year by year towards the pensions of other women, many of whom may be much better off than themselves. In the same way, a man who dies before he reaches the age of 65, leaving no widow and no children, may have been paying for forty years or more out of very scanty earnings a weekly contribution towards the pensions of other people, some of whom may be already possessed of a fairly comfortable income. Wholesale injustice of this type is inherent in schemes of compulsory insurance framed on political lines.

But the injustice does not end with the levy made upon direct contributors. A very large part of the money used to meet the cost of State pensions and State insurance comes out of the national exchequer, and is provided by taxes levied upon poor people as well as upon rich. In the current financial year the Chancellor of the Exchequer estimates to obtain roughly £222,000,000 from taxes imposed upon articles of popular consumption. The details are as follows:

It may safely be assumed that at least a third of the revenue obtained from these taxes is provided by poor people-by people to whom every shilling is a matter of importance. In particular, the duty on beer presses most heavily on the poorest-paid class in the community, namely, agricultural labourers. Beer is an excellent beverage for people working in the open-air; the extremely heavy tax now levied upon it is a real injustice to

* Financial Statement, 1927-28.

workers on the land. The tea duty and the sugar duty also press heavily on poor people. Tea is an article largely consumed in the poorest households; sugar is a valuable food, especially for children. The taxes paid by the poorer classes on these and the other articles enumerated above certainly amount to not less than £70,000,000 a year, and it is worth while to contrast this figure with the cost to the exchequer of various social services.

Old age pensions and widows' contributory pensions are estimated to cost the exchequer in the current year £36,780,000 ; the Ministry of Labour, which is responsible for the government share of the unemployment payments, is to cost £11,650,000; and the Ministry of Health, which provides sickness benefit, will cost £19,440,000. The total of these services is £67,870,000. Even if the whole of this sum represented the actual payments made to the poorer classes they would be receiving less than they pay in taxes quite apart from what they pay in compulsory contributions. But a considerable part of the money goes to pay for public services, which bring only an indirect benefit to the poorer classes, and a large part goes in payments to persons who are well above the poverty line. At best, social reform is a clumsy and expensive method of relieving poverty.

Nor does it in practice tend to check the evil it sets out to relieve. When old age pensions were first established, Mr. Asquith, the author of the scheme, speaking in the House of Commons, on May 7, 1908, predicted that the cost to the exchequer was not likely to exceed and would probably fall short of " £6,000,000 a year. He added that " the saving to local rates in respect of poor relief, which will result from a system of State pensions, ought in the long run to be considerable and account will of course have to be taken of this in future adjustment of exchequer contributions in aid of local rates." That was the picture presented to parliament and the country in 1908. After nineteen years' experience we find that old age pensions, apart from widows' pensions, are estimated by the Chancellor of the Exchequer in the current year to cost no less than £32,746,000, or more than five times Mr. Asquith's estimate, although southern Ireland no longer comes into the picture.

Nor has the establishment of old age pensions produced, as Mr. Asquith prophesied, any decline in the cost of poor relief. Comparative figures for the years 1910-11 and 1924-25 are given

in the " Drage Return," issued in August, 1926. They show that the cost of Acts relating to the Relief of the Poor for England, Wales and Scotland rose between those years from £16,158,130 to £40,443,000. Yet, during that period, in addition to old age pensions, parliament had established the system of unemployment insurance and of health insurance, each heavily subsidised by the exchequer and each providing an alternative means of relief for persons who previously had to seek help from the Poor Law. Parliament had also provided a new means of relieving parents of part of the cost of maintaining their families by authorising the provision of free meals in public elementary schools at the expense of the Education Rate. Yet, in spite of all this new expenditure to relieve poverty-old age pensions, health insurance, unemployment insurance, free meals for school children-the cost of the Poor Law rose in fifteen years from £16,000,000 to £40,000,000.

Thus the actual result of social reform is not a diminution, but an increase in the volume of State-aided poverty. Surely that fact should suffice to condemn the whole policy. "Social reform" in practice multiplies the number of persons who are dependent upon the State for support. As that policy extends the strength of the nation will inevitably decline. If a nation is to be strong, its citizens must be able and willing to support themselves.

