A 988,681
BLISSARD
LETHIC OF
USUAY
AND
INTEREST
HB
639
.B65

:
ARTES
1817
SCIENTIA
VERITAS
LIBRARY
OF THE
UNIVERSITY OF MICHIGAN
TUEBOR
SI-QUÆRIS PENINSULAM AMŒNAM
CIRCUMSPICE
HB
6539
,865
THE ETHIC OF USURY AND INTEREST,
A STUDY IN INORGANIC SOCIALISM.
THE ETHIC
OF
USURY AND INTEREST
A STUDY IN INORGANIC SOCIALISM
BY
W. BLISSARD M. A.
Vicar of Seasalter Kent
Author of "The Socialism of Christianity," etc.
"Ever
a State flourisheth where wealth
is more equally spread.'
FRANCIS BACON.

ARDVA QVÆ· PVLCRA
LONDON:
SWAN SONNENSCHEIN & Co.
NEW YORK:
CHARLES SCRIBNER'S SONS
1892.
PRINTED AT NIMEGUEN (HOLLAND
BY H. C. A. THIEME OF NIMEGUEN (HOLLAND)
AND
TALBOT HOUSE, ARUNDEL STREET,
LONDON, W.C.
CONTENTS.
CHAPTER.
I. THE POLITICAL ENFRANCHISEMENT OF USURY
II.
III.
PROPERTY IN LABOUR AS THE BASIS OF INTEREST.
PROPERTY IN UNDERPAID LABOUR AS THE BASIS OF
PAGE.
1
16
USURY
33
•
IV.
THE ORGANISATION OF LABOUR.
45
V.
THE ORGANISATION OF PROPERTY
51
•
VI.
ORGANIC SOCIALISM A NEGATION OF PROPERTY IN LABOUR.
63
VII.
THE GERM OF USURY IN USELESSNESS .
76
VIII.
THE CONFLAGRATION OF THE PROPERTY OF LABOUR
88
•
IX. THE LOCUSTS OF LUXURY
94
X.
THE STANDARD OF LUXURY A DEPRESSION OF INDUSTRY.
105
XI.
THE RENT OF SPECULATION A MEASURE OF USURY
114
•
XII.
NATURE'S SOCIALISM DEFEATED BY UNLIMITED BEQUEST. 127
XIII.
RECAPITULATION OF THE ARGUMENT.
142
•
XIV.
THREE OPIATES OF THE CHRISTIAN CONSCIENCE
150
XV.
POLITICAL RESTRAINTS UPON THE INDUCEMENTS AND
FACILITIES FOR ACCUMULATION .
159
XVI.
THE DIFFUSION OF WEALTH DRIES UP THE SOURCES OF
USURY
175
XVII. SOME MORAL FACTORS OF THE PROBLEM
188
PREFACE.
The abolition of the Usury Laws, which has only been
consummated within the last half century, has raised the
presumption that Usury itself was then abolished-in
other words, that Capital was, thenceforward, morally
entitled to whatever share of the produce of Industry which
it could appropriate.
The self-esteem of "Property" promptly took a long
stride in advance of even this position, and posed as a
benefactor to the working classes by its claim to give them
employment, by the simple process of consuming, i.e. des-
troying, under the name of Interest on Capital, or of Rent
of Land, as large a portion as possible of the material
wealth which industry had produced.
This doctrine, when cast in an extreme form, implies that
the existence of a large class of non-productive consumers
is at least as beneficial to a Community, as a large class
of producers of wealth;--which comes to much the same
thing as to affirm, that those who shear sheep in mid-win
ter are doing them a service.
Hence has arisen the moral toleration of a system which
viii
PREFACE.
deletes all distinction between Usury and Interest, by giving
Capital a free hand to exact its profits to the uttermost
farthing of economic possibility.
The object of the following pages is to enquire, whether
the causes of a Usurious element in Interest have not
survived the abolition of the legal definition of Usury;
also, whether, by touching the springs of economic action,
it is not possible, to reduce, if not to eliminate from the
profits upon the use of Capital, that excess over a really
earned Interest, which moralists have branded with the
name of Usury.
W. B.
THE ETHIC OF USURY AND INTEREST.
CHAPTER I.
THE POLITICAL ENFRANCHISEMENT OF USURY.
THERE is one form of contract which has only been
freed from legal interference within the last forty
years: the contract as to the terms on which sums.
of money shall be loaned.
This, though apparently a simple question, has been
as strenuously debated as any point of human policy,
on lines of Religion and Statecraft. It has been for
many centuries the centre of a conflict, in which
benevolence, moral duty, the exigencies of commercial
enterprise, confusion of economic thought, the doc-
trines of Philosophers and Canonists, the deliberations
of Parliaments and the edicts of Autocrats have striven
to find some modus vivendi.
When a merchant sells a bale of cloth he expects
to achieve a profit beyond the remuneration of his
trouble and an insurance against any risk of loss.
In other words he looks for a gain from the more
1
2
THE ETHIC OF USURY AND INTEREST.
possession of the goods, or of the money which
enabled him to purchase them. Another person may
elect to buy a house, a horse, or a boat, with the
view of allowing others the use thereof for a
specified time, upon payment, under the name of hire,
of such a sum as will do more than recompense his
trouble and replace the article so lent when it shall
be worn out. He also expects to make a gain out of
his possession of wealth, or the means of purchasing
it. There is thus no material difference between the
two transactions. In both cases the possession of
money brings gain to its proprietor, beyond the due
payment of any trouble he may be at in the manage-
ment of it. In the former case this gain comes in
upon a series of similar transactions with different
articles, as he buys successive bales of cloth when
he has sold its predecessor. In the latter case the
gains accrue from a series of similar transactions
with the same article, as he lets out his horse, or
house, or boat from one time of hiring to another.
Or again he may elect to discontinue the active
management of his money, in buying to sell again,
or in buying to hire out to a tenant, and may
commit his funds to some one else who will see to
such work, and then remit to the lender, under the
name of Usury,' the afore-mentioned gain which
1 "
Usury" is until the close of this chapter used in its original
meaning of any profit upon an advance.
THE POLITICAL ENFRANCHISEMENT OF USURY.
૨૭
attaches to the possession of money when others
are less abundantly provided.
It thus appears that though the contract for the
loan of money raises obviously the question of usury,
it is latent in all trading contracts entered into by
persons trading with their own capital. Usury is
involved explicitly in the former case, implicitly in
the latter. Thus the Persians of whom Herodotus
tells us that, in their antipathy to usury, they repu-
diated all buying and selling, were not by any means
inconsistent. The expectation of a profit through
the possession of money, enters into average trading
contracts, covertly or openly.
(4
In ancient times the loaning of money set up an
odious debt-slavery. The fields of wealthy Romans
were in a great measure tilled by gangs of adjudicated
debtors, who were in a more evil plight than the
convicts employed on Portland Harbour.
The pri-
vate prison with adjudicated debtors working in it,
was still the appendage to the Roman money-lender's
house, even in the third and fourth centuries of the
Christian era.” 1 Under the Law of the XII Tables,
the creditor might hale the debtor on loan before the
magistrate, who would allow thirty days for payment.
If in that period the debt was not discharged or a
surety found, "the creditor took possession of him and
carried him home, where he kept him in chains for
1 Grote's History of Greece, Vol. iii. p. 213, Appendix.
4
THE ETHIC OF USURY AND INTEREST.
two months. If the debt was not paid within these
two months, the sentence of addiction was pro-
nounced, and the creditor became empowered either
to put his debtor to death, or to sell him for a
slave, or to keep him at forced work, without
any restriction as to the degree of ill-usage which
might be inflicted upon him. "1
At Athens (600 years B.C.) similar conditions
prevailed. The great body of small freeholders and
tenants were deeply in debt. The fields were studded
with mortgage pillars engraved with the name of the
mortgagee. Many natives had been sold into foreign.
slavery in discharge of their debts. More were liable
to be adjudged slaves to their creditors until they
could either pay, or work out, their debt; failing
which their younger sons and unmarried daughters
might be taken. The mutiny of the oppressed against
the wealthy which grew out of these intolerable.
conditions was quelled by Solon's Seisactheia. By
this famous Act of Relief previous debts were can-
celled, and the power to take the debtor's body in
pledge abolished. No futile attempt was made to
fix a legal maximum of interest. But the abolition
of debt-slavery secured future peace and contentment.
The Roman method of pacifying the discontent
which was fomented by the spectacle of debtors in
chains was less successful. The Roman Genius
1
¹ Grote's History of Greece, Vol. iii. p. 212, Appendix.
THE POLITICAL ENFRANCHISEMENT OF USURY.
5
usually wrought most congenially in the Imperative
Mood. Sumptuary laws were its not infrequent instru-
ment. The Lex Orchia fixed the number of guests
who might be invited: the Lex Fannia limited the
cost to ten asses, or about the value of one sheep. In
a similar spirit the XII Tables embodied in the year
500 B.C., the fatal principle of attempting to fix the
price of the use of money on loan, a principle which,
together with much more valuable matters, passed into
English jurisprudence. Julius Cæsar did indeed after-
wards endeavour to make the property of the debtor
the main security for the debt. But the Cessio Bonorum
was hedged in by so many precautions that the
impecunious debtor often found himself enslaved in
the end. Again, by a legal fiction, known as the
Nexum Obligatio, "the severe process which legally
belonged only to the recovery of the principal
money, was extended by the Nexum so as to com-
prehend the interest "1 This method
method was also
imported into English jurisprudence, so that under
colour of non-performance of a specific covenant,
judges who could not enforce payment of interest
when it was illegal, would give as damages double
the interest claimed.2 Blackstone also complains
of a residuary legacy of this fiction, under which
courts of law technically adhering to ancient prece-
'Grote's History of Greece, p. 212.
2
Encyclopedia Brittannica Vol. xxiv. p. 18.
6
THE ETHIC OF USURY AND INTEREST.
dents refused to consider the full payment of debt,
interest, and costs, as satisfaction of this fictitious
bond. 1
Cotemporaneously with these impressions upon Eng-
lish jurisprudence there was a moral influence at work
upon opinion, partly derived from Greek Philosophy,
partly from the Hebrew denunciations of Usury. Prac-
tical Greek men of business cordially acquiesced in Solon's
allowance of interest, when the degrading and oppres-
sive security of the debtor's body was prohibited. But
Aristotle, confusing between wealth and money by
which it was conveniently exchanged, condemned as
unnatural the taking of any increase for the loan
of money, on the ground that money cannot repro-
duce its kind. Medieval schoolmen found in the
problem a congenial field for the subtleties of casuis-
try, and discovered that a price might be lawfully
taken for the loan of a house, but not for the loan
of its value in money.²
Two opposite faults are sometimes observable in
the interpretation of Scripture, the one an excessive
literalism: the other the evacuation of its meaning
by a mystical exposition. Of the latter we have an
illustration when St. Thomas Acquinas explains away
the recognition of usury in the Parable of the Pounds
by expounding it "in a metaphorical and spiritual
1
2
Commentaries, Vol. iii. p. 435.
Principles of Economies, Prof. Marshall. Vol. 1. p. 628.
THE POLITICAL ENFRANCHISEMENT OF USURY. 7
""
sense. The habit of literalism was equally shown
when St. Jerome, being asked whether a person who
had lent a bushel of corn for seed, which had yielded
ten-fold, was not entitled to something more than
the return of the seed, replied in the negative, quot-
ing as his authority--" Whatsoever a man soweth
that shall he also reap." (Gal. vi. 7.)
This bondage to the letter of Scripture was re-
sponsible for centuries of conflict between the moral
antipathy to usury, and the economic necessities
which demanded a supply of Capital which was never
forthcoming on philanthropic principles alone, but
required a recompense in money. From the Council
of Arles (A.D. 314) downward, stringent canons were
passed forbidding the Clergy to receive usury on
pain of excommunication; and at the great Council
of Nicœa (A.D. 325), the penalty of deprivation was
added. Later canons somewhat modified this sever-
ity, that made at Orleans (A.D. 538) expressly
exempting Deacons from the rule.
As regards laymen the discipline was less strict,
candidates for ordination not being always questioned
on the point, and if so questioned being admitted on
a promise of future abstention, coupled with the
bestowal of their wealth upon the poor. Gregory of
Nyssa draws an important distinction between usury
and other offences, such as theft. It is, he says, for-
bidden, but, unlike theft, allowed to pass unpunished.
"
со
THE ETHIC OF USURY AND INTEREST.
With the growth of the temporal power of the
Papal See a recrudescence of severity is observable.
The Legates of Pope Adrian II. inform him (A.D. 787)
that they have prohibited usurers in England. In
earlier ages the abstention from usury had been
rather a counsel of perfection. In the middle ages
taking usury is treated from the point of view of
Ecclesiastical discipline.
In personal exhortation a very distinct line is taken.
St. Ambrose quotes Cato's saying " fænerare est occidere
hominem", and declares appropriately that whilst Chris-
tians are eager after their percentages or hundredths
Christ's care was to seek and to save the hundredth
lost sheep. Commodianus exclaims that the alms of
the usurer are unacceptable to God.¹ These sweeping
denunciations are, however, partly accounted for by
the object lessons of debtors sold into slavery, which
had made debts on loans traditionally detestable.
Puritan Divines used even less measured language.
John Weemse (A.D. 1636), imbued with totally dif-
ferent ideas from those of Lord Wemyss, applies to
interest receivers of his own times the ancient re-
proach, that their house is the house of the Devil (domus
Satana). One penny per cent. is adjudged as enough
to shut out of the kingdom of Heaven.
1
With all this, circumstances often proved too strong
For many of the above statements cf. The Dictionary of
Christian Antiquities :-Article on Usury.
THE POLITICAL ENFRANCHISEMENT OF USURY. 9
for abstract theory. Hallam relates¹ on the authority
of Izaak Walton how Bishop Sanderson would on no
account accept interest upon his money, but was quite
willing to receive seven instalments of £20 a year
in return for a loan of £100. Bechmann2 states
how in establishing a Mont de Piété at Vicenza
(A.D. 1450) the authorities under the sanction of Pope
Pius II, in order to avoid the reproach of usury
declined to demand interest, but admonished bor-
rowers that they should give a remuneration accord-
ing to their piety and ability.
These principles personal and disciplinary are
reflected in English legislation.
So late as Edward
Edward VI. an act was passed for-
bidding the taking of any interest upon money.³
Queen Elizabeth while making forced loans from her
subjects, paid no interest, even when, which was
not always the case, the principal was repaid.¹ Con-
sistently enough with this practice an act was passed
in 1571 which violently condemned all usury, but
permitted ten per cent. interest to be paid.5
The thirty-seventh year of Henry VIII. forms,
however, the legislative starting point of the new era in
2
3
Middle Ages Vol. iii. p. 406 n.
History of Inventions Vol. iii. p. 31,
Hume's History of England, Vol. iii. p. 306.
4
Ib. Vol. iv. p. 197.
Ib. Vol. iv. p. 218.
10
THE ETHIC OF USURY AND INTEREST.
which usury instead of being banned is regulated.
Hence-forward the price of money was fixed by Act of
Parliament. James I. reduced Elizabeth's price from
ten to eight per cent. During the usurpation it was
farther lowered by two per cent. But on the Restora-
tion, the greater luxury of the times, or the liberality
of Parliament raised the price again to the level of
the reign of James II.¹
The policy herein adopted was the necessarily
futile policy of endeavouring to harmonise two irre-
concileables; the economic values of an article of
commercial use, and the twinges of partially infirmed
consciences. "A distinction was made between moder-
ate and exorbitant interest, and though the casuists
did not acquiesce in this legal regulation, yet it
satisfied even in superstitious times, the consciences
of provident traders. "2
With expanding commerce and greater enlighten-
ment these Usury Laws were doomed to go the way of
other sumptuary laws. But the leaven of Lord Bacon's
doctrine worked very slowly. In the twelfth year of
Queen Anne the principle of fixing the legal rate of
interest was retained, but the rate itself, was lowered to
five per cent. Already the distinction had been aban-
doned, which had been expressed in laws from the times
of Justinian downwards, between mercantile loans,
'Blackstone. Commentaries, Bk. iv. p. 156.
Hallam's Middle Ages. Vol. iii. p. 406.
THE POLITICAL ENFRANCHISEMENT OF USURY. 11
and those advanced to "common borrowers," to use
Bacon's phrase. Then early in the reign of William IV.
a new distinction was imported, recognising the
length of the currency of a loan; the Usury Laws
being by William IV. c. 98, suspended for the
first three months of certain advances. In the second
year of the present reign, this time of grace during
which free contract was allowed was extended to
twelve months, and to loans above £10 in value,
with the proviso that advances upon the security of
land were still subject to the penalties of the Usury
Laws if the legal rate were exceeded.¹
1
These frequent modifications of the laws are proof
of the progress of Jeremy Bentham's arguments as
to their impolicy. Nothing perhaps affords a more
striking proof of the inertness of the legislative
machine, than the fact that it should take so many
years for Parliament to be permeated by the doctrine
that it is incompetent to perform the functions of an
open market in fixing prices of commodities, especi-
ally the commodity of money. For not until the seven-
teenth year of the present reign were all restraints.
upon the terms of the contract for the loan of land
and other securities finally swept away.
This repeal of the Usury Laws is, however, only
a confession of the incompetence of the Legislature
to draw a specific boundary, or scientific frontier
English Encyclopedia. Vol. iii. p. 512.
1
12
THE ETHIC OF USURY AND INTEREST.
between extortionate and reasonable interest. It
makes no declaration that all rates of interest are
morally moderate, or economically reasonable. That
question remains where it was.
Throughout all this conflict between moral and
legal precept, and economic value, the common sense
of mankind has drawn a distinction between Usury
and Interest, accounting an exorbitant rate, Usury;
and a moderate rate, Interest. John Calvin comment-
ing on the fifteenth Psalm voices this distinction as
definitely as is perhaps possible when he says, "The
gain which he who lends his money upon interest
acquires, without doing injury to any one, is not
to be included under the head of unlawful usury.'
In the following pages the term "Usury" will be
confined to the gain which may be conceived of as
unlawful because unearned. "Interest" consisting of
that profit upon the use of capital, which may be
conceived of as being strictly due to its aid.
"
The Economic Freedom of the last thirty-six years
has borne fruits which fill some with alarm, others
with horror. In a world enriched by many centuries
of discovery and progress, where markets are often
overstocked with food and clothing, there are multi-
tudes not incapable or idle, who are unable to
procure sufficient food or decent raiment. In a nation
remarkable for its professed Christianity there is a
large class, to whom inordinate wealth makes the
THE POLITICAL ENFRANCHISEMENT OF USURY. 13
Christian virtue of self-denial a rare attainment. In
yet larger masses the barest decencies of family
life are impossible. There is maturing in our midst
a degraded nation which is physically, mentally, and
morally stunted, and well-nigh outcast from the
civilisation, moral and material, which environs it.
At the same time a Labour War is in process
in which the two armies of Capital and Labour are
federated against one another in enlarging masses,
with results to the organisation of Industry that are
not yet foreseen.
A condition of the people thus intolerable to
Religion, Humanity and Statesmanship demands a
remedy, which some find in Charity, some in Emi-
gration, some in Land Nationalisation, some in various
forms of Socialism. In other words the policy of
laissez faire is tacitly abandoned by all social refor-
mers. "Something must be done, "
is the cry.
Unlimited competition during one generation has
yielded social results which are heart-rending as
well as discreditable. Undeserved misery, simmering
discontent, bitter antagonism between classes, the
palpable elimination out of multitudes of lives of the
decencies, comforts, and hopes which to good men
make life worth living- these are symptoms of an
economic disease which will not cure itself. They
suggest the enquiry whether unlimited competition
was the only alternative to the Usury Laws.
14
THE ETHIC OF USURY AND INTEREST.
The difficulty has been, by what practical method
to allow interest, and abate this injury. A fixed
rate of lawful interest was an empiric remedy, and
failed. The solution of the problem by economic forces.
which are derived from the self-regarding instincts
of human nature has failed more signally. The ob-
ject of the following pages is to enquire how far
Civil Law by touching the springs of economic action
may restrain the lawful Interest which commerce
requires and justifies, from drifting into the unearned
Usury which the historical conscience has always
detested, as being gained out of the sacrifice of human
victims on the altar of Competitive Covetousness.
Such legal interference is an admitted principle of
legislation. The only questions which can arise are
as to its extent and its aims. In unreformed Parlia-
ments no scruples were ever shown as to interfering
with economic laws so as to benefit the legislators.
Wages were fixed by Act of Parliament. The im-
portation of Irish cattle was prohibited for the benefit
of English landowners, just as the importation of
foreign corn was handicapped by a duty.
The doctrine of laissez faire inaugurated later
was not so much a policy, as an interregnum between
two policies. It succeeded a system of violent inter-
ference of the Civil Law against economic forces.
It should precede a system of directing these forces
into channels of social usefulness.
THE POLITICAL ENFRANCHISEMENT OF USURY. 15
In the Factory Acts the principle of interference
is admitted on the ground that women and children
need protection. This opens a door wide enough
to let in much larger measures. For under the capi-
talistic system vast numbers of adult men are weak
in relation to the powers of capital. Already the
idea is gaining ground as to the propriety of short-
ening the hours of labour in mines, by reason of
the exceptional nature of the employment. Bank-
ruptcy Laws remit in certain cases a portion of the
debt. The Law of Limited Liability is a legal restric-
tion of the ordinary risks of trading. We admit
the Principle of Intervention. We have only to
decide, in what manner, to what extent, and in
whose interest it shall be exercised.
CHAPTER II.
PROPERTY IN LABOUR AS THE BASIS OF INTEREST.
THE question of Usury is so obviously dependent
on the rights of labour, that the first point must
be, to consider what these rights are. Clearly, if
workers in general are enjoying their full property
in their labour, there could be no further question of
Usury or no Usury. Every just demand would, in
such case, be satisfied, and discontent would show as
a mere ebullition of covetousness. No one, however,
believes, or in view of the actual facts, can pretend,
that an ideal justice is being practically carried out
in the economy of Society.
The natural right of possession is derived from
labour. What we use, is either a free gift of Nature,
like water, air, herbs, wild fruits and berries, trees
for fuel, and caverns for shelter, or such trans-
formation of the free gifts of nature, as may be
1
By Natural Rights are here meant the elementary moral
rights of human beings not considered as members of an organised
Society.
PROPERTY IN LABOUR AS THE BASIS OF INTEREST. 17
effected by man's labour and ingenuity, working by
means of the forces and fertilities of Nature. As for
the free gifts of Nature which in their widest sense,
include the soil of the earth, its waters, and atmo-
sphere, its forces and fertilities, that which grows
upon its surface without cultivation, and that which
lies beneath its surface-there can be no natural right
in particular persons to exclusive possession of any
of these. They are the inheritance of the whole
race. Any private property in them is artificial,
the creature of Civil Law. "To reconcile people to
this, after they have once admitted into their minds
the idea that any moral rights belong to them as
human beings, it will always be necessary to con-
vince them that this exclusive appropriation is good
for mankind on the whole, themselves included."1
As for the commodities made by man out of the
material provided by Nature, by aid of the forces
supplied by Nature; in so far as Nature is part agent
in the production, there is no natural right of private
property in them; in so far as labour, whether of
mind or body, has contributed to their present form
and usefulness, the natural right to the use of the
utility, lies clearly with the person whose labour of
any kind has imparted to the raw material of the
earth this element of usefulness to man. All other
1
¹ J. S. Mill. Principles of Political Economy, p. 142. This
was said of land, but admits of a wider application.
2
18
THE ETHIC OF USURY AND INTE REST.
things being equal A can have no natural right to
the thing which B has made.
This natural Law is universally admitted. If of
several children gathering shells on the sea shore one
finds and picks up a beautiful specimen, she claims it
as her own, a claim which only violence would dis-
pute. If of two adults who have spent the afternoon
picking blackberries from a hedge, one should demand
any part of what the other has collected, the only
ground upon which such a requirement could be
morally based must be that of some equivalent ser-
vice rendered, which is to be thus requited. Should
he take his companion's store, under ordinary con-
ditions, might and not right would have prevailed.
Or if one of two settlers in the Canadian plains
should have lassoed a prairie horse his comrade looking
on and doing nothing, the sole natural right to the
steed would be with the man who had caught it. It
is impossible to conceive of any such case, i.e. of
persons on an equality, where it would not be held
to be an intolerable oppression for one to encroach
upon his neighbour's natural right to enjoy what he
owes to his own exertions.
In this natural Labour-Right, as we have stated
it, there has been the essential element of the equality
of footing of the persons concerned. In actual life,
however, any original parity of circumstance, is soon
lost, and then the natural right is impaired.
PROPERTY IN LABOUR AS THE BASIS OF INTEREST. 19
Thus, if of two persons labouring equally at the
same work, one of the two has to obtain his supplies
of food from the other, he cannot on the completion
of the work, claim one half of the produce of their
joint industry. His right to what he has made, is
now not complete. In any case it is diminished by
the value of this food belonging to the other. But
since, ex hypothesi, he could not restore the value of
this food until the job was completed, his share will
be diminished by something more than its precise
value, for he had no natural right to eat some of
the other's food. How much more than its value he
will have to allow, will depend rather on the other
than on himself, since he could not have lived without
this food, and the other could have done very well
without providing it to the shrinkage of his own meals.
The natural right to enjoy all that one has made,
has now been weakened, if it has not rather disap-
peared. For that particular transaction, the second
man has lived by favour of the first, but for whom
he would not have been alive, and would have made
nothing. Moreover his condition will now be that of
daily increasing weakness. Taking now less than the
products of his labour, he will be in a more foodless
and therefore dependent position than he was at start-
ing; he will now be weaker in bargaining than he
was at first, and will have to part with a greater
share of what he has made. He has discounted his
20
THE ETHIC OF USURY AND INTEREST.
expectations, and like all persons who run into debt
by spending what they have not yet got, his indebted-
ness is likely to increase.
We have thus the natural right of every man to
enjoy all that he has made, replaced by an econo-
mic right which allows him such a proportion of the
fruits of his industry as is determined by the relation
between his own weakness, and the strength of his
partner. In any case some of the natural rights of
man have been lost. A condition is set up, of servi-
tude which easily slides into slavery or something
nearly akin to it.
Whether these natural rights have been simply
lost, or whether they have been forfeited, will depend
upon finding out who was to blame for the first down-
ward step, by which one man has to look to the
other for food. At present, however, we will assume
that the opportunities of the two men have been equal.
Each, we will say, might have worked on equal
terms, having started with the same store of food,
if both had been equally prudent.
Wherein, then, is to be found the spring which has
shifted these men on to two different planes of life,
lifting the former up to the level of mastery, depres-
sing the latter into servitude? The cause lies in the
exercise by the one of forethought and self-control,
and in the negation of these virtues by the other.
The latter has consumed his store in immediate grati-
PROPERTY IN LABOUR AS THE BASIS OF INTEREST. 21
fication, careless of the future, much as the bullock
takes its fill of the bundle of hay set before it,
trampling what it does not eat, reckless of to-mor-
row's hunger. The other has looked forward. He
has put constraint upon his appetite, and saved, at
the cost of some self-denial, enough out of the
fruits of past industry to keep him alive until he
can reap the next harvest. The life of the one has
been the life of the animal. The other has brought
into the conduct of his life the two particularly
human faculties of forethought and self-denial.
