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Leader (1850-1860), 17th December 1853, Edition 1 of 2, Page 1211

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      the working classes consists m the smallness of the sums which they can command , and in the precarious nature of their income . The consequence is that they make their insurance investments only for objects of urgent importance ; and , as those investments involve a number of small payments , they are seldom worth the attention of capitalists . There are two immediate results of this state of affairs '; the cost of management becomes considerable in proportion to the advantage ; and as the managers are often poor , bustling , and needy men , there are

      frequent defalcations . Such projectors naturally undertake what regular insurance companies will not . The benefit club will play with the edge tools of the actuary , though not commanding his skill or advice ; and the man of sixty , who has been paying all his life to a club , may find that just as he requires the help which he has provided the club fails . The working class * , the most numerous , and in the aggregate the most productive , possess the advantages neither of

      banking nor of insurance . The Poor Law is indeed one kind of insurance , and a valuable kind , though it is very limited—it is an insurance against actual destitution . The savings' bank also affords a place of deposit , but ridiculously limited to a verysmall sum in the year . These two institutions provide nothing for sickness or old age , and little for families left suddenly destitute by death . Nor , from the causes which we have mentioned , do the friendly societies supply the deficiency . .

      The whole subject has commanded the attention of a man admirably suited , both by natural genius , by attainments , and by public spirit , to make the most valuable suggestions—we mean Mr . Farr , the statist of the General Register Office . ~ The grand things wanted are a provision against sickness , and a subsistence in old age . The latter point is a desirable object for all classes of society ; but it would be specially advantageous if the labour market could be relieved of aged persons , who do not really contribute to production , but only hinder . There is a certain amount of work to be

      done in the country , and there is no doubt that it could be done quite as well , or better , if it were only entrusted to the effective men of the country . Let us take an example . In the printing trade there is a given number of workpeople , and at present a given quantity of work to be done . In some branches , by an improved machinery and regulations , the amount to be executed by a given number of men in a given time might be considerably increased ; but the printers object to

      increase the rate of production in a given hour , because the increased speed would throw the older hands out of work . This is a most just and proper consideration ; but the regulation intended to effect it violates all reason and economy . A given set of men execute a given amount of work , but could take more besides ; only they keep down the rate of production in order that a few aged persons may not be cast destitute . They thus restrain production to a point below that at which a smaller number of men could execute more

      work , by a rule which prevents any man from doing better than his superannuated grandfather . Abolish that restriction ; and if the grandfathers were thrown out of work , the quantity executed by the smaller number would be absolutely greater . Thus it would be cheaper to pension oil" the old people , and leave to those in the prime of life their full swing .

      If to the general fact we add the particular one , that b y a better adaptation of savings a livelihood could be secured to each man in his old age , we have a double and powerful incentive to make duo provision . But , as the income of the working classes is precarious , and as the talent which they can command * w administration is also precarious , two new plasHes of . circumstances are required for remler"ig thig provision of the working class available with certainty . Wo want n rule enabling the CfirnerM of precarious incomes to make an insurance

      not dependent upon the steady payment of a uxed annua l premium ; and we also want a guarantee , "which the working classes cannot command , that the rep ayment assured . shall be certain . Mr . Farr proposes to attain the latter object by Government control , lie observes , also , with great truth , that whereas most of our financial mid industrial Operations arc brought about by the combined ^ tion of musters and working men , it in moat "Oflirablo that the employing classes . should give u * o » r aid , either in the formation or administration ° * the requisite fuiulu . The three chief objects W'U ' h the working man most desires are , an

      annuity in old age , an allowance during sickness , and something for survivors . Mr . ' Farr has prepared tables which show that these objects may be attained by precarious payments , or payments onlj continued for a short period . To take an example of insurance against sickness : —A man aged 20 , who pays < £ - 650 , or 13 s . at the beginning of every quarter ( Is . a week ) , for five years , would , without the payment of any further premium from the fifth year inclusive , be entitled to £ : 454 , or 9 s . Id . a week , for every week of sickness that he experienced during the next forty years , or until the

      age of 65 , when the payment of a deferred annuity would commence . An example of life insurance : —Ea . ch single pound paid in by . a depositor on the principle of life insurance is by calculation worth a specific sum on the death of the depositor ; and Mr . Farr proposes a set of tables which , would mark out the respective value of each single pound deposited at successive ages . A depositor , therefore , beginning at an early age , and continuing subsequent years , might pay in a deposit of one or more pounds , with the certainty that at his death a

      specific sum for each pound deposited will be paid to his survivors . A provision of this kind is much wanted for all persons whose income is precarious , and ought not to be limited to the working classes . It is particularly necessary for professional men and sailors , and we have for some time contended in favour of such a provision . Mr . Farr supplies the requisite for the purpose , the principle on which a table should be formed . He suggests , also , a plan for assuring a deferred annuity on the same principle ; that is to say , an annuity deferred until after a given year , with a given sum for each pound deposited . It is very advantageous for the life assurance and the annuity to be com- V 3 *¦ 1

      bined ; the risks of the two correct each other . A man beginning , say at the age of twenty , and paying one pound on the annuity account , and one pound on the insurance account , would be entitled to leave at his death nearly 2 ? . 18 s ., and to receive at the age of sixty-five an annuity of about 17 s . Next year he would deposit 2 L more , and at his death he would leave about 51 . 12 s ., or be entitled to receive at sixty-five an annuity of \ l . 12 s . ; and so on , until , if he kept up his premium until the age of sixty-five , then retiring from work and relinquishing his premiums , he would be entitled to receive an annuity of 18 Z . 7 s ., and leave at his death 911 . 1 Is . for his

