persons who have had a prolonged academic training, but who are not able to do something for which there is a demand, and for which the world is willing to pay. The results of such a course of action may be seen on a large scale in India. In one of the colleges of an Indian University in a large manufacturing town, fourteen young men—very agreeable and frank, outspoken fellows—met at random in one of the hostels, were asked what, on completing their college course, they intended to do; twelve answered to become "pleaders," and two hoped for something in the Government service. None proposed to follow manufacturing industry, agriculture, or commerce. The legal profession which they proposed to enter was so crowded that pleaders are said to have been competing with each other to obtain cases by a kind of Dutch auction regarding fees, and also to promote litigation wilfully in order to obtain a living. It is from a kind of "intellectual proletariat" in all countries, that dangerous political agitators are drawn who take up political life not to improve the conditions of their fellows, but to find some sort of a career for themselves, having no useful occupation to turn to.
FOOTNOTES:
Since the above lines were written I hear that a Committee of Inquiry has been appointed by the Government to report on the subject.
How shall we better distribute the product of industry, and allay the unrest of which we hear so much? There's only one way—by improving our methods of production. To effect this the earnest and active co-operation between those engaged in industry must be employed.
... No longer must a man be supported by his union when he refuses to mind two lathes because the custom of the factory confines him to one. No longer must an employer assign as a reason for cutting prices that the man's wages are too high.... Each side must endeavour better to understand the outlook of the other.—SIR HUGH BELL.
The second grievance mentioned in the Quarterly article already referred to is: "The wages are too low." To remedy this grievance, increased productivity, along with greater economy in working, is the first essential in order to obtain the funds out of which higher wages can be paid; the second, to get a fair allocation and distribution of the profit made. Increased benefit will also be a stimulus to better work.
For a crowded country like ours to maintain a leading position in industry is obviously a necessary condition either of welfare or progress. It is of first importance to secure work of high quality. A highly civilised and trained nation must hold its own by the superior quality of the articles produced as well as by being able to supply both its own needs and to compete in prices with others by the quantity of output. It may be possible, for example, to hold the market for fine spinning when other countries are well able to supply coarse yarns from their own factories. Hitherto this country has been able to maintain a lead in industry largely through causes which are no longer operative. Thus, we had (1) a settled Government when Germany and Italy were divided into a number of small and inefficient and often very badly governed States, when France was exhausted and unsettled, and when America was only in its infancy; and (2) the advantage due to the fact that the great discoveries and inventions which advanced industry were mostly made in Britain, when industry was developing at the close of the eighteenth and beginning of the nineteenth century. Many of these inventions were made by manual workers who, by intuitive genius, saw what was needed to meet the requirements that arose in practice. There was not then that fund of accumulated scientific knowledge and experience in existence which anyone must have before he can make any advance or improvement to-day. There was an interesting print published some forty years ago giving portraits of the Englishmen who had made contributions to practical science and who might have been assembled together in one room in 1808. It included many who made their inventions as manual workers. Murdock, who invented a new lathe, and developed the use of coal gas, worked until over forty years old for a wage of a pound a week; Davy had been apprenticed to an apothecary; Bramah, who invented a new hydraulic press, once worked with a village carpenter; Bolton and Watt and Nasmyth, the inventor of the steam hammer, were practical engineers. Never in the world's history has there been such a galaxy of practical talent and inventive power as those whose portraits are shown in this picture. Now a larger amount of preliminary knowledge as to what has already been done and of the sciences is necessary, in most cases at least, before useful inventions can be made. The more widely this scientific knowledge can be made available throughout all classes in the country the greater is the possibility of maintaining our lead. It is also important to maintain, so far as technical education can give it, skill in carrying out methods already established and improving them, and also in making the worker more adaptable to new conditions and altered circumstances instead of being a mere machine able to do one class of work only, and adhering simply to the one rigid method which he may have learnt. But knowledge and training are not all that is wanted. It is essential that all classes connected with industry should realise that increased production in established and well-understood industries is essential, and that it can only be obtained, first, by willing and vigorous work on the part of the workman, aiming at producing as much as possible in the hours during which labour can be efficiently carried on without detriment to health or depriving the labourer of the opportunities of enjoying a life outside his daily routine; and, secondly, by the increased use of the best machinery and labour-saving appliances and working such machinery to its fullest capacity. Instead of that, it has often been the policy to restrict the production of each man's labour, one reason being lest there should not be enough employment to go round, and also to view the introduction of machinery which might displace labour with hostility and suspicion. In order to give the leisure which the workman needs for a full and healthy life, and to provide a wage which will enable him to secure the comforts which he rightly desires, as well as to obtain adequate remuneration for those who manage businesses, and interest on their money for those whose capital is to be embarked in them, increased production is necessary; but it cannot be expected that workmen will realise this or desire the result unless they know certainly that they will obtain at once a benefit from it. It has too often been the case that where some new invention has been made, or new machinery introduced, or the conditions of trade have enabled an industry to be more profitable, the workman has not shared in the benefits obtained until he has pressed for an increase of wages, even to the extent of striking or threatening to strike. The faults and jealousies leading to restricted production are not all on one side. Cases have arisen when a manager has let out a piece of work to a group of workmen at a price which has resulted in a larger output in a given time at less cost, though the amount paid to each man has been higher owing to increased diligence, yet the employers raised objections, because the wages earned were "more than such men ought to have."