Thus these two qualities are essential factors in
the maintenance of the natural rights of labour.
Where they are lacking different results ensue accord-
ing to the degree of civilisation. In savage con-
ditions, the absence of forethought and self-control
entails the forfeiture of life itself. Starvation thins
out of the ranks those who make no provision for
future wants. In civilised life, the penalty lies rather
in the forfeiture of some degree of personal freedom.
Economic forces are brought into play, whose inex-
orable working separates men into two classes, servitors
and the served.
But these two qualities work in a much larger
sphere. With the aid of Invention and of Industry,
they have carried Society along the path of Progress
and Civilisation.
22
THE ETHIC OF USURY AND INTEREST.
Without implements very little more would be
possible than to provide for simple wants on an un-
varying scale. The squirrel always will lay up its store
of nuts, and the rat often, if it has access to a potato
patch, will do as much. But if the stores laid by,
are merely applied to satisfy man's natural wants,
the human society would have been as stationary
during the past ages as the busy and prudent society
of the Ant-hill, or the Hive.
The vis inertia of nature is such that man's mus-
cular strength is relatively powerless in its presence.
For a
man to provide his family with sufficient
wheat, he must every year, dig and cultivate two
and a half acres of average land at the least. It
would require weeks of labour to draw a ton of coals
like water out of a well from a coal mine at Can-
nock Chase, and then to carry it on the back to
Canterbury. Churlish Nature would refuse most of
her treasures to man relying on a bare right hand,
and would grant but a little and that on hard terms.
Man would sink down exhausted by the fatigues
of moving the giant's little finger.
But to those who will woo her in the way she
likes, she has a cornucopia waiting to be shaken
out. Inventiveness, ingenuity, patience, self-sacrifice
-not rude assault-this is the wooing that prevails.
Thus overcome she is the willing Alma Mater of
mankind. Nature has wonderful secrets which she
PROPERTY IN LABOUR AS THE BASIS OF INTEREST. 23
will pour into the listening ears of those who by
their diligence in searching them out, show a willing-
ness to make due use of what she may reveal.
These are the only terms upon which Nature ele-
vates mankind. Improved types of animals have been
developed from lower types. But those in any
species have usually in the historic period remained
stationary, except in so far as they have been effected
by contact with man. The hawk's eye is as keen,
and the lark soars as high, and the honey-bee's cell
is as perfectly constructed now, as when the Britons.
dyed their bodies and lived in caves. Man being at
the apex of animal life, can only be improved within
the species, by development of individuals through
their environment.
Thus man, with a spade, a knife, a spear, a
plough, leading a tamed horse, rowing a boat which
he has hollowed out of a tree-trunk, is thereby
differentiated from the brute creation. Where they
are stationary he moves forward. From the cavern
he moves into the booth covered with skins, from
the booth to a log-hut, from the hut to a cottage of
bricks thence to a villa, a mansion, a palace. At
first he warms himself at a fire kindled out of the
half-rotten branches broken from the forest trees by
the tempest. He ends by sitting before a fire of
coals drawn from the bowels of the earth. Instead
of aimlessly wandering from valley to valley to find
24
THE ETHIC OF USURY AND INTEREST.
a patch of corn-land not yet worn out, he rides forth
exploring fresh fields and pastures new, he paddles
down the river in his canoe, he crosses the sea in
a galley, then he embarks on board a steam-vessel,
then the paths on the wide ocean become dangerous
through the multitudes of the fleets and navies that
convey to his enjoyment the fruits of other climates
and soils.
From the aboriginal, clothing himself when he is
clothed at all—with skins, and plucking berries and
grubbing roots for his food withal, we arrive by
ascending the Staircase of the Centuries, to the
Civilised Man, sitting down to meat at a table bearing
food brought from half-a-dozen remote countries,
sipping tea made from the leaves of shrubs growing
in China and Ceylon, flavoured with sugar drawn by
tropical suns from the soil of Barbadoes, warming
himself at a fire the fuel of which is supplied out
of primeval forests, buried beneath the ocean a
million years ago the bottled-up sunlight of ages
when man was an unknown quantity; clothed in the
cloth, or linen or silk that is reeled out so many
yards a day from the looms of Leeds, Belfast and
Lyons; reading a message despatched to him an hour
or so ago from his son at the Antipodes.
As the vis inertia of Nature is almost immoveable
to man wrestling with her with empty hands: so
the fertilities and forces which will be set in mo-
PROPERTY IN LABOUR AS THE BASIS OF INTEREST. 25
tion for the benefit of man equipped with knowledge
and machinery are various, mighty and beneficent.
There is one condition precedent—rigorously
insisted on. The gifts of Nature aided by industry
must, on no account, be entirely squandered in
immediate gratification. On no other terms will Nature
hand out the key by which her store of wealth may
be unlocked.
The inventions, researches, and advances in mechani-
cal skill are due to the non-consumption of any
year's national dividend entirely upon the present
needs of personal life. A stationary existence only
is secured by the elementary human forethought
which out of a summer's abundance lays up a store
for the winter's needs.
The real step forward is only taken when the
whole even of this store is not assigned to those
whose labours have produced it, but a part allotted
to those who will invent, construct, and improve new
implements whereby larger crops may be won from
Nature's bosom, or a more effective use made of her
forces and fertilities.
When, in every year, the family consumes on its
existence the whole of what its labours have pro-
vided, it cannot advance beyond its original point of
civilisation; when every family does this, the entire
community lies stranded beside the River of Progress.
When some consume everything upon themselves
26
THE ETHIC OF USURY AND INTEREST.
and some do not, to the latter only is due any increase
in the productiveness of labour. Then, owing to them,
either less labour is necessary to procure the same
comfort, leaving leisure for culture of the mind; or
else the same labour is more fertile, affording a
higher standard of comfort.
The one set of persons are carrying the community
onward or upward, the others are a drag upon the
wheels.
On the hypothesis that all have equal opportunities
of thus aiding Social Progress, the selfish destroyers
of its wealth deserve condemnation; while those who
have served the cause of Progress by saving from
personal consumption a part of the earth's produce,
and devoting it to the improvement of natural
mechanism, have a claim to a reward proportioned to
their service and to the efforts which they have
made in rendering it. These are the authors of
advance in Civilisation, in the Arts and Sciences, in
Literature and Religion. For the command over
Nature differentiates the civilised man from the
savage.
But when circumstances are not equal, the moral
claim to reward will differ. The very wealthy find
it very much easier to set apart from personal des-
truction a much larger portion of their yearly share.
The culpability of not doing this is therefore great
and merits severe penalties. Or if they do save,
PROPERTY IN LABOUR AS THE BASIS OF INTEREST.
27
the service rendered may be great, but the difficulty
of rendering it is less, and the moral claim to recom-
pense proportionably less also.
Or if any are in such poverty, that from no fault
of their own, they cannot fall into the ranks of
social progress, the State itself is to blame. It is
sinning both against itself, and against them, for it
compels them to live incomplete lives. They are
serving their species as beasts of burden serve it.
A nation, which by its institutions, propagates within
itself a race of social dwarfs will finally suffer as
it deserves. It is busy in crushing out of a section
of its citizens qualities which are the gift of God
in favour of perpetual Progress. It is in habitual
rebellion against the conditions of its evolution, for
it is destroying some by poverty, that it may work
out the moral ruin of others by superabundance. It
is plucking out by the roots in some those laws of
human development, which are necessary in all for
the elevation of the race.
Those who are aghast with horror at the poverty,
the misery, the recklessness, the brutishness, the
degradation, the lives physically and morally stunted,
by which they are encompassed, should rather be
horrified by its primary causes. "An enemy hath
done this." The man moulded in the image of God,
is being forced by the artifices of social life into a
condition of less forethought than that of the squirrel
28
THE ETHIC OF USURY AND INTEREST.
or the rat, and so tends to revert to original types.
And since always, corruptio optimi pessima, the
socially compelled brutality of man degraded, becomes
intolerably worse than the natural brutishness of
the beast.
""
It appears hence, how accurate is the common phrase,
which calls thrift, "saving." Economists favour such
other words as, "abstinence, "" deferred enjoyment,
and the like. But "to save
to save" expresses the primary
idea, that something has been saved from the destruc-
tion to which mere animal instinct would devote it.
In such salvage lies the progress of the human species.
from savagery to Godhead. By how much has thus
been "saved," has the salvation, material, mental and
moral, of the race been achieved.
This civilised advance comprises two factors, the
material and the moral. A fund reserved from per-
sonal consumption, and devoted to extend the com-
mand over the powers of nature, and to support a
larger band of workers is the material factor of
civilisation. In other words an annual increment of
Capital is necessary. In fact, it is believed that one
sixth part of the material income-two hundred
millions out of about thirteen hundred-is thus set
apart for reproductive purposes. This is the sine
quâ non of social progress.
It might be thought of no consequence by whom
this is saved, so that the necessary sum be forthcoming.
PROPERTY IN LABOUR AS THE BASIS OF INTEREST. 29
But that is not so. Much will depend upon the persons
by whom it is saved, whether they are few or many.
If the sum total be made up, in the main, by the
large savings of a few wealthy persons, their motive.
is not forethought, nor does their action educate self-
denial. The motive power is ambition or greed. The
conduct is not self-denial, but a deferred self-indulgence.
Some luxuries are dispensed with for a few years, in
order that then far greater luxuries may be enjoyed
without stint. This section of society is being leavened
with the lust of power, of place, of self-gratification.
On the other hand, the savings being made by the
few, the many have no opportunity to save. To look
beyond the next week is a painful act, so precarious
is the outlook. The "berth" may be lost, no work is
to be had, want may have broken up the home. This
is all that the average wage-earner can see in the
magician's glass. Even the well-paid artisan, knows
that the loss of a limb, or the failure of health would
plunge him into social ruin. Men cannot, will not,
ought not to, look closely forward into a future
which prudence cannot save from disaster. That way
lies the mania of recklessness.
To give point to the argument, let any one take
two typical lives. First, that of the man who dies
bequeathing a million of money which he has amassed.
In his lifetime he has added that amount to the
capital of his country, for we assume the case of
30
THE ETHIC OF USURY AND INTEREST.
honourable, business enterprise. This is in itself a
public service. But at what cost has it been rendered?
There must have been ambition and the desire for
gain. No moralist would say that a life of money-
making is a healthy environment for any mind. At
the very best it is sordid work. Seen at the worst
the most evil passions are educated, harshness, tyranny,
avarice.
Next take the case of any one of that population
of one and a quarter million persons in London,
who are in poverty. Real forethought is an utter
impossibility. At the utmost, some of them have
provided against occasional sickness. With that excep-
tion, life is mainly animal life. When they have
plenty they consume it all, for there is no sufficient
practicable inducement to do otherwise. When times
are bad, they go without. The two humanising facul-
ties of forethought and self-control lie dormant for lack
of opportunity.
:
They are cripples of the worst kind. They may
have physical strength, they certainly have physical
desires. They have the faculties of the brute; but the
moral controlling faculties of the man within them
are numbed. A moral atrophy is consuming those ethic
fibres of the being which differentiate the man from
the animal.
Thus the Christian maxim-"Be not anxious for your
life," (St. Matt. vi. 25. V.R.) is an impossible factor in
PROPERTY IN LABOUR AS THE BASIS OF INTEREST. 31
the two extreme sections of society. The sphere of
Large Capitalism is infected by an absorbing incessant
anxiety to make gains in the future. The vast hordes
of the disinherited are fain to shut their eyes to a
future which looms so forlorn and possibly hideous.
They are not even careful for their life. They are
rather leavened with the dare-devilry of the gambler
who has been black-listed by Dame Fortune.
The consequent loss is economic as well as moral.
The fact is patent that beyond provision for sickness
and burial, there is no general effective saving on
the part of the manual labour classes. Professor
Marshall estimates that one hundred millions, about
one fifth part of their aggregate wages is unworthily
spent.¹ This is a waste of the material resources of
the nation. It might have been so expended as to
increase the National Dividend, causing more and
more regular employment, and elevating the masses.
That it was not so spent, was no doubt partly due
to folly, but more largely to the fact that the conditions
under which they live, for the most part favour
habits of unthrift and self-indulgence; and, in the
lowest classes, make life in its happiest aspects a
see-saw of waste and want.
In the condemned cell of Austrian criminals-or the
"poor sinner's cell"-on the night before his execu-
tion the convict is allowed to choose his last repast,
Principles of Economics, Vol. i. p. 747.
1
32
THE ETHIC OF USURY AND INTEREST.
however sumptuous. There is a quaint humanity in the
custom, at a trifling cost. But the waste is enormous,
which is due to the recklessness of the thousands of
social cripples in the business world, who have been
forced by economic pressure to abandon all hope of
a healthy social life.
Thus civilisation is something more than a social
progress which only requires the yearly saving of a
sufficient Capital. It is a moral and therefore indi-
vidual progress. It is not only a question of how
much Capital shall be accumulated, but by whom it
shall be amassed. In these savings there is a labour
so useful to society that it earns a reward, and ought
to be duly recompensed. There is a labour also
that is essential to the healthy life of each individual.
It thus becomes the function of the statesman and
of the moralist, to bring about such a more equable
distribution of goods, that all shall be obliged, and
shall be able, to labour in saving.
CHAPTER III.
PROPERTY IN UNDERPAID LABOUR AS THE BASIS OF USURY.
WE are now in a position to see the reasons of
justice on which the lawfulness of a commercial
interest on capital is founded.
The starting point is the economic right of every
man to what by his labour he has produced. It is
his own, to use as he will. But there are two ways
in which he may consume it. He may consume it
all, whilst he is working to produce a similar sup-
ply. Or he may eat somewhat less himself and
wear less clothing or not renew it so often, and
give the remaining food and clothing to another man
who is engaged in making a plough for example.
In the former case the food and clothing will be
consumed by one man who has replaced its equivalent
by his labours. In the latter case the food and clothing
will have sufficed for two men, one of whom has re-
placed it as before, and the other has made a plough
by the aid of which more land can be cultivated and
the food of the community proportionably increased.
3
34
THE ETHIC OF USURY AND INTEREST.
The question at issue is-does the first man who
has supplied the plough-maker with food and clothing
deserve a reward? Has he rendered a service, and
has he laboured in any way? Certainly he has
laboured, for it would have been easier to consume
all his food, and wear warmer and better clothes,
and it required some effort, a real labour though
nervous and not muscular, to forego these comforts.
It was no part of his duty to feed and clothe his
fellow-labourer. He has laboured in this non-destruc-
tion of what he might have lawfully destroyed, and
he has by so doing been instrumental in increasing
the productiveness of future labourers, for now there
is a plough more in the world than, but for him,
there would have been. That labour of his has aided
production. He has therefore a right to be paid for
his labour, i.e. to receive something more than the
return of an equivalent to the food and clothing
which he advanced. Also productiveness being in-
creased there is a fund out of which he can be paid.
He deserves a recompense, and the borrower has a
store out of which he can without loss give the
recompense. For the plough-maker, since his plough
aids future production, has been able to sell it for
more than the value of his own labour in making it.
This is the foundation of interest on capital.
Interest is a man's lawful property in the produce
of his own labour, which by a further effort or labour
UNDERPAID LABOUR AS THE BASIS OF USURY. 35
he has stored up in some form that benefits not only
himself but the community. The right to some interest
on capital, is in pari materia with the right of
labourers of every kind to what they have by their
labour produced. But for his effort in saving a portion
of his goods from unproductive consumption, and
devoting it to productive consumption, the community
would have been so much the poorer. He is thus,
therefore, one of the army of producers, though in-
directly, and has earned his pay as much as any other
industrial soldier.
We have here, negatively, the definition of unlawful
interest, commonly stigmatized as usury. As interest
is property in stored-up labour, so usury is property
in unpaid or, which is included therein, in under-
paid labour.
It may arise in two ways. The loan may be for
unproductive purposes, or it may be for productive
purposes but exorbitantly repaid.
Loans for unproductive purposes may have two
different objects:-either to enable the necessitous to
tide over a short period of want, or to enable the
spendthrift to revel in present luxuries by mort-
gaging the resources of the future.
This last is of the two the most pernicious to the
State. The ordinary mischief of unproductive con-
sumption is multiplied tenfold or more. It is mischiev-
ous enough when the owner of an estate spends year
36
THE ETHIC OF USURY AND INTEREST.
by year the income from it in riotous living. But
when by the money-lender's aid he has raised and
prodigally spent in one year the incomings of ten,
not only is the unproductive consumption of that year
increased, but it is now out of the power of the owner
for several years to spend its revenues productively,
for they pass to some one else who has no other
interest in the matter than to receive them. An
object lesson in the evil of this has been recently
given in the case of the Savernake Estate. The
cconomic injury was here so glaring as to be held
to justify a legal interference with personal rights.
There is a precedent here for further legal interfer-
ence where the general results are less obvious but
more pernicious.
1
The other kind of unproductive loan, is that to
the necessitous-known in its smaller transactions
as pawnbroking. Mr. C. Booth gives an instance
which illustrates the improvident borrowing of the
very poor. There is a father (blind) with a pension
of 5s. 6d. weekly, an invalid daughter, two daugh-
ters, factory girls, paying 12s. a week between them
for their board, and a fourth daughter, a school-girl.
He found that this family with a united income of
17s. 6d. per week, were in the habit of pawning the
same set of garments for 16s. at the beginning of
the week, and redeeming them at the end of the
¹ Labour and Life in East London, Vol. i. p. 142.
UNDERPAID LABOUR AS THE BASIS OF USURY. 37
week for the charge of 4d. Thus they obtained a
week's income in advance by paying interest at the
rate of one hundred and six per cent. per annum!
Such advances whether to the improvident or to
the necessitous, are usurious-whether the rate of
interest be one per cent, or one hundred. Except in
comparatively few cases they are sought to main-
tain life, and in no sense to provide capital. Occa-
sionally they are of this latter character, as when
a tailoress pledges her shawl to enable her to pay
the week's hire purchase of a sewing machine. But
as a rule they are unproductive loans. They in no
way increase the productiveness of labour. The debts
are incurred because those who incur them are
behindhand with the world, and must live, yet may
not steal. The payments made in respect of them
are made, not out of profits but out of privations. It
is so much added to the cost of living, for the reason
that those who pay this extra cost of living were
already so poor that they could not pay the usual
cost.
As things are, the pawnbroking system may be
necessary, and convenient, and the only current
remedy against greater evils. But for all that, the
loans on which it flourishes are advanced out of a
fund of unfruitful money. The interest received is.
not a payment for capital, the effort of saving which
has advanced the civilisation of the world. There
38
THE ETHIC OF USURY AND INTEREST.
has been a labour in saving, but an unfruitful labour
which has produced nothing and therefore on the
maxim that labour has a right to what it has pro-
duced, has no right to recompense for it has produced
nothing. Such transactions are usurious, such so-called
interest is usury. "Usury is the certainest means
of gain, though one of the worst, as that whereby
a man doth eat his bread, in sudore alieni vultus.”1
This is the usury which is so vehemently con-
demned in the Bible, so that for centuries the name
of usurer was odious, Jeremiah complaining that he
was publicly detested though he had never lent money
on usury. (Jeremiah xv. 10.)
It has been already noted how this religious denun-
ciation of usury has to this day coloured men's
views of the subject. It becomes important therefore
to make sure that we have correctly gauged its
scope.
Any abstract moral law is perpetual. But a moral
law which defines duty in concrete cases, must be
rigidly confined to the details which it regulates.
Cotemporaneous history will throw light on these
details. We have in the Book of Job, whether
regarded as a narrative of facts or a poem descriptive
of life, indications of a policy of aggression upon
poverty as prevalent even in times of pastoral and
non-commercial simplicity.
¹ Bacon's Essay on 'Riches'.
UNDERPAID LABOUR AS THE BASIS OF USURY.
39
แ Some remove the landmarks. They violently
take away the flocks and feed thereof. They drive
fatherless, they take the wi-
away the ass of the
dow's ox for a pledge. They turn the needy out of
the way, the poor of the earth hide themselves
together." (Job xxiv. 2, 3, 4.) So that "as for the
mighty man he had the earth," (Job xxii. 8.) and is
thus reproached, "Thou hast taken a pledge of thy
brother for nought, and stripped the naked of their
clothing. Thou hast not given water to the weary
to drink, and thou hast withholden thy bread from
the hungry." (Job xxii. 6, 7.)
The Hebrew Law-giver is no doctrinaire legislating
for the commercial relations of the Nineteenth Cen-
tury. But he would stem the tide of inhumanity
which was in his own times giving the earth to the
mighty man. So his code bristles with injunctions
such as these. "If thou lend money to any of my
people that is poor by thee, thou shalt not be to him
as an usurer, neither shalt thou lay upon him usury."
(Exodus xxii. 25.) "If thy brother be waxen poor
and fallen in decay with thee, then shalt thou relieve
him,.... take thou of him no usury, nor increase.
(Levit. xxv. 35, 36.) "Thou shalt not lend upon
usury to thy brother; usury of money, usury of
victuals." (Deut. xxiii. 19.)
""
Further, although no debt was recoverable when
the septennial year of release came round, this was
40
THE ETHIC OF USURY AND INTEREST.
・・・・
not to prevent lending to the necessitous without usury,
and at the risk of losing the principal. "If there be
with thee a poor man, one of thy brethren. . . . thou
shalt not harden thy heart, nor shut thine hand from
thy poor brother: but thou shalt surely open thine
hand unto him, and shalt surely lend him sufficient
for his need in that which he wanteth. Beware
that there be not a base thought in thine heart,
saying, the seventh year, the year of release, is at
hand, and thine eye be evil against thy poor brother,
and thou give him nought." (Deut. xv. 7, 8, 9.)
We find in the usury laws of the Hebrew Polity
both a provision for the poor, and a remedy against
poverty, for there would be so much the less induce-
ment to accumulate wealth upon which the relief
of poverty was such a heavy first-charge. This from
first to last was the sin of usury in the Old Testa-
ment-making gain out of the necessities of the poor.
So Ezekiel in his vigorous exposition of personal duty
classes usury with the abomination of oppressing the
poor and needy, spoiling by violence and not restor-
ing the pledge. (Ezekiel xviii.)
In all this the lawfulness of sharing in commer-
cial profit is not touched. When, however, with the
expansion of commerce this question had become fami-
liar, there is no doubt as to its propriety. In one
of Christ's Parables, the unprofitable servant is con-
demned because he had hoarded his Master's money
UNDERPAID LABOUR AS THE BASIS OF USURY. 41
instead of laying it out at interest.
While the employer
for requiring some
is represented as culpable, not
increase, but for being so hard and austere a man
as to exact the whole of what his servants had gained
by trading with his capital.
In so far, however, as the Hebrew code deals with
commercial profits, it permits them. Land was the
only form of capital with which men were then fami-
liar. As to this, rent was expressly permitted. The
provision that land could only be alienated for the
unexpired term until the next jubilee year, constituted
the so-called purchase money, a rent paid beforehand
for a lease of ten, twenty, or thirty years, as the
case might be. Hebrews were also allowed to lend to
aliens upon usury, partly perhaps because foreigners
were more engaged in the commercial use of money,
partly also because of the clannishness of Hebrew Law.
On the whole then, so far as the authority of
Scripture may be quoted at all, it maintains two
positions. One, that land being commercially produc-
tive might be loaned at an interest or rent for a
limited term of years; the other, that making a gain
by trading on the necessities of the poor, was a sin
against God, and a crime against the nation. When
the hireling is oppressed in his wages, receiving
less than what his labour has earned, the profit
made out of him is usury. Usury is a property
set up in the underpaid labour of other men.
The
42
THE ETHIC OF USURY AND INTEREST.
slave-owner is a usurer. The receiver of profits
that accrue because, from any cause, men are forced
to accept a mere subsistence wage, is also a usurer.
What portion of a dividend is lawful interest, and
what portion of it is usury cannot always be speci-
fied. But so long as there exist in a nation a
multitude of persons willing to be industrious, living
miserably, and constrained to endure long hours of
work in order so to live, unable to provide for their
wants one week ahead; with such a precarious
footing in the hives of industry that they are never
sure of getting work by which they may live during
health and youth, and much less should they be
enfeebled by age or sickness; while at the same
time there are others with a redundancy of means,
thoroughly secured to them whether sick or well,
idle or industrious:-in such a nation, we have all
the outward symptoms that it is ravaged by usury.
A whole nation may be miserably poor together, and
yet there shall be no suspicion of usury. But where
one part of a nation is very rich and another part
is very poor, unless it can be shown that the whole
of the wealthy class owe their riches to nothing
else but their own exertions, while the whole of the
poor class are idle, incompetent, or thriftless, the
presumption is of usurious dealing. The burden lies
upon such a nation to clear itself of the charge of
trading on the necessities of the poor.
UNDERPAID LABOUR AS THE BASIS OF USURY.
43
These are symptoms only. In our analysis of the
distinction between interest and usury, we have
reached this point. Interest is the just payment of
a labour in saving that has proved productive. Usury
in commercial loans is the payment which the stronger
is able to wring out of the weaker over and above
that just payment; an excess which is obtained out
of the industrial worker's due reward. Interest is a
property in labour. Usury is a property in un-
derpaid labour. The same reason which justifies the
interest receiver in demanding to be paid for his
services, condemns him for exacting from the industrial
worker that excess of interest (i.e. usury) which is
filched from wages.
What is just wage, or what is exorbitant interest
cannot be precisely defined. Just, unjust, moderate,
exorbitant, are relative terms, whose meaning depends
upon circumstances. What causes may be at work
to lower wages below their just scale, or to raise
the rate of profits and interest above their due level,
so that they become exorbitant or usurious, must be
examined; and the extent to which they have operated,
measured.
For the last generation these matters have been
left to the settlement of economic laws. The level
has been an economic level. Until then there was a
general consensus of opinion that the economic standard
was so treacherous a rule that it ought not to be
44
THE ETHIC OF USURY AND INTEREST.
left unregulated. Attempts to govern it, were aban-
doned, not as being wrong in their aim, but as being
inoperative.
Now, the conviction is more intense than ever that
the vexed question of usury cannot be submitted to
economics as sole arbiter. In the present century two
movements have been set on foot to deal with the
problem :-Trades-unionism and Socialism. These
must next be considered.
The former would evict usury by the organisation
of labour. The latter would extinguish both interest
and usury by a new organisation of property.
CHAPTER IV.
THE ORGANISATION OF LABOUR.
NATURE abhors a vacuum. The void caused by
the repeal of direct usury laws has been filled by
the indirect method of trades-unionism. Of this
the raison d'être is to strengthen labour in the
higgling of the market with capital. Those who
felt where the shoe pinched through the isolation of
the labourer, saw that by combination they might
secure a larger share of the joint profits of industry
and capital.
Its results have justified both this contention,
and the hostility of the profit-receiving classes
who withstood it. An Act of Parliament exacting
that from such a date wages should be raised by
one tenth, would have proved as futile as the Act
of Queen Anne which fixed the rate of interest at
five per cent. But the repeal of the anti-combination
laws has in many industries done more than this—to
the extent even of raising the wages of miners thirty
per cent. in the last three years. It may be true
46
THE ETHIC OF USURY AND INTEREST.
enough that the ability of employers to pay this
enhanced wage is not created by trades-unionism
but by the state of trade. But it is also true that
the ability of the employed to secure their share of
these improved profits is almost entirely due to their
combination.
