Thirdly, there are the Railway Savings Banks, which have collected from the workmen employed and from their families nearly five million pounds. It is right to observe that they give a rate of interest exceeding by about 1 per cent. that given by the Trustee and Post Office Savings Banks. It is also to be borne in mind that the deposits in Savings Banks are not drawn wholly from the industrial population, but that many, especially women and children, belonging to other classes make use of the banks. Indeed, the Postmaster-General, in an approximate estimate made some years ago, calculated that women and children constituted 56 per cent. of the whole number of depositors. School Savings Banks and Penny Savings Banks are also to be mentioned as feeders of the ordinary Savings Banks, and as greatly increasing the opportunities of saving afforded to the young, and instilling into them valuable lessons of thrift.

Such is the story the department I am about to leave has to tell of the free and spontaneous efforts of the industrial population to better their condition by means of thrift and economy. It is, I venture to think, one which speaks well for the general body of that population and has great promise for the future of the country. In times of depression, as well as in times of prosperity, the gradual increase of the funds of these various bodies has been maintained; the members have not been compelled by the one, nor tempted by the other, to relax their efforts and their sacrifices.

I ask forgiveness for having detained you so long on so small a branch of the great subjects with which this Section has to deal, and which will be well illustrated in the important papers and discussions that are set down on its programme. The course of events has given to one group of subjects, that has often been considered in this Section, a new and unexpected prominence; and we await with keen interest the teaching which economic science has to offer on the questions of the day.

The following Papers were read:

is

1. The Growth of Rates. By BENEDICT W. GINSBURG, M.A., LL.D. Without attempting to deal with this question as a whole, the paper designed to show the impossibility of raising, as is proposed, large sums of money from our provincial cities for the purposes of higher education. With this view the statistics of seven important towns-Birmingham, Bradford, Bristol, Leeds, Liverpool, Manchester, and Sheffield--are examined, and the area, population, rateable value, amount raised by the rates, and levy of rates per pound over decennial periods for the last half-century, taken out. Liverpool, as being the nearest and perhaps the most important city, is taken as an example, and her position discussed in detail. Comparing 1881 with 1851 it appears that though the population and rateable value had increased, the rates had also risen from 1s. 8d. to 38. 114d., so that the amount extracted from the ratepayers rose from 134,000l. to 609,000l. per annum. In 1901 it had further risen to 6s. 94d, in the pound, the increase over the amount of ten years previously having been 84 per cent. The movement of municipal indebtedness, not only for remunerative undertakings, but also for general purposes over the whole country, has also been upwards. The Local Government returns show a total expenditure for all the municipalities of 88 millions in 1898, and of 121 millions in 1902, on reproductive works. The return which is made, however, by these undertakings is not proportionate to the capital charges incurred. Liverpool, for example, has spent 7 millions to obtain a return of but 45,000l. per annum. The ancient sources of expenditure, such as the poor law, are not those upon which the present large outlays go. Housing, electricity, tramways, and education account for most of the increase. In the last ten years Manchester's contribution to the School Board has trebled, rising from 40,000l. to 120,000l., Birmingham's has risen from 73,000l. to 134,000l., and Liverpool's from 62,000l. to 128,000l. In view of these facts and of the probable results of the new Education Act, it would seem improper that new undertakings should be even contemplated.

2. Depreciation and Sinking Funds in Municipal Undertakings.
By STANLEY HORSFALL TURNER, M.A.

The questions to be raised centre about the fact that all municipal undertakings are started with borrowed capital which must be repaid within statutory periods, and it is important to understand how this initial burden should be distributed as between the present and the future. Usually in reproductive undertakings the sinking fund is based upon the life of the subject, and beyond this there is, in general, no obligation to provide reserves. No decisive answer has at any time been given to the question whether depreciation funds should be kept, with the result that municipalities differ very widely in their methods. A few have adequate depreciation funds, others have either inadequate ones or none at all. According to the latest returns the annual average depreciation fund for municipal tramways in England and Wales is only just over one half per cent. on the capital borrowed, and tramways show the largest percentage of any municipal industry. It is urged by those municipalities which have no depreciation fund that the sinking fund, being based upon the life of the subject, is the depreciation fund, and that if the loan is entirely repaid when the plant is worn out or obsolete the present has done all that is necessary. Their successors must borrow to reinstate the works. The only alternative, as the law now stands, is to have a depreciation fund in addition; and if this were a true depreciation fund it would be too great a burden upon the first generation, since the life of the subject is taken into account twice over. Those municipalities which voluntarily lay aside a full depreciation fund urge that once an undertaking is started its value should be maintained, as in a private company working a similar undertaking, and that the sinking fund is an extra requirement enforced by Parliament because it is deemed undesirable to allow any permanent local debt. While this second view recommends itself as the sounder finance for reproductive undertakings, there are serious objections to it so long as the sinking fund is fixed on the present principles. The first generation is burdened twice as much as the second and succeeding generations. It not only repays the whole debt, but also builds up an equal capital for future generations which have no sinking fund to pay because their capital is no longer borrowed. The difficulty arises because the statutory requirements, which contemplated none of the recent extensions of municipal activity, are not suited to some of the present undertakings, and in these cases a depreciation fund should be made obligatory, while the sinking fund should be entirely dissociated from the life of the subject.