The purpose of the present article is to urge that we cannot escape the danger of national decay through ever-expanding pauperism unless we reform the franchise. Under our present constitution the policy of the government is determined by the least responsible elements in the nation. The majority of electors pay no direct taxes and consequently very few are able to realise the financial results of any proposal that is laid before them. Candidates for parliament therefore find it profitable to offer bribes to the electors out of the public purse. Nobody troubles to ask how that purse is to be re-filled. The man in the street apparently regards it as bottomless, and may be excused for doing so in view of the line taken by many of our prominent politicians. For example, Mr. Lloyd George a year ago became involved in a newspaper controversy with Mr. Neville Chamberlain over the amount of benefit accruing to insured women under the Health Insurance Act of 1920. Mr. Lloyd George ended up his reply with the following words: "So far, therefore, from plucking

feathers from the sick woman's pillow as he (Mr. Chamberlain) suggested, the Act of 1920 added many more to its comfort from the Treasury store " (Morning Post, March 19, 1926). If a man who has held the office of Chancellor of the Exchequer, and has also held the still higher office of First Lord of the Treasury, can thus speak of the Treasury as a "store" from which money can be ladled out ad libitum, it is not surprising that the mass of the electors should be unconscious of the economic results of public expenditure.

They will never acquire that consciousness until every elector is a direct taxpayer. Indirect taxation has practically no effect on the mentality of the average citizen. Not one person in a thousand knows what amount of duty is levied by the State to-day on tea or beer or whisky or sugar. Nor, even when that knowledge has been acquired by consulting a popular almanack, can the consumer be quite sure how much the tax costs him. Generally the consumer has to pay rather more than the exchequer receives, because the trader must allow for interest on extra capital outlay. But in some cases, when the imposition of a tax has checked consumption, the trader may-as a temporary expedient in the hope of stimulating business-charge part of the tax against his profits. In any case the actual purchaser of a pound of tea or a glass of beer has no means of knowing precisely how much of the price that he pays is due to the legitimate costs of production and marketing, and how much to the humours of the Chancellor of the Exchequer.

In the case of direct taxation the position is entirely different. Between the income tax-payer and the public exchequer there is a direct relationship. The exchequer demands a specific payment from each person assessed for income tax, and unless that person is mentally deficient, he grasps the fact that the money is called for to meet the expenditure of the State, as sanctioned by parliament. He proceeds to make the natural inference that if there were less public expenditure there would probably be a smaller call on his private purse. If the income tax were made universal there would quickly be an overwhelming electoral demand for economy in national expenditure.

It may be asked whether from the administrative point of view it is practicable to make the income tax universal and to collect the tax from weekly wage-earners. The answer is that the machinery

for so doing already exists, and that there is no serious difficulty in the way of applying it to this purpose. In the course of the past twenty years, parliament has built up a vast organization for collecting compulsory contributions from weekly wage-earners for health insurance and unemployment insurance, and this system has now been extended to contributory old age pensions. All that is necessary is to apply the same machinery to the collection of the wage-earner's income tax.

This would merely mean, so far as the employer is concerned, the addition of another column to the sheets on which the deductions from wages are recorded; so far as the wage-earner is concerned, it would mean an extra weekly payment based on his average earnings. In return for that additional direct payment the weekly wage-earner would receive-if the reforms here suggested were carried out a substantial reduction of the indirect taxation which he now has to pay in the shape of duties on articles of popular consumption. In the case of the poorest wage-earners, the weekly income tax would be considerably less than the present weekly cost of indirect taxation. As above urged, one of the worst features of our present system of indirect taxation is that it presses most severely on the poorest classes, with the result that many poor people are now bearing an altogether unfair burden of taxation. People ought to be taxed in proportion to their means, not in proportion to their needs. On grounds of justice alone, the duties on tea and sugar, cocoa and dried fruits, ought to be abolished altogether, and the duties on beer and spirits appreciably reduced. It would at the same time be worth while to abolish the duties on coffee and chicory, which yield a quite insignificant revenue. The fewer we have of these trumpery duties, the less is the cost of collecting the national revenue.

This reduction of indirect taxation would mean a loss of revenue from customs and excise which may be put at, roughly, £50,000,000 a year. If our expenditure is to continue at the present scale, that sum would have to be raised by slightly increasing the payments made by present income tax-payers—all of whom would benefit by the abolition of duties on articles of daily consumption—and by extending the income tax downwards, so that every person made a reasonable contribution to the expenses of the State, based upon his income. But, directly this reform was in sight, it is certain that the whole outlook of parliament