The very miseries which workmen and their
families have endured during strikes, and show them-
selves still willing to endure, prove the exact con-
trary to the conclusion which it is often sought to
infer from them. It is thus shown, not that strikes.
are disastrous to workmen, but that they are on the
whole beneficial. For none but madmen would
continue to inflict upon themselves useless sufferings,
They are sometimes taunted with foolish submission
to their leaders. The taunt proves how much they
owe to their leaders. Submission to authority is not
an English foible. This obedience to trades-union
discipline is one of the strongest proofs that can be
brought forward, that combination has given to
workmen such a share of the margin of profit as
was worth fighting for.
But making all allowance for the victories it has
won, the combination of employers and employed
against one another can never cut down the Upas
tree of usury.
Capital and Labour which in production are part-
ners, are thus put on the footing of war in the
THE ORGANISATION OF LABOUR.
47
division of the profits of their partnership. As in
other wars the ultimate sanction is that of pitched
battles-strikes or lock-outs, when partners in
business seek to settle the terms on which they
share the profits, by ceasing to do any business, and
quanto valeat destroying profits. This Labour War
also imports into an intricate economic problem the
ruinous element of passion. Besides it is of the
essence of strife to be continued until one or the
other of the parties to it are beaten; this may mean
the destruction of an industry, or the transference
of trade to a foreign country.
The miners' holiday of March, 1892, points to another
weakness. As it has suited capital before now, by
trusts and unions, to limit the volume of production,
and force prices up by a monopoly of the supply, so
it may suit, or what is nearly as disastrous, seem
to suit labour to limit the output. A real solidarity
between the coal miners of Great Britain and Bel-
guim, and the coal porters of London, opens up
serious possibilities. The corollary to combination,
is federation of great interests. Perhaps we are by
no means near the limit of this federation on either
side of the conflict.
But there is another inherent weakness in trades-
unionism. Let federation be carried to its extremest
limit, and there will always be outside it those who
are too poor, too isolated, too irregularly employed,
48
THE ETHIC OF USURY AND INTEREST.
or too economically feeble and incompetent to organise
themselves. At present out of eight million adult
manual-labourers not two millions are members of
trade-unions. Thus only a minority are directly
benefited. Of the unorganised some at least will be
worse off. What unionists gain, either capital or
non-unionists will lose. And certainly capital will
be able to transfer some, probably a large part, of
the loss, to the weakest party in the triangular
duel the unorganised labourers. Probably the de-
pressed condition of the three hundred thousand persons
"in poverty" in London is partly attributable to this
cause. The camp followers of the army of industry
will have to put up with the leavings of organised
labour.
This is so obvious that the trend of the New Union-
ism is setting strongly towards Socialism. These
industrial weaklings must be helped somehow both
for humanity's sake, and in the interests of trades-
unions. Hence the demand for an Eight Hours Act,
and in some quarters even for municipal workshops
to absorb artificially the redundant labour.
Combination is thus confessedly unable to effect
the complete emancipation of industry. It imports
no fresh moral solvent into the conflict between
Labour and Capital. Its utmost work is to centralise
the self-regarding interests which cause the strife.
On the one side are federated the interests of capital,
THE ORGANISATION OF LABOUR.
49
on the other those of Labour. Superior strength is
still, as before, the final arbiter. Inter arma silent
leges. Settlements SO made are in no necessary
concord with economic propriety.
This was sharply illustrated in the coal crisis of
March, 1892. Several hundred thousand pounds extra
were paid by the public for their coal. Some of the
wealthier coal-merchants were enriched, some of
the poorer impoverished or ruined. Many work-
people in affiliated trades were thrown out of work
for a time or altogether. Some of these trades
were depressed, some destroyed, some fell bankrupt.
Producers for foreign markets were heavily handicapped.
More than half a million of wages were sacrificed,
to say nothing of injury to mines and machinery.
These are the necessary incidents of the attempt to
settle wages by combination. The attempt was either
justified by circumstances or not. If the former, we
see the price that has to be paid, that wage-earners
may receive their due. If not justified, we have an
object lesson of the evils which must ensue so long
as one of the parties to the strife is in necessary
outlawry from economic responsibilities.
Hence the rapid extension of Socialism. Frag-
mentary remedies, such as nationalisation of the
land, single-taxation, the taxation of ground rents,
are yielding place to wider theories. It is recognised
that wealth must be socialised, either distributively
4
50
THE ETHIC OF USURY AND INTEREST.
or collectively, if the exploitation of labour in all
forms of industry is to be checked. The economic
equilibrium must always be in danger, so long as
nincty per cent. of the population are wage-earners,
with little hope or ambition of becoming proprietors,
individually or collectively.
The inherent weakness of trades-unionism lies in
the fact that it tends to crystallise the unnatural
division of society into wage-earners and capitalists.
Starvation on one side, physical force on the other,
in place of mutual economic interest, find the final
arguments.
CHAPTER V.
THE ORGANISATION OF PROPERTY.
THE re-action against unlimited competition in the
division of profits, is emphasised by the rapid emer-
gence of Socialism as a political factor. Owing its
origin and its force to a growing discontent with the
results of economic freedom, it formulates a theory
aimed at substituting justice for privilege in the
distribution of the fruits of industry.
Some analysis of the real meaning of Socialism is
desirable, to dispel the popular misrepresentations of
its aims. Multitudes of educated people to this day
persist in believing that it is nothing else but a policy
of public plunder. It is to them only a euphemism
for stealing, a convenient method whereby those who
have not, may, being most numerous, take what they
want, from those who have.
It is in reality a political programme for the
economic re-construction of Society. It is therefore
open to criticism. Its basis needs to be examined,
52
THE ETHIC OF USURY AND INTEREST.
and any flaw in the theory discovered. Those who
simply denounce it as a covetous confiscation of their
goods, may find the charge retorted upon themselves,
and not without reason. Practicable or not, econo-
mically sound or not, it professes to prevent confis-
cation, not to promote it. If in protecting the worker
from suffering the confiscation of any of the fruits of
his industry, it has to confiscate unearned profits of
the non-worker, it would claim that the latter is the
less in the choice of two evils. Later on reasons
will be given for disagreeing with its premisses. Here
it is enough to say, that the battle should be joined on
one issue only, its economic soundness. By that test
its justice can alone be tried. Socialism is a protest
against the abandonment of all endeavours on the
part of the State, to check usury. State Socialism
if established would be the enactment of oblique
usury laws, for it would abolish all private owner-
ship of the interest on capital. With John Weemse
(A.D. 1636) it regards the house of the usurer as Domus
Satano;-interest-receiver and usurer being reckoned
as one person. Thus Greek Philosopher, Roman
Censor, Medieval Monk, Puritan Divine, Fabian
Socialist, and Social Democrat, on this point are.
united in one happy family.
Much confusion has been caused by the use of
the word Socialism in two different senses, (i.) to de-
note a principle, (ii.) to denote a method. The term
THE ORGANISATION OF PROPERTY.
53
describes as the Bishop of Durham put it, "a
theory of life, and not only a theory of Economics." 1
As a principle socialism subordinates the indivi-
dual to the society. It is opposed to the individual-
ism which uses men for purposes of private gain,
and it implies the joint-working of men with men
for mutual advantage. The members of a trades-
union are applying Socialism, though collective owner-
ship is outside their theory. The Socialism of the
New Testament is often urged, although distributive
ownership is the principle which it applies. Any
process is often and properly termed socialistic which
diffuses among a community what would otherwise
have accrued to individuals. Thus the whole machin-
ery of Poor relief is applied socialism, which, how-
ever, was carried a step further in Mr. Goschen's act
for charging the maintenance of in-door paupers
and lunatics in the Metropolis, upon the common.
fund of the Metropolitan rates. So also rates and
taxes upon realized property, the Land tax, and
Income tax when not levied on the earnings of in-
dustry, are socialistic. Thus, in passing, we note
that those who are working to relieve earned in-
comes, from Income tax are really socialists. So-
cialists themselves use the word in this general sense.
Thus "there are socialistic measures, that is, they
tend to the recovery from landlord or capitalist
1
·
At the Church Congress at Hull. Oct. 1, 1890.
54
THE ETHIC OF USURY AND INTEREST.
"9 1
of some portion of the tribute which they levy."
In this general sense, socialism is a very elastic.
term. Individualism and socialism stand at the op-
posite poles. Between them there are as many shades
of meaning as there are tints of grey between black
and white. A society being composed of individuals,
there can never be either absolute individualism or
absolute socialism. The energy, enterprise, brain
power, muscular strength, imagination, self-interest of
the individual are necessary factors in social life.
When they are harmonised with the common good of
the society so as to afford the best guarantees for a
high standard of individual life thoughout it, we realise
the ideal of socialism.
In its confined technical sense the word denotes
one particular method by which these ends are to be
attained, i.e. by the collective ownership of land
and all industrial capital. Its adherents would sub-
stitute for the (partly) socialised individualism which
now exists a complete re-organisation of society. No
one would be allowed to possess either land or any
of the agents of production. The only property
allowed would be in consumable goods which moreover
must not be disposed of at more profit than would
repay the trouble of selling them. Goods of the
second and higher orders would be vested in the
community and not in individuals. In popular lan-
Capital and Land. Fabian Tract, No. vII, p. 16.
1
THE ORGANISATION OF PROPERTY.
55
guage every one might spend such income as he
possessed in any way he thought fit, but he would
not have the power of investing it so that it should
bring him in a future income.
requires some effort
For the diversified
startling contrasts,
The change is so vast that it
of the imagination to realise it.
industrial life of to-day with its
its grades and ranks, its masters and work-people,
its money making and prodigal luxury, its charities
and its poor, there would be under the solvent of this
Socialism, one class. All would be communal pos-
sessors. All would be in communal employment.
All land and capital would be directly owned by
the whole community, and all individuals would
labour in some capacity as servants of the State,
receiving according to their earnings their due share
of the common production. This has been shortly
stated as the collective ownership of land and
capital for purposes of production, with individual
ownership of the things produced for purposes of
consumption.
66
"1
We are familiar with one application of this
method, viz. in the Post Office. The scheme involves
the transformation of the multifarious industries of
to-day into a universal civil service. The proposal
is to vest in the community, or in some municipal
section of it, all lands, houses, factories, railways,
I
¹ Cf. Schäffle's Quintessence of Socialism, pp. 103 and 104.
56
THE ETHIC OF USURY AND INTEREST.
tramways, canals, mines, shipping, bakeries, gas works,
water works, all distributive employments, shops,
grocery stores, butcheries, and in short every industrial
business, such as is carried on for profit by the aid of
capital and other men's labours. Such enterprises would
be the property of the State, and worked either nation-
ally, communally, municipally, or parochially. The
services rendered and the commodities produced would
be divided among the workers, on some principle of
equity which perhaps has not yet been discovered or
agreed upon, so that each should have assigned to him
the precise share of food, clothing, and other utili-
ties produced, to which he was justly entitled.
This is technical Socialism carried to its logical
conclusion. Probably none of its English adherents
expect their ideal to be thus realised. But whatever
comes short of this is an amorphous State Socialism,
and would sin against its leading principle of ideal
justice. For to compel one person against his will to
become a civil servant on the ground that private capi-
talist industry was unjust, and notwithstanding to
permit his neighbour to enrich himself by private
capitalist industry, would be to attempt to combine
two self-contradictory principles of justice.
This Organic or State Socialism, must, confining
ourselves to its English exposition, be again subdi-
vided. It may be either catastrophic or opportunist.
The extreme school, in their bitter discontent with
THE ORGANISATION OF PROPERTY.
57
the miseries and injustice, which they see, and many
of them feel, would, by a violent upheaval, effect the
forcible transfer of productive property, from the indi-
vidual to the State. Land and capital would be
confiscated. Those who now live upon the receipt of
rent and interest would be bidden to go and earn
their living, and take their share, and no more, of
the product of labour. This, whether by forcible
eviction from property, or by the euphemism of a
tax of 20s. in the £ on unearned incomes, is the pro-
gramme of those who would socialise by catastrophe.
The most vehement individualist can hardly oppose
this more vigorously than Mr. Bernard Shaw,¹ him-
self a thorough-going State Socialist, who demonstrates
the starvation which it would bring to a host of workers
of all grades, by its ruinous disorganisation of industry.
And in truth Catastrophic Revolution is not the natural
outcome of constitutional government in which freedom
broadens down from precedent to precedent. Tradi-
tional rights put an effective drag on the wheels. Only
if they are unwisely used will the vast reserves of
democratic power be put forth in violent change.
But let no one hug the belief that changes can be
staved off which will be very painful to the privileged
classes, but very just towards the multitudes whose
lives are now made painful by the privileges of the few.
The other form of Organic Socialism is the Oppor-
1
¹ Basis of Socialism, pp. 189 and 190.
58
THE ETHIC OF USURY AND INTEREST.
tunist. There is to be no sudden, violent, complete,
transformation. We are not on Saturday night to
pay or receive wages as individualists, and then to
begin life anew as civil servants on Monday morning.
The final consummation of State Socialism is to come
through a transition which may be the movement of
several generations.
The exponent of this scheme is the Fabian Society
which "works for the transfer to the community of
the administration of such industrial capital as can
conveniently be managed socially," as well as for
"the extinction of private property in land."
This transfer is to be effected gradually, "without
compensation but not without such relief to expropri-
ated individuals as may seem good to the com-
munity.'
99 1
The transition is described more fully in one of
the Fabian Essays in an essay by the Editor.
The first step will be by the taxation of ground
rents to equip municipalities with a first instalment
of Land and Capital. Municipal employment will be
given to the unemployed first of all. The wages
being better, and the hours of labour shorter, all
underpaid labourers will swarm to the municipal
industries and demand work, which must be given.
There will thus be large and rapidly growing industries
organised municipally.
'Leaflet Basis of the Fabian Society.
THE ORGANISATION OF PROPERTY.
59
The process once set in motion, will go on from
The
year to year with accelerated momentum.
constantly rising wages must be met by the private
capitalist, which he can only do in one of two ways,
by the reduction of his profits or by capitulating to
the municipal capitalist.
66
The resources of municipalisation are, however, noć
yet exhausted. It will be well to quote the exact
words. 'But even rents when they are town rents,
are at the mercy of a municipality in the long run.
The masters of the streets and the traffic can nurse
one site and neglect another. The rent of a shop
depends on the number of persons passing its win-
dows per hour. A skilfully timed series of experi-
ments in paving a new bridge, a tramway service,
a barracks, or a small-pox hospital, are only a
few of the circumstances of which city rents are the
creatures. The power of the municipality to con-
trol these circumstances, is as obvious as the impotence
of competing private individuals."1
Thus there are two features in the scheme. The
profits of capital are to be extinguished by (i.) State
competition raising wages on economic lines; (ii.) muni-
cipal power by an arbitrary exercise hastening and
completing the operation. It would be "either
stale-mate or checkmate."
A similar policy would extinguish private property
¹ Basis of Socialism, p. 196.
60
THE ETHIC OF USURY AND INTEREST.
in land. By a special tax laid upon agricultural rent
land would be purchased and municipally farmed.
It is reckoned that great profits would be made in
high municipal farming. That is a point to be de-
cided by experience. Such profits, large or small-or
it might be, losses-would no longer be personal.
Any advantage, or any financial disaster would be
shared by the community.
These two schemes of Organic Socialism are, it
will be seen, identical in aim, they differ only in
the manner of reaching the goal. The aim is to
make public property of all forms of interest on
capital. Social Democracy would do this thoroughly
and at once by a social revolution. Fabian Oppor-
tunism would work by a gradual process, vesting in
the community from time to time such items of
profitable property "as might be conveniently social-
ised." Both are founded on the same theory that
to exact or receive any amount of interest on capi-
tal is immoral-a sin against the community, which
deserves punishment, and requires to be determined.
It should be added that State Socialism is theo-
retically not Communism. Communism is the nega-
tion of private property in any form. Its maxim
is," From every one according to his powers, to
every one according to his needs." This involves
inequality as to labour, equality in reaping its
fruits. The natural right of every one to the fruits
THE ORGANISATION OF PROPERTY.
61
fin
of his own industry is annulled, when another's needs
encroach upon it.
Organic Socialism on the other hand, founds itself
upon this right as indefeasible, proposing to abolish
private ownership of profit-bringing property, in order
to secure this right. In theory the two are absolutely
distinct. Organic Socialism concedes private property
in consumable wealth, but not in the instruments of
production. Communism denies rights of private
property in either. Later on we shall see that
though thus distinct in theory, there is a connecting
link between the two.
Christian Socialism occupies a position different
from either. It is not, as some suppose, merely
Organic or State Socialism plus Christianity. Chris-
tianity is a moral and religious system whose
matrix was a condition of distributive ownership.
Christian Socialism is therefore tolerant of this, though
somewhat jealously critical of its inherent faults.
But while State Socialism knows no other method
of regenerating society than that of a rigid economic
mechanism, Christian Socialism regarding society as
an organism largely controllable by moral forces,
is less rigidly bound down to collectivism as the
sole justifiable method of life. It will freely use it
in restraint and punishment of competitive covetous-
ness. But in addition, it will seek to permeate
society with moral and spiritual motives, powerful
62
THE ETHIC OF USURY AND INTEREST.
enough to counterwork those self-regarding motives,
which are the mainspring, and if unchecked will
prove the curse, of any purely economic system,
whether it be worked on individualist or collective
lines.
CHAPTER VI.
ORGANIC SOCIALISM A NEGATION OF PROPERTY IN LABOUR.
THE ground is now cleared for judgment on the
contention which underlies every proposal of State
Socialism,—that there can be no private right on
the part of individuals to receive in any form, interest
on capital. State or Organic Socialism is urged as
an economic mechanism to destroy an alleged eco-
nomic immorality, the exploitation of labour by the
capitalistic exaction of interest.
This is the foundation of the entire theory. The
language used upon the point is unfaltering. Interest
on capital is immoral, iniquitous, robbery, at best
a tribute exacted by a conqueror from a van-
guished foe. There can be no question of how much
or how little, there must be none at all. Ten per
cent. robs the labourer badly, but one per cent. robs
him.
So to the State socialist there can be no partner-
ship between labour and capital, at least only in
production, but none in the division of the profits.
64
THE ETHIC OF USURY AND INTEREST.
The capitalist may take what he has earned as wages
of superintendence, perhaps something as insurance
for risk, but nothing at all as interest, or as rent.
He who owns land or capital is represented as a
robber of the community when he receives either rent
or interest. No compensation can be allowed for
expropriation, but a compassionate allowance might
be granted. This is the doctrine, what are its founda-
tions?
Putting aside natural fertilities and forces, labour,
it is truly said, is the creator of all wealth, which
belongs therefore justly to those whose labour has
produced it. The argument is put thus in a popular
form. The total annual produce is valued at thirteen
hundred million pounds, of which the manual labour
class receives four hundred million pounds worth, the
"legal proprietors of the three natural monopolies
of land, capital, and ability" taking the rest. Thus
it is said, that of every pound's worth which the
labourer produces he in robbed "by legal monopolies"
of all but seven shillings.
The weak link in the chain of argument is obvious.
Labour of course is the producer of wealth, but it
is labour past as well as present. The point at
issue is whether the owner of the present labour is
to take the whole of the profits ousting the owner
of the fruits of past labour. Upon what thesis of
morality is the community the only immediate heir
NEGATION OF PROPERTY IN LABOUR.
65
of the fruits of stored-up labour, which had those
terms been made known beforehand would almost
certainly never have been stored up?
The aid which capital gives to increase the pro-
ductiveness of labour is enormous. A farm labourer
in Kent, can, at the cost of five hours' labour, have
delivered at his cottage door, a cwt. of coals, which
it would have cost him a twenty days' tramp to carry
from the nearest coal-pit, even if he found the coal
lying ready to his hand. Sixty years ago it was
computed that the labour of one man weaving cloth
by the aid of machinery was as productive as the
labour of two hundred men had been without it.
Since then capitalistic reproductiveness has enlarged
its scope, and increased in degree. The saving of
wealth from unproductive personal consumption has
added a new generative force to those of nature.
""
The canon that the labourer is worthy of his hire,
affirms an economic propriety in giving his share to
the indirect as well as to the immediate producer.
A man who should, by a timely alarm of fire, "
a warehouse of goods from destruction, would be
held to have earned his reward as a part-producer
of those commodities. The mariner who by his
"look-out" at the bows of the vessel in co-operation,
with the steersman,
6 saves " it from destruction,
contributes quite as real a service as the fireman
in the stoke hole, or the sailor bending the sails.
5
66
THE ETHIC OF USURY AND INTEREST.
The term "labour" is very comprehensive. Human
ingenuity, contrivance, enterprise, courage, risk, inven-
tion are acknowledged as efforts deserving reward
as truly as manual labour. There can be no true
reason for excluding these efforts of self-restraint
which by saving the fruits of labour from personal
luxurious consumption, have so vastly increased the
volume of the fruits of the future labourer.
It may be urged that it is selfish to require
payment for such services. But it is quite as selfish
for any person to require wages for labour of any
kind. And it is more selfish for those who have
not used these efforts of saving, to demand a full
share of all the benefits accruing from the labours
of those who have.
For in fact, this has been the work of individuals.
There are spendthrifts and there are frugal per-
sons, even though all enjoyed equal opportunities.
It is the latter who have pushed the car of the
State over the rugged ground of uncivilised life.
There has been a strain of individualism in all pro-
gress hitherto. State socialism condemns and would
punish individualism, and seek to carry on the
world without its aid. It has to show that the
former course is just, and the latter possible.
Without doubt, as is often scornfully urged, the
millionaire's effort in "saving" is trivially insignificant.
This, however, does not touch the point of the econo-
NEGATION OF PROPERTY IN LABOUR.
67
mic morality of rewarding services rendered to the
community by personal service. It proves two points,
however. One, the propriety of preventing such large
accumulations. The other, the reasonableness of a
sharply graduated Income tax on large incomes
from capital. The small investor has made a painful
effort to save. To the large capitalist the effort is
nil. Yet, under the iniquitous system in vogue, the
one who has laboured hardest in saving to provide
for sickness or old age, pays income tax at an
equal rate with the man whose efforts have been trifling,
and whose motive,-greed or ambition.
On the whole then, the fallacy in the theory of
Organic Socialism is its non-recognition of the part
which individual savings have taken in the genesis
of civilisation. Accordingly it constructs a theory
of justice which excludes individuals from reward
for their past services in that respect; and it would
construct a system oblivious of the needs of such
services in the future, and dependent for success on
the majority of citizens being themselves thrifty, and
able and willing to coerce the thriftless minority.
Here appears the connecting link between State
Socialism and Communism. In theory they are
absolutely distinct, the former affirming and the latter
denying, the property of man in the fruits of his
own labour. “To every man according to his work"
68
THE ETHIC OF USURY AND INTEREST.
in the maxim of the one. "From every man accord-
ing to his powers, to every man according to his
needs," is postulated by the other. In continental
socialism the two are often mixed up. So that the
Pope¹ may be excused for his confusion between
them. Thus, when the German anti-socialists laws
were repealed on October 1, 1890, the occasion was
celebrated by the re-publication of the Gotha Pro-
gramme of 1875. The first paragraph of this mani-
festo of German Socialism closes thus-" all having
equal rights in proportion to their reasonable require-
ments."2
Thus German State Socialism, avowedly,
as other forms of it implicitly, casts itself upon a
stream which ultimately flows into the ocean of
Communism. And for this reason, that it infringes,
in one particular, its own law of property in the
fruits of labour, denying such rights to those who
labour by "saving.'
saving." It is, of course, fatal to a law,
to abstract its principles by making its application,
in so much as one case, arbitrary. It is henceforth
not a law at all, but the expression of will. Its
foundations being undermined, the fabric of property in
labour falls to the ground, with the final result that
things are shared, proportionably to "requirements,
and not to the just claims of labour. It is therefore
material to the stability of property in labour, that
1
2
Encyclical on the Condition of Labour, par. 5.
See. "Times," Oct. 2, 1890.
NEGATION OF PROPERTY IN LABOUR.
69
the economic relations between all efforts and their
due reward should be maintained.
What the extent of that remuneration should be,
whether it is not now excessive, and artificially en-
hanced, and how these artificial increments of the rate
of interest, and accumulations of its sources may be
prevented, are questions which must be deferred.
All that is here affirmed is, that in the interest
of labourer and capitalist alike, and on the basis
that the labourer is worthy of his hire, those who
have aided production by preserving from luxurious.
consumption some part of that which in fact they
possessed, should be remunerated for their trouble.
They might have hoarded their means of enjoyment,
in which case the community would have lost more
than themselves. It is morally just, as it is certainly
expedient, to pay individuals for not doing, as a
money economy permits them to do, the disservice to
the community of hoarding their money, and diminish-
ing its resources. There is a lawful interest which
capital earns. There is an economic propriety in
some interest upon capital.
In short, interest on the capital which a person
has saved, is founded on his property in his own.
previous labour in effecting that saving. Usury is
the property which he claims, and by force of cir-
cumstances is able to exact, in the underpaid labour
of others. There appears to be a capital behind it.
70
THE ETHIC OF USURY AND INTEREST.
But such as there is has already been remunerated
by the payment of interest upon it. The dividend
that exceeds this, though nominally rated upon
capital is really derived from the power which is
possessed of obtaining the services of others at less.
than their true value.
It is clear that the original sources of these two
payments being thus different, any successful attempt
to deal with the problem must keep the distinction
clearly in sight. The collective ownership which is
proposed in State Socialism deliberately ignores the
distinction, and would abolish the individual's just
property in his own labour of saving, in order to
destroy his iniquitous property in the unpaid labour
of other men; that is to say it saws off the branch
of the tree on which it is sitting.
The value of collective ownership evidently depends
on the principle which underlies it. It may be set
up on the basis (i.) of the lawfulness of interest, or
(ii.) of the immorality of it.
Of the former kind of collective ownership we
already have large experience. The Local indebted-
ness two years ago amounted to one hundred and
ninety-five million pounds.' This had been borrowed
for harbours, docks, piers, Board Schools, gas
works, water works, markets, etc. A further sum
of sixty-six million pounds thus borrowed had already
Barker's Facts and Figures for 1892, p. 171.
NEGATION OF PROPERTY IN LABOUR.
71
been paid off. Thus gas works, water works,
harbours, etc., to the original value of two hundred
and sixty millions are collectively owned, to this extent
that they are mortgaged to individual capitalists
for the sum of one hundred and ninety-five million
pounds, part of which is every year paid off by a
sinking fund. This is often pointed to as an appli-
cation of the collectivism of State Socialism. But it is
not really so. It is rather collectivism based upon
the lawfulness of interest on capital.
¹
In this character its results are generally admirable.
Take for example the supply of gas. Of the sixty
millions of capital applied to this industry two thirds
are in private, one third in municipal, ownership; the
former supplying sixty thousand million cubic feet,
the latter supplying thirty thousand million cubic
feet. The gas supplied by private companies, costs
the consumers 3s. 74d. per thousand cubic feet, that
supplied by corporations 3s. 34d. per thousand cubic feet,
including in both cases the receipts for bye-products
such as coke and tar. Moreover, the number of con-
sumers in the two cases is almost identical. The private
companies supplying an average of fifty-three thousand
cubic feet per annum, to 1,128,836 consumers: while
the corporation works supplied an average of twenty-
eight thousand cubic feet yearly to 1,115,267 con-
It hence appears that for some reason, partly
1 Financial Reform Almanack for 1892, p. 67.
sumers.