It is essential if the workers are to make it their aim to increase production and to use every effort with that object, that they should know that of a certainty, and at once, they will get a benefit from what is done. At present it is commonly the case that in order to obtain an adequate wage the worker works overtime, and presses to have overtime work, because the rate of pay for overtime is higher, and that during the normal hours of work he does less. Cases have actually been known in which the worst class of workmen play during the greater part of the week, and then have gone, during the War at all events, to work for the week-end, including Sunday, at a very high rate of wages at some other place. In the short time of working at abnormal rates they have gained as high wages as the steady and efficient workman who keeps steadily at work through the normal hours. As long as such conditions exist we shall not have the shorter hours which are necessary for healthy and happy life, and we shall have the friction and irritation which arise from too long hours of work. A higher rate of wages during shorter hours of work, when the work is done with vigour and efficiency, and the certainty that the wage will be increased if results are favourable, are necessary conditions for industrial welfare and industrial peace. The wage system should be so designed as to make it clear that the wage is a share in the industry's earnings which is to advance as these earnings advance. A "regulated slide of wages rising with the prosperity of the industry as a whole" would help to secure this without friction. Methods of industrial remuneration giving an assurance of thus sharing the benefit of increased or more economical production are required. A valuable work on such methods, which are already very various, was published by the late Mr. David Schloss many years ago. New methods will, no doubt, be found. The problem, however, is one for judicial treatment by those who have devoted special study to it.
The methods already tried include the more general adoption of piece-wage, progressive wage arranged in various ways giving a fixed rate for the hours worked plus an additional sum proportionate to the excess of output over a fixed standard, collective piece-work, contract work, co-operative work, sub-contract, profit-sharing in various forms including special bonus, product-sharing, and industrial co-operation.
Each method should be considered on its merits, in the light of the experience already gained, and having regard to its applicability to each class of industry. The aim and the principles which must guide endeavours to achieve it are clearly stated by Mr. Schloss:
"But while a reduction of hours of labour, say to eight hours in the day, may readily be admitted to be on grounds both economic or social highly desirable, yet it is no less desirable that during those eight hours every working man in the country shall use his best available tools and machinery, and, performing as much labour as he can perform without exerting himself to an extent prejudicial to his health or inconsistent with his reasonable comfort, produce an output as large as possible. In the interest of the people as a whole it is expedient that the remuneration of the labour of the industrial classes shall be increased, and since this remuneration is paid out of the national income, it is a matter of great importance not only that the working classes shall succeed in obtaining for themselves a far ampler share in the national income than they at present receive, but also that the productive powers of the working classes shall be exercised in a manner calculated to secure that this income shall be of the largest possible dimensions."
FOOTNOTES:
This chapter is intended to refer to what may be regarded as normal conditions. In some cases the recent rise in wages has been excessive. The present position is chaotic, and the ill-advised manner in which the 12-1/2 per cent. advance was made has added to labour troubles and will cause great difficulty in the future.
This is not the place to discuss the merits or demerits of any theological views or of any system of Church government, but the question of the influence of religion on the life of the State and the way in which and conditions under which it can be rightly exercised cannot be overlooked. There is no doubt whatever that religious influence might be a most potent and useful factor in Reconstruction, using the word in the broadest sense. There are some branches of work in which no other known influence can effect what is required. Leaving aside for the moment the fact that there are needs of humanity which religion alone can satisfy, and looking only to social improvement, the power of religion has been proved again and again, especially in dealing with the cases that seem most difficult and almost hopeless. In India, for example, there are certain debased tribes which are habitually criminal, and have, in fact, by tradition devoted themselves to the commission of crime. The only agency which has been able to effect a reclamation and improvement of these tribes is the Salvation Army, which, by general consent, even of those who have no sympathy with its particular religious views, has achieved wonderful results. There is no doubt, too, that some of the worst parts of certain seaports in our own country have been vastly improved by the same agency. This has been done by a definite appeal made on religious grounds, and those who have made it have been inspired by religious motives. It required, however, a body which had peculiar methods of its own to do it. The basis of the action, also, of such organisations as the Church Army and the Young Men's and Young Women's Christian Associations is definitely religious, and the vigorous and successful way in which their work has been carried on by such associations is due mainly to the influence of religion. It would be well for our present purpose to treat the question from a position, whether real or assumed, of absolute detachment from any particular religious belief, and from any special religious community. Looked at even from such a detached position, it appears that the first condition required to enable religious influence to be effectively exercised is to secure religious peace. It is impossible to deny that there has been a kind of jealousy and hostility between those who hold different opinions about theological and ecclesiastical questions which injures the work of all. Anyone, for example, who was in the habit of meeting educated Indians at the time of the Kikuyu controversy could not have helped noticing the harm done to the cause of the Christian religion by that controversy. There were Indians, whose attitude to Christianity before might almost have been called wistful admiration, seeing the brighter hope and fuller life it opened to all classes, and the universal brotherhood of men which it proclaimed, who then spoke in an altered tone, and their feeling seemed to be tinged with a half-concealed and almost contemptuous pity. How much beneficial action might be taken by religious bodies acting in co-operation! There is a deep truth in a remark once made by the late Bishop of Manchester, Dr. Moorhouse, when speaking of possible co-operation on a certain matter between people belonging to different religious communities: "It would be so easy did we only recognise how large is the area covered by things on which we agree, how important they are, compared with those on which we differ." Some have felt so keenly the injury done by religious differences that schemes have been put forward for corporate union of a number of different Churches. Such union may or may not be possible, but, even if it is, is it best to bring about such a union by any compromise under which one side gives up part of what it regards as useful and important in exchange for a similar concession on the other? May not a kind of confederation between different bodies for certain purposes, each maintaining its separate existence, be better than formal incorporation? May there not be a unity of spirit and bond of peace between those whose views differ, without either party giving up the iota to which he may attach importance? Forms devoutly prized and helpful to one man may be repellent and a hindrance to others.
