CHAPTER XVIII. TESTS OF PROSPERITY.

National Income: Pauperism: Wages: Income-Tax returns: Savings: Banking statistics: Shipping: Import of Raw Material: Leisure: little luxuries. Measured by all these tests, the country is prosperous and progressing.

BEFORE coming to the more drastic proposals now before the country, we may profitably ask how the nation stands as measured by the ordinary canons of prosperity.

According to the famous calculation made by Sir Robert Giffen, the National Income, in 1875, was £1,200,000,000. His revised calculations in 1885 put it at £1,350,000,000. In a paper read by him before the British Association in 1903, it was estimated at £1,750,000,000.¹ At the other end of the scale are the figures of Pauperism. In 1862, 47 persons per 1000 were at some time or other in receipt of poor relief in England and Wales. In 1901, there were only 25 persons per 1000. Or, to take a more adequate calculation, while population has increased 18 per cent. in fifteen years, pauperism has decreased by 9 per cent.¹

First, as to Wages, the earnings of the great mass of the people. The Board of Trade Blue Book takes five groups of trades—Building, Coal Mining, Engineering, Textiles, and Agriculture—and, going back twenty-five years, finds that wages have risen, since 1878, in the five groups, from a figure indicated by 85.27 (or, in the four groups, excluding Agriculture, from 82.84) to 100 in 1900. Since then, there has been no fall in wages as regards Building and Textiles, and there has been a rise as regards Engineering and Agriculture. The average, however, has been brought down to 97.70 by a fall of some 12½ per cent. in the wages of Coal Mining.

This seems fairly satisfactory, especially when it is remembered how the purchasing power of money has risen: that 69d. to-day buys as much as 100d. did in the average of years about 1873. Or, to use another calculation, 100d. to-day buys as much as 140d. did twenty years ago.¹

Comparing this with the progress of Germany, an elaborate calculation in the same Blue Book, p. 275, shows that German and British money wages have risen about equally since 1886. But, in the last twenty years, the purchasing power of money in Germany has risen only 12 per cent. as compared with 40 per cent, in Great Britain. That is to say, taking quinquennial periods, “in the last five years, a German worker has been able to purchase as much food of the kind to which he is accustomed for 100 marks as he could get previously for 112 marks, while the English workman has been able to make 100 shillings go as far in purchasing food as 140 shillings would have gone twenty years before.”²

Take, next, the earnings of the comfortable and wealthy classes. The following is the comparison which emerges from the Income-Tax returns; that is, the incomes which people with over £160 of income³ admitted to the government that they were earning:

1868-9.	Gross Income,	-	£398,794,000
1875-6.	”	-	544,376,000
1894-5.	”	-	657.097.000
1901-2.	”	-	866,993,000

It should be noted that the comparison with the decade 1868-76 is a comparison with years of abnormal prosperity.

Confirmation of this is given by the well-known calculation of what the Chancellor gets for every penny he puts on the Income Tax.¹

In 1872-3,	the penny yielded	-	£1,741,088
In 1882-3,	”	-	1,962,871
In 1892-3,	”	-	2,239,856
In 1902-3,	”	-	2,580,000

One must be careful in applying this comparison to the corresponding returns of other nations. It has been asserted that Income-Tax returns in Germany show even better than ours. But Prussia taxes incomes down to £45: thirty per cent. of the population show incomes between £45 and £150: less than five per cent, come under the assessment over £150—which permits us to guess how many come under the £45.² But, as we do not impose Income Tax till £160 of income is reached, and give degressive abatements on incomes under £700, our Income-Tax returns witness to the prosperity of the comfortable and wealthy class only. As regards those whose income is under £160, the evidence of prosperity is got from the rise of wages.

Next, as to the Savings of the people. In 1882, Sir Robert Giffen calculated these, as a whole, at £200,000,000 per year. In a letter to the Times of 3rd Dec, 1903, he estimated them at £264,000,000.

The Post Office and Savings Banks deposits have grown as under: In 1871, £55 millions; in 1881, £80 millions; in 1891, £114 millions; in 1901, £192 millions; in 1902, £197 millions.

A very improper use of statistics is sometimes made in comparing the amount per head of Savings Bank deposits in protected countries with that in our own. According to this, Denmark appears at the top with £15 11s. 6½d., and Great Britain at the bottom with £4 2s. 5¾d. The fallacy of the comparison may be suspected on noticing that France appears second last on the list, with £4 8s. 8¼d. The reason, of course, is that France limits her deposits to £60, and Great Britain hers to £200, while, in most other countries, there is no limit. Thus the savings of the comfortable and richer classes are compared with those of the working classes.

Such comparisons, too, are of no validity unless account is taken of the other opportunities there are for small investors. In a well-banked country like our own, for instance, it may very well be the case that people, having risen to thrifty habits through the savings banks system, may pass on to invest their money in other things—precisely as, in the life of the individual, the money box is exchanged for the savings bank, the savings bank for the ordinary bank, and the bank deposit for wider investments. Mr. Brabrook, indeed, called savings bank deposits “infantile efforts in thrift.”