72
THE ETHIC OF USURY AND INTEREST.
its comparative cheapness, municipal gas is much
more popular with smaller comsumers. In a business
of only one half the extent of the private companies,
it serves almost the same number of consumers.
Evidently its method of business is less high-handed,
and more popular.
But the difference in the remuneration of capital
in the two systems is more marked. The Capitalists
who advanced the forty millions (nearly) for the private
gas works, divided amongst themselves £3,143,641.
Those who supplied the twenty-one millions for
the municipal works, received only £971,755.' Had
the latter been remunerated on the same scale as
the former more than £1,600,000 would have
been required. There was thus a gain on this head
of £630,000. The gain is indeed really much more,
since of the £971,755 a considerable part is applied
to the sinking funds. Neglecting this we may, how-
ever, put the case broadly thus, that three pounds
under the municipal system, will go at least as far
as five pounds under the private system.
It is obvious that this system might be most
usefully extended. The profits of all partial mono-
polies, contain an element that has not really been
earned. Such industries are therefore fit subjects for
stringent legislation. In two partial monopolies a
large part of the profit is the creature of legal and
¹ Barker's Facts and Figures for 1892, pp. 123 and 124.
NEGATION OF PROPERTY IN LABOUR.
73
social requirements:-as in the supply of gas an
element of the profit is derived from the necessity of
light in the interests of order and safety; and in
the supply of water, is due to sanitary regulations,
and the growing rateable value of property.
A collective competition is in such cases particularly
healthy, both as a means of cutting down excessive
profits, and of cutting off the sources of extravagant
compensation for expropriation. Indeed the principle
may be applied wherever capital is sinning against
the State by an impenitent extortion upon labour.
But a collective competition against all forms of
capitalistic enterprise, armed with the rate-payer's
money, and by fair means or foul, by "Small-pox hos-
pitals" adjoining a citizen's place of business, or by
incessantly tearing up the pavement in front of his
shop, bent upon ruining the industry in which he
has embarked his capital:-this is pregnant with
other consequences. The particular expedients would
probably be disavowed, but the central idea remains,
that of ruthless hostility to all profit-bringing capital.
The sweater, the dividend hunter, the public enemy
who fattens on the profits of ill-paid labour is put
on the same footing as the public servant who, by
setting aside part of his income for productive consump-
tion, is helping to increase the out-put of labour in
the next generation. All are treated as guilty of the
same crime and are punished alike.
74
THE ETHIC OF USURY AND INTEREST.
Civilisation, as we have seen, is promoted by fos-
tering in every individual the thrift which is exer-
cised in forethought and self-control. The vice of
the present system is, that this is rendered impossible
in the multitude, and while it is reasonably practised
by some persons of moderate means, is covetously
worked by others. In order to remedy the latter
abuse of thrift, it is proposed to punish it in the
second class of persons, and to take away in the
former all personal motives to its exercise.
Assuming for the sake of argument, that the tran-
sition period of opportunism, has been passed, and
State Socialism is in full swing, what is the position.
and the outlook?
The maintenance of the status in quo would be
consequent on the municipal self-control in setting
apart for productive consumption a sufficient portion
of the National Dividend to provide for future pro-
duction. But the thrift of the State or of munici-
palities cannot be larger than the aggregrate of
the thrift of its constituent items. Of these indivi-
duals, many will have been penalised for their
previous private thrift, more will have been accus-
tomed to find enough capital provided without action
on their part, and will indeed have come into the
possession of this on very easy terms. The two
classes will thus have before their eyes two object
lessons, the one of the folly, the other of the apparent
NEGATION OF PROPERTY IN LABOUR.
75
needlessness, of laying up capital. Add to this that
it is much more difficult, human nature being what
it is, for a person to submit to diminished wages
for the benefit of the whole society, than for his own
palpable advantage. We have thus strong reasons for
fearing lest the popular vote under municipal social-
ism should be in favour of sharing out too much.
The capital which is now provided-often for very
selfish reasons-by individual thrift, would then require
to be raised by a diminution of wages-for all, ex
hypothesi, would be wage-earners-in other words
by an apparent tax upon industry. The future of
the race would depend upon whether this tax was
submitted to, or rather proposed by, the majority.
It is not enough to say that they must, or to take it
for granted that they would do this. The real question,
before embarking on so vast a change, is as to whether
it would bring into play forces which could be relied
upon as a substitute for expropriated Individualism.
CHAPTER VII.
THE GERM OF USURY IN USELESSNESS.
USURY being Property in underpaid labour it will
arise through any cause which hinders the labourer
from exacting the due reward of his work. The
crux of the problem lies here. Whenever such
causes operate, high interest means something worse
than bad security, it involves bad Christianity.
To discover its origin an extreme case may be
taken. Let it be supposed that some person enjoys
the privilege of employing slaves in some industry
where the other labourers are really free to obtain
the full reward of their labour. These slaves, we
will say, produce by one day's work, what can be
sold for five shillings, two shillings of this paying
the interest on the capital invested, the cost of the
material used, and the undertaker for his trouble.
Then the free labourers will have earned, and ex
hypothesi, will have received three shillings for their
day's wage, while the slaves will have received their
maintenance, worth we will say, one shilling. That
THE GERM OF USURY IN USELESSNESS.
77
is to say, while the cost of production is the same
in each case, the expenses for labour of the slave-
owner producer will be one shilling, and the corre-
sponding expenses of the free-labour producer will be
three shillings. The slave-owner will therefore,
beyond his own remuneration, and the interest on
his capital, make an extra profit of two shillings
per diem per slave. This will be a rent, or quasi-
rent, being derived from the use of the free gift of
Nature-men who from their circumstances can be
enslaved.
The owner of this profit has been able to annex
it, through the non-freedom of his slaves. Had they
been free, they would have demanded and secured
the three shillings wage which the freemen get. But
they are not free. Consequently while the cost (in
labour) of production is one day's work, the expenses
(for labour) to the slave-owner, is one third of a
day's wage. He enriches himself by pocketing the
balance.
The above is an extreme case, but it illustrates
the course which affairs take in the ordinary routine.
of business. It shows that if, in any way,
the
expenses of production can be kept below the cost
of production there will accrue to the capitalist a
gain which he has not earned. Over and above
his own remuneration and the interest on the capital
which he possesses or borrows, there is a profit which
DorM
78
THE ETHIC OF USURY AND INTEREST.
he takes when he is able to secure labour by paying
a price less than it is really worth. This is some-
times expressed by saying that labour has in such
cases been exploited. When the pay of the work
is shockingly small or the conditions of their toil
frightfully hard, they are said to be "sweated," but
the difference is only of degree. And the gains so
acquired come under the ban of usury, for they arise
out of trading on the necessities of the poor.
That this exploitation of labour is the rule rather
than the exception is implied by Professor Marshall,
when he says, "We shall gradually discover a great
many limitations of the doctrine that the price at
which a thing can be produced represents its real
cost of production, that is the efforts and sacri-
fices which have been directly and indirectly devoted
to its production. That doctrine would indeed re-
present facts accurately enough in a stationary
society in which people's habits of life, and the meth-
ods and volume of production remained unchanged
from one generation to another; provided that people
were tolerably free to choose those occupations
for their capital and labour which seemed most
advantageous." 1
The point had been observed and vigorously
denounced in ancient times. The Prophet Malachi
believed that the coming Christ would be a "swift
Principles of Economics, p. 408.
Maou
THE GERM OF USURY IN USELESSNESS.
79
"9
witness" against "those that oppress the hireling
in his wages. (Mal. iii. 5.) The apostle James
writes thus, "go to now, ye rich, weep and howl
for your miseries that are coming upon you. . .
Behold the hire of the labourers, who have mowed
your fields, which is of you kept back by fraud crieth
out; and the cries of them that reaped have entered
into the ears of the Lord of sabaoth." (St. James
v. 1—4.)
The illustration given shows also one cause of the
exploitation of the labourer-his non-freedom. When-
ever he is not tolerably free to choose those occu-
pations for his labour that seemed most advantageous,
what he loses, another gains. The extent to which
he is exploited will be measured by the degree of
his non-freedom. If the unholy gains of usury
are to be cut off, the causes of the labourers' depression
must be first discovered, and then remedied.
The economic problem of the day is, to equate
the cost of production to its expenses. And this
not in a few industries only, for it is easy to see
that such causes as operate to disturb the equili-
brium between these two affect almost the entire
industrial efforts of the nation.
With the exception of a few articles such as
diamonds, the cost of the original raw material is
very trifling compared with the expense of the labour
of transforming it into a utility. The expense incurred
80
THE ETHIC OF USURY AND INTEREST.
in purchasing the ores and the coal while yet in the
bowels of the earth, the clay, the trees in the
Norwegian or Canadian forests, and of any natural
product apart from the labour expended in its culti-
vation, is small compared to the expense of labour in
manufacture, in transport, in distribution; and often,
indirectly, in the construction of the machinery,
railroads, ships, and the like, of which some use
is made.
Thus the raw material of valuable lace, may cost
only a few pence; or a few pounds may pay for the
various ores, and the royalties of the coals used upon
the construction of machinery worth thousands of
pounds. In this way the group of capitalists engaged,
one after another, upon the production of finished goods,
spend much on labour, and little on raw material.
The profits of capital are derived then from the
business of buying two commodities-raw material
and human labour-and in selling these again in the
shape of some combination of the two. Its expen-
diture on raw material is a small item, that on
labour enormous. Moreover the raw material has to
be bought as a rule from monopolists, owners of
the soil, mines, etc.-with whom advantageous terms
cannot be made. Consequently the source of gain
to competing capitalists must be found in their ability
to keep down the price of their main purchase---
labour.
THE GERM OF USURY IN USELESSNESS.
81
There is therefore evident a paramount motive-
not always for greed, but for commercial existence-
running through the cycle of production from the raw
material of the earth to the finished article, to depress
the condition of those who have labour to sell.
For in buying, the advantage lies in buyer or seller
not meeting on equal terms. The party which can
afford to hold back from buying must get the better
of the party which cannot hold back from selling.
In proportion, therefore, as the labourer is without
other means of living, must he sell his labour at a
lower price than he would do, had he a share in
the National Property.
Unless it can be shown that he had no moral claim
to this share, the price which is necessary to procure
his labour, is less than its real cost, and the person
who puts this difference into his pocket has been
able to rob him, in the same way, though not to
the same extent, as the slave is robbed.
The very fact that there exist side by side such
abnormal accumulations of capital, and such abnor-
mal masses of poverty, is itself evidence of the
extent to which this process has been going on.
Their existence is also a guarantee that it will
go on at an accelerated rate. Buyers go into the
labour market with increased property, many sellers
go there with increasing poverty. Thus wealth and
poverty tend to increase in Geometrical Progression.
6
82
THE ETHIC OF USURY AND INTEREST.
What is thus taken from poverty and added
to wealth, strengthens the command of the latter,
as it weakens the command of the former, over the
labour market.
If this is irremediable there is an end of the
question. But we have to enquire whether there are
any artificial, and so removable, causes of the
depression of labour.
As things are, increase of the population is a very
palpable cause. When more men are seeking employ-
ment than can be offered them, wages are lowered.
A trifling redundancy of labourers may lower the
scale of pay over a large area. A thousand men
out of work, only obtain it by underselling a
thousand other men. These in their turn undersell
a thousand others, and so on till the whole body in
that trade have suffered a fall of wage.
Improvements of machinery, directly or indirectly
save labour somewhere, and so throw persons, for
the time at least, out of employment, influencing the
labour market, in much the same way as a sudden
increase of population.
Here then "what should have been for men's wealth
becomes to them an occasion of falling." Until,
which is very far off, the limits of food are reached,
a normal increase of man made in the image of God,
and every improvement in the fertility of natural
forces, should be unmixed blessings to all mankind.
THE GERM OF USURY IN USELESSNESS.
83
Yet, so out of harmony with the Creator's will, has
society become, that both these should-be blessings
become curses to many. They pauperise multitudes,
and render their life more precarious, unhappy, and
desolate, and, in some cases, brutish. Plainly some
immorality is at work. A short examination of the
case will detect it.
Let it be first supposed that there is a colony of
ten thousand families, living under a system in
which all perform useful work, the products of which
are equitably divided to every one according to the
quantity, the quality, the difficulty, the disagreeable-
ness, and the value of the work done.
on
(1) Suppose now five hundred adults to be added
to this colony. They will in the course of the ensuing
year require 500 × 300 days' products of labour, but
the other hand they will add to the common
stock precisely the same amount. All that will be
necessary will be the adjustment of their exertions so
that the requisite additional food, clothing, house-
room, etc., be provided. This being done, this immi-
gration of strangers will have caused no economic
inconvenience.
(2) Next let it be supposed that by some remark-
able inventions or improvements in machinery or
otherwise, the rate of production is so increased that
after allowing for any consequent increase of con-
sumption the labours of five hundred families are found
84
THE ETHIC OF USURY AND INTEREST.
to be unnecessary. That is to say, in the various
industries nine thousand five hundred families can now
produce as much as the ten thousand families have
hitherto consumed, and a little more.
How is employment to be found for these five
hundred families, that, in exchange for the goods.
which they want, they may produce goods which
others will want?
This may be done in one of two ways. First,
the day's labour of each colonist may be reduced on
the average by about one-twentieth part, so that
the total out-put may be the same as before.
Or secondly, they may continue applying the same
amount of labour, with the result of a largely in-
creased out-put, when with some necessary adjust-
ments of labour, each colonist would still find work
to do, and all would receive larger supplies of the
fruits of their work.
In the first case, the whole colony will enjoy the
advantage of shorter hours of labour. In the second
case, the benefit reaped will be that of more abun-
dant, and, relatively to the labour applied, cheaper
goods. In either case labour-saving machinery has
been to the gain of all, and the injury of none.
Next, let it be supposed that this colony, is under
a different system-in which there are several classes,
A, B, C, and D, so arranged that the A class does all
the work, and receives about half the produce, while
THE GERM OF USURY IN USELESSNESS.
85
those in the B, C, and D classes, do none of the work
but receive the other half of the produce. While
each person in the A class receives the unit share,
each in the B class, let us say, takes four such
shares, in the C class eight, and in the D class
twelve such shares. The number moreover in the
various classes are to be such, that those in the
A class by working full time can only just obtain
for their own consumption what is necessary accord-
ing to their ideas of living, and no more.
Now, as before, we suppose that by the development
of labour-saving machinery, five hundred of the A class
find that their services can be dispensed with, and
yet there shall be the same store of common wealth
as formerly. We have now to see whether work
can be found for them as under the other system.
(1) As for the first remedy, in which the others
produced less so as to make room for them, the case
is now by no means the same.
The B, C, and D classes cannot produce less, for
they are producing nothing. And the A class can-
not afford to produce less, for they are only now
obtaining enough and no more.
It is true that the B, C, and D classes might be
content with something less than their large shares,
handing over the balance to the A class who could
then afford to produce less and so make room for the
unemployed five hundred. But the B, C, and D classes
86
THE ETHIC OF USURY AND INTEREST.
value so highly their long standing privileges that
they will not hear of any curtailment.
can
(2) The other remedy was for all to consume more.
But ex hypothesi the only way in which a person
consume more, is by first producing something
extra to exchange for it. Here again the B, C, and
D classes do not help, for they are non-producers.
Also the A class cannot help, for they are already
doing their utmost.
The only possible employment for the five hundred
unemployed is that of personal service to the B, C, and
D classes, some of whom may, instead of personally
consuming their entire shares, spend part of it in
maintaining unproductive servants. Some will now
be unemployed, and of the rest their position will
be precarious since their masters may at any time
prefer to take out their shares directly, rather than
at second hand by keeping servants whom they
do not need. Thus improved production has created
a class of unemployed, and a class of personal ser-
vants. The latter not being producers of necessaries
do not stand on the same solid ground as those
who are. They are in fact called "dependants" and are
such, because their position depends upon whether those
who employ them value their services sufficiently to
forego other enjoyments for the sake of retaining them.
The two classes once established, the next improve-
ment in production will find the A class weaker
THE GERM OF USURY IN USELESSNESS.
87
by so many unemployed or precariously employed
persons. Thus the depression of labour will work
with constantly increased momentum.
There is no need to discuss the almost parallel
case of the depression of labour by increase of
population. But we arrive at the conclusion that
where there are endowed non-working classes, increase
of population, or improved production depress the
workers, and tend to aggravate the original in-
equalities.
The case here supposed is, of course, in its salient
features, that which at present exists amongst ourselves.
The one cause of mischief as yet apparent is idleness.
The laws of Heaven that all shall work, have been
broken, and so destitution has been multiplied in
the world. Idleness through excess of wealth has
begotten poverty through lack of work.
CHAPTER VIII.
THE CONFLAGRATION OF THE PROPERTY OF LABOUR.
THE effect of a non-working class who are at the
same time large consumers, has been noted as intro-
ducing precariousness and servitude into employment,
and so creating a usury fund out of artificially de-
pressed wages.
Concrete results of this may be further illustrated.
Let it be supposed that one hundred thousand persons
whose average expectation of life was twenty years.
were suddenly and prematurely destroyed, as by an
earthquake or a pestilence; but that nevertheless,
for the ensuing twenty years, the whole mass of
the food, clothing, etc., which had they lived, they
would have consumed, was periodically brought
together and destroyed in a huge bon-fire.
Such a portentously wasteful holocaust would excite
horror throughout the civilised world. Every tongue
would be busy in deriding it. The wise would predict
enough to be guilty of
for the community foolish
such wickedness the calamities which it would deserve.
THE CONFLAGRATION OF THE PROPERTY OF LABOUR.
89
But to our social system must be said:-De te
fabula narratur. Precisely this is being continually
done, only on a vaster scale. Excepting the young
who are being brought up to a life of usefulness, the old
who are being supported after a life of usefulness
on the principles of deferred pay for work already
done, and the afflicted who should be maintained in
the interests of our common humanity, every useless
person is simply a destroyer of what other men have
laboured for. Such a person is economically defunct.
Whether he lives and consumes, or dies twenty years
before his time and the fire consumes for him, makes
and can make no economic difference to the commu-
nity. His existence only impoverishes his neighbours,
and contradicts the first Christian principle of loving
one's neighbour as one's self. The harm which he
thus does depends on the emoluments of his idleness.
If his means are larger so much the worse are his
depredations on society.
Elsewhere I have pointed out that on moral grounds
"a useless life is an incessant unspoken blasphemy
against God." 1
Here we
are concerned with its
economic effects. Well-paid idleness is as destructive
as a conflagration continually devouring the fruits of
the earth and of labour.
But in fact its annihilation of wealth is on a much
larger scale.
1
The Socialism of Christianity, p. 86.
90
THE ETHIC OF USURY AND INTEREST.
Let it be further supposed that two hundred thou-
sand adults are constantly engaged in carrying
handsful of gravel to the top of Snowdon, and down
again, being meanwhile comfortably housed and fed
and clothed at its base, that they may pursue this
occupation of lost footsteps. Again the outcry rises
to heaven against this scandalous waste of labour
and of wealth, which must eat out the vitals of the
nation which indulges in such pastimes.
Again we ask what are the servants of the idle
doing more than this? What they do may be pleas-
ing to their masters and mistresses, it helps the
community not at all. They pamper the pride or
minister to the comforts of the slothful, but they
are no more useful to the State than if they were
perpetually engaged wandering up and down a moun-
tain. The idle blot out of the national wealth, not
only that which they consume but that which is con-
sumed by their servants and the ministers to their
pleasures. Their destructive power is multiplied by
the number of their servants. The men and the
women who doing nothing serviceable themselves,
keep other men and women to cook for them, to
decant wine for them, to dress their hair and their
bodies, to wait upon them, to ride behind them on
horses, to lead lap-dogs for them, to carry their
prayerbooks for them to church,-not content with
destroying food and clothing themselves are keeping
THE CONFLAGRATION OF THE PROPERTY OF LABOUR. 91
others to do it also. If the whole number were
deported to Saturn, with a weekly bonfire of what
directly and indirectly they would have eaten,
drunk and worn out-the State would stand just where
it now is. There would be gaps in the ranks of its inha-
bitants, but there would be no dislocation of industry.
One or two observations are necessary. Nothing
is here said of the personal servants of those who
themselves are servants of the community. Such set
free for useful occupation those whom they serve,
and are really partners of that work. The household
of the Prime-minister give him leisure to go about
the affairs of State. The same is true of every useful
calling, whether that of the manufacturer, ship-
owner, author, poet, priest or preacher, school-master,
actor, business manager, down to the humbler home
where the little nursemaid minds the children while
the wife cooks her husband's dinner. None such are
unproductive or
or could be well spared. And the
definition of useful occupation should be a wide one,
extending far beyond that of industrial, commercial,
or professional work. It should comprise every effort
to benefit the community. The mother's leisure to
train her children or to take a wholesome, elevating
place in society, or to be engaged benevolently, is
profitably afforded by the aid of servants. Manual
labour is not misapplied when setting free more
highly-cultured natures to do greater services. And
92
THE ETHIC OF USURY AND INTEREST.
since human nature is impressed by such things, the
retinue of servants which to the vulgar gaze gives
dignity to the holders of high office, is not altogether
a public waste. It would be better otherwise, but,
things being as they are, such influences may be
recognised as part of the service which wealth is
able and therefore may by expected to render.
Also nothing is here urged against pleasure. The
economic waste is in the enjoyments of the useless.
These destroy so much without any return, that not
enough is left for the maintenance, let alone the
comfort of others.
Further the argument applies to the general expen-
diture of the useless. If such an one spends a thousand
pounds a year on carriages and horses, it is plain that
all that is consumed by the grooms, and the horses,
the wear and tear of the carriages, harness, stables,
etc., is so much destroyed of the wealth of the com-
munity. But if the same sum be spent on railway
travelling, also by a useless member of society,
though the loss is not so palpable nor so easily
separated from profitable expenditure on the same
objects, yet the proportional share of the personal
consumption of the railway servants, and of the
wear and tear of the railway plant, is so much of
national wealth destroyed without any return.
Thus all which useless persons consume them-
selves, and all which is consumed by those who
THE CONFLAGRATION OF THE PROPERTY OF LABOUR. 93
minister in any way to their wants, and pleasures,
is a total loss. If they themselves had been non-
existent, and all this had been devoured by the
flames, the nation at large would have suffered no
further injury than it endures by reason of their life.
This is readily seen in the case of the idle poor.
They are rebuked as cumberers of the ground, who
doing little or nothing themselves, quarter them-
selves upon those who work, or upon those who
have. Those who live by begging are plainly
leeches sucking the blood of the industrious.
But by a strange perverseness of the imagination,
the idle rich who are generally the loudest to cen-
sure the idle poor, plume themselves on being bene-
factors to the human race. Do not they circulate
money, giving employment to armies of working
people? It is a poor ambition at the best to be the
sewer pipes whereby the fertilising streams of
"filthy lucre
lucre" may be spread abroad. But it is
unfounded. Whether a person live by begging money,
or by taking unearned money in virtue of some
legal right, can make no difference to the economic
results of its expenditure. The only possible differ-
ence between the idle poor and the idle rich, is that
the latter destroy immeasurably more of the national
wealth, and are a heavier burden upon industry. The
one kindles a cottage fire, the other a conflagration.
CHAPTER IX.
THE LOCUSTS OF LUXURY.
IN the two previous chapters we have noted the
depression of industry owing to the destruction of
a large portion of what are its fruits, and should
have been its rewards, by the idle and the useless.
The same consequence follows another cause-the
luxurious expenditure of means that have been
earned. Consumption on pleasures or luxuries whe-
ther by the idle or the industrious, since production
is neither its object, nor is advanced by it, must be
reckoned as unproductive."'
"
When the Jews under Nehemiah's leadership rebuilt
the walls of Jerusalem, "half of my servants wrought
in the work, and half of them held the spears, the
shields, and the bows and the coats of mail," narrates
their leader. (Nehemiah iv. 16.) The labours of the
soldiers and policemen who protect society, of the
religious persons who instruct it, and of the various
classes, singers, actors, and the like who recreate it
1
¹ J. S. Mill. Principles of Political Economy. p. 32.
THE LOCUSTS OF LUXURY.
95
by amusement, are auxiliary to production. Everything
which is consumed, in increasing the efficiency of the
working community, whether by greater comfort and
better nourishment, or by reasonable enjoyments, or
through the bonds of Society, moral, social, and religious,
contributes indirectly even to its material wealth.
Luxury passes beyond these limits. Any expen-
diture by the useless is a loss to the community. So
also is the luxurious expenditure of incomes which
have been earned.
The waste of national resources takes place in two
ways-by multiplying needless servants, or by extrava-
gance in consumable goods.
The whole tribe of servants of luxury, are like
the locusts who devour the food which useful cattle
would have eaten. The footman earns his dinner by
riding on the box of his mistress's brougham, or by
lolling in the hall ready to answer the door bell. The
day ended, both services and dinner have vanished.
The match-girl eats her dinner, having earned it by
making so many gross of match boxes. The dinner
is gone, but the boxes remain to swell the volume of
commerce.
At the best the service of luxury is naught. So
many people have had their vanity gratified. It is
often a minus quantity from the moral standpoint.
An unwholesome pride, contempt of humanity, stand-
offishness, is its evil legacy.
96
THE ETHIC OF USURY AND INTEREST.
Then there is the luxury which consumes inordi-
nately. Costly wines, dainty foods, rich and varied
clothing, train-loads of furniture and upholstery,
mansions, carriages of half-a-dozen kind, stables full
of horses, shooting boxes, deer forests, yachts-
these are some of the items in the menu of life.
Our criticism of luxury is not ascetic. The scan-
dal of luxury is its false asceticism. It demands as
a rule of life, privations, self-denial, Lenten fare all
the year round-from others! A properly distributed
luxury is good in itself. The earth was made for
man, not man for the earth. And it was made to
be enjoyed.
But what sort of enjoyment is this? These plea-
sures are purchased at the price of others' pains. It
is as though in a besieged city, some were dining
off sewer rats, and others gorging themselves upon
sirloins of beef.
There can be no moral right to luxury while
multitudes of the industrious are unable to feed
themselves properly, clothe themselves warmly, or
save their children from the evil education of life
in a single room. For whilst this lasts there is no
economic right to luxury.
What has been wasted upon it, is so much de-
ducted from the industrial capital of the nation. In
the place of so many yachts, carriages, mansions,
there might have been more looms, carts, cottages,
THE LOCUSTS OF LUXURY.
97
colliers, adding to the wealth of the nation and to
the worker's means of obtaining his share of it.
Luxury also works in antagonism to the interests
of the labourer, by its capriciousness.
Moderate incomes are spent with monotonous
regularity. So much is set apart for rent, clothing,
bread and meat, grocery, fuel and light, etc., with
all the dull absence of fancy of an automatic
machine.