There is much to be learnt from a saying quoted by Sir Edwin Pears in writing of certain Mahommedan sects: "The paths leading to God are as numerous as the breaths of His creatures; hence they consider religious toleration as a duty." Toleration does not mean simply abstinence from the thumbscrew and the rack or even the repeal of the Conventicle or the Five Mile Act, but appreciation of the religious opinions and practices of others, and due respect for them. Without formal union there may not only be peace and goodwill between bodies which keep up their separate organisations, they might also act together heartily and effectively both in philanthropic work and in combating certain evils for which the influence of religion is the most effective cure. It is a good sign of the times that a joint volume has already been published on Religion and Reconstruction, containing essays by a number of those whose views no doubt differ widely, but who find no difficulty in uniting in a common undertaking. The book contains essays by Bishop Welldon, Dr. Orchard, Monsignor Poock, and others representing different communions, and they appear to have had no difficulty at all in a joint enterprise of this kind.
Is there any sufficient reason why the leaders of religious thought belonging to other denominations should not be invited sometimes to speak in the pulpits of the National Church? They would not use the occasion for attacking Episcopacy. Conversely it might be a wholesome thing if a Bishop or other well-known Episcopalian clergyman occasionally spoke to the great congregations in such familiar London meeting-places as the Newington Tabernacle or the City Temple. They might be trusted not to choose Apostolic Succession as their subject. Joint religious services have already been held, and the practice might be extended. The Bishop of London has been seen in Hyde Park on the platform with representative men from the Wesleyans, Independents (it is pleasanter to use the old name rather than "Congregationalist," which may be correct, but is hideous), and Presbyterians, with a band from the Salvation Army in attendance. Such things do good, and are the best reply to the orators by the Reformers' Tree, whose most effective weapon is to sneer—not unnaturally—at the enmity amongst Christians. A "church" parade for the Volunteers has in a village been held in the Baptist chapel, and many who had never entered a Nonconformist place of worship before, felt how real "unity of spirit" did exist.
Another fruitful opportunity for joint work is in the realm of study and of theological education. This object would be promoted by the establishment in our Universities of theological faculties where a part—it may be a large part but not the whole—of the training of those who intend to enter the ministry or for other reasons to devote themselves to theological study may be carried on. Such a faculty has been instituted with marked success in Manchester. No test is imposed except tests of knowledge, but the faculty has been said to be the most harmonious in the University. Whatever body he belongs to, whatever Church he wishes to serve, the student could not fail to gain profit from studying the language of the New Testament under a scholar like the late Professor Moulton, and would never find anything that—to use the words of the founder of the University—"could be reasonably offensive to the conscience of any student." Already the effect of such a faculty in advancing theological study and still more in uniting members of different communions in the pursuit of truth has been most marked.
There is one point, however, in considering the influence of religion on Reconstruction which must be borne in mind. Untold harm has been done in the past by the intrusion of the lawgiver or the judge into the domain of religion, and, on the other hand, by the intrusion of the minister of religion into the domain of the legislator or the magistrate. It is essential that in dealing with any question of legislation or political action the clergy and ministers of all denominations, if they take part at all, should speak as citizens, and not professionally. They, in virtue of their office, ought not to be, and they have the highest authority for not claiming to be, judges or lawgivers. They have not, and ought not to claim, any authority to decide on the lawfulness of paying tribute to Caesar; any such claim must be strenuously resisted. The use of religious sanctions as weapons of political warfare is not wholly obsolete. We hear of it from across St. George's Channel—it should be condemned like poison gas on the battlefield. And, lastly, it must never be forgotten that there are certain things with regard to which attempted suppression by law is certain to result in evil and disaster. With regard to these things the influence of religion, on the other hand, may be all-effective if it is kept absolutely distinct from any question of legislation or of legal penalties. The spheres of religion and the criminal law must never be confused. Shakespeare, "the mirror of human nature" for all time, once blended bitter irony with infinite pathos. "Measure for Measure" has its warning for every age. It would be well to study the ugliest as well as the most beautiful parts of that drama, and see what it really means, and what is its lesson.
Exercised within its proper sphere the influence of religion may still be as potent a force now as in the past. It may inspire the right frame of mind in dealing with every question, may encourage hope, sustain faith, and diffuse charity.