Unfortunately, though there are very many ways of investing small savings in this country, the figures are not easily obtainable, particularly over periods of time. It is well known that great numbers of the working classes own their own houses and house property generally, and hold considerable stock in industrial companies.¹ Trade Union Funds are all working men’s money.² Two figures, happily, are available. One is the funds invested in Co-operative Societies. Comparing the returns for the United Kingdom for the years ending December, 1891 and 1901, the increase was from £16½ millions to £40¾ millions. The other is the deposits in Friendly Societies. Here the increase is from £8 millions in 1871 to £14 millions in 1881; to £26 millions in 1891; to £43 millions in 1901.

Banking statistics offer another test of prosperity. The deposits of all the Joint-stock Banks publishing accounts show the following advance: in 1883, £400 millions; in 1888, £470 millions; in 1893, £633 millions; in 1898, £781 millions; in 1903, £834 millions.

The Clearing-House returns—that is the value of cheques, bills, etc., passed through the London Clearing House—have increased as follows: £4¾ milliards in 1871; £6¼ milliards in 1881; £6¾ milliards in 1891; £9½ milliards in 1901; and £10 milliards in 1903. Whatever the precise importance attached to this as evidence, it shows one thing at least—the universal use we make of banks. But, for people to make use of banks, at least shows that they have money enough to open a banking account, and the figures are, of course, generally, a witness to the increase of trade and the position of London as the banking centre of the world.

The state of Shipping is a test of prosperity peculiarly significant as regards this country. The increase in our net tonnage, from 5,690,798 in 1870, to 7,978,538 in 1890, and to 10,054,770 in 1902, speaks for itself, particularly if it is remembered what the “net tonnage,” of a nation, constantly renewing its mercantile fleet, means when translated into “carrying capacity.”¹

Another test one might apply. It is notoriously difficult to get any figures of home trade, inasmuch as every man keeps his business secrets to himself: and yet such figures would give us, perhaps, the best test of national prosperity. But we can get at something that lies at the foundation of many of our industries—the import of raw material. We can do nothing with raw material but make it up into finished goods. If these goods are exported, there is a check on one employment of it. But if they are not exported, it shows that the raw material has been used up by the industries of the country, and remains in the shape of goods for consumption at home. If, then, the quantity of raw materials coming into a country increases, it is as good an indication as may be of progress in a great many directions. The following is the increase in quantities of imports from 1886 to 1901:

India-rubber, in cwts.,	194,000 to	466,000
Copper, in tons,	197,000 to	264,000
Timber, in loads,	5,500,000 to	9,200,000
Cotton, in cwts.,	15,300,000 to	16,300,000
Leather, in lbs.,	77,800,000 to	148,300,000

But, beyond these formal and statistical tests, take some not so easily reducible to figures. Where else are the hours of labour so short? Where is there a country that has an almost universal half holiday on Saturdays and a universal whole holiday on Sundays? In what other nation does one find whole populations of cities pouring out for a week or ten days in summer, and spending what must be called lavishly at coast or country? Or take a little thing, and therefore all the more significant. The bicycle is, probably, the most beneficent invention of the last generation as regards the health of the people—men, women, and children. One may go for twenty miles in the populous parts of rural France, and never meet a working man riding a cycle. In what part of Great Britain, outside of the mountainous districts, would this be possible?

Such, then, are some of the material evidences of our prosperity at the present time. Let it be granted that they are no evidence of national character, of virtue, even of happiness. At least they are not evidence of want of character, of viciousness, of unhappiness. The moral life may be difficult above a certain income; below it, it is impossible: considering how far most other countries are below our level of income, there seems no doubt, that we are ahead of almost every nation in the material conditions of the Good Life.

¹This is the total money income earned by the people of this country, based on the statistics of the Income-Tax Returns, and on calculations for other earnings. As to the method in which the figure was arrived at, see my Distribution of Income, book i., chap. ii.

¹Pauperism, it should be noted, does not necessarily go pari passu with Poverty. If one might amend Scripture, the statement “the poor ye have always with you,” might be changed to “the pauper ye have always with you.” There is nothing very optimistic in saying that the time is near at hand when working-man poverty will cease out of the land. But so long as we have drink, thriftlessness, vice, insanity, and friendless old age; so long as there are men who marry, make their wives dependent and incapable of working for themselves, and then desert them; so long there will be pauperism.

¹For the course of prices from 1873 till now, see p. 191.

²Board of Trade Blue Book, p. 226.

³Before 1894-5, incomes over £150 were taxed.

¹The later yields per penny would be greater but for additional abatements made to the smaller incomes.

²It seems to be the case that about two-thirds of the population of Prussia, the richest state of Germany, have wages under £45.

¹The 2000 Building Societies in Great Britain and Ireland have £62 millions of funds.

²The 600 Trade Unions have more than a million and a half members, and nearly £5 millions of funds. The figures here and above are taken from the Presidential Address to Section F of the British Association in 1903 by Mr. Brabrook, Chief Registrar of Friendly Societies.

¹Statistical comparisons in regard to Shipping are very complicated, and, therefore, very often misleading. See Appendix for a full treatment of the subject. (Reprinted, by kind permission of the Editor, from an article contributed by me to the Glasgow Herald of 26th November, 1903.)