The manufacturers and the tradesmen supplying
such wants can calculate with accuracy upon the
character and extent of the demands of this sort
which they will have to supply. These things are
necessaries. Not until they are supplied will fancy
indulge itself. There is little uncertainty and risk
in such trades. Consequently the so-called co-opera-
tive stores had an easy task in destroying the in-
flated profits which apathy had made possible.
But so soon as incomes rise much above this level
of providing for necessaries and for a low standard
of comforts, there enters uncertainty and risk, which
must be met by a higher scale of profits. Fancy,
and not necessity, now determines the purchase.
Fashion runs now in this, now in that direction.
Hence inflations of particular industries to be followed
by stagnation. One of the motives for the acqui-
sition of great wealth is to possess the means of
gratifying any whim. The demand that is dictated
7
98
THE ETHIC OF USURY AND INTEREST.
by fashion, being fictitious, cannot be exactly gauged
by those who have to supply it, who therefore have
to protect themselves from loss by high profits. For
the cravings of fashion are exhausted by being
supplied. As soon as the mode has become common
it becomes unfashionable. The extra demand lasts
long enough to have set to work people competent.
to supply it, and then the butterfly of fancy alights
somewhere else.
This power of fashion is proved, if proof were needed,
by the fact that some years ago when there was
great distress among the ribbon makers at Coventry,
some benevolent ladies relieved it by reviving some
fashion for ribbon. More recently the general mourn-
ing for the Duke of Clarence, caused wide-spread
dislocation and slackness of trade, with much indi-
vidual suffering.
On the whole its influence is to depress labour.
For the first effect of any sudden demand is to
give its chief profits to capital. The demand price
is for a time much higher than the supply price.
That is to say, purchasers will have to pay a
greatly enhanced price for the article, while the
capitalist will only need to pay a slightly enhanced
price for labour, so that the latter gains the chief
benefit of the rise of prices. Presently more capital
is invested in the production, with increased compe-
tition for labourers to employ it, so that they now
THE LOCUSTS OF LUXURY.
99
are able to secure their share, or part of it, of the
extra advantage. But by this time the short capri-
cious demand has died out, and a considerable num-
ber of workers are thrown out of that employment,
to depress the labour market until some new open-
ing be found. This may take time. And, meanwhile
a small body of unemployed persons, compelled to
undersell others in order that they may live, depress
wages over a wide area.
Thus abnormal accumulations of wealth act in
two ways. The consequent luxurious expenditure,
in so far as it is capricious, and lasting only for
short periods of time in particular industries, enables
the capitalist to skim the cream of the profits, thust
adding to those accumulations which are the cause
of the mischief. Further, the frequent changes of
industry, involving the transference of workers from
one department to another, involves the creation of
floating classes of unemployed persons who can only
live at the expense of the lowered wages of their
own order.
Thus in both ways a condition of constant changes
"in the volume of production" tends to keep the
expenses of production from becoming a true measure
of its cost. That is to say capital benefits by the
losses of labour.
Something of the same sort follows upon that
luxurious expenditure which is not capricious.
BorM
100
THE ETHIC OF USURY AND INTEREST.
The price paid for an article in a fashionable West-
end shop, is generally much beyond its value and
its price in some less favoured locality. The wealthy
would often disdain to buy it, were this not the
case. But does the manual-labour producer of the
article, receive any or much of this extra price?
Some slight evidence was offered to the House
of Lords' Sweating Committee upon this point. Thus
"The Rev. Mr. Adamson (vicar of Old Ford) says
that some of the best silk mantles sold in West-
end shops are made in his parish at 74d. each, this
being the price paid for making the whole mantle
right throughout, and they have to find their own
cotton and silk and oil for the machine." 1 This is
only an isolated case, and there may be some
mistake as to the true character of the work.
Then "a shirt was produced by this witness (Mr.
Arnold White) such as is worn in the West-end.
It was what is called a 'bespoke' shirt made to
measure.... and it is all made complete for 1s.
each. The sweater gets 2s. for it, so that he makes
a clear profit of 1s. each, and the shirt itself is
sold in the shops for about 7s. 6d."2
These statements, so far as they go, lead to the con-
clusion that the worker does not obtain more for his
work on high-priced goods, than is due to superior work.
1
¹ See Report v. par. 48.
2 See Lord Dunraven's Draft Report, par. 55.
Muoll
THE LOCUSTS OF LUXURY.
101
More substantial evidence may be found elsewhere.
Miss Beatrice Potter states that in the West-end
coat trade, where workmanship and fit are desiderata,
the tendency is for the work to leave the high-class
English journeyman who does all the work upon the
same coat for about 18s., and to pass to the Jewish
factory system where the coat passes through several
hands, the work in some parts being inferior, and
the total price for making the coat about 14s. "The
whole of the bespoke" trade for retail shops
might be executed by English journeymen tailors.
As it is, only a certain, and, I fear, a decreasing
proportion of orders are made under the old system.
A large number of "ordered "
"ordered" coats are made by
Jews. "1
((
Miss Potter also gives tables showing the prices.
per hour earned in the Jewish factories for different
classes of this work. Thus, the tailor machinist in
the "best bespoke" work gets from 6d. to 9d. the
hour. In "stock and common work" the same kind
of work commands 5d. to 6d. the hour.2
There is here a substantial advantage to those who
supply West-end shops. But though the earnings may
be 2d. an hour more, the employment is less constant.
In the best bespoke shop the work is fast and
furious during the busy season (from March to August,
66
¹ Labour and Life of the People. p. 213.
2
Ib., p. 222.
102
THE ETHIC OF USURY AND INTEREST.
•
from October to Christmas) and tends to heap itself up
at the latter end of the week.... On the other hand
the workers are locked out for weeks together
In the manufacture of stock and slop coats the current
flows more smoothly." It is plain that in this depart-
ment the manual worker secures very little of the
inflated prices of fashionable shops.
"1
The testimony of Mr. Schloss as to the bootmaking
trade runs in the same direction. "By the workbook
of a steady man working for a West-end shop now
before me I find that he made £1 18s. 3d. (net) in his
best week, but his weekly average for the year is
only £1 4s. 3d. Another industrious maker (working
for a different master) is shown by the wage sheets
of his employer to have earned in one exceptionally
busy week £2 4s. Od. (net) while his average through-
out the year is only £1 5s. 4d."2
Mr. Schloss, taking next fourteen men working as
"lasters" for three different manufactures of goods.
for "stock" finds the average weekly wage of these
men to be £1 7s. 3d.³
Thus we find evidence that what might be ex-
pected takes place. The stress of competition from
above and below, tends to deprive the manual-labour
producers of highly-priced goods, of more than a
¹ Labour and Life of the People, p. 225.
2 Ib., 228.
Ib., 267.
THE LOCUSTS OF LUXURY.
103
fractional advantage. The circumstances which raise
the price which can be demanded, do not in general
affect the price at which the labour can be procured.
As to this, the law of substitution will be constantly at
work, leading employers wherever practicable to sub-
stitute cheaper factors of production.
Where does the surplus of this luxury price go?
Partly to build up large trading fortunes, partly also
in the payment of extortionate ground-rents. Thus,
by a sort of magnetic attraction, the principal expen-
diture of the wealthy, goes to create new bodies of
wealth. Riches move in a vicious circle. To him
that hath is given so that he may have more abun-
dantly.
A signal illustration of this law of depredation
through luxury is afforded by the re-afforesting of
vast tracts of the Highlands. Wealthy brewers and
manufacturers will pay more for the luxury of six-
weeks holiday in deer-stalking, than farmers can pay
to graze or till the land. These, and their shepherds,
are ruthlessly expropriated to make way for a few
gamekeepers and footmen. The land which, while
being improved, would have supported a farming
population and paid a small rent, now pays no true
rent. The rent-so-called-of a deer-forest is no
producer's surplus at all. It is the price which inso-
lent wealth, having first wrung it out of underpaid
labour, pays for the luxury of amusing itself by
104
THE ETHIC OF USURY AND INTEREST.
laying thousands of acres desolate. The square miles
of Scotch deer-forests are a huge object lesson of the
economic antagonism between Luxury and Industry.
This with variations innumerable is the general effect
of luxurious expenditure. The fields of industry
have been visited by a flight of locusts who have
destroyed much of the fruits of its fertility.
CHAPTER X.
THE STANDARD OF LUXURY A DEPRESSION OF INDUSTRY.
THAT there should be "Water, water everywhere
and not a drop to drink" implies a scene of torture
which has inspired a great poem. It is the torment
also of the social Hell to which economic failures
are consigned. Men, women, and children are half-
starving in the midst of plenty. Factories and looms
are put upon short time because the market is
glutted with linens and woollens which no one will buy;
miners take a week's play, and an extra weekly holi-
day, because coal is too plentiful and cheap to pay
them for getting it; such stores of good wheat are
poured into the dock warehouses of London and
Liverpool, that for years past home farmers have
been at their wits' end to sell their corn at a
profit. Nevertheless multitudes of persons have gone
ragged, and half-naked, and have lain in bed shivering
for want of an extra blanket. They would have liked
to be able to buy coal which the miners would like
to be set to work to get. They are often hungry,
106
THE ETHIC OF USURY AND INTEREST.
their frames are weak and stunted, though there is
more food in the market than its producers can easily
sell. Into London is poured more of the wealth of
the world, than it knows what to do with. Yet in
London, three person out of every ten are so in poverty,
as never to be quite sure whether they will be properly
fed, warmly clothed, and decently housed; and often
to be quite sure that they will be ill-fed, ill-clad,
and penned like sheep in a single room. The diffi-
culty is not that food is wanted and cannot be sup-
plied. It is the labourers who are not wanted. The
warehouses are crammed, but no one will put the
key of labour into their hands, that they may unlock
the door and fill their wallets.
A century ago the bug-bear of civilisation was
the pressure of population on the margin of subsis-
tence. For a long time to come there need be no
such fear. The virgin soils of new countries can,
by a mortgage on their future profits, attract capital
enough to till them. And Transport, which obeys
the Law of Increasing Return, forms so large an
item in the expenses of producing foreign food in
the home market, that the American and Indian
cornfields are for all practical purposes as near to
London or Birmingham as the farms of Kent or
Cambridgeshire. So long as our coal-fields, and our
manufacturing command of foreign markets, hold
out, our population are no nearer the margin of
THE STANDARD OF LUXURY A DEPRESSION OF INDUSTRY. 107
subsistence than if they were located in Manitoba.
The pressure is not of the population against the
margin of subsistence, for thousands of acres are
lying uncultivated because food is so abundant that
it does not pay to till the land. But there is a
pressure of the industrious against the margin of
remuneration. Every year vast quantities of the
products which should recompense labour, are des-
troyed by the useless and their parasites, and in the
luxuries of some of the industrious. There is thus
so much the less left to be divided among the work-
ers. Those who are strongest, either by their com-
bination, or their skill, or the possession of some
property, or by opportunity, will gain the lion's
share. The rest must be content with the jackal's
fare. They degenerate in economie value. Still
must the full tale of bricks be made though less.
straw be given. Only the more efficient can be
employed. The margin of remunerative labour is
raised. Those who do not reach it form an econo-
mic residuum, who are sometimes worth low wages,
and so obtain casual and irregular employment.
There is thus room for a standard of comfort. When
population was in danger of pressing on the margin of
subsistence, it was invoked as an oblique method
of keeping down the population. If the wages fund
were, as used to be implied, a fixed sum, a higher
scale of wants could only be supplied by limiting the
108
THE ETHIC OF USURY AND INTEREST.
number of persons to be provided for. Nothing short
of this could raise the scale of wages.
Now, however, the contest is as to a division of
the earnings and interest fund, which shall give
more to the wage-earner. Whatever is thus taken
from unproductive consumption, being so much added
to productive consumption, lowers the margin at
which labour ceases to be remunerative, and causes
the employment of persons who under the previous
high pressure could not be profitably employed.
Here anything which raises the standard of com-
fort aids the wage-earner. There is an ingrained
Conservatism in human nature which never willingly
falls back from an advantage gained. What has
been enjoyed cannot be lost without pain. The
stamp of food, clothing and shelter, which before it
was habitual was a mere luxury, is henceforth a
real necessary. This is a maxim in Law which takes
account always of the condition in life when it is
called upon to define necessaries for 'Infants' or
alimony for married women. This is the two-edged
morality of the Church Catechism-requiring all to
do their duty in the state of life in which they
shall be placed. They may not by foul means rise
out of it, nor by negligence sink below it. There
is a moral propriety as well as an economic advan-
tage, in a standard of comfort which rises proportion-
ably with general progress. It is a silent impalpable
THE STANDARD OF LUXURY A DEPRESSION OF INDUSTRY. 109
}
force, which if universally applied would be irresistible.
Those who, by two or three days' work, or a week's
work at low wages, can earn enough to supply
mere animal wants, hang like a millstone on the
neck of self-respecting labourers.
But there is a check upon the raising of this
standard of comfort. When improved wages are
spent in the best way, they raise the standard of
living and activities. The labourer and his children
are better fed, and cared for. Their efficiency is
increased, and with it the National Dividend. The
standard of productiveness of each unit of labour
is raised. But so long as the economic system
regulating the division of earnings and interest
remains unchanged, the largest share of this increase
will go to the capitalist. It is with the improve-
ment of human machinery as with the improvement
of other machinery that it redounds to the advantage
of capital more than of labour. "Hitherto it is question-
able if all the mechanical inventions yet made
have lightened the day's toil of any human being.
They have enabled a greater population to live
the same life of drudgery and imprisonment, and
an increased number of manufacturers and others
to make fortunes. They have increased the com-
forts of the middle classes." 1 Their experience
teaches the manual labour classes that if, by a
¹ J. S. Mill. Principles of Political Economy, p. 455.
1
110
THE ETHIC OF USURY AND INTEREST.
more prudent manner of life, they increase their effi-
ciency and the national wealth, the main bulk of
the benefit goes to the non-labouring class. Here
probably is the secret of much deplorable improvi-
dence and self-indulgence on the part of those whose
earnings would enable them to maintain a high
standard of living. The English working-classes
have long been noted for extravagant living. At
the present time the prevalent idea is restriction of
individual out-put by an Eight Hours' Act, and by
miners' play-days. Probably this is due to the
inherent vices of the system that has been in vogue,
which has discouraged a really high standard of
living, and turned a standard of comfort too often
into mere self-indulgence.
At this point there enters the lists another com-
batant brandishing a jewel-bedecked sword--the
Standard of Luxury. Probably it is the most potent
factor of modern life. Ambition is a dangerous qual-
ity-a blessing or a curse according to its objects.
It may drown a continent in blood if it be the ambi-
tion of a Napoleon, or link society and commerces
with new bands if it be the ambition of an Edison.
But of all ambitions that for money in the abstract
is the most perilous. Money in excess may mean
pride, luxury and sloth. The ambition for power,
rank, fame, rule, implies some golden qualities,
even though mixed with base alloy. But the ambi-
THE STANDARD OF LUXURY A DEPRESSION OF INDUSTRY. 111
tion for money appeals chiefly to the most sordid
and vulgar. Avarice is the master passion of those
who are least under the restraint of intellect or of
morals.
It grows by what it feeds upon. The possessor of
a thousand a year seems rich beyond the dreams
of avarice to the man who only gets fifty. He is
poor by the side of another who enjoys double his
income. His means bring him into the society of
those in contrast with whose leisure, his work is
drudgery, and his luxuries despicable. In the arena
where the conflict lies in consuming as much wealth
as possible, there towers above him some giant in
the noble art. The down-turned thumbs of Pluto-
cratic Society threaten him with social insignificance.
Hence frantic efforts to fight with a larger golden
sword. The handle of the economic lever is grasped
more resolutely. The best investment must be found.
Every opportunity of making gain is utilised. The
inflated dividend is the breath of social life. That
some may do nothing and be rich, and others may
do something and be more rich: that countless petty
dynasties may be founded, whose chiefs shall enjoy
power without responsibility, privilege without merit,
and luxury without labour, the labour of the sons
and grandsons to remote generations of the disinherited,
is put in pawn.
In this way there is infused into the conflict be-
112
THE ETHIC OF USURY AND INTEREST.
tween labour and capital, a subtle penetrating power,
which appeals to the least imaginative, which awak-
ens the most enduring passions, which stirs the
most sordid natures, and is under none of the re-
straints of noble desires. Personal covetousness, both
in society and in commerce, has much to answer for.
But this social covetousness, because it is the most
subtle is therefore the most oppressive tyrant over the
weak. There is cast upon wealthy idleness the evil
glamour which makes it appear worthy of respect.
To do nothing and to destroy much of what others.
have produced, instead of being reckoned, as it is,
the basest of occupations, is, in the diseased imagi-
nations of (so called) Christian society, esteemed the
most honourable. Every scheme of Christian life,
from that of the Papal See to that of the Unitarian,
is fashioned, in theory, upon the model of the simple
self-forgetting life of Christ. A social state in which
pride, luxury and uselessness are respected, desired,
fought for, even to "the continued destruction of all
that is worth having in multitudes of human lives"
is essentially antichristian. The religion which is in
it, is that of the worship of mammon, not of Christ.
Thus the standard of comfort of the producer, and
the standard of luxury of the consumer, are striving
the latter to raise, the former to depress the margin at
which labour becomes economically profitable. The
THE STANDARD OF LUXURY A DEPRESSION OF INDUSTRY. 113
""
latter is not only, intrinsically and by circumstance,
much the strongest. Also every victory which it
wins, enables it to win greater victories. By its
increased unproductive consumption it has "speeded
up the working of the social machinery by which
this destroyed wealth can be replaced. It has thus
raised the point at which the less capable can first.
replace their quota of what others have destroyed, and
then earn a living. In other words the least com-
petent are discharged, and are thus added to the already
large army of casually employed persons who in
order to live must undersell labour at any practic-
able point, and so increase the funds of luxury
which were the first cause of their depression.
A high standard of luxury is a very potent
factor indeed in the genesis of the Usury which arises
out of a property in unpaid labour.
∞
CHAPTER XI.
THE RENT OF SPECULATION A MEASURE OF USURY.
THE
causes which generate unearned incomes
have been noted. What is their result?
1
The total income derived from property must
amount to £470,000,000 yearly. The gross annual
value of the lands and houses or other buildings
assessed for Income tax for the year ending April 5,
1890, was £197,000,000. Since many small pro-
perties of both kinds would escape assessment, we
shall probably be below the mark in estimating the
yearly gross value of land and buildings therefore,
at £200,000,000.
Again, the interest on stocks, shares and bonds is
reckoned at £155,000,000. 2 To which must be
added £89,000,000, the interest estimated by Mr.
Giffen2 upon capital privately loaned or invested in
8
¹ Barker's Facts and Figures for 1892, p. 144.
* Mulhall's Dictionary of Statistics, p. 246. pub. in 1866.
Essays in Finance, Vol ii. p. 403. quoted from “ Facts for
Socialists."
THE RENT OF SPECULATION A MEASURE OF USURY.
115
business, after all payments for management. These
calculations were made some years ago. We shall
not be far wrong in placing the present total of
Dividends and Interest in Capital at £270,000,000.
Some deductions have now to be made. From
the gross value of house property and land one-third
may be allowed off, for repairs, estate expenses, etc.
This would leave about £133,000,000 as the net
income. But there may also be reckoned earnings of
ownership and management. The self interest of
the owner prevents waste and depreciation of value
by careless or dishonest tenants. Five per cent. on
the total income, or £10,000,000, would abundantly
reward such services. The net income from lands
and buildings thereon must be at least £123,000,000.
Taking the other item of £270,000,000 of divi-
dends and interest, there is no outgoing for repairs,
also the earnings of management are much less,
many share-holders and dividend receivers doing
nothing whatever in the supervision of their property.
Three per cent. on the income, or £8,000,000 in
all, would amply repay these services.
The net income from both sources, land and build-
ings and other capital, is thus found to be £385,000,000.
The larger part of the Property from which this is
received will have been inherited, and is therefore
absolutely unearned by its present possessors. A
considerable portion, however, will have been saved
116
THE ETHIC OF USURY AND INTEREST.
by its present owners. Perhaps, at an outside
estimate, £100,000,000 of annual income is derived
from such sources. On the principles laid down in
the foregoing pages the persons who by the effort
of saving have added to the agents of production of
the national wealth, deserve to be paid for this
labour, as much as for any other. Let us assume
that two pounds out of every three pounds of
interest would, if more could not be got, be sufficient
inducement to saving, then £66,000,000 must be
written off on this head, as the earnings of saving.
Thus we arrive finally at £320,000,000,¹ as the
yearly income that is absolutely unearned by any
service that has been rendered beforehand by those
who now receive it. Of the National Dividend, about
one-fourth part is a first charge upon industry,
being consumed by, or in favour of, those who have
themselves rendered no precedent service.
This is the measure of well-paid uselessness.
Some of its recipients afterwards render otherwise
unpaid services. But at the best such services are pre-
paid, the community taking no guarantee that the
1 To avoid the error of an over-estimate of unearned incre-
ment the deductions made in the text on account of earned
interest are purposely estimated on a much more liberal scale
than many would allow. In The Socialism of Christianity, p. 10,
the statement "nearly the whole of it” would be more precisely
expressed thus: "more, and possibly considerably more, than
two-thirds of it."
THE RENT OF SPECULATION A MEASURE OF USURY. 117
receivers of one-fourth part of the National Income
shall aid it in any way. To that extent the fruits
of labour are pledged to non-labourers.
The number of these latter is indicated by the
census of 1881, from which it appears that there
were in the United Kingdom four hundred and seven
thousand one hundred and sixty-nine¹ adult males
(over twenty years old) entered as without occupation.
Doubtless many of these were really engaged in some
other occupation whereby the wages of idleness might
be added to. Others were retired from active life,
others again were yet preparing for useful life, young
men at the Universities and elsewhere. After all
such deductions, the number of adult males who either
lived without occupation, or possessed such large
means that they could have lived without it, remains
enormous.
In another way we may judge of the unevenness
of the distribution of wealth, which conduces to
luxurious extravagance, even of incomes some of
which would be said to be earned.
In the three years, 1888, 1889, and 1890 probate
duty was paid upon seven thousand eight hundred and
five estates of £10,000 (personalty) and upwards; the
total value of such estates being £318,394,000.
In the same period probate duty was paid on
£466,336,000 in all. That is to say, personal estates
Quoted from Facts for Socialists, p. 5.
1
118
THE ETHIC OF USURY AND INTEREST.
of £10,000 and upwards, comprised sixty-nine per
cent. or two-thirds of the total sum rendered vacant
by death, and belonged to seven thousand eight hundred
and five persons. Since property is found to pass by
death, on the average, once in twenty-one years, it would
appear that two-thirds of the personalty of the United
Kingdom is in the possession of fifty-four thou-
sand six hundred and thirty-five persons, and
belongs to them in amounts of £10,000 and upwards.
Here is sufficient proof that there must be much
luxurious expenditure, since fifty five thousand per-
sons have the spending of the profits of two-thirds
of the personal property of the kingdom. To give to
the population of a moderate town, control over such
vast expenditure, cannot but be ruinous to industry.
But the Stock Exchange exposes most effectively,
the existence of vast masses of unearned interest.
Whenever the dividends paid by any industrial under-
taking rise above the point at which capitalists are
willing to carry it on, the prices of the shares rise,
the original capitalist, as a rule, passes out of the
concern, and new owners take their places whose capi-
tal is invested at the current rate of interest, having
due regard to the character of the undertaking.
To give a few instances. London and North
Western Railway Stock paid in August, 1890, a divi-
dend of six and three-fourths per cent. but to the inves-
tor only four and one-twelfth per cent. Similarly East-
THE RENT OF SPECULATION A MEASURE OF USURY. 119
London Water Works paid a dividend of seven and
a half per cent. but to the investor only three and a
half per cent. The dividend on London and County
Bank shares was twenty-one per cent. but the inves-
tor only received four and a half per cent. Brunner
Mond and Co. paid a dividend of thirty per cent., but
yielded seven and a half per cent. to the investor.
While Bryant and May with an annual dividend of
twenty per cent. yield little more than seven per cent.
to any purchaser of shares.
These instances might be multiplied to any extent.
This occurs with all successful undertakings. When
the normal profit has been passed, the capital which
owns and works the undertaking cannot take any of
that surplus. It all goes in enhanced price of shares
to enrich the capitalist who has abandoned the enter-
prise. Let us see the significance of this.
The original Stock of the London and North Western
Railway was £38,000,000. Its owners at the present
date have paid £68,000,000 for it. And it is now
being worked as though what cost £38,000,000 had
really cost £68,000,000. The prices of labour and
the charges for freight are all calculated on that
scale. The consumer and the labourer have been
exploited of a capital sum of £30,000,000.
Thus take the case of the eight London Water Com-
panies. In December 1883, the total capital expended
on the supply of water to London, was (in round
120
THE ETHIC OF USURY AND INTEREST.
numbers) £10,000,000. But its then owners had
paid for the undertakings £24,000,000. Here again,
consumer and labourer are exploited of fourteen mil-
lions of capital.¹
Again the capital embarked in establishing Bryant
and May's works, was £400,000. The business is
now worth £1,120,000. Purchasers of Bryant and
May's matches are paying as much as would have
been necessary if the manufacture were nearly three
times as costly as it really is.
From these examples it will be seen that taking
all the successful public companies, the capital neces-
sary to supply the public wants as they are now
supplied, has been needlessly increased by hundreds
of millions, to the great loss of the public who pay
more than they need as consumers, or else receive
less than they could and ought as labourers.2
3
The effect of this loading of capital may be suffi-
ciently illustrated by one example. The revenue of
the Railways of the United Kingdom for 1890, avail-
able for dividend, was £36,760,000. This yielded an
average dividend all round of four per cent. In round
'Return to House of Commons, 1885. See Financial Reform
Almanack, 1892, p. 43.
2 Some allowance must be made in this argument for the fact
that a (relatively) inconsiderable amount of capital has been
issued at a premium.
3 Barker's Facts and Figures for 1892, p. 142.
THE RENT OF SPECULATION A MEASURE OF USURY.
121
A
numbers four millions of revenue afforded one-half
per cent. dividend. Had the rate per cent. of interest
and dividend been lessened by one-half per cent., there
would have been available for wages an extra sum
of four millions. But the wage bill of the Railways
amounts, it is said, to £19,000,000 per annum.
diminution of one-half per cent. of dividend would
add a little more than four shillings to every pound
of wages. Any loading of unnecessary or over-
rewarded capital tells heavily upon wage-earners.
In any Railway Company which makes more than
even five per cent. on its stock there is no economic
excuse for low wages or long hours. These are
solely owing to the inflated prices of stock. The
public pay enough in all such cases, to remunerate
capital at its current rate and to pay better wages.
These above-par values of stock, are created out of
cruelly long hours of work, or out of insufficient
wages.
One other example may be given. On August 30,
1890, the five and a half millions stock of the Gas
Light and Coke Co. was worth thirteen and a quarter
millions nearly. At its market price on February 28,
1892, it was worth one million and a quarter less. Why
this depreciation? It is the consequence of an effort
on the part of industry to emancipate itself from the
needless obligation to pay dividend on thirteen mil-
lions of capital, when five and a half millions was
122
THE ETHIC OF USURY AND INTEREST.
the true cost of the enterprise. The responsibility
for the Gas Strike which threatened to plunge Lon-
don into darkness and disorder, may be traced home.