Reiterated until wearisome we hear the question asked, "What is wrong with the Church?" sometimes from outside with a tone almost of contempt, with little, or no care, for remedy if anything be wrong; sometimes from within with a note of anxiety, uncertain whether it is safe to confess openly the fact that anything can so be wrong. To the question coming from within the Church, a voice might answer from the outer galilee, "Is not what is wrong with the Church—like what is wrong with most of us—thinking, perhaps talking, too much of itself, considering what figure it makes in the world, rather than in self-forgetful devotion giving itself to the work set before it, to delivering some message in which it intensely believes as necessary for mankind?" It has been likened to a bride; is not the bride too self-conscious, thinking whether her garb is not fine enough or too fine, her possessions too small or too large, her influence too weak or opposition to it too strong? How much discussion is devoted to the question, what phrases must be repeated, what forms adopted, to pass the janitor who guards her doors! As has been truly said, the really useful reform for all of us would be that each should do his appointed work at least ten per cent. better than he has done it before. The work to be done should be the special work assigned to each and for which each is best fitted. We long for peace, but in settling the constitution of a League of Nations it will be the jurist not the churchman who will help us. In aiming at political or industrial peace the practical good sense of the statesman, the employer, and the workman will best point out what is wanted; the Church, as such, is better out of the way in framing legislation. But suppose even that we establish securely international and political, industrial and social peace, is that peace all we need? Shall we not still in youth be restless, anxious about the future of our own lives and the lives of those nearest to us, unsettled by ambitions for what we may not attain, disappointed at the little progress we make; restless all through life, disturbed by thoughts of what we desire but cannot have; restless, most of all, in age, knowing that attainment is no longer possible, and, if we have attained anything, feeling how little it is worth? Who will take for his proper sphere to show the way to a peace which may pass the understanding of those who, in disappointment and loss and vain endeavour, which will go on even if the dreams of national and social progress and improvement are realised, and alike in failure or success, will need that peace more and more as long as the life of man lasts? Sometimes we see among those round us calm faces the living "index of a mind" at peace, which make us feel that there are those working in our midst in whom that peace exists. Let her tell the way to that and the answer would be, "There is nothing wrong with the Church; she is fulfilling her mission; ever, as of old, will glad welcome greet the footsteps of him that bringeth good tidings, that publisheth peace." [7]
FOOTNOTES:
The word "Church" is used in the sense which each reader chooses to attach to it. Definition in such matters leads to dissension.
Political economy, as a branch of the science of a statesman or legislator, proposes two distinct objects, first, to provide plentiful revenue or subsistence for the people or, more properly, to enable them to provide such a revenue or subsistence for themselves, and, secondly, to supply the slate or commonwealth with a revenue sufficient for the public services.—ADAM SMITH.
Taking first the second of the two objects mentioned by Adam Smith, it will be convenient under the heading of "Retrenchment" to treat not only the question of economy in the expenditure of the State, but also the other side of the account, and consider what general lines of action should be adopted to make revenue balance expenditure, in the first place by reducing expenditure, and, in the second, by increasing revenue, in view of the fact that the absolutely necessary expenditure will be enormously enhanced to meet the interest on the National Debt. Assuming that the War were to end in the spring of 1919, the debt will probably amount to about seven thousand millions after allowing for loans due from the Allies and Dominions so far as they are likely to be then recoverable. Taking interest at 5 per cent. with a sinking fund of only half per cent., it is estimated that the permanent annual charge in respect of the Debt will then be about 380 millions. No doubt part of the Debt bears interest at a lower rate than 5 per cent., but a portion has been borrowed at a higher. This is on the assumption that the War will end within this financial year. Even if the War does end within the financial year, much of the expenditure occasioned by it must go on during the period of demobilisation, and during part of that period the Debt will probably go on growing, as it can hardly be expected that sufficient revenue can be raised by taxation to meet this continued expenditure directly due to the War. There will also be for many years to come a very heavy expenditure on pensions, and, whatever other savings may be effected, the duty of providing pensions for injured and disabled sailors and soldiers is paramount, and the provision must be made generously.
It seems highly probable, therefore, that the annual Debt service will ultimately amount to nearly 400 millions, and may be much more if the War goes on over 1919. It is a gigantic burden to bear. Mr. Bonar Law has stated in the House of Commons that a loan of one thousand millions represents the labour of ten million men for a whole year, so we may take it that the annual charge for the National Debt will require the whole labour of four million men to meet it, and that this charge will be continuous for many years. The normal expenditure after the War, apart from Debt service, has been reckoned to be 270 millions. It will certainly be more unless rigid economy is practised and all the new schemes which are being proposed involving expenditure of money are carefully scrutinised to see whether the expenditure is such as the country ought to undertake in view of its financial obligations. As the Debt service will be practically constant and irreducible unless revenue largely exceeds the total annual expenditure, which is very improbable, it is clear that a strong effort must be made to reduce this expenditure and also, so far as possible, to increase the State revenue. Unless this is done there will be a deficit even after the War, and the Debt will have to be increased to meet it. There is no question of greater urgency, and it must be resolutely faced. We shall probably find a disposition, both in the Government and in Parliament, to shirk it. The influence of the extension of the electorate will, in all likelihood, be against rather than in favour of economy. There is a common assumption that people can get the State to pay for things instead of paying for them themselves; that there is no need to practise personal economy or to save because the State will provide. Wage-earners who began by practising some self-denial in order to save have said, "What is the use of troubling? The man who saves is really no better off than the man who spends all his earnings, as the State will provide what is required to meet the needs of the latter."
What, then, can be done to reduce expenditure? It is impossible to do more than indicate in outline the machinery by which this expenditure is or might be controlled. During the War, for various reasons, the regular and ordinary checks on extravagance and waste have almost ceased to operate. The situation seems to have been getting worse until the appointment of a Special Committee of the House of Commons on National Expenditure in July, 1917. The Committee consisted of men with business knowledge, and its reports have furnished valuable suggestions. On such a subject anybody who has not direct access to documents and definite personal knowledge of the work and expenditure of various departments, and also some personal experience in State finance, may well hesitate to express an opinion, and will prefer to quote the views of those who have fuller information and better means of judging. There has been much waste; what has gone on has even been described as a "wild orgy of extravagance." The phrase has been used not only by irresponsible critics, but by business men whose words carry weight. Let us call two witnesses out of many available.