      survivors . Every increase to the premium would give an increase to the benefit assured . If , through failure of means , the premium is stopped , the life assurance and the annuity would not be forfeited , but only diminished in the exact proportion . The accounts would be very simple : the mere register of the sums paid would furnish all that was wanted for the calculation of the ultimate payment according to the table . But dealing in such small sums would entail considerable

      expense , unless the system were conducted with the guarantees and the facilities which Government can command . The employing classes might assist by talcing the premiums out of wages , of course only on the actual request of the working people , and handing them over in a lump to Government , which would save much trouble , and therefore expense . They might , we may add , assist still more by placing information on this subject before the working classes ; and if they were to act in that spirit , they would not only secure the attachment and trust of their fellowcountrymen amongst the working classes , but would also removo many of the causes which

      render the labour of tho country inefficient , and thus keep down tho profits of the employer . The provisions suggested by Mr . Farr so . strictly belon'T to tho same class of assurance which the Poor Law aflbrds , that they may be called the completion of that measure . If anything is to bo suid in justification of the Poor Luw , much more may bo said in favour of the plan suggested by Mr . Farr ; and we believe that nothing more could secure the peace of the country , the comfort of the masses , and tho elevation of tho popular character and skilled labour of this country , than such a plan of provision . The Benefit Societies Act expires next yenr ; tho recommendations of thu Committee on Insurances have still to be dealt with ; a Poor Law reform ia expected by public opinion . Members ought not to neglect the only great national subject ho admirably handled by Mr . Farr , and embodied in a separate appendix to the annual report of the Registrar-General for 1853—t . h « " Abstracts of 1841 ) . "

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      MORAL SIGNS IN AMERICA . It is rather remarkable that , notwithstanding the experience which politicians and public writers ought by this time to have accumulated , they are continually falling into the mistake of taking the last act as a proof of the general tendency of public opinion . In England the last receipt is a proof of all interior payments ; a sufficient rule since it is known , but , logically , not quite so correct as the rule in Scotland , which requires the last three receipts . In the course of public opinion , it appears to us that the last three events at least should be taken into the account . Every now and then , on the receipt of a mail from the United States , there is a great cry , either that repudiation has been abjured , or that it is in full force . It is not very long since the judges of Mississippi , sitting "in-error , " decided that the public bonds which had been repudiated still held good as a claim on the state , and must be met . In the United States the office of judge is subject to annual election ; but it is not usual to enforce that rule , the judges being practically permanent , as they are in this country , where , the Grown retains the power of removal should the judges behave ill . The state elections in Mississippi have just been taken , and . the judges are threatened . One , Judge Yerger , has already paid the penalty of adhering tt > the rights of the creditor ; and our English contemporary , th 8 ' Times , evokes the ghost of Sydney Smith to chastise the rampant doctrine of repudiaf . inn "P oriTievlvflnjn .. Ji . nf 1 . fl . il .

      Now , the truth is that opinion does not change with the impressions of the writers that partially reflect it . In Mississippi state there is a permanent opinion in favour of repudiation , with a strong . influential opinion in the opposite direction ; the two opinions are in conflict , and in their conflict they threaten to upset the judgment-seat . It is deeply to be regretted that judges should be liable to be thus called to account for conscientious decisions ; but it must not be forgotten , that in Mississippi the election principally turns on the merits or demerits of Governor Foote , who is opposed by Mr . Jefferson Davies , the present Secretary-at-War , with great success . This is admitted by the New York correspondent of the Times , who has constantly endeavoured to show that the administration was losing in the state elections . Tho fate of the judges , therefore , is not so clearly traceable to repudiation . On the other hand the principle of repudiation docs survive . It is a rising idea in America , as well as England , that one generation cannot properly pledge another . In this country , through the great influence of official and monied-people , it has been our custom to connive at the very lavish arrangement of Ministers , to whitewash every successive Chancellor of the Exchequer , and to accept his disposal of our means as if he , fifty years ago , perhaps , knew better than the people of the present day how to dispose of their means . The absurdity of that proposition has not failed to attract attention , and an intellect distinguished above all others in this country by its fineness and conscientious scruple , that of Francis W . Newman , has declared in favour of a summary treatment of the national debt , which is far from being unlike repudiation . The bonds of Mississippi , contracted to support the planters' bank , and sold below par , —or , m other words , failing to obtain the money nominally presented in their text , —and made payable hi London without the authority of the public body , really offer manyreasons for repudiation . We do not believe , however , that the material advantages once gained by the loan have been entirely superseded ; and itdoes appear to ns that the state which takes advantage of those conveniences is morally bound to pay even if the legal claim were less technically enforced by law than the judges declared it to be . What we have endeavoured to show , however , is that , so fiu- from being perfectly unreasonable caprice , repudiation ia an opinion supported by reason , and possessing n permanent existence . Wo agree with the New York correspondent of the Times in cautioning the public against attaching too much importance ! to these apparent reverses . Pennsylvunian bonds were once worth nothing but to point Sydney Smith's jokes ; they are now at par : in the meanwhile , hoAvever , those who were terrified at the idea of repudiation , must have lost considerable sums of money , pocketed by those who retained a more consistent trust in tho good faith of the American republic . Another incident of the day m of an extremely satisfactory kind ; not because it proves a sudden

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      December 17 , 1853 ] TEE LEADER . 1211

  • Citation
    • Leader (1850-1860), Dec. 17, 1853, page 1211, in the Nineteenth-Century Serials Edition (2008; 2018) ncse-os.kdl.kcl.ac.uk/periodicals/l/issues/vm2-ncseproduct2017/page/11/