It was not entirely the fault of the men, nor en-
tirely of the direction, but of a vicious system which
permits original promoters of an undertaking to
abandon it, carrying off £240 for every £100 invested.
No doubt some remuneration is due where risk
is encountered. But excessive inflations of capital
have fostered speculation rather than encouraged
enterprise. There was no such risk in starting a
matchmaking factory as to entitle its promoters to
a bonus of £720,000 beyond the return of their
venture of £400,000.
One moral consequence may be here glanced at.
In the speculations which arise out of this system,
we have the fount and origin of the evil of gambling.
What, it is often asked, does the honest gambler do
worse than the honest Stock Exchange speculator?
He is morally speaking no greater sinner. Both
acts are founded on the same evil desire-that of
getting money without labour. Morally the gambler
and the speculator are on the same level. All
efforts to quench the one will be futile, while the
latter evil doer has full play.
Economically, however, the speculator is a worse
sinner than the gambler. In gambling there is no
economic loss. Money is transferred from one man's
THE RENT OF SPECULATION A MEASURE OF USURY.
123
purse to another. Its new owner, spends or invests
it, in the room of its former owner.
But in Stock Exchange Speculation, the counters
are human lives. The speculator buys for a rise
a very large factor, in which rise will be the depres-
sion of labour.
By maintaining the dividend of the East London
Water shares at seven and a half per cent. the investor
gets three and a half. He is therefore constrained by
his position to use every effort to secure the present
scale of profits. The surplus has already been dis-
counted and carried off by his predecessor in title.
Stock Exchange Speculation, skimming the cream
of future as well as past profits out of labour, puts
the high-dividend-paying business on a par with
that which just remunerates its original expenses.
Another turn is given to the handle of the lever
which depresses the worker in favour of the capi-
talist.
The operations of the Stock Exchange fulfil two
functions. The first is that of the barometer to show
when interest rises up to the point of usury. When
the dividend is seven per cent. and the yield to the
investor is four per cent. the balance of three per
cent. is economically unearned, and is Usury, and the
money market proclaims the fact.
The other function is an active one. These floating
Usuries out of underpaid labour give occasion for
124
THE ETHIC OF USURY AND INTEREST.
gigantic Speculations. Operators in the money market
discount these annuities wrung out of human lives,
and the labourer in dealing with his new capitalist
employer has to satisfy two demands, the remunera-
tion of the capital really required for the undertaking,
and that requisite to pay annuities to the original
promoters or their assigns.
The cause of the evil is not far to seek. The
Stock Exchange conscience has been quick to discover
the unearned Interest i.e. Usury; but the Christian
conscience has been less sensitive, and has tolerated
what was economically intolerable.
There is thus drawn from the resources of the
nation, a Rent of Speculation. Beyond the normal
remuneration of capital and of labour there are
profits which do not recompense either of the two
agents of production. Capital receives its normal
rate of Interest, Labour obtains its market wages.
The surplus is the speculator's. The prospective
values of land, and of every instrument of produc-
tion are discounted. Thus to take an example, some
one more far-seeing than others, or what is more
likely, having more money at command, sees that
land near
some town will be made more valuable
by its approaching prosperity. He buys for £500 a
field which in ten years' time he has sold in plots for
£1,500. He has added nothing to its value. But
the £30 a year which he can be certain of receiv-
THE RENT OF SPECULATION A MEASURE OF USURY.
125
ing as interest on the £1,000 he has made by his
venture, is simply a Rent of Speculation-a specu-
lator's surplus. Whatever may be the immediate
source to him of this income, it comes ultimately out
of the labours of those who afterwards live upon
those plots of land.
This is the case with all the profits of specu-
lation when once the projectors of some real industry
have been recompensed for the risks incurred in
starting. Afterwards the money that is "made" out
of Stock Exchange fluctuations brings to its owners
an income which speculation has been able to filch
from the partners in industry, the capitalist and the
labourer. Its source is unearned income. Its extent
may be easily illustrated. The Bankers' Magazine of
March, 1892, gives the value of three hundred and thirty-
four securities on February 22, as £2,790,535,000.
Again the Bankers' clearing house return for 1890
showed that the Stock Exchange transactions for
that year reached the total of £808,000,000. This
was sixty millions more than the whole export and
import values of the year. Besides this, large sums
pass internally through the Stock Exchange. A certain
portion of all this represents genuine investments in
case of death and otherwise. But the purely specu-
lative business must be enormous.
Every rise in the value of securities, however
obtained, compels the new holders to put pressure
126
THE ETHIC OF USURY AND INTEREST.
upon labour to maintain the dividends at a point
which will yield the normal rate of Interest. The
intimate relations between speculative values and the
outside world, may be seen from the fall of five to
fifteen per cent. in London Water shares immediately
on the election of a new County Council.
Otherwise expressed, the mere apprehension of
adverse influences resulted in a (slight) fall of the
Rent of Speculation, showing how it is due to causes
whose operation may be considerably promoted or
checked by political action. Its relations with the
expenses of production are analogous to those of other
rents. It does not enter into these expenses, in the
limited sense, that it is, in general, the creation of
artificial causes which have kept the expenses of
production below their normal level.
GENERAL NOTE: It is not to be inferred that the current rate
of interest, or average yield to investors, contains no element
of usury. All that is above that is certainly usurious. Besides
which every thing which unduly weakens labour, in the
conflict with capital, introduces into usual interest a really
unearned element. Hence in the calculation of the earnings of
saving, a deduction has been made, of one-third off the esti-
mated profits of capital saved by the present generation.
CHAPTER XII.
NATURE'S SOCIALISM DEFEATED BY UNLIMITED BEQUEST.
Or the past political laws which have favoured
the massing together of property it is needless to
say much. Their effects are as obvious as their
intention.
The design of representative institutions is to give
power to these who are considered to have a claim to
exercise it for their own protection. An oligarchy of
property-owners may be expected to take good care
of their own interests. They would argue that in so
doing they were only fulfilling the purposes of the
Constitution, which would have extended those powers
had it been thought desirable. An absolute Monarch
will always have more regard for the multitude than
a Parliament representing holders of property. For
the sole ruler has more need to conciliate the good
will of the populace, than those have, who are both
more numerous, and command the resources of life
of those who are under them. The legislation of a
Parliament owing its origin to a limited franchise
128
THE ETHIC OF USURY AND INTEREST.
may be expected to be, what it certainly was, more
favourable to property than to labour.
The famous Statute of Labourers of Edward III.
struck the key note of future law-making. It aimed
at taking from the labouring class the enhanced
economic value of their labour. One-third of the
population having perished in the Black Death of
the Autumn of 1348, the market value of the sur-
vivors was thus raised-but this statute deprived.
them of the advantage. No farm labourer, tailor
carpenter, smith, mason, tiler, carter, or shoemaker
might take more, than the rate of wages current in
1347, under penalty of imprisonment; and no one
might pay more under the penalty of heavy fines.
Revised, and re-enacted with heavier penalties to
meet renewed disobedience and evasions, this law
remained on the statute book for two hundred and
twelve years. Four hundred and fifty years ago a
carpenter or a mason who should refuse to work
unless he was paid more them 4d. a day, might have
been thrown into gaol.¹
On the repeal of these laws in 1562 the era of
Judicial" wages dawned. Justices of the Peace were
empowered to fix from time to time the scale of
pay. Having been for some time obsolete, the last
exercise of this power, so far as is known, took
effect in 1824.
¹ Professor Thorold Rogers. Work and Wages, p. 213.
NATURE'S SOCIALISM DEFEATED BY UNLIMITED BEQUEST. 129
Of a piece with such legislation were the imposi-
tion of duties on the importation of corn, and the
restraint by an Act of Charles II. on the
importation of cattle from Ireland. These are but
samples of laws conceived in a spirit of favour
to property.
The laws are gone, but some of their effects
remain. The fortunes and estates which they created
may have several times changed hands, but have
been centres towards which wealth has continually
gravitated.
Besides these tangible results, the spirit of these
laws-the quasi-sanctity of property--remains to this
day. There is no such educating influence as a Law.
Accepted as being politically right, it imbues
succeeding generations with the belief that its sub-
stance is morally right. Generations of law-making
founded on the superior rights of property over
labour, which really means over men's lives, has
inade an abiding dint in the conscience of the nation.
Hence those maxims of the Law-courts, under
which it is a much cheaper crime to half-kill
any one-particularly a wife-than to steal sixpenny-
worth of goods, or to poach a partridge. Hence
also the arrogance of Property, which in the utmost
good faith, and very often on the avowal of most
Christian principles, sets up a quasi-sacred claim
to make as much as it can out of those who own
9
130
THE ETHIC OF USUKY AND INTEREST.
nothing. Attempts to raise wages, or to shorten the
hours of toil have been and are to this day resented
as though they were assaults on the moral order of
things. In the ethic code of property owners it is
sheer covetousness when the industrial worker asks,
like Oliver Twist, for more, it is the spoliation of
Property; but there is no covetousness, no spoliation
of Labour, when Property exacts the uttermost
farthing. In an economic contest, moral right is
genuinely believed to be only with the owner of
property. To forego one-half per cent. of the dividends
of Railway Property would be more than enough to
enfranchise every engine-driver, guard, signalman,
and porter from excessive hours of toil. Yet the
average shareholder would consider this as quite
outside his religious duty. Why so? Because cen-
turies, during which both the laws and customs have
pre-supposed the rights of Property to be sacred, have
educated owning-classes into the moral arrogance
which despises the rights of living.
Two principal political laws of accumulation, how-
ever, remain in force:-Laws of Entail, and Laws of
Bequest.
The former lie outside this enquiry, unless it be
to note the stimulus given to the ambition for large
commercial fortunes by the existence and the rivalry
of large landed estates.
NATURE'S SOCIALISM DEFEATED BY UNLIMITED BEQUEST. 131
But the Laws of Bequest have a very intimate
bearing on the genesis of Usury.
There is, as we have seen, a lawfully earned inter-
est on capital. This has been earned by the effort
of saving and waiting. But by whose labour? By
the person who has saved the capital, by which the
house has been built, or if the enterprise is a large
one, by the labours of saving of those persons who
clubbed together to build the fleet of ships, or to
construct a factory or a railway. A certain payment
for these services has been earned and it will repay
the community thus to reward those of its citizens
who have not uselessly destroyed all that the laws had
given them. But accumulations, once set on foot, and
especially when favoured by political laws, tend to
the exaction of more than what has been earned:-a
Usury, and not an Interest. Aggregation is an un-
doubted Natural Law. By it, under the name of gravi-
tation the earth was formed, is now held together,
and is daily enlarged, it being computed that every
year twenty millions of the cosmic bodies which
swarm in space, are drawn into its substance. By
the same Law of Aggregation the sun is enabled
to pour out volumes of heat and yet maintain its
fires.
The larger attracts the less. But this centralisation
of material wealth upon a select few is so injurious
to those on whom it flows, and so unjust and inju-
132
THE ETHIC OF USURY AND INTEREST.
rious to those who are thus denuded, that Nature has
established a decentralising force.
The right of property is woven out of three sepa-
rate rights with different bases: the economic, the
moral, and the legal.
The economic is derived from labour. The legal,
is based upon possession. The moral right is that
of justice.
The function of the moral right is mainly to cor-
rect the faults of the other two. Moral right is
partly a principle, partly a sentiment. As a principle
it is applied to the due distribution of the free gifts
of Nature:--land, air, water, mineral reserves--the
forces and fertilities of Nature. On the principles of
justice, the earth and its fulness, belong equally to
all the children of men. Justice as a sentiment
provides for such as are unable, by reason of youth,
sickness, feebleness of mind or of body, or of old age,
to secure on economic grounds a right to live. These
economic outlaws are brought under the protection
of the moral law. The moral right is essentially
distributive.
On the other hand, the economic right of pro-
perty, inherently; and the legal right of it, incidentally,
are accumulative. Here Nature steps in to decentralise.
By death the economic right of property is dis-
solved. It was a right of enjoyment, and the labourer
ceasing to be, cannot exercise it.
NATURE'S SOCIALISM DEFEATED BY UNLIMITED BEQUEST. 133
Also by death the legal right of property is
determined, for it is really the right of possession.
It is a leading principle of English jurisprudence
that property is derived from occupancy.
"
Thus Blackstone lays it down. Property both in
land and moveables, being thus acquired by the first
taker, which taking amounts to a declaration that
he intends to appropriate the thing to his own use,
it remains in him, by the principles of universal
law, till such time as he does some other act which
shows an intention to abandon it."1
There resides in this an inherent element of injury
as well as of benefit to the community. As we
have already seen, and as the present condition
of society abundantly testifies, with the commence-
ment of centres of property, centripetal forces are
set in motion which tend to its excessive aggre-
gations.
Nature, however, interposes a sufficient remedy.
There is no more significant act than that of dying
by which the occupant of property "shows an inten-
tion to abandon it." Property based upon occupancy
ceases thereupon, by the principles of universal law,
to remain in him.
Death is the natural method by which a place on
the earth, and a share in its fulness, is made pos-
sible, to a race which increases and multiplies, and
Blackstone's Commentaries, Book ii., p. 9.
134
THE ETHIC OF USURY AND INTEREST.
is withal, apt in appropriation. There is no need to
consider how affairs would have been ordered in the
ideal world where there was no death, and no sin-
therefore no covetous expropriation. Death-it is a
commonplace of Theology—is the necessary conse-
quence of sin: it is certainly a remedy against accu-
mulation.
An unlimited legal power of bequest, is a defiance
of Nature. It is besides, a contradiction of the foun-
dation-principle of legal estate. The man ceases
by death-to occupy, yet is invested with plenary
disposal of that which the law vested in him on the
sole ground that he occupied it. The law is thus
inconsistent with itself. On one day, it concedes
the right of property because he possesses. On the
next when, by the act of God, he ceases to possess,
it vests in his remains all the rights which a corpse
can now enjoy,-those of disposal. A piece of paper
which until then was of no greater value than as a
fire-lighter becomes, in consequence of its author's
death, a legal instrument, powerful, by its disposition
of millions of capital, over the lives, fortunes, indus-
try, and destinies of multitudes, who have not yet
even begun to live.
No doubt the opposite extreme, that as "the law
of Nature suggests, the estate should again become
common, and be open to the next occupant,"1 would
¹ Blackstone's Commentaries, Book ii., p. 13.
NATURE'S SOCIALISM DEFEATED BY UNLIMITED BEQUEST. 135
be even more disastrous. Society would be perpe-
tually resolving itself into its original elements.
Cohesion and therefore progress would be impossible.
So reason steps in dictating the course to be
adopted in the interests-not now of the individual,
but of the community. Thus to quote once more,
“Naturally speaking, the instant a man ceases to be,
he ceases to have any dominion: else if he had a
right to dispose of his acquisitions one moment beyond
his life, he would also have a right to direct their
disposal for a million of ages after him; which would
be highly absurd and inconvenient. All property
must therefore cease upon death, considering men as
absolute individuals, and unconnected with civil society:
for then, by the principles before established, the
next immediate occupant would acquire a right in
all that the deceased possessed. But, as under
civilized governments which are calculated for the
peace of mankind, such a constitution would be pro-
ductive of endless disturbance, the universal law of
almost every nation (which is a kind of secondary
law of Nature) has either given the dying person
a power of continuing his property, by disposition
of his possessions by will; or in case he neglects to
dispose of it, or is not permitted to make any dis-
position of it, the municipal law of the country then
steps in, and declares . . . who alone shall have a
right to enter upon this vacant possession, in order
136
THE ETHIC OF USURY AND INTEREST.
to avoid that confusion, which its again becoming
common would occasion." 1
On the principles laid down in this passage the
right of bequest is not inherently personal to the
individual as was the right of possession during life-
time. Both, considered as practically enforceable, are
civil rights, in that they are creatures of the State.
However just his title may be, a man cannot enjoy
his property against those who would strip him of
it, unless by the aid of society. Neither, except by
the same aid, can he appoint who shall enjoy it after
his own death.
But the reasons upon which the State confers these
two rights-the right of undisturbed enjoyment
during life, and the right of assignment of such
occupancy—are by no means of the same kind. It
confers the former from consideration of the moral
right which may be conceived of as attaching to the
occupant in virtue of the mere fact of his occupancy,
assumed to be not unlawful. It confers the latter
from consideration of advantage to the society, i.e.
to itself; partly by the greater inducement to prudence
and frugality through some privilege of bequest; partly
by the avoidance of confusion should property be vacated
at death, and no successor to it designated.
The very diversity of laws of bequest and succession,
in different countries, and in the same country at differ-
¹ Blackstone's Commentaries. Book ii, pp. 10. 11.
NATURE'S SOCIALISM DEFEATED BY UNLIMITED BEQUEST. 137
ent times, show "how futile every claim must be that has
not its foundations in the positive laws of the State." ¹
For example death might mean, for anything we
know, transference to a similar life on another planet.
If it were so, there could arise no moral right to
the control of property on two planets at the same
time, on the earth by testament, and on Mars, let
us say, by occupancy. Whatever right of bequest
is exercised has its foundations in the positive laws
of particular States.
This civil right being thus founded on considera-
tions of social advantage, is thus doubly artificial.
Being derived from reasons involved in its consequent
benefits, these reasons should be from time to time
reviewed in the light of the altered conditions of life,
and if public injury can be proved overbalancing the
advantages gained, the same reasonable motives for
allowing it will be turned into arguments for modi-
fying a power which was never more than a privilege
comferred by the State and therefore revocable.
The arguments advanced in favour of unlimited
bequest are either social or economic. Under the
former head it is urged to be of advantage to the
State, that parents should have control over their
children, and that they should be able to follow the
dictates of natural affection by leaving them some
1 Blackstone's Commentaries' Book ii p. 13.
1
138
THE ETHIC OF USURY AND INTEREST.
provision for their wants. This is very true. But
then unlimited powers of bequest having confined
property among a small class, have defeated both
these objects. In the year 1888 only nine per cent.
of the people who died, bequeathed so much as one
hundred pounds. The other ninety-one per cent., or
such of them as were parents were cut off from the
exercise of this much-needed parental control, or the
gratification of parental affection.
The economic arguments are three. The first, that
persons are better encouraged to use every effort
if there is granted to them full power of disposal
after death of their property. This may be, but as
before ninety-one per cent. are shut out from this
inducement. Recent discussions on old age pensions.
have made it clear that the wage-earning classes
living from week to week on wages, precarious always
upon the accident of health, and often upon the
chance of employment, either have not the ability,
or are discouraged under the existing system from
the attempt, to provide even for their old age.
Then it is urged that large estates are advan-
tageous. Adam Smith pointed out long ago that the
ancient advantage in large landed estates passed
away when public security was guaranteed by govern-
ments. In turbulent times, the eldest son inheriting
the whole estate, was better able to protect his
tenantry and retainers from buccaneering invasions.
NATURE'S SOCIALISM DEFEATED BY UNLIMITED BEQUEST. 139
This state of things has long since come to an end.
The former commercial use of large fortunes has
also disappeared. However large the undertaking,
the necessary capital can always be provided in
small sums, under the limited liability system. Also
the supply of business ability is so abundant that in
fact great enterprises are increasingly put under
salaried management.
"
McCulloch's arguments in behalf of primogeniture,
inferentially apply to the making of "eldest sons
out of fortunes made in commerce- that the emula-
tion of the other members of a family, is a strong
incentive to greater energy in rivalling the eldest
son's position. In the chapter on the Standard of
Luxury, it has been seen that such rivalry is a potent
factor in the depression of the manual labour
classes.
Hence it appears that unlimited bequest either
defeats the very objects for the furtherance of which
it is allowed, or in those cases where there once
was an advantage in keeping large fortunes to-
gether, is now unnecessary.
The net results may be very briefly stated. Ninety
per cent. of the population, "have nothing of any
kind except as much old furniture as will go in
a cart." 1
In the year 1888, a few more than half
1
¹ Mr. F. Harrison's Report of Industrial Remunerative Conference,
p. 429.
140
THE ETHIC OF USURY AND INTEREST.
a million of people died in the United Kingdom. Of
these, seven per cent. or one in every fourteen had no
home of their own to die in, their death-chamber
was in the workhouse.¹ On the other hand one in
every two hundred, or two thousand four hundred
and forty-five persons, died "worth" ninety-nine
millions-two thirds of the personalty disposed of
by testament in that year.2
Further, in the year 1889, twenty-seven persons-
who might form a good-sized dinner party-bequeathed
personal property of the value of £ 10,000,000;
while, in the last twenty-seven years, five hundred
and eighty-seven persons disposed from their death-
beds of personalty to the amount of £230,000,000.
Such figures indicate not only the extent to which
in the past property has accumulated; they are
proofs of how the process is still going on. Mr.
Giffen estimated the capital value of all kinds of
property for the year 1885 at £10,000,000,000.
This being so, in the course of about one generation
a company of people who would fill a moderately
large concert hall, controlled the future disposition
of about one-fortieth part of the entire National
Capital. Their signatures, properly attested, to a
few documents, determined for another generation
at least, who should be the owners after their own
¹ Barker's Facts and Figures for 1891, p. 88.
2 Financial Reform Almanack for 1892, p. 65.
NATURE'S SOCIALISM DEFEATED BY UNLIMITED BEQUEST. 141
decease, of that proportion of national wealth. We
have seen how important to the community is the
way in which property is owned, whether it be con-
centrated in few hands or in many. The lives, the
fortunes, the morals, the miseries, the degradations,
the intemperance, the unchastity, of multitudes
now living, and of larger multitudes yet unborn
hang on the decision of the question whether this
shall be diffused, or accumulated. The decision
of these momentous points is, for the most part,
relegated to the graveyards. Who shall have the
spending of one-fortieth of the national income, with
the tremendous dominion over men's lives and actions,
their bodies and souls, their sufferings and hopes,
which is wrapped up in that privilege, has been
dictated by less than 600 corpses lying in their
coffins. 1
¹ This is literally true for his "Will" has no validity till
the breath is out of the testator's body.
CHAPTER XIII.
RECAPITULATION OF THE ARGUMENT.
Ar the risk of some repetition, I must now gather
up the threads of the argument.
The phrase "a fair day's wage for a fair day's
work" represents, not what the labourer can obtain
under any existing conditions, but what he ought
to and would obtain, in a state of perfect economic
freedom of all parties. It is not the market price of
labour but its true economic value.
Two principal conditions are necessary for this
"fair wage." One, that both capitalist and labourer
shall be equally free to engage in such occupations
and on such terms as they may approve. The other,
that the flow
the flow of business and production shall
be even, and not liable to constant changes in the
volumes or methods of production. Under such con-
ditions each agent of production will be in the way
to secure its due share in the recompenses of it.
The money price that has to be paid to obtain sup-
plies, either of capital or of labour, will tend to
RECAPITULATION OF THE ARGUMENT.
143
fairness. There will be no usurious element in
interest on capital. The labourer will receive the
hire of which he is worthy-a fair day's wage for
a fair day's work.
But great inequalities of fortune, however brought
about, destroy both these conditions.
When the lawful possession of the earth and its
fulness has once passed into the keeping of a small
minority, the remainder, being thus disinherited, are
no longer free to make advantageous bargains for
the use of their labour. There is no equality in
the barter between the two parties-capital and
labour. Often there is the utmost inequality, as,
for example, between the match-making firm which
gains a dividend of twenty per cent. on its capital, and
the wretched women and children who must live some-
how. The lives of human beings are thrown into
the scale, and the wedge of the gold of Ophir, for
all Isaiah's hopes, weighs them down.
But this is not all. A class of persons is now
established, who can live without labour, upon the
share which they are thus able to seize, of the
value of the labours of others. These persons are
now economic nonentities. If they did not exist
at all, and their portions were continually destroyed,
the conditions of production would be unaffected.
The net aggregate sum of the commodities jointly
produced last week by labour and capital, acting
144
THE ETHIC OF USURY AND INTEREST.
upon the free gifts of Nature, is the National Dividend
for that week. "It is also the source of payment
for the labours of next week! "1 Those who desire
to enjoy a share of these things, must first work
to replace that share or its equivalent. What they
will then deserve, will be much or little (assuming
the efficiency of their work) according as the National
Dividend is large or small.
These calculations are, however, thrown out, by
the existence of a non-labouring class, with a right
to receive and consume at least one-fourth part of
last week's dividend, without doing anything to
replace it. What they spend, excepting what part
they may re-invest, which will probably be small,
for that goes lightly which comes lightly, is so much
destroyed without any economic return by those
who consume it. If it is to be replaced, so as to
form part of next week's National Dividend, the
burden of doing this falls upon others, and increases
their labours, or in other words lessens their real
wages.
At this point another disturbing element is felt.
Things are so, that much of what is thus received,
and of other incomes that are earned, is enjoyed in
such large sums that it can only be spent in luxuries.
Thus more than three hundred millions yearly goes
to provide for two hundred and twenty thousand
¹ Prof. Marshall. Principles of Economics, pp. 562 and 564.
RECAPITULATION OF THE ARGUMENT.
145
families, at the average of sixteen hundred pounds
a year for each family.
This luxurious expenditure tells in two ways.
Part of it, spent on needless establishments, and on
those who minister to the ease, the pride, or the
extravagance of the luxurious, is so much simply
destroyed; the servants and other ministers of luxury
rendering no services to the community, but only
such as are valuable, or thought to be so, to indivi-
duals.
The greater mischief, however, wrought by luxury
is its perpetual disturbance of the methods and volumes
of production. Money spent to gratify the caprices,
fancies, follies, to say nothing of the vices, of those
whose necessary wants are already supplied, will intro-
duce endless changes in the supply of these varying
demands, and thus render impossible that "Stationary
State," which is essential if the price of labour is
to tend to equality with its value.
Inequalities of fortune having thus introduced
wealthy idleness and luxury, have brought into
action economic forces of great power, and, as things
now are, operating in a sphere of vast extent, the
uniform tendency of which is to deprive labour of a
part of its true-value hire, and thus to enrich those
who have, by robbing those who have not.
These economic forces have, moreover, been re-
10
146
THE ETHIC OF USURY AND INTEREST.
inforced politically. Nature provided a rude remedy.
It would have re-distributed possessions at the death
of the possessor, thus nipping in the bud the evil of
accumulations. The law rightly stepping in to pre-
vent the disorder of a general scramble for unoccu-
pied wealth, has gone much further, and by conferring
upon the dying man unlimited powers of bequest,
has enabled him to sin against his survivors by
promoting these massings together of property which
Nature abhors and would have hindered. The law
has indeed gone further still.
Law is an educating force. What it allows, it is
held to approve and to desire. It has thus brought
to the mischievous work of accumulating property,
loyalty to itself, natural affection for children, the
sense of family duty, and the fell processes of pride
in founding a family. Every law must be taken
to have designed that which it has accomplished.
Since the law might have greatly retarded the pro-
cess of accumulation which in fact it has furthered,
it must be supposed to have desired a distribution of
property so unequal that perhaps ninety per cent. of the
population have not more property than will go in
a cart, while two-thirds of the property (personalty)
of the Nation is owned by fifty-four thousand
persons.
In short, the present condition of things, whatever
its merits or demerits, is artificial. There will always
RECAPITULATION OF THE ARGUMENT.
147
be, under the best arrangements, economic tendencies
by which we have the poor amongst us. The true
function of moral and political law is to counteract
these tendencies.