Mr. H. Samuel, in speaking of the work of the Select Committee, as late as June 19, 1918, said, in the House of Commons, "that the Committee had formed the opinion that in some cases the staffs of Government departments had been swollen beyond all estimation; that they were frequently ill-organised; that there was much waste of labour and consequently of money in their establishments; that the Treasury had not risen to the occasion during the War, and the Committee had regretfully come to the conclusion that the War Office had been adopting a deliberately obstructive attitude." Mr. Runciman on the same occasion stated that "lax expenditure and loose control over distribution of public money went far beyond the immediate departments concerned. It went down into every factory, and the general effect was a scale of national extravagance from which we should recover after the War only with the greatest difficulty."
We shall not recover at all except by immediate, determined and, above all, methodical action. Small economies, as Mr. Gladstone long ago pointed out, are not to be despised. It is no doubt right to put up notices in Government offices not to put coal on the fire after three o'clock, but these savings will not go far when half a million can be thrown away on the bogs and rocks round Loch Doon with no useful result of any kind, and yet nobody seems to be made responsible for this waste, nor can anyone say why it was allowed. We hear again and again of improvident contracts and extravagant purchases, and also of absurd cost incurred in supervising minute details. Why cannot clear general authority to act on the spot in certain matters be given to some responsible person, instead of instituting a system of checks which often cause great delay as well as expense? A water pipe at a camp wants some slight repair, costing less than half a sovereign. No one there has authority to give an order, a well-paid official must be sent a day's journey to inspect, and incurs expenses far exceeding the cost of the work to be done. Why is good agricultural land taken for a site when there is plenty of land near which is waste or of little value? Why does a well-known firm which has a telephone and a post-bag think it worth while to pay £15,000 for an introduction to a Government Department? Why have we heard again and again of prices paid for goods greatly in excess of the price for which they could be obtained from well-established firms in the trade? Such instances could be multiplied, but enough has come to light publicly, and been proved, to show how essential it is to have some authority to deal with such matters and stop the leakage which becomes a torrent. Apparently there has been an improvement lately in many respects, but we are yet a long way from perfection.
There will be an immense dead weight of influence against economy owing to the fact that so many persons are interested in keeping up and increasing expenditure. As was said in the debate above referred to, "It looks as if London were becoming a huge bureaucratic town where everyone will be working in some Government department or other." One might say everyone of all ages, remembering a remark made by someone entering a building near Whitehall, and seeing the crowd of girls and boys in the corridor, "I thought I was coming to a Government office, but it seems to be a crêche."
For efficiency as well as for economy a thorough revision of the executive departments of the Government is necessary. There is no doubt that the present system has grown up at haphazard. It would be difficult for anyone to form a clear idea of the duties assigned to or powers conferred on the various departments, to say who in each department has authority to do certain acts, or is responsible for seeing that they are done properly.
To get the best account of the executive departments in England as they existed before the War we must go to America. Professor A.L. Lowell's book may be taken as the standard work on that subject. The chapters on the Executive Departments, the Treasury, and the Civil Service give a clear and interesting account of the administrative arrangements of the British Government. He shows how new departments have grown up from time to time to meet some new want as it arose, but their powers are often ill defined. Various Boards were created, but in some cases it became an established practice that the Board should not meet, or a Committee of Council was set up and the work carried on under the supposed direction of "my Lords." It was a mere fiction. There has been no clear and consistent scheme for distributing the work of Government between the various departments on any intelligible principles.
All are spending money, some of them enormous sums. Staffs are growing inordinately, much of the work is duplicated, much consists in communications with other departments which would be unnecessary if the work of each were better defined.
It should be clear in each department who has authority to decide any particular question, to incur expenditure, to enter into binding agreements. The executive government of the country is in a chaotic state, relieved to some extent by the good sense and good feeling of the members of the great army of officials who carry it on. No one can deny that the Civil Service is not only pure, but, taken as a whole, its members individually are both able and industrious. It is better organisation that is required. Some of the new Ministries ought to be scrapped directly the War is over, and the business of others continued only so far as necessary for winding up. But these new departments will die hard.
Since the War new departments have grown up like mushrooms, sometimes without any clear statement of their functions or powers being made, and there has not been time to settle them at leisure by a course of practice. The result is overlapping, friction which would be intolerable but for the good-natured forbearance which English people have for a state of confusion, waste of time and money in sending minutes, and in correspondence between different departments, and often delays which have had most unfortunate results. Does anyone know exactly what are the respective functions and powers of the Ministry of Reconstruction, the Ministry of Labour, the Board of Trade, the Ministry of Pensions, the Ministry of National Service, the Board of Works, the Ministry of Food Control, the Board of Agriculture and Fisheries, the War Trade Department, the Home Office, the Local Government Board, the Committee on Food Production, the Restriction of Enemy Supply Committee, the Priorities Committees, the Ministry of Munitions, etc., etc. The list might easily be extended.
A thorough revision of the executive departments is necessary if government is to be both efficient and economical. There is plenty of good material in the Civil Service, and it will always be easy to obtain more. It is the system or want of system that is wrong.