FRIDAY, SEPTEMBER 11.

The following Papers and Report were read :

1. The Wealth of the Empire, and how it should be used.1
By Sir ROBERT GIFFEN, K.C.B.

The paper is intended to initiate a discussion on the objects of the expenditure of the aggregate wealth of the British Empire, whether by individuals or by the State.

For the purpose of the discussion it is assumed, on the basis of recent investigations, that the aggregate income of the people of the United Kingdom may be placed at about 1,750 millions, and the aggregate wealth at about 15,000 millions. The data as to the rest of the empire are not so familiar, but the aggregate income of the whole empire is put at 3,130 millions, including 270 millions for Canada, 210 millions for Australasia, and 600 millions for India. The corresponding capital for the whole empire is assumed at 22,250 millions, including

Published in the Journal of the Royal Statistical Society, October 1903,

1,350 millions for Canada, 1,100 millions for Australasia, and 3,000 millions for India.

Attention is next called to the report of a Committee of the British Association, consisting of Professor Jevons, Mr. Leone Levi, Mr. Stephen Bourne, and others, who investigated in 1881 and 1882 the subject of the actual expenditure by the people of the United Kingdom, and reported to the meetings of the Association at Southampton in 1881 and Southport in 1882. In their first report, dealing with a total of 878 millions of expenditure, the Committee expressed the opinion that 500,400,000l., or 56.9 per cent., were spent on food and drink; 147,800,000%., or 168 per cent., on dress; 121,700,000l. on 'house,' including house-rent, furniture, coal, gas, and water; while among other items there were 15 per cent. spent on tobacco, 1-3 per cent. on education (less than on tobacco), 1.4 per cent. on Church' (also less than on tobacco), 0·8 per cent. on 'literature,' 0-6 per cent. on newspapers, and 0.7 per cent. each on 'theatres and music-halls' and 'other amusements.' It is pointed out that such a distribution of expenditure is not surprising to those acquainted with family budgets. The bulk of what people spend naturally goes primarily to food, clothing, shelter, and defence; and the miscellaneous and what may be called the higher ends of civilised existence have less proportionate amounts devoted to them.

Applying with some variation the principles and methods followed twenty years ago, we obtain the following analysis of a sum of 1,386 millions expended at the present time:

According to this the proportion of the food-and-drink bill is apparently less than in the report of the Committee of 1881; but this is largely due to a difference in the mode of arranging the figures. If the last item of all, the cost of distribution, were spread proportionally over the earlier items, and the taxes on tea, sugar, beer, and other articles were also included with them, the food-and-drink bill would be more nearly 600 than between 400 and 500 millions. Another cause of the change is the fall of prices since 1881. Generally the order of the items of expenditure is much the same as twenty years ago. A similar table for the whole empire would show some variation, as a poor community like India spends more in proportion for food, while the self-governing colonies are exempt, or exempt themselves, from defence items, which constitute a large part of the expenditure for national services in the United Kingdom.

Discussing the question of what expenditure should be, the first point we raise relates to the food-and-drink bill. It is suggested that there is probably economic waste in some directions, especially in the expenditure by the artisan and wealthier classes on meat and alcohol; but equally there are large numbers of the people insufficiently fed, though we may not accept fully the recent inferences commonly made from the writings of Mr. Rowntree and Mr. Charles Booth. Attention is drawn to the economic gulf separating the United Kingdom and the self-governing colonies from India and like parts of the empire occupied by subject races. We find that forty-two millions of people in the United Kingdom consume in food and drink alone, if we take the expenditure at the retail point, an amount equal to the whole income of three hundred millions of people in India.

A second point raised relates to the expenditure on housing. increase of this item has been since the report of twenty years ago

Great as the the expendi

ture being about double what it was, with an increase of less than one-fourth in the population-we must look for further outlay in this direction as the wealth of the population increases. The increase of expenditure, it is to be feared, has not been accompanied by an equal increase of accommodation, being due in part to a rise in the monopoly value of town and suburban areas and an increase in the cost of building.