Political laws, in many ways, of which unlimited
bequest is only one, has aggravated them. Moral
law, pregnant with remedies against pride, luxury,
and greed, has been far too much of a dead letter,
or something worse. What might have been frowned
down has been tolerated-very often encouraged.
Modern society is the product of laws, moral and
political, working upon economic forces. Its evils
are therefore, in no small measure, artificial, and so
curable.
These evils are forced into prominence in the lower
strata of society. There is an inexorable law, akin
to the natural law of the survival of the fittest,
whereby the most efficient factors of production are
substituted for the less efficient. Just as the gar-
dener throws aside his broken spade and buys a new
one, and will change that for a plough if it suits
his purpose, so the capitalist will use the best ma-
chinery, human or non-human, that he can get. This
is inevitable, and, within due limits, essential to
progress.
But when one-fourth part of the National Dividend
has to be rendered to those who make no return
service, there must ensue to defray this mortgage
148
THE ETHIC OF USURY AND INTEREST.
a "speeding up" of the whole machinery. There is
set up an economic covetousness which is the most
pitiless of all, for the employer in every grade, what-
ever his own kindness or generosity, is compelled in
financial self-preservation, to make the most of every
instrument of production.
The first brunt of this falls upon the human ma-
chinery. New machinery is costly, and will not be
bought until it pays better to discard that which is
old-fashioned. An old horse must be fed by his
owner, and so is sure to be well fed so long
as he is worth more than the knacker's price. But
there is, generally, no loss but only gain in substi-
tuting a young, capable worker, for another who is
half worn out, sickly, feeble, or less competent. This
latter can be left to shift for himself. If in the end
he falls upon the rates, dies in the workhouse, and
is buried by "the parish,
the parish," the expense falls too
remotely upon the employers to form part of their
calculations, and in the cold cynicism of finance it
pays better to incur the expenses of Pauperism than
to employ the economically incompetent.
Taking London as the object lesson of wealth and
poverty-thirty per cent. of its inhabitants form this
economic residuum. They are "in poverty" either
through irregular employment, insufficiently-paid
employment, or casual employment. The high pressure
competition has forced them out of the ranks. They
RECAPITULATION OF THE ARGUMENT.
149
cannot run with the rest, they can only walk, and
they are paid for their walking what it is worth.
Any accident, illness, temporary loss of work, change
of fashion, invention of new labour-saving machinery,
sinks them down to a lower grade of inefficiency. By
the time the crisis has passed they are in chronic
want. They are like the cripple waiting to be helped
into the healing well. Before he can hobble down
some more active cripple has exhausted for the day
its healing virtues. There is in Christian ethics a
force which might have aided them. But it has been
evaporated out of economic life under the fierce fires
of unlimited competition. "That human well-being
may be most effectually promoted by the simple pro-
cess of leaving people to themselves, leaving indi-
viduals, that is to say, to follow the promptings of
self-interest, unrestrained either by the State or by
public opinion, so long as they abstain from force or
fraud-this is the doctrine commonly known as
laissez-faire."¹ The malevolent neutrality of such eco-
nomic freedom produces conditions that are really artifi-
cial, as in many aspects they are palpably degrading.
Professor Cairnes. Essay on Political Economy, p. 241.
1
CHAPTER XIV.
THREE OPIATES OF THE CHRISTIAN CONSCIENCE.
LIGHT is thus thrown upon one or two popular
fallacies.
There is a strange heresy, which drugs the Chris-
tian conscience into "that moral torpor which can
endure that we, with our modern resources and
knowledge, should look on contentedly at the con-
tinued destruction of all that is worth having in
multitudes of human lives."1 It is the belief that
the useless are useful.
A very wealthy person is seen to employ and
to pay a multitude of persons, servants and others;
and, less directly, to partly support various tradesmen,
mechanics, and professional men. All these would
lose the whole or a part of their livelihood, should
he suddenly take himself and his income to the
Antipodes. Hence the idea that a wealthy spending
unproductive class is a benefit to the community.
This theory, exploded by Adam Smith one hundred
Professor Marshall. Principles of Economics, Vol. i., p. 737
THREE OPIATES OF THE CHRISTIAN CONSCIENCE.
151
and thirty years ago, survives to this day even
among fairly intelligent persons. It canonises the
idle. It deifies the riches which Christ declared to
be in irreconcileable rivalry with God. It is an
opiate to the Christian conscience, a drag upon the
chariot wheels of Social Reform.
If it were true, the moral teaching of the New
Testament would be founded on false economics.
The love of riches might shut a man out of the
Kingdom of Heaven on earth, but it would qualify
him as a saviour of mundane society.
It is a humble rôle that is thus accepted: this of
sewaging the fields of industry with gold. To sit
still, to spend much and to do nothing, would be-if
the doctrine were true-the perfection of utility. It
would be plainly ruinous in a single family settled
on an island in the Pacific Ocean. It is advocated
as invaluable to a nation. Done on a small scale
by a person who idles away his life on the alms of
a few shillings a week, it is denounced as shameful.
When, however, it is perpetrated at the rate of hun-
dreds of millions a year under the sanction of Property,
it is extolled as a benefaction to the country.
The millionaire comes into a neighbourhood and
gives employment by spending money right and left.
How useful are rich men, is then the cry. Truly so,
if no one else could or would spend it, except rich
men. All that they do is by their command of the
152
THE ETHIC OF USURY AND INTEREST.
store of past products of labour, to gain new pleas-
ures or advantage for themselves, leaving it to
others to replace what they have thus consumed.
What has happened is much the same as when the
deepest well in the village has been pumped dry.
The neighbouring wells are lowered. There is local
enrichment at the cost of remote poverty.
Accumulations of wealth, as has been seen, depress
the condition of the labourer, and augment the Usury
which is derived from the profits of underpaid labour.
They are a burden, not a benefit.
Again light is thrown upon the rights of property.
A moral claim is laid to secure the possession of
whatever profits of property are economically possible.
Property, i.e. goods of the second and higher orders,
itself has no intrinsic value. The incomings from it
are the fruits of industry applied to it. Its value is
therefore no fixed quantity. It may have brought
in to its owner £100 last year, but this year under
a juster division of earnings and interest it may only
bring in £80. The eighth commandment is invoked
by both parties. On whose side is its weight thrown?
That extra £20 adjudged to the capitalist, would
mean the spoliation of labour. So far from religious
sanctions being, in such case, in favour of the pro-
perty owner, they are against him. Religion con-
demns all spoliation; of labour quite as strongly as
of capital. In fact since labour is usually the weaker
THREE OPIATES OF THE CHRISTIAN CONSCIENCE.
153
of the two, and the more likely to be oppressed, a
priori, religion ought to be on the side of labour.
In practice religion is often invoked in support
of what is, rather than of what ought to be. This
is truly the province of civil laws. They uphold
rights by actual possession or by contract. Moral
laws give to each man his due. To buttress the
institution of legal property by the eighth command-
ment, is the inversion of the true order, and would
make religion the obedient servant of civil and
economic laws, a mere auxiliary to the police.
"
Thou shalt not steal," is indeed the foundation
stone of the true institution of property, understood
as embracing both labour and capital. It is a dis-
criminating force, seeking to apportion justly between
two claimants.
Called in like Balaam to curse social reform, it
comes to bless it. It is the epitome of a property
code, which was distributive in all its details.
Commencing with equality of possession, it forbade
accumulation saying, "Thou shalt not steal;" and to
nip the desire before it had blossomed into act, it
added "Thou shalt not covet." The only covetousness
known to the Hebrew law was the desire for
what other men possessed when all had their due.
The coveting and stealing of the decalogue, is the
desiring or the taking, not what others happen to
possess, but what they ought to possess.
154
THE ETHIC OF USURY AND INTEREST.
If there could be any doubt as to this, it is made
perfectly clear in the commentaries of the time.
The complaint is, of oppressing the hireling in his
wages, of adding house to house, and field to field,
of the splendour of ceiled houses, and painted walls.
The Scriptural law of property is distributive. It is
turned inside out by those who apply it to support
accumulation. Thus the cry against the spoliation
of property, nine times out of ten, boomerang-like,
returns to wound its unskilful user.
And so the function of Christian morality emerges.
It is certainly not merely to say "ditto" to the law
of possession. This would be to efface itself. Cer-
tainly also it has no data upon which to decide
what rate of interest is lawful.
But recognising two rights of property-in labour,
and in stored-up labour, it first seeks out, and
then destroys those causes which amass wealth to
the impoverishment of labour.
These must not be mere platitudes of the study.
Capital, complacently, and labour, bitterly, believe
that Christianity has been captured by "property."
There is too much foundation for the belief. There
are many signs, however, of an awakening of
the Christian conscience. The claims of labour are
better understood, and that is a long step towards
their being conceded.
But another anodyne is applied to the conscience.
THREE OPIATES OF THE CHRISTIAN CONSCIENCE.
155
Poverty, it is thought, is to be met by almsgiving.
The stirring of the conscience effervesces with the
cry-what can I give? The function of wealth is
thought to be the relief of poverty. Almsgiving is
hushmoney, ransom, charity, according to circum-
stances.
Philanthropic charity cannot touch the causes of
social ills. Its use is to relieve hard cases that
arise in the working out of economic laws.
as
The habitual relief of the poor by private charity
cannot fail to have much the same effect upon wages
out-door poor-law relief of the able-bodied.
It depresses them. There is a class of women in
East London, who, being partly kept by relations and
friends, take in needle-work at such low rates that
they cannot live upon them. They thus fix the
scale for those who live by
class.
work of the same
In the cap-making and one or two similar indus-
tries, the work is harder and the pay lower, rela-
tively to that in jam factories, because in the former
case, the work is reckoned genteel enough for the
daughters of clerks and others who are partly
or entirely boarded by their fathers; while in the
jam factories none work but the factory girl who
must live by her earnings. Generally in many
home industries the scale of wages is lowered
by the pocket money" competition
competition
"
of the
156
THE ETHIC OF USURY AND INTEREST.
wives and daughters of the better-to-do artisans.¹
The necessity of living by what is earned, acts in
much the same way as a high standard of comfort—it
forces the worker to insist upon at least enough
wage to live upon. The effect of a flow of charit-
able doles is much the same as that of the famous
Berkshire experiment:-a portion of the year's wage
is paid by some one else than the employer. Whether
this be done by the rate payer, or the philanthropist,
is of little consequence economically. Capital which
has managed to skim the cream off the improvements
of machinery, and the better organisation of
industry, will far more easily skim the cream of
charity.
Doles to the necessitous are the sweater's oppor-
tunity. The mansion house Unemployed Fund of
1888, drew to the metropolis a crowd of hungry
campfollowers of the army of industry. The work
to be done was not increased, but the number,
already too large, of competitors for it was, with
loss to every one but the sweater. He discharges
his hands in slack times, and takes them on again
when business improves.
improves. Meanwhile they have
been kept alive for him by gifts and doles. They
work perhaps nine months in the year, and assisted
by charity eke out existence for the other three.
1 Cf. Miss Collett on "Woman's Work" in Labour and
Life in East London, pp. 468, 469.
THREE OPIATES OF THE CHRISTIAN CONSCIENCE. 157
In other words for nine months pay they are at the
beck and call of capital.
This charitable assistance is necessary as things
are, and is often very gracious on the part of the
givers. But it is no remedy. It increases the gains.
of capital, and shortens the arm of the powerful
lever to maintain wages, which is found in the
necessity of living by labour. In the ideal state
the less need of it the better.
The other branch of philanthropy is more legiti-
mate, the rescue of children and of adults. Those
who pick out of the gutter the waifs and strays,
and make of them capable citizens, or who take by
the hand the fallen and the wretched victims of
misfortune, folly, crime, idleness, or drink and set them
on their feet again, are truly serving God and the
State. There is some danger even of such help being
discounted. Mr. C. Booth¹ seems to
to think that
dissolute parents are already beginning to rely on
their neglected children being cared for.
But at the best, all this only heals some of the
running sores of society. While the disease itself is
let alone fresh sores will break out elsewhere.
The pressure of competition is continually breaking
down the weaklings. What they want is not to be
1 Such "interference may begin to be counted on, and if so
it will finally stand convicted as the cause of misery." Life
and Labour in London, Vol. i., p. 127.
158
THE ETHIC OF USURY AND INTEREST.
helped when they have been thrown down, but
rather to escape being thrown down at all. Charity
at the utmost can only pump the ship-Social Reform
must stop the leak.
The remedy lies not in giving, but in giving up:
not in charity but in social justice. Wealth must
be socialised in the earning of it, not doled out
from the superabundance of unearned treasures.
CHAPTER XV.
POLITICAL
RESTRAINTS
UPON THE
INDUCEMENTS AND
FACILITIES FOR ACCUMULATION.
To what conclusions are we pointed?
Capital has been saved by efforts which deserve
to be paid for. The service being personal has,
however, no claim for payment beyond the lifetime
of the person who has rendered it. Then the com-
munity is the rightful heir. Any profits of such
capital are then due to public order and security,
and the social progress consequent thereon, and to
the labours of the generation then living. The
public expediency of encouraging such saving sug-
gests more than the barest rights. But as things
are, any person who has saved capital can attach
to his heirs for ever, the whole of its future earnings.
But this is not all. By the inequalities of con-
dition thus introduced, capital is now able to gain
a further profit from underpaid labour. In other
words much of what is called interest, dividend,
or profit, is really Usury.
160
THE ETHIC OF USURY AND INTEREST.
Labour is thus plundered twice over. First, of the
profits of the stored-up labour of the past, of which,
after those who stored it up have been personally
rewarded, it is the lawful heir. Next, and in con-
sequence, it is deprived of a considerable share of
its co-temporary earnings.
This may seem to beckon in State Socialism.
This remedy, as has been pointed out, goes beyond
the disease. It does not, in its treatment of the
past, duly recognise and reward the function of
individual thrift in the promotion of national wealth.
Also, in its proposals for the future, it does not
provide a sufficient guarantee that social thrift will
enter in to take the place of the individual thrift that
has been expropriated, discredited and penalised.
The true problem is how to maintain this lawful
interest, while destroying usury. Here the broader
Christian Socialism which is not bound down exclu-
sively to mechanically economic remedies, is indi-
cated. The old attempt to specify what exact amount
of profit was usurious, and then to forbid it by
quasi-sumptuary laws was an obvious failure. Its
abandonment led to the experiment of complete eco-
nomic freedom. In this the inherent power of money,
has turned the scale in favour of capital. Hence
amongst the lowest classes, misery and degradation;
amongst those just above them, an almost revolutionary
discontent,--are rife. The proximate cause being
POLITICAL RESTRAINTS.
161
undue accumulations of wealth amongst comparatively
few, the remedy must be sought for in breaking up
this policy of accumulation.
This may be effected in two ways: either the
inducements to amassing property, or the facilities
for the process may be lessened, if not removed.
Taxation has long been used for other than fiscal
purposes:—as in the Excise, to restrict consumption
of alcohol, in the death duties to keep property in
families, and in the taxes on menservants, carriages
and a few such matters, to penalise or restrain
luxury. It might properly be used as a restraint
upon fortune-making. An Income tax rising in
poundage with the income would have its effect.
The game of exploiting labour would not be so well
worth the candle of resisting combination-if of
every extra five hundred a year so obtained, an
increasing proportion had to be handed over to the
State in taxes.
A few years ago a graduated Income tax was
esteemed a project of spoliation. Now the absence
of it, is rather seen to be spoliation. The State, as
things are, every year by an unjust Income tax
plunders the industrious twice over. First it takes
as much from the income which has been earned, as
it does from the income which has been inherited.
Next the smaller incomes which have been earned
pay at the same rate out of the earned fund for the
11
162
THE ETHIC OF USURY AND INTEREST.
necessaries of life, as others do out of the unearned
fund for its superfluities. One-fortieth part of the
necessaries of one family are taken away, in order
that only one-fortieth of the luxuries of another
may be taken.
Taking other imperial taxes into account the
injustice is seen to be greater. It has been com-
puted that relatively to income, the rich pay 4·96
per cent., the middle class pay 6.7 per cent., and the
manual labour class pay 5.81 per cent.¹ That is to
say, the poorest pay on every five pounds of their
income six shillings in taxes, where the richest class
would pay five shillings on the same income. The
narrowest income that has been earned, often by an
inadequate wage, pays one-fifth more than the largest
income, much of which has not been earned at all.
This is spoliation, but not of the rich.
Thus justice and expediency point in the same
direction. Taxes on industry hinder its expansion.
Taxes on moderate means are both severely felt,
and often diminish the funds available for the best
bringing up of the next generation. The ideal tax
is that on unearned incomes. It is taken from a
fund which ought not to exist, but being there
belongs more to the community than to any indivi-
dual. Its diminution lessens both luxury and idle-
ness. It were better taxed
taxed away by degrees.
1 Mulhall's Dictionary of Statistics, p. 438.
POLITICAL RESTRAINTS.
163
Certainly public policy demands that such taxes
should be laid upon it as may check the formation
of a fund of unearned income which is founded upon
injustice, and is fertile in mischief.
There is one object to which such a tax might
justly be devoted:-old age pensions. Labour, after
providing three hundred millions yearly to maintain
a limited class in idleness, cannot provide for its
own old age. The proprietors of these unearned
incomes may properly be required to support during
old age the workers who have maintained them during
their whole life. An average Income tax of eight-
pence in the pound on these incomes, on some more
and on some less, would provide ten millions. Ab-
stract justice would claim a complete maintenance for
those who have been industrious. Partly to distin-
guish the industrious from the idle, partly also not to
extinguish thrift and independence, some substantial
evidence of saving should be required. But the real
maintenance can come, ought to come, and can only
come, out of the resources of unearned property.
That any person whose life has been industrious,
and serviceable to the State, should linger out its
closing years, in the privations, or under the stigma
and livery of pauperism is one of the scandals of the
age. A pension is simply deferred pay. Those,—
and their name is Legion-whose wages have been
depressed by causes beyond their own control, have
164
THE ETHIC OF USURY AND INTEREST.
laboured on the terms of deferred pay. If they are
pensioned in old age, they receive that pay. If they
are not, or, as under the existing Poor Law only
meagrely pensioned, they are deprived of the whole
or a part of their due, to say nothing of the contemp-
tuous treatment to which they are subjected as
paupers, when they are really extinct volcanoes of
wealth.
It has been seen (in Chapter XII) that in many
successful jointstock enterprises, the profits above a
certain margin serve no economic purpose. The
margin varies with the risks of the undertaking,
from little more than four per cent. in the best rail-
ways to seven per cent. and more; being always high
even in the soundest banks owing to the cover of
uncalled capital which is necessary. Thus when the
dividend of the Midland Railway was six per cent.
the yield to the present owners was four and one-sixth
per cent. The difference between these two rates really
passed to the former owners. What cost thirty millions
in the first instance costs its present owners forty-
four millions. The profits of the railway as a going
concern have to remunerate a capital of fourteen mil-
lions beyond that which founded it. A certain portion
of this extra capital in the first instance remunerated
the risks of the original investors. But the share
which they received, if any, was only a moderate
sum, and ought not to have been more.
POLITICAL RESTRAINTS.
165
This is the case with capital measured by hundreds
of millions. The persons whose capital now works
these enterprises gain no advantage from high divi-
dends. Since they have paid out former owners by
a heavy premium, the effect is the same as if they
had to pay to the former owners the difference
between the actual dividend, say of six per cent.
and the yield to the investor of four and one-sixth per cent.
That is to say, the profits above the current yield of
capital in any class of investment, does not re-
munerate those whose capital is now carrying it on,
and is a deduction from the earnings of the labourers.
It flows away from the enterprise altogether. Neither
of the two parties occupied in it, reap any advantage,
and one is directly injured. This difference, which
amounts to many millions yearly, is a Rent of Specu-
lation. As it rises and falls, it is tossed to and
fro among speculators, and forms the ground work
of vast gambling transactions. Public policy requires
both on moral and on economic grounds that the
Stock Exchange value of shares shall be kept as
nearly as possible on a level with their original
value. Is it beyond the power of Statesmanship to
deal with this Rent of Speculation?
As regards future companies it can be kept within
bounds. An Income tax might be levied on the
profits of a company when these rise above a cer-
tain margin, to be paid in addition to personal
166
THE ETHIC OF USURY AND INTEREST.
Income tax. In other words the State might lay its
hand upon those extra profits, which after a time
are certain to flow away from the necessary capital.
Or it might be provided that when shares reached
a certain premium, there should be conceded to the
employés or the public a right of purchase of a
certain number, to be drawn by lot. This would,
as with bonds redeemable at par, keep the price
down. The premium should be fixed at such a
sum as might fairly remunerate risk, but should not
be raised too high, for risky undertakings are not
to be encouraged.
This would involve publicity of accounts, after
some specified form. It is well known how J. S.
Mill advocated publicity in limited liability quite as
strenuously as the principle of it. Certainly the con-
cession of so great a privilege as exemption from
the ordinary responsibility of business undertakers to
pay all their debts, justifies any such requirement.
How to deal with the Rent of Speculation which
already exists is a different matter. An Income tax
is always legitimate. Moreover, if the rights of pro-
perty are to be held as absolutely inviolable no reform
is ever possible. The rent of farm land, has been
reduced thirty per cent. by the repeal of the corn laws.
The Rent of Speculation, which is so iniquitous in
its origin and demoralising in its influence, is hardly
more sacred than the rent of land. There is no
POLITICAL RESTRAINTS.
167
difference in principle, in reducing one more than the
other, unless it be that the speculator's gain are less
worthy of consideration. On the other hand the
stress upon labour is not only cruel, but so politi-
cally disquieting that it may find more violent
remedies.
The above are merely thrown out as suggestions.
Other means of reducing the Rent of Speculation may
be divided. Whatever does impose limits upon it,
will check the exploitation of labour. The motive
thereto will be weakened in proportion as its gains
are reduced. An impetus will be given to profit
sharing, or to some form of joint ownership between
capital and labour, by any method which sends the
profits above a certain point away from capital. The
gambling capitalist thrives upon usury. Evict him
and a truer level will be found between earnings and
interest.
The artificial facilities for accumulation can only
be restrained by placing some limit to the absolute
power of bequest now enjoyed.
Although possessions are due to general industry
and public safety and progress as well as to the
individual's energy, their owner after his death can
dispose of them as completely as though he were
their sole creator, and no one's interest but his own
were involved. Excepting what he has enjoyed under
some settlement, the remainder is subject to the dead
168
THE ETHIC OF USURY AND INTEREST.
man's autocratic will. The power thus exercised is,
as has been noted, no natural, nor social right. It
is a civil privilege, conceded upon reasons of supposed
advantage which obtained under totally different
conditions. In France no such power is now per-
mitted. The dying owner can dispose by will of a
small portion of his estate, contingent on the number
of his children. It is divided into shares more numer-
ous by one than there are children of the testator.
Each of these children inherits one share, the testator
disposes of the one that is thus left vacant
English law while granting absolute disposal
favors bequest among the nearest relatives, the legacy
duty varying from nothing to husband or wife to
ten per cent. to a stranger in blood. This is a survival
of the times when fortunes being smaller and more
equally distributed the family affection of the enter-
prising was thought worthy of a stimulus. In these
times of accumulativeness, the rule might be reversed
to this extent that, after a certain sum has been
bequeathed to lineal relatives, a much higher duty
should be charged upon further bequests to them than
to collateral relatives or strangers.
The principle of this already forms part of the
law. Legacies to the Royal Family are free of
duty, i.e. are encouraged. But as many of the
powers and privileges of the Crown have in the flux
of time lapsed to the Commons, so without any breach
POLITICAL RESTRAINTS.
169
of continuity might this encouragement of bequest to
the Crown be extended to bequest to the community.
Or
Other abridgements of bequest have been sug-
gested. Some have proposed that there should be
attached to the testator an incapacity to bequeath
more than a fixed sum to any one person. J. S.
Mill favoured the other suggestion of an incapacity
in any one person to inherit more than a fixed sum,
with an exception in favour of the inheritors of large
houses and mansions. These objects might be pro-
moted more smoothly
more smoothly by legacy and succession
duties on an ascending scale and rising to a high
percentage when large fortunes are inherited.
again, the principle of Mr. Goschen's estate duty of one
per cent. on estates of £10,000 and over might be ex-
tended, both upwards and downwards, very high estate.
duties being charged on an ascending scale as fortunes
increased in magnitude. The principle is already
adopted, but inadequately carried out. Thus on an estate
of £500, £10 is paid in Probate duty on £1000,
£25 is paid, and above that £30 on every addi-
tional £1000, until the limit of £10,000 is reached,
when a further one per cent. is exacted as estate
duty provided there is only one inheritor. The prin-
ciple is admirable that large fortunes shall pay on
a higher scale. But it is inadequately applied. On
a small property the burden weighs heavily. On
large fortunes after an extra one per cent. has been
170
THE ETHIC OF USURY AND INTEREST.
added, accumulations, however large, escape any further
increment of estate duty. The man who leaves
£1,200 as provision for his widow will have his
estate charged at the rate of three per cent.; while the
millionaire's estate of a thousand times the value will
contribute at the rate of only four per cent. The thin
end of the wedge has been inserted, it only needs to
be driven well home.
It cannot be urged that by any of these methods
the rights of the living would be infringed, for they
have no rights, but only expectations. Expectant
heirs are at the mercy of every whim of the posses-
sor of unsettled property. A second marriage may,
and often does, disinherit a whole family of sons
and daughters. Or all may be left to the widow,
who even at the age of eighty may transfer her
children's patrimony to a wealthy suitor. The very
completeness of the testator's powers, makes it easier
to remedy the mischief. The power of the dead
man's hand is so despotic that every individual
member of the whole society is deprived of any
shadow of a right to the personal property which
by this last will and testament the deceased is
grasping. The only rights that will be curtailed are
the rights of the deceased.
In the case of small properties these prospec-
tive rights have their advantage in stimulating
enterprise. Large accumulations are so injurious to
POLITICAL RESTRAINTS.
171
the community that for every person whose expec-
tations of a large inheritance are abridged, hundreds
of others will find their prospects improved. In this
case, as in others, the rule of civil life holds, that
the good of the many must prevail over the advan-
tage of the few. The motives for large accumula-
tions are at the best, ambition. In proportion as
they are discouraged, will the ability and therefore
the motives to smaller thrift be fostered.
It is thus abundantly clear that without any violent
dislocations, such as would shake the foundations of
public security, much might be immediately done by
the wider application of principles already acted
upon, both to lessen future inducements to the mass-
ing of property, and to break up into smaller frac-
tions existing accumulations.
In this as in all true progress, the rule Festina
Lente applies. Every short step that was taken at
first, and at once, would make much longer steps
more possible and more prudent.
Numerous precedents exist for dealing with income,
and bequest. Thus Income tax is charged on the
funds of benefit societies. There are co-operative
societies for provident purposes. Individual co-opera-
tors though not otherwise chargeable with Income.
tax are taxed upon the provision they have made for
sickness or burial. Here is a precedent for an
172
THE ETHIC OF USURY AND INTEREST.
Income tax on the income of joint-stock companies.
apart from any personal Income tax payable by
individual shareholders on the incomes drawn from
it. If it is not unjust to tax co-operators in saving,
it cannot be unjust to tax co-operators in production.