The next question is to provide or restore a more effective general control over expenditure and impose checks on the growing expenditure which has been so marked in recent years, even before the War.
The ordinary machinery for dealing with and controlling expenditure is or should be fourfold.
(1) The spending departments make definite estimates or are supposed to do so. Since the War, this has not been the rule. Of course, there are many cases in which it would have been absolutely impossible to let the items of proposed expenditure be published or discussed in the House of Commons; but, as soon as War requirements permit it, proper estimates should again be prepared and pressure put upon the departments to reduce them. At present the pressure is all the other way; the heads of the departments apparently like to have a large establishment as well as to extend their jurisdiction. It is not merely to give their department more importance and a claim therefore to higher salaries; sometimes it is the natural tendency of the vigorous man to enlarge the scope of his influence. Boni judicis, says the old maxim, ampliare jurisdictionem. ("It is characteristic of the good judge to extend his jurisdiction.") It would be a good thing if instead of estimates being laid directly before a Committee of the whole House of Commons, where some small item is often the subject of long and acrimonious debate and millions are passed without comment or consideration in a few minutes, the estimates of each department were fully considered as a whole by some small competent Committee of the House, uninfluenced by party feeling, and representatives of departments could be asked questions on their estimates.
To compare small things with great, a committee of this kind has been found of the highest value in institutions where there are various departments requiring large expenditure. It is usually then felt by each person who sends in an estimate that it is to the credit of his department not to make claims for expenditure which cannot be justified. When the scale and character of the expenditure have been scrutinised and the estimate has been passed, it is much better to leave a very free hand as to the exact mode of expenditure. Outside control then becomes irritating, and is itself a cause of extravagance; it means more accounts, more correspondence, more consideration of papers.
(2) The Treasury is supposed to have the function of control, but a change appears to have taken place, and it has now to a great extent lost its control, and has even itself become a spending body. Professor A.L. Lowell, in the work above referred to, after speaking of the Treasury as the department which exhibits in the highest degree the merits of the British Government, points out that even ten years ago, "with the waning desire for economy and the growth of other interests, the Treasury has to some extent lost its predominant position; although it will no doubt maintain its control over the details of expenditure, one cannot feel certain that its head will regain the powerful influence upon general or financial policy exerted thirty years ago." A very guarded statement, as was becoming in an author writing in another country at a time when the tendencies to which he alludes were only beginning to show themselves. Things have advanced during the last ten years in the direction Professor Lowell indicated as probable, and it is high time that this advance should be stopped.
We might venture to ask, indeed, the following questions: (i) Has not the Treasury during the last ten years lost a large portion of its control, and since the War almost its whole control over expenditure on a large scale? (ii) Is the Treasury not more concerned with paltry details than in imposing any real check on the extravagance of spending departments? (iii) Has not the policy sometimes been actually to encourage expenditure, and has not there been one case at least, even of introducing vexatious taxation where the amount collected is far less than the cost of collection? (iv) What has the Treasury done to prevent or control "the orgy of extravagance" since the War began? The department of State which has to do with revenue, with getting as much as possible and spending only what is necessary, which has the duty of "making both ends meet," ought to resume its functions and regain its influence so that the Government may be conducted "on strict business principles," to use Professor Lowell's phrase, "as it was throughout a great part of the nineteenth century."
(3) The Cabinet should exercise more controlling power, and recognise its collective responsibility for keeping down expenditure. As Professor Lowell points out, the position of the Chancellor of the Exchequer in the Cabinet was one of almost commanding influence. In Mr. Gladstone's time his powerful personality, regularly exercised in favour of national economy, did certainly have a great effect in preventing extravagance, and some other Chancellors of the Exchequer no doubt used an influence in that direction, but can it be safely asserted that there is in the Cabinet as a whole sufficient attention given to retrenchment?
(4) Lastly, the House of Commons is supposed to control expenditure. That control has generally been used, and quite rightly, as a means of calling attention to grievances, and as giving an opportunity for criticism of the executive; but the House of Commons should also put pressure on the executive to curtail expenditure, not so much by discussing small details which would be far better dealt with by such a small Estimates Examination Committee as suggested, but by using its influence generally against an increase of expenditure unless a clear case for it is made out. During the War, Parliamentary control, at least until the appointment of the Committee above mentioned, seems almost to have gone. The House of Commons does not now exercise its influence as it ought, to check extravagance, and probably the more widely the electorate is extended, as already said, the less will the House of Commons care to exercise rigid control in favour of economy. It is always an easy way of getting popularity to be what is called "generous" when dealing with other people's money. Everyone who looks after the public interest by trying to prevent expenditure, whether national or local, which is not imperatively called for, is styled mean and narrow-minded, and his task is a thankless one. Everyone who wants money spent will be able to make out a plausible case, either that the amount is so small or the object is so important that what he asks must be granted, and he will have some eager constituents to back him up. The best chance for economy is to have a body of men whose decisions the House will respect and not overrule, except for really good cause, who have both the knowledge and the strength of character to go through the estimates and call attention to the cases in which substantial reductions could be effected, or proposals for increased expenditure refused. It will not be an agreeable task, and now probably less popular than ever. The masses admire lavish expenditure whether by public bodies or by the private person who spends his money "like a gentleman," and it is to be feared there will not be much help from the women electors, as women, although they may practise economy occasionally themselves, usually regard it as a most objectionable virtue in a man. How often in families do we find the mother and sisters will admire the self-indulgent idle youth who spends money freely even if he borrows from them, rather than the steady, plodding son who, by rigid economy and personal self-denial, helps to provide them with the means of livelihood!