A third point raised is the adequacy of the amount spent on army and navy services, included under the heading of national services.' While the sum spent for civil government (excluding education), though large-about 114 millions-is allowed to be in all probability legitimate for the most part, being for such purposes as post-office, law and order, sanitation, and the like, and a sign rather of the advanced condition of the people, it is suggested (1) that the sum of seventy millions for army and navy may be insufficient, and (2) that the amount of the proper expenditure for these purposes is not really a matter for choice, but one that must be decided absolutely by expert opinion. The burden of seventy millions is about 4 per cent. only of the aggregate income of the people of the United Kingdom, and 0.47 per cent. of their wealth. When the empire is surveyed as a whole it is feared that the only sensible addition made to the above outlay for defence is by India, which spends eighteen millions out of its poverty, the remainder of the empire not spending five millions altogether. How to organise properly the defence of the empire as a whole is a question that does not seem to have been taken rightly in hand by our authorities, who insist too much on money contributions from the different parts of the empire to a distant centre, instead of addressing themselves to the development of local resources.

The last point raised is as to the sufficiency of the expenditure on educationabout thirty millions only in the United Kingdom, including imperceptible amounts for scientific investigation, while in the rest of the empire the amounts are also small, the Government expenditure in India, for instance, being about two millions only. The United Kingdom ought to be spending 100 millions where it now spends thirty. Such sums are not really extravagant. Extensive diffusion of education and scientific knowledge and training are not only essential to the greater efficiency of labour and capital by which the means of living are provided, but they are equally needed for the conduct of life itself, for the health and comfort of the workers, their freedom from debasing superstitions and prejudices, their capacity to enjoy the higher pleasures, and their ability to manage all common affairs. The funds to meet such increased expenditure will be provided easily enough by the greater energy and efficiency of labour which education will develop, and by the abandonment to some extent of the present national ideas respecting play. India and the like parts of the empire should also receive a corresponding development. Education is the watchword, and should be the first. thought in our minds.

Finally a suggestion is made that the investigations of the Committee of 1881 as to the actual objects of expenditure should be resumed and continued.

2. Report of the Committee on the Economic Effect of Legislation
regulating Women's Labour.-See Reports, p. 315.

3. On the Rating of Land Values. By J. D. CHORLTON.

The amount of local rates and also the rate in the pound have rapidly increased in recent years owing to the growth of population and the development of urban communities. At the same time, and for the same reasons, the value of land in towns and urban districts has very largely increased, and in some cases has been multiplied many times over. Hence the proposal to rate land values.

The minority of the recent Royal Commission on Local Taxation recommended the addition of a site-value rate to our present system of rating. The result will be the creation of a graduated system of rating, properties on more valuable sites

paying a larger proportion of their value in rates than properties in less valuable sites. The incidence of the present rates paid in respect of inhabited houses is just as much upon occupier as if the same amount of money were raised by a local income tax. The incidence of a site-value rate will be upon the owners of site value. The best method of collecting the rate will be to levy it upon the occupier, with permission to him to deduct it or part of it from his rent.

Present contracts ought not to be excepted, but the holders of chief rent or perpetual annuities charged on land ought not to be rated.

The rate will tend to fall in its capitulated value upon those persons who own the land at the date of the imposition of the rate. The rate should therefore commence at a small figure.

A separate valuation of land and buildings is possible, and its cost would not be excessive. Uncovered land in the neighbourhood of large towns should not be taxed.

4. The New Labour Party in its Economic Aspect,
By H. B. LEES SMITH, M.A.

History of the new Labour party. It makes a compromise between the 'old' and the 'new' trade unionists. The two main points at issue:-

(1) The older school distrusted appeals to the State, but the younger advocated a somewhat dogmatic socialism.

(2) The older wished to act with the Liberal party, while the younger fought for an independent Labour party.

The new party was called into existence at the Plymouth Trade Union Congress in 1899. A resolution was carried that a conference be called 'to devise ways and means to secure the return of an increased number of Labour members to the next Parliament.' This led to the formation of the Labour Representation Committee. At first the older school held aloof. The alarm caused by the Taff Vale case, however, pushed the new party to the front. In February 1903 the members affiliated to the Labour Representation Committee numbered 861,150, an increase of 83 per cent. in a year.

The compromise may be expressed as follows:

(1) The newer school do not insist on members being pledged to any socialist dogma.

(2) The old unionists have given way on the question of forming an inde pendent party.

There seems to be little doubt that collectivism will be the foundation of the social policy advocated by the new party. By what kind of economic reasoning will this collectivism be supported? The danger of Marxist theories being popularised. Pamphlets and speeches by Labour leaders show that this is by no means slight. It is best seen by an outline of the Marxist system. This may be divided into two parts:—

(1) The labour value theory. Criticism.

(2) The theory of surplus value. Criticism.

Examples are adduced showing the influence of these doctrines on workshop economics.'

5. A Contribution to the Statistics of Production and Consumption of the United Kingdom. By S. ROSENBAUM, B.Sc.

An examination of the figures relating to the production and importation and total consumption of corn during the years 1872-1901 shows the following facts: Wheat land in the United Kingdom has gone down from 3 to below 2 million acres; barley land from 2,600,000 acres to 2,100,000 acres; and oats land from