A company Income tax which is levied when the
dividend rises above the normal interest on capital
would not be a tax upon industry, being charged
upon that producer's surplus which "does not enter
into the expenses of production."
Again the rates levied upon the Tithe Rent-charge
which is received subject to the performance of the
duties of an incumbent, are really a tax upon an earned
income. A clergyman who receives an income of £120
a year from Tithe Rent-charge in consideration of
the discharge of his parochial duties will, crede experto,
pay upon that sum in the form of Rates, an Income tax
of £17 odd, or about 2s. 11d. in the pound. If it is
just that an earned income of £120 should pay an In-
come tax of 3s. in the pound, it must be unjust that
an unearned income of £1,200 or of £12,000 should
only pay at the rate of 6d. in the pound. Here in the
taxation of the clergy is a precedent for a very heavy
graduated Income tax on the wealth of the idle rich.
Property owners when they had Parliamentary power
did not think it unjust to levy an Income tax of about
3s. in the pound on clerical incomes. They cannot
complain if the Proletariat carry out to its logical con-
POLITICAL RESTRAINTS.
173
clusion their own principle of taxation, by imposing
at least as much on unearned but very much larger
incomes.
Yet once again, the owners of land in the neigh-
bourhood of industrial centres, have, as a matter of
fact, severely limited the powers of bequest of the
public. To take one example out of many, Edg-
baston in the suburbs of Birmingham comprises square
miles of land covered with villas and other houses,
erected for the most part at the expense of indivi-
duals others than the owner of the site. The value
of these buildings must amount to some mil-
lions. Yet the persons who have spent these millions.
possess only a very limited estate in the houses which
they have built. They cannot dispose of them by
will beyond the term of the lease on which they
were granted the right of building. When that has
expired, the whole property passes, ipso facto, to
the heirs of the original owner of the site. If an
individual may thus use his powers to limit the powers
of bequest of his fellow-subjects, the State, which is
the sole fountain of legal rights, cannot be dis-
allowed the right to limit powers of bequest in any
way that may be for the general public advan-
tage.
While, however, precedents are not wanting, the
broader grounds justifying intervention are found in
the fact, that unlimited power of bequest, allowed
174
THE ETHIC OF USURY AND INTEREST.
in one tenth part of the community, has abolished
the power of leaving anything worth speaking of, in
the case of the other nine-tenths. Moreover, inas-
much as the creation of property, and its value
afterwards, are, in very great measure, due to the
progress and stability of the society, this latter
body may justly claim against any individual, a
potential voice, at the least, in the disposition of the
estate after the owner's death.
CHAPTER XVI.
THE DIFFUSION OF WEALTH DRIES UP THE
SOURCES OF USURY.
THE effect of the changes sketched in the preceding
chapter must be a greater diffusion of capital. When
the waste pipes in the rainwater tank are closed
up, the water will brim' over the edges at all points.
If capital is hindered from flowing into the posses-
sion of a few, it must, unless its growth be hindered,
be spread abroad among the many.
There is, of course, one way in which the fund
available as capital might be curtailed. This fund
is the excess of the produce of labour over those
things which are necessaries of life for the pro-
ducers. If the efficiency of the labourers, either per-
sonally, or by an inferior organisation of industry be
lessened, this excess will be correspondingly reduced.
Events are, however, making it clear, that the
organisation of industry, does not now, as formerly,
depend upon large private fortunes. The limited
liability system has changed all that. Paid manage-
176
THE ETHIC OF USURY AND INTEREST.
ment, with acquiescent shareholders, is now the
rule. In proportion as shareholders take a dormant
part in directing the business, does it matter less
whether they are many or few, i.e. to say whether
the capital is contributed in small shares or in large.
Since the greatest undertakings are, as they now
are, conducted on the joint stock system, and inas-
much, moreover, as private firms are continually
transforming themselves into Limited Companies, we
have the clearest, because a practical, proof, that
large accumulations in private hands are no longer
necessary for the effective organisation of industry.
Therefore no fears need be entertained as to the
continuance of the fund out of which future Capital
must be formed. So far as it depends on the pro-
ductiveness of Labour, it will not be less, but will
presumably be greater.
On the other hand, so far as it depends upon
what is consumed as necessaries of life this excess
will be greater. Large private fortunes mean a
high standard of the necessaries of life, with a cor-
responding extravagant consumption. As fortunes
are lowered and equalised this unproductive con-
sumption will be diminished. The excess fund
available for capital will be greater than it now is.
There will be an increased ability to save.
Several causes will also increase the disposition.
For one thing people are more disposed to do
THE DIFFUSION OF WEALTH.
177
that for which they have opportunities. All that
most can now do, is to put a few pounds into the
savings bank, without much, if any, prospect of
ever being able to invest it in any palpable form
that appeals to the imagination. But should accu-
mulations be broken up, capital must trickle down
into lower social strata, bringing opportunities of
small investments within reach. The passion for
saving in France to purchase "Rentes" is well known.
In England as a more industrial nation, it might
find a wider exercise. When once property has
been more thoroughly diffused there will be in the
market, through death and otherwise such a constant
choice of small properties, in Land, Houses, Shares,
etc., that the opportunity will help to breed the
will to save.
Again the multitude of small proprietors will by
the force of example, substitute a standard of saving
for the standard of extravagance which too often
prevails. Mankind is very much influenced by its
human environment. Where most of the neighbours
own something, those habits of thrift whereby their
example can be emulated will spread their roots.
Also, small proprietors are apt to be more saving
them large ones. Those whose means are assured
are apt to bring up the eldest son on their own
scale of expenditure, and to quarter the younger
branches of the family upon society by means of
12
178
THE ETHIC OF USURY AND INTEREST.
the various lucrative offices which interest can secure.
Persons of humbler means aim rather at giving all
their children a good start in life in various pro-
ductive industries. The latter augment the fund
available for capital, as much as the former draw
cheques upon it.
Thus in various ways, greater diffusion of property
tends to increase both the ability and the disposition
to thrift. It will also, in more than one way, lower
the rate of interest.
This will result from the greater abundance of
capital, which besides belonging, much of it, to small
proprietors, will be less likely to migrate. But
other causes will also tend to lower the rate of
interest.
A high standard of Luxury presses the rate up-
wards. Persons of small means, with a false stan-
dard of worth which requires them to live both in
idleness and in gentility-it is these to whom three per
cent. seems paltry. These with visions of seven per
cent. as the very least that will suffice their wants, are
the prey of the company promoters. But a whole-
some belief in the honourableness of earning a
living, together with lower standards of luxury will
breed contentment with a lower yield. The new
class of investors, with humbler views of life, and
looking chiefly for a provision for old age will be
even less exacting.
THE DIFFUSION OF WEALTH.
179
But the main cause of a lowered rate of interest
will lie in the emancipation of industry. In propor-
tion as property is diffused among the wage-earning
classes, will they be strengthened in the labour
market. There will be less need, and less desire,
for the wasteful machinery of strikes which seek to
improve the condition of workers by stopping industry.
Men will not wish to injure a property in which
they have some other interest beyond that of drawing
from it weekly wages. Anything which legitimately
strengthens the wage-earner when he offers his
labour for sale, will help to dry up these sources of
property in underpaid labour, i.e. of Usury.
It may be urged that the mere breaking up of
accumulations of property cannot have such far-
reaching effects. But judging from experience there
is good reason for the expectation.
From the legacy and succession returns of 1840,
it would appear that society then consisted of
five million two hundred and ten thousand families
who were divided
divided thus. There were eighty-six
thousand eight hundred and thirty-three families of
the rich class, seven hundred and eighty-two thousand
one hundred families of the middle class, and four
million three hundred and forty-one thousand and
sixty-seven families of the working class. By similar
returns for 1877, the number of families had increased
180
THE ETHIC OF USURY AND INTEREST.
to six million seven hundred and seventy-six thousand,
a rise of twenty-eight per cent. Had the relative
conditions remained unaltered, the rich families would
have been increased by twenty-four thousand three
hundred and thirteen; the middle class by two hundred
and eighteen thousand, nine hundred and eighty-eight,
and the working class by one million two hundred and
fifteen thousand four hundred and ninety-eight fami-
lies. In fact, however, in 1877 the classes had in-
creased as follows: Rich families by one hundred and
thirty-five thousand six hundred and sixty-seven, or
one hundred and fifty-six per cent.; middle class
by one million forty-two thousand three hundred,
or one hundred and thirty-three per cent.; while the
working class had increased by only two hundred and
eighty-eight thousand and thirty-three families, or
six per cent.¹ That is to say, in those thirty-seven
years, nine hundred and twenty-seven thousand four
hundred and sixty-five families passed out of the ranks
of the working class into the classes above them,
while the rich class was augmented by one hundred
and eleven thousand three hundred and fifty-four
families above its normal increase.
These figures are very significant. They show
that forces have been at work lifting people upwards,
but especially into the ranks of wealth, the increase
of the richest being by one hundred and fifty-six
¹ Mulhall's Dictionary of Statistics, p. 473.
THE DIFFUSION OF WEALTH.
181
per cent., and that of the middle class by one hundred
and thirty-three per cent.
This was the case, although as has been pointed
out, economic and political forces during that period
were tending strongly towards accumulation. Never-
theless the class without property decreased by twenty-
two per cent., and the class possessed of moderate
property increased by one hundred and five per cent. ;
in both cases the increase and decrease being reckoned
relatively to the normal rate of expected increase.
Clearly then there were strong forces counteracting
the accumulative tendencies.
Here there is a hopeful augury. If in some way
as sketched out, these strong accumulative forces can
be broken down, then those forces which in the past
have been elevating the working classes, being no
longer impeded, or very much less impeded, will be
able to work out an amelioration of the wage-earning
classes, such as will be beyond any experience in
the past.
These effects may be easily traced out in the three
main divisions of society:-property-owners, wage-
earners, and the residuum of economic incapables.
Let it be supposed that by a high tax upon exor-
bitant incomes the motives for obtaining them were
severely checked; and that by limitations of bequest
or succession, fortunes that have been accumulated
182
THE ETHIC OF USURY AND INTEREST.
What has been already
were rapidly divided in much smaller shares among
a much larger number of heirs. Two potent socialising
forces would now be set permanently in motion, the
one touching the springs of action, the other distri-
buting the national wealth. It would be folly to heap
together wealth of which year by year the State
would take a heavy toll.
massed would be automatically divided out again. We
have already seen that there is nothing in this to
check industry and thrift. Ambition, carelessness, and
luxury would be penalised. Obstacles to national pros-
perity would be removed, its healthful causes fostered.
The least result would be the raising of consi-
derable funds by this extra Income tax and these
heavy death duties on large properties. So much
wealth would every year be thus socialised. There
would be no lack of funds from which to subsidise
the pensions of worn out toilers. Increased death
duties might be fitly applied, in honorable compe-
titive socialism, to destroy not the fruits of thrift,
but vested interests in usurious profits.
Two years ago, five thousand seven hundred and
two persons died worth more than £4,000 each,
bequeathing a total of £136,000,000. This is about the
average of every year. Had a law been in force
prohibiting, with necessary exceptions, any one person
from inheriting more than £4,000 for example, that
vast sum of £136,000,000, and a similar sum every
THE DIFFUSION OF WEALTH.
183
subsequent year, would be diffused over larger areas.
Each of these smaller inheritances would henceforth
be centres of dissemination instead of, as heretofore,
accumulation. For the new class of owners having
less to leave behind them, would be compelled by
family affection to apportion their estates in sums
considerably less than the legal limit. Thus the first
generation would see large results of legally com-
pelled distribution. Succeeding generations would find
social forces coming in to quicken the law's action.
For the moral effects would be very great. The
Law of Unlimited Bequest educates people into ideas
of accumulation. Like the laws of primogeniture it
sets up a fashion of large fortunes. A strictly
limited power of bequest is an educating force in
the opposite direction. Vast numbers of persons
who now, being disinherited, strive and push to
raise themselves by fair means or foul to the level
of wealthy relatives or neighbours, would themselves
be heirs of a moderate share, with a strong hint
from the State that it was not their interest now
to lay up excessive treasure upon earth. A lower
standard of fortune, and therefore of unproductive
consumption, would be set up. Distributive socialism
would be rapidly permeating the community, and
with accelerated velocity in each succeeding generation.
The effect upon the wage-earning classes would be
felt in two ways. First, the strain upon the orga-
184
THE ETHIC OF USURY AND INTEREST.
nisation of industry would be weakened. The com-
petition of capital for extra profits would slacken, as
the enjoyment of them when realised was curtailed.
Next, capital filtering downwards in small sums
would come within the grasp of wage-earners, stimu-
lating by its opportunities that thrift and self-depend-
ence of which Benefit Clubs, and Building Societies
have given such ample proof. Thus capital in its
usurious tendencies becoming weaker, and labour by
its participation in capital becoming stronger, the
two agencies, now so often in conflict, would be
drawn together. Nothing tends more to "peace with
honour" between two parties than an equality of
strength. A great impetus would thus be given to
the movement for still further diffusing capital among
the wage-earners by profit sharing and co-operation.
There would ensue a continual levelling down of
capitalists, and a continuous levelling up of wage-
earners-both processes tending to a continuous des-
truction of property in underpaid labour.
Professor Marshall estimates that about "£100,000,000
annually are spent even by the working classes, and
£400,000,000 by the rest of the population of
England in ways that do little or nothing towards
making life nobler or truly happier.
"9 1
Here indeed is a nest-egg of prosperity, if only we
can prevent its being addled every year, as it now
1
¹ Principles of Economies, Vol. i., p. 747.
THE DIFFUSION OF WEALTH.
185
is. This £400,000,000 a year, when the standard
of fortune, therefore of luxury, therefore of unpro-
ductive consumption, has been lowered, will be ab-
sorbed into the productive consumption of the nation,
instead of being wasted by the few. This £100,000,000
a year, when the standard of prudence has been
raised by opportunities for its exercise, would become
a lever of elevation, instead of being, as now, too
often, an instrument of degradation.
We have seen how strong was the upward move-
ment in the period from 1840-1877, even when
labour was passing through a time of great weak-
ness. It is obvious that when the tendency to accu-
mulation is checked which increased the richest class
by one hundred and fifty-six per cent., what they
lose will percolate downwards. A variety of forces
tending to the emancipation of industry would have
a freer action.
There remains the large class of various shades of
poverty, forming in London at least, nearly one-
third of the population. These, for the most part,
form a sediment from the classes above them. The
poorest of them, those in chronic want, are not as a
rule born into their class. They are the waifs and
strays who have drifted downwards. The whole class
consist of economic pariahs from society, because
they are economic incapables. They are in casual,
irregular, or poorly-paid employment because under
186
THE ETHIC OF USURY AND INTEREST.
the high pressure competition of the times they are
not worth a happier lot.
First the recruiting sergeants of this army of
poverty would be shorn of much of their power.
Intemperance, unthrift, misfortune, sickness, accident,
the premature death of the breadwinner, incapacity
whether, physical, mental, or moral, bring individuals
down from the regularly employed, fairly paid wage-
earning classes. For a trifling (economic) fault the
offender is reduced from the ranks. But under a
more equable diffusion of the means of living every
one of these causes of depression would be weakened.
Added to which there would be less of that reckless-
ness which often breeds a new progeny of incapables
or vicious. The environment would be healthier.
But further, the pressure upon those who do sink,
or are on the point of sinking, would be less severe,
The fierceness of the competition for financial exis-
tence would be moderated, when there was no longer
a first charge upon industry of perhaps more than
£300,000,000 a year in maintenance of uselessness,
to say nothing of a foolish and extravagant spending
of real earnings. There would not be so many weak-
lings evolved out of the system. Such weaklings
as did exist, would not be relatively so feeble, for the
depressing conditions of their lives would not be
so strong. In other words there would be fewer and
weaker causes at work manufacturing incompetence,
THE DIFFUSION OF WEALTH.
187
degradation, and misery. The hideous output of demo-
ralised humanity would in time altogether cease. So
long as human nature is weak we may expect to
have the poor always with us. But the artificial
manufacture of hopeless, and often brutalised poverty
might at least be abandoned. The motive power of its
machinery will be quenched by any of these methods
for the extinction of property in underpaid labour.
Parallel with these movements, the principle of
Collectivism might be applied in fair competition,
especially in those industries which like gas works,
water works, tramways, etc., are partial monopolies,
much of the profits of which are as entirely due to the
industrial prosperity of localities as are ground rents.
The methods suggested in the foregoing chapters
would have already eliminated a great part of the
artificial profits of these undertakings, and so made
them purchaseable on much easier terms, should
municipal ownership be desired.
The two movements, of distributive socialism and
of competitive socialism would work on converging,
but never absolutely identical lines, after the manner
of the hyperbola and its asymptotes. The trend
would be towards a fusion of (the now) mutually
destructive classes, and to the ultimate extinction of
the property in underpaid labour, which the world
for centuries has branded as Usury.
CHAPTER XVII.
SOME MORAL FACTORS OF THE PROBLEM.
THE problem of usury and interest has been treated
in these pages from the point of view of the facts,
the necessities, and the general economy of English
life. The social question in each nation will be
largely determined by hereditary character and cir-
cumstances. In the case of England, insular position,
colonising aptitudes, manufacturing supremacy, capa-
cities for self-government in combination with tradi-
tional conservation of many Feudal Privileges and
Powers, have differentiated the social question from that
of every other nation. Not the least important among
these factors of the problem, are the ethical pecu-
liarities of the English temperament. A few sentences
may therefore be fitly added in conclusion, on the
uncovenanted moral activities which are thus infused
into our own movements for Social Reform.
In the balance of Nature there is, as a rule, a
corrective for every mischief. Thus, if, as has been
often said, the religious reformation of three cen-
SOME MORAL FACTORS OF THE PROBLEM. 189
turies since, imported strong individualising forces.
into the English Polity, there has also been set at
work, a powerful counteragent, in the strong per-
sonal grasp of moral truths which was the inevitable
consequent of the religious movement. Without
entering on the discussion of the possibility of any
other origin of ethical ideas, there can be no doubt
that Christian Ethics connote the intuition of an
Absolute and Eternal Law of Right, existing outside
the individual, and not limited by his own percep-
tions or sensations of its existence.
Such a law is essentially socialising in its effect
upon conduct, since it provides for the rights of men,
considered not as individuals, but in their relations
to one another and their Author. One remarkable
feature in the English character is the personal
apprehension of this Absolute Law, which first neces-
sitated the Reformation, and then was continually
educated into fuller developement by its accomplish-
ment. Though, therefore, there was a serious loss of
socialising influences, in the resultant weakening of
ecclesiastical authority, the door was opened for a
corresponding gain, to be found in the Englishman's
habit of making moral truth his own, by the
rigorous application to it of individual judgment ;
provided of course that these moral sentiments be
rightly directed. It is certain that in no other
country are the moral factors of the problem so im-
190
THE ETHIC OF USURY AND INTEREST.
portant to social reform as they are in England,
though it must also be admitted that, hitherto, they
have lain dormant, or even have been active on the
wrong side.
For this, the time honoured confusion between
Usury and Interest, coupled with the obvious utility,
necessity and propriety of the latter, has been, in a
great measure, answerable. Thus the religious con-
demnation of Usury has been, except in flagrant
instances of extortion, as much a dead letter in modern
ethics, as the Hebrew ceremonial of sacrificing
animals for purposes of worship, is in modern
ritual.
The attempt has been made in the foregoing
chapters, but with what success the reader must
judge, to show that the ancient sin of Usury constantly
reappears in our life of to-day, though generally
under some disguise, which it is by no means always
easy to strip off. The moral bases have also been
pointed out of that political action, which abandoning
as inoperative, except for harm, the unscientific attempt
to discriminate, by a hard and fast line, Usury from
Interest, shall nevertheless set itself, by indirect
legislation, to dry up the sources of the former. In
promoting this moral appreciation of the issues
involved there is as great scope for the moralist as
for the statesman.
But besides this function of levelling the road for
SOME MORAL FACTORS OF THE PROBLEM.
191
the royal progress of political laws, there is a
wide field for moral activities. The habits of judg-
ment and of living may thus be placed under a
wholesome education.
This practical revival of the spirit of the religious
Usury Laws, in the form, under which they are
expressed in the New Testament, of the repression
of the desire for abnormal wealth, touches the very
mainsprings of human action, and is irreconcileable
with the postulates of economic freedom. The moral
right to much that is, in fact, possessed, is called
in question, and the conscience cannot be satisfied
with the mere reply that such possession is an
economic possibility. A healthy casuistry will enquire
into the distinctions between Usury and Interest in
the concrete, as well as in the abstract.
Probably no surer element of stability can be
induced into present-day society, than that which
would follow such a Christian Revolution in the
judgment as to the sacredness of property in the
stored-up labour of the past, as shall recognise with
the broadest sympathy a pre-dominant sacredness of
the worker's own property in his labour of to-day.
The creed that property may lawfully take as much
as it can get, is only a repetition, with economic
variations, of the old and dangerous symphony that
"Might is right." It is a strain that could be played
with other variations, by those who wield the power
!
192
THE ETHIC OF USURY AND INTEREST.
of numbers. The conditions of stable equilibriums
are attained when economic rights and political powers
are tempered and restrained, according to the ever-
varying needs of the time, by moral rights.
(
There is another sphere for the working of the
moral sense. It has to form a healthy public
opinion as to the discreditableness of abnormal wealth.
The social respectability" of riches works the see-
saw in which the depression of Industry is as deep
as the standard of Luxury is high. A huge bon-
fire is daily kindled of the rightful property of the
labourer. An unfair command over the enjoyments
of living is obtained at the expense of depriving
many of a fair share of the leisure, cultured
comforts or even necessaries of human life. How
can such a state of things be deemed respectable?
The persons so deprived may not always be the
particular workers from whose labours that wealth
has been directly gained. Their treatment may have
been passably fair, their lot not altogether, or at all,
wretched. The pressure upon them may have been
by no means severe. But an inexorable Law of
Substitution will have been sending that pressure
downwards with ever-increasing momentum, until
upon the lowest social stratum, as upon the water
at the bottom of a deep tank, the weight of cir-
cumstances is an intolerable burden. In this way
the crowds who are "in poverty," the multitudes "in
SOME MORAL FACTORS OF THE PROBLEM.
193
chronic want," and the "sweated " generally, are the
victims of an intricately connected social system.
In this sense "a fortune can only be made out
of the misfortunes of others."1 It may have been
earned. The inventions of the Bessemer process,
or of the Telephone and Phonograph, are worth to
mankind many millions, and would be cheaply pur-
chased at that rate. But there is no guarantee that
the reward will come out of the pockets of the
people who have most benefited by the invention.
There is rather a certainty that under the system
in vogue the burden of payment will be shifted from
one to another until it finally rests, not upon the
economic beneficiaries, but upon those who are
economically and socially the weakest.
They pay, in degradation and wretchedness, in
indecent housing and in precarious living, in
shivering and toil, or worse still, in want of the
permission to toil, in an aimless, hopeless "procras-
tination of death," the penalty which Nature exacts
for the breaking of those laws of hers which would
have socialised among the living the perishable fruits
of the earth.
As these things are realised, may we not look for
a growing sense of shame at even being rich. From
the intellectual point of view, the desire of abnormal
wealth is despicable. From the Christian point of
1
See Socialism of Christianity, p. 65.
13
194
THE ETHIC OF USURY AND INTEREST.
view it is immoral, as involving Usury. From the
economic point of view the realisation of the desire,
means to multitudes the toils of semi-slavery and
the misery of chronic want.
The plea for liberty has been urged by those to
whom it means liberty to rule over men's lives, and
to waste the products of their labour. There is
another plea for liberty which thunders on the sen-
sitive tympanum of the moral ear the liberty to
lead human lives, of progress, of culture, of hope,-
in a word, of manhood--which, in the Christian ideal,
connotes the likeness of the Divine.
THE END.
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HENRY GEORGE.
"Written with striking ability, and sure to attract attention."-Newcastle Chronicle.
42. The Revolutionary Spirit preceding the French Revolution.
FELIX ROCQUAIN. With a Preface by Professor HUXLEY.
"The student of the French Revolution will find in it an excellent introduction to
the study of that catastrophe.”—Scotsman.
43. The Student's Marx.
EDWARD AVELING, D.Sc.
"One of the most practically useful of any in the Series.”-Glasgow Herald.
44. A Short History of Parliament.
B. C. SKOTTOWE, M.A. (Oxon.).
"Deals very carefully and completely with this side of constitutional history."
Spectator.
45. Poverty: Its Genesis and Edoxus.
J. G. GODARD.
"He states the problems with great force and clearness."-N. B. Economist.
46. The Trade Policy of Imperial Federation.
MAURICE H. HERVEY.
"An interesting contribution to the discussion."-Publishers' Circular.
47. The Dawn of Radicalism.
J. BOWLES DALY, LL.D.
"Forms an admirable picture of an epoch more pregnant, perhaps, with political
instruction than any other in the world's history."-Daily Telegraph.
48. The Destitute Alien in Great Britain. ARNOLD WHITE; MONTAGUE CRACKAN-
THORPE, Q.C.; W. A. M'ARTHUR, M.P.; W. H. WILKINS, &C.
"Much valuable information concerning a burning question of the day."-Times.
49. Illegitimacy and the Influence of Seasons on Conduct.
ALBERT LEFFINGWELL, M.D.
We have not often seen a work based on statistics which is more continuously
interesting."-Westminster Review.
50. Commercial Panics of the Nineteenth Century.
H. M. HYNDMAN,
"One of the best and most permanently useful volumes of the Series."-Literary
Opinion.
51. The State and Pensions in Old Age. J. A. SPENDER and ARTHUR ACLAND, M.P.
"A careful and cautious examination of the question."-Times.
52. The Fallacy of Saving.
JOHN M. ROBERTSON.
"A plea for the reorganisation of our social and industrial system."-Speaker.
53. The Irish Peasant.
ANON.
"A real contribution to the Irish Problem by a close, patient and dispassionate
investigator."-Daily Chronicle.
Prof. J. S. NICHOLSON.
54. The Effects of Machinery on Wages.
"Ably reasoned, clearly stated, impartially written."-Literary World.
55. The Social Horizon.
ANON.
"A really admirable little book, bright, clear, and unconventional."-Daily
Chronicle.
56. Socialism, Utopian and Scientific.
"The body of the book is still fresh and striking."-Daily Chronicle.
57. Land Nationalisation.
F. ENGELS.
A. R. WALLACE.
DOUBLE VOLUMES, Each 3s. 6d.
1. Life of Robert Owen.
LLOYD JONES.
"A worthy record of a life of noble activities."-Manchester Examiner.
"Will be of real value to co-operators, by giving them an insight into the work of
one of the most enthusiastic and single-minded of our English Social Reformers."--
Economic Review.
2. The Impossibility of Social Democracy: a Second Part of "The Quintessence
of Socialism".
Dr. A. SCHÄFFLE.
"His chief merit consists in seeing that Social Democracy can be best met not by
measures of repression but by a constructive policy of social reform."-Spectator.
3. The Condition of the Working Class in England in 1844. FREDERICK ENGELS.
"An interesting medium through which to judge of the progress made during
nearly half-a-century."-Pub. Circular.
YVES GUYOT.
4. The Principles of Social Economy.
"An interesting and suggestive work. It is a profound treatise on social economy,
and an invaluable collection of facts."-Spectator.

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