Turning to the other side of the account, what can be done to increase the revenue of the State? It has been estimated that for the year 1919-20 it will amount to £900,000,000, but of this £300,000,000 is excess profits duty, which can hardly continue—in its present form at least—beyond the period during which additional expenditure above the permanent normal requirements is needed, in order to carry out demobilisation. Putting the permanent charge to meet interest on debt and the cost of the public services at £670,000,000, there may be a deficit even if the present rate of taxation is maintained, and the normal expenditure remains at its existing level. There will be no surplus for the reduction of debt, or to meet new demands. Some new sources of revenue must, if possible, be found, and the old ones require readjustment.
Income tax, if levied on the present system, has touched the extreme limit. A rate of taxation willingly borne to meet the cost of war while danger threatened will be felt more and more burdensome as time goes on. To meet a higher income tax there will be pressure to increase salaries paid by the Government and all public authorities. An official salary fixed at £5,000 a year when income tax was one shilling and sixpence, may be thought insufficient when it is nearly ten shillings including super-tax. Persons have incurred liabilities for rent and other fixed payments which they are not able to reduce. All along the line there will be claims for higher payments for services rendered or goods supplied. On the other hand, industrial undertakings will have to pay more for the capital they must borrow to carry on and develop their work, and 6 per cent. instead of 4 per cent. will have to be paid for debenture capital now raised by the best industrial companies. For those who have money to lend, the burden of tax may thus be practically met by an increased income, but for those whose money is locked up in permanent investments there will be no indirect relief in higher rates of interest. Income tax, house duty, and rates will absorb so much that the margin for voluntary expenditure will be small even out of incomes that are nominally high.
The death duties, especially where a deceased person leaves a large family, already cause much hardship. A general increase in the existing rates of estate duty cannot be made without discouraging thrift. It is a hardship if it is made impossible for parents to make reasonable provision for children some of whom may from various causes be unable to earn for themselves. On the contrary, where there are no children and no widow to be provided for, death duties might be much increased without causing hardship. A very much higher legacy duty might be charged in the case of large sums passing on death to persons other than the widow, direct descendants, or other near relatives of a deceased person. On small legacies the present rates should suffice, but there is no moral claim for distant relatives to be allowed to take large sums. Would there be any real hardship in imposing a heavy duty of, say, 25 per cent. on gifts over, say, £1,000 to collateral relations not dependent on the testator or to strangers? Or there might be a graded scale according to the remoteness of the relationship. In case of intestacy it would be often a real advantage to take the whole property for the State, if there were no relations within the third or fourth degree, i.e., uncles and aunts, and nephews and nieces being in the third degree, first cousins in the fourth. Economists for the last hundred years—Bentham, Mill, and others—have advocated such a change. Nearly every judge or officer of the Courts who has to do with the administration of estates would support a change which would do away with much wasteful litigation and disappoint no reasonable expectations. No source of revenue should be neglected if it can truly be said that by imposing the additional taxation proposed there will be (i) no dislocation of trade or hampering of industry or commerce; (ii) no discouragement of thrift; (iii) no real hardship; (iv) no great expense incurred in collection in proportion to the amount raised. It is only sheer stupidity that refuses to adopt a means of raising even a small amount when the method proposed for doing so would have positively beneficial results in other ways.
The land increment duty should be a warning as regards cost of collection. That cost relatively to the amount produced has been enormous. But actual cost of collection as returned, represents only a small part of the expenditure really caused by the tax. The time taken up in making returns and filling up forms and obtaining the necessary advice in doing so is a burden on those who own even the smallest landed property and causes real hardship and injury. It discourages people from acquiring small properties.
The only other source of additional revenue in immediate contemplation appears to be the luxury tax. If this can be levied so as to fall on articles which are really luxuries, i.e., things not required for full and healthy life, the effect of such a tax should be wholly beneficial. If, notwithstanding the tax, people go on buying such luxuries the State will gain. If, on the other hand, the effect of the tax is to check expenditure on luxuries it will be a gain to the country, because its productive power and its purchasing power will be used to obtain articles which are really valuable and do promote national welfare. The idea that those who spend money on luxuries are helping trade, and so benefiting others, ought to have been exploded long ago. If the industry which has been devoted to producing articles which are really useless were diverted to producing things of utility, the aggregate of human happiness would be greatly increased. A difficulty in applying the tax is that the price of an article is little criterion as to whether it is a luxury or not.
There are two other sources from which additional revenue might be obtained.
First, to impose again an export duty on coal. Such a duty would help rather than hinder British industry. That industry is dependent absolutely on the supply of coal. British Coal Measures are an asset which enables the country to keep industries going, but it is a wasting asset. Deeper and better mining may have upset calculations made by Professor Jevons many years ago when he warned the country of the disastrous consequences of using up our coal supplies, but sooner or later the pinch will come. An export duty ought to be imposed on coal directly the present war restrictions can be removed. Our stores of coal cannot be indefinitely increased by increased industry. If the duty operated to reduce export of coal British manufacturers would gain, and be able to produce commodities at less cost. If the demand from abroad were so strong that export did not diminish, the country would gain to the whole extent of the duty paid by foreign purchasers. The ordinary arguments in favour of free trade do not support objection to such an export duty as this. There will be ample demand for all the coal that can be produced. Even if there were not, it would be well not to use it up so quickly. There are some kinds of coal, of which the amount available is very limited, yet until the War broke out quantities of such coal were freely sent to other countries, some of it to those who are now at war with us, and so used to help our enemies, who got the precious mineral cheap because we refused to allow the imposition of an export duty. Probably the duty when it was tried was not imposed in the best way, being charged at a fixed rate per ton instead of on an ad valorem scale, but this fault could easily be corrected. Special exceptions in favour of Colonies or Allies, or for the supply of certain places, might be made by arrangement in consideration of some equivalent favour, or to meet some particular need.
The other suggestion involves more difficulties, and is of a more far-reaching character. Would it not be possible to replace to some extent the excess profits duty, which cannot be permanent, by a duty on "excess dividends," that is, on the amounts paid out of the profits of a business for the use of capital above a certain percentage? The excess profits duty, in spite of all its anomalies and the difficulties of assessment, has saved the financial situation during the War; a tax on excess dividends might "save the situation" afterwards. When a business is successful, paying, as many businesses have recently done, dividends of 30 to 50 per cent., and sometimes even more, the return made to those who have invested money in them is clearly excessive. From such profitable businesses those who have the responsible management no doubt may generally get better remuneration, possibly the workmen may get a small bonus or share in such profits, but those who by a mere stroke of good luck have embarked their money in these businesses, shareholders who very likely know nothing whatever about the conduct of them, benefit enormously. Such a tax would not discourage thrift or prevent a person from getting a reasonable return on his savings. Take the case, say, of two professional men. Both, by hard work and using up their lives in the effort, manage to make a fair income and bring up their families. One of them, to make provision for the future, invests £2,000 in safe securities with fixed rate of interest, and £2,000 in some company whose business is of a more or less speculative character, but by good fortune becomes able to pay a dividend of 30 per cent. The other invests a like sum in firm securities, and £2,000 in another company which turns out a failure. Neither of them has anything to do with the conduct of the business of the company in which he invests, but one has got a tip from some friend or other who thinks he knows of a good thing. The work of the two men is exactly the same; it is a mere fluke that one gets a huge return and the other puts his money into a company which, without any fault on his part, brings in nothing.
The tax suggested would be levied on the excessive profits distributed in respect of the capital embarked in businesses of every kind. It was pointed out long ago that a tax thus levied on all alike would be paid wholly by the capitalist and "would neither affect the prices of the commodities produced nor the distribution of capital." The duty might be graded according to the percentage to be received on the capital of each investor. It might be reasonable for the first 10 per cent. to pay only the ordinary rate of income tax. Money in fixed permanent securities may now produce 5 per cent. or 6 per cent., and the additional 4 per cent. free from the excess duty would be a fair return for risk and an inducement to enterprise. The rate of excess duty might be increased according to the excess of profits above 10 per cent. until when the profits reached, say, 30 per cent. the duty on the amount in excess of 20 per cent. might be very high. The effect of the tax would not be to reduce the spending power of the community; it would only be that the State instead of the individual would to the extent of the duty obtain the power of purchasing what it required, and discharging its liabilities with the money it took from excessive profits. The amount of the tax, the method of grading and mode of levying it, would require careful consideration; but if the difficulties and inequalities introduced by the War excess profits duty could be met, there seems no reason why the difficulties of the tax thus proposed should not be also solved; at all events, an attempt should be made to see how it would work out.
Where money is rapidly acquired by some stroke of fortune and is not the result of steady industry the result is constantly unwise and often harmful expenditure either by those who have acquired it or their immediate successors. There is an old Lancashire saying as to fortunes rapidly made, that there are only three generations from clogs to clogs: "What is unreasonably gathered is also unreasonably spent by the persons into whose hands it finally falls." It may be spent "in a stupefying luxury twice harmful both in being indulged in by the rich and witnessed by the poor."
There is a great danger to the State at the present time from large amounts of money rapidly acquired being accumulated in few hands. There are many signs that we are likely to enter a period which may be described as the reign of the "nouveaux riches." The great financiers, the persons with enormous interests in huge combines, will exercise more and more an undue and dangerous influence on fiscal policy and political life. The old nobility and the class of country gentlemen will have less power. Their resources will be seriously crippled, and their families perhaps extinguished through losses in the War. The middle class, which, in the last century, exercised the strongest influence on political life, and from which most of our men of letters and science have sprung, may now be crushed. On the more highly educated part of the middle classes whose means are limited the burden of the War has fallen most heavily. Taxation seems deliberately arranged to place as heavy a burden as possible on those of the middle classes who have children to bring up and to educate in the way they think best, and who endeavour to provide means by which their families can occupy the same position in life which their parents have done. The rate of income tax paid by a bachelor and a spinster is increased if they marry, although their necessary expenses will be enormously increased if they have a family to support. A bachelor with £500 a year may be living in ease and luxury; if he marries and has four or five children to educate he may find difficulty in meeting the needs of his family with £1,500. In the same way the death duties are absurdly small on the estate of the bachelor who leaves no family, but are a real hardship on the family of the man who dies leaving a number of children.
The tendency is towards a rapid accumulation of huge fortunes. In considering the incidence of taxation Bacon's advice might well be remembered: "Above all things, good policy is to be used that the treasure and moneys in a State be not gathered into few hands, for otherwise the State may have great stock and yet starve, for money is like muck, not good except